Document:

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                                                                    EXHIBIT 10.1

PURCHASING AND LICENSING AGREEMENT, DATED SEPTEMBER 9, 1997, BETWEEN ATOM
MEDICAL CORPORATION AND MASIMO CORPORATION.

CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION.
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                       PURCHASING AND LICENSING AGREEMENT
                                     BETWEEN
                            ATOM MEDICAL CORPORATION
                                       AND
                               MASIMO CORPORATION

                             DATED SEPTEMBER 9, 1997

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                                   EXHIBITS

Exhibit A.     MASIMO SET(R) Definition
Exhibit B.     Trademarks, Legend, Logos
Exhibit C.     List of Patents and Patent Applications
Exhibit D.     Price of Products
Exhibit E.     Specifications for Products
Exhibit F.     End-User License Agreement

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                       PURCHASING AND LICENSING AGREEMENT

       THIS PURCHASING AND LICENSING AGREEMENT ("Agreement") is made and entered
into as of this 9th day of September, 1997, by and between ATOM Medical
Corporation, a Japanese corporation ("ATOM"), and MASIMO CORPORATION, a Delaware
corporation ("MASIMO"), with reference to the following:

R E C I T A L S:

       A. MASIMO has developed a new technology known as Signal Extraction
Technology ("MASIMO SET" as defined in Exhibit A) MASIMO SET(R) incorporates
circuitry and software which, among other things, acquires and detects signals
generated by red and infrared LEDs, and which is designed to extract arterial
oxygen saturation and pulse rate values from such signals.

       B. ATOM is a manufacturer of medical equipment and desires to incorporate
MASIMO SET for SpO(sub 2) into its medical equipment for distribution by ATOM
throughout the world.

       C. MASIMO has acquired substantial Know-How (as defined below) in
extracting signals from signals contaminated by noise.

       D. MASIMO has acquired and expects to continue to acquire a reputation
for excellence, and its Trademark has and will continue to acquire valuable
goodwill.

       NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, ATOM and MASIMO hereby agree as follows:

       1. DEFINITIONS. As used in this Agreement, the following terms, whether
used in the singular or the plural shall have the following meaning:

               1.1 Accessory means cables (including, but not limited to the
        MASIMO PC08 and PC12, 8 ft. and 12 ft. patient cables) or any other
        accessory manufactured by MASIMO and used with any of the SpO(sub 2)
        Sensors or Licensed Devices.

              1.2 Distributor means a party that markets Licensed Devices to
       End-Users on behalf of ATOM or a customer of ATOM that buys Licensed
       Devices from ATOM, private labels such devices, and markets such Licensed
       Devices to End-Users.

              1.3 End User is a direct user of Licensed Devices in a clinical
       environment for medical diagnostic purposes on patients (OEM and medical
       equipment manufacturers are specifically excluded).

              1.4 Improvement means any invention, adaptation, modification or
       change relating to MASIMO Technology.

               1.5 Licensed Devices means ATOM's completed patient monitor
        devices incorporating MASIMO SET whether made in circuit board, software
        or integrated circuit form for SpO(sub 2) Measurements. Licensed Devices
        shall not include any methods other than MASIMO SET for calculating
        arterial blood oxygen saturation. Licensed Devices specifically excludes
        all Fetal Oximetry applications and venous oxygen saturation
        applications.

              1.6 Licensed Trademarks means the MASIMO SET product designation
       and word mark(s) set forth on Exhibit B.

              1.7 MASIMO Confidential Information means information and
       proprietary material of MASIMO disclosed to ATOM and includes, but is not
       limited to, the following types of information and

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       other information of a similar nature: ideas, concepts, materials,
       techniques, models, data, designs, documentation, flow charts, budgets,
       projections, forecasts, marketing and development plans, the Masimo
       Technology, the Software, communication protocols, and testing
       procedures.

              1.8 MASIMO Technology means technical information, inventions,
       concepts, techniques, products, components, concepts, trade secrets,
       know-how, techniques, designs, processes, communications protocols, the
       Software, whether patentable or not, patent applications, copyright
       applications, the Patent Rights, and copyrights and all other
       intellectual property rights relating to MASIMO SET alone or incorporated
       in MS Boards, SpO(sub 2) Sensors, Improvements and related documentation
       generated prior to or pursuant to this Agreement.

              1.9 MS Boards means MASIMO's standard circuit board or chip set
       which contains MASIMO SET and algorithms necessary to process the
       information transmitted from the SpO(sub 2) Sensor and convert it into
       SpO(sub 2) Measurements.

              1.10 Party means ATOM or MASIMO; Parties means ATOM and MASIMO.

              1.11 Patent Rights means all patents owned by MASIMO on technology
       developed by MASIMO which cover SpO(sub 2) Measurement in Licensed
       Devices. The present patent numbers and patent application are set forth
       on Exhibit C to this Agreement.

              1.12 Products are MS Boards, SpO(sub 2) Sensors and Accessories.

              1.13 Purchase Orders has the meaning set forth in Section 4.1
       ("Purchase Orders").

              1.14 Software means any and all computer/instrument software
       and/or firmware developed by MASIMO that is used or useful in connection
       with MASIMO Technology.

              1.15 SpO(sub 2) Measurements means noninvasive measurement of
       arterial oxygen saturation (accounting for Hb and HbO(sub 2) only) and/or
       pulse rate from neonate, pediatric and adult subjects (excludes fetal
       measurement and venous oxygen saturation).

              1.16 SpO(sub 2) Sensor means reusable and disposable MASIMO
       standard adult, pediatric or neonatal sensors for use with making SpO(sub
       2) Measurements. Standard SpO(sub 2) Sensors currently manufactured by
       MASIMO have the following model numbers:

               LNOP(R) - Neo-Pt;  Disposable Neonatal Sensor (Pre-Term)
               LNOP(R) - Neo;     Disposable Neonatal Sensor
               LNOP(R) - Adt;     Disposable Adult Sensor
               LNOP(R) - Pdt      Disposable Pediatric/Slender Digit Sensor
               LNOP(R) - DC1;     Reusable Adult/Pediatric Digit Clip Sensor

              MASIMO intends to produce additional standard models of the
       SpO(sub 2) Sensors. As MASIMO produces such additional models, the
       Parties agree to negotiate in good faith their inclusion in this
       agreement

              1.17 ATOM Confidential Information means information and
       proprietary material designated by ATOM as Confidential Information and
       which MASIMO may obtain as a result of MASIMO's relationship with ATOM or
       access to its premises. Confidential Information includes, but is not
       limited to, the following types of information and other information of a
       similar nature: ideas, concepts, materials, techniques, models, data,
       designs, documentation, flow charts, budgets, projections, forecasts,
       marketing and development plans, communication protocols and testing
       procedures.

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              1.18 Subsidiary means any majority owned or wholly owned
       subsidiary, or any entity over which a Party has control.

       2. LICENSES GRANTED

              2.1 Licenses Granted to Licensee.

                     2.1.1 MASIMO grants to ATOM a personal, non-transferable,
              and non-exclusive worldwide license to incorporate the MS Boards
              into the Licensed Devices, to demonstrate Licensed Devices, and to
              distribute Licensed Devices to (i) End User customers and (ii)
              ATOM Distributors. This license includes the right to ATOM to have
              the Licensed Devices manufactured by a third party for ATOM;
              however, such Licensed Devices may only be supplied to the
              marketplace with ATOM's or ATOM's and ATOM's Distributors' private
              label and logo exclusively and distributed exclusively through
              ATOM distribution channels. In addition, a third party making
              Licensed Devices for ATOM may not also be a Distributor.

                     2.1.2 ATOM agrees that it will not reproduce or disclose to
              any third party any portion of the Software and that it may
              transfer copies of the Software in object code form only, and only
              in conjunction with a transfer of a Licensed Device to End Users
              and Distributors. ATOM agrees to include a copy of the End-User
              License Agreement attached hereto as Exhibit F with all Licensed
              Devices, and agrees that it will require all Distributors to
              include a copy of the End-User License Agreement attached as
              Exhibit F with the transfer of Licensed Devices to End Users. If
              ATOM enters a signed agreement with the End User customer or
              Distributor, ATOM also agrees to attach the End-User License
              Agreement as an exhibit and include the following clause or a
              substantially similar clause in the signed agreement:

                     The end-user agrees to comply with the terms of the
                     attached License Agreement. MASIMO is a beneficiary of this
                     agreement between ATOM and the end-user, and has a right to
                     enforce the provisions of the License Agreement.

                     2.1.3 MASIMO retains all rights, title, and interest in the
              Masimo Technology and Improvements, including, without limitation,
              all patents, copyright, trade secret, and any other intellectual
              property and proprietary rights. Nothing in this Agreement should
              be construed as a sale of the Software or any copy of the
              Software.

                     2.1.4 ATOM agrees that the Masimo Technology contains trade
              secrets and proprietary information belonging to MASIMO. ATOM
              agrees to maintain the confidential nature of such trade secrets
              and proprietary information and agrees not to use, print, copy,
              provide, or otherwise make available, in whole or in part, any
              portion of the Software or related materials except in accordance
              with this Agreement. ATOM will not be provided access to source
              code for MASIMO Technology. ATOM agrees not to attempt to
              decipher, decompile, or modify the Software or develop source code
              for the Software or allow others to do so.

              2.2 Limitation of Licenses Granted

                     2.2.1 No license is granted under this Agreement with
              respect to the MS Boards and Masimo Technology other than as
              integrated parts of the Licensed Devices. ATOM shall not have the
              right to manufacture MS Boards, SpO(sub 2) Sensors or Accessories
              or any circuity or software that performs the functions of the MS
              Boards for the Licensed Devices.

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                     2.2.2 Except for a transfer of Licensed Devices to end-user
              customers and Distributors accompanied by the End-User License
              Agreement, no right to grant sublicenses is granted under this
              Agreement.

                     2.2.3 Nothing in this Agreement shall be construed to grant
              any rights to ATOM in fetal oximetry, venous oximetry or any other
              application of MASIMO SET other than the use of LICENSED Devices
              to make SpO(sub 2) Measurements, and nothing in this Agreement
              shall be construed to grant any rights to ATOM to distribute or
              otherwise market MS Boards or MASIMO SET separate from Licensed
              Devices.

              2.3 Trademarks, Legends and Logos.

                     2.3.1 No Implied License. ATOM agrees to include the
              following legend on the exterior of Licensed Devices:

                     NO IMPLIED LICENSE
                     Possession or purchase of this device does not convey any
                     express or implied license to use the device with
                     replacement parts which would, alone, or in combination
                     with this device, fall within the scope of one or more of
                     the patents relating to this device.

              Initial quantities of labels containing this legend are available
              from MASIMO upon request.

                     2.3.2 Grant by Masimo. MASIMO hereby grants to ATOM a
              non-exclusive license to use the Licensed Trademarks with the
              Licensed Devices for identification purpose and for publicity and
              promotional purposes when it is advertising one of its Licensed
              Devices.

                     2.3.3 Quality Control. In order for ATOM to maintain its
              trademark license hereunder, ATOM agrees that the Licensed Devices
              bearing the Licensed Trademark shall be of a high standard of
              quality, at least as high as ATOM's historical products, so as to
              protect and enhance the goodwill pertaining to the MS Boards and
              SpO(sub 2) Sensors. MASIMO has the right to inspect the
              manufacturing and distribution points of ATOM for the Licensed
              Devices, at any reasonable time, to ensure the ongoing quality of
              the Licensed Devices. Should MASIMO at any time determine that the
              quality of any Licensed Device does not adhere to MASIMO's quality
              standards, MASIMO will provide written notice to ATOM. ATOM shall
              have three months from such notice to bring the quality of such
              Licensed Device up to standard or to cease any further use of the
              Licensed Trademark in connection with the promotion or sale of
              such Licensed Device until MASIMO has indicated that it is
              satisfied that the deficiencies in quality of the Licensed Device
              have been corrected.

                     2.3.4 Trademark Marking. ATOM agrees that it shall use the
              MASIMO Product Designation set forth in Exhibit B on all Licensed
              Devices standing independently on the front or face of the unit in
              a plainly visible site. Prior to any such use, ATOM shall obtain
              consent from MASIMO as to the use and location of the Licensed
              Trademark, which consent shall not unreasonably be withheld.

                     2.3.5 Advertising. All advertising for Licensed Devices
              must include one or more of the Licensed Trademarks. Prior to any
              use or publication, all advertising copy shall be forwarded to
              MASIMO for its approval, which approval shall not be unreasonably
              withheld.

                     2.3.6 The Licensed Trademarks may not be used on or in
              reference to any products other than Licensed Devices.

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                     2.3.7 Except for the ATOM trademark and/or trade names, the
              Licensed Trademarks may not be used in direct combination with
              other trade names, trademarks or symbols. Moreover, the trade
              names, trademarks, or symbols of one party may not be used in any
              way which may suggest that one party is a division, affiliate, or
              subsidiary of the other party.

                     2.3.8 ATOM acknowledges the validity and exclusive
              ownership of the Licensed Trademarks by MASIMO. ATOM agrees not to
              use the Licensed Trademarks in any way which might endanger
              MASIMO's rights in and ownership of the Licensed Trademarks.

                     2.3.9 Patent Marking. ATOM agrees to mark each Licensed
              Device manufactured or sold by it in accordance with the Statutes
              of the United States relating to marking of patented articles.
              MASIMO will, from time to time, update its patent numbers for ATOM
              as patents issue. When MASIMO updates its patent numbers, ATOM's
              obligation to update its product marking shall occur upon the
              earlier of the exhaustion of labels for Licensed Devices bearing
              the current patent numbers or one year from the update by MASIMO.
              Initial Patent marking is shown in Exhibit B.

       3. ATOM COMMITMENTS/LICENSE FEE

              3.1 ATOM agrees to purchase all Products from MASIMO.

              3.2 Best Efforts. ATOM agrees to use its best efforts to make
       MASIMO SET its primary pulse oximetry technology, including, but not
       limited to integrating MASIMO SET into its products for SpO(sub 2)
       Measurement and by solely promoting the sale of such Licensed Devices
       over devices for SpO(sub 2) Measurement which do not incorporate MASIMO
       SET.

              3.3 Integration Commitment. Except for ATOM products in which
       Nellcor SpO(sub 2) technology is specifically requested by ATOM's
       customers, ATOM will exclusively integrate Masimo SET into all of its
       future instruments which require SpO(sub 2) Measurements. In no event
       will the percentage of ATOM Instruments exclusively containing Masimo SET
       fall below 80% of the total instruments containing SpO(sub 2)
       Measurements from Atom.

              3.4 Sensor Commitment. ATOM agrees that it will not sell or
       otherwise market any products for SpO(sub 2) Measurement with License
       Devices except SpO(sub 2) Sensors and Accessories purchased from MASIMO.

              3.5 Stand-Alone Pulse Oximeter. Masimo agrees to use its best
       efforts to provide ATOM a source to purchase a private labeled Masimo SET
       stand-alone pulse oximeter thru its other OEM partners. When such a
       stand-alone Licensed Device is available to ATOM, ATOM will cease all
       shipments of non-Masimo SET stand-alone pulse oximetry instruments.

              3.6 Product Lines. Prior to the launch of each Licensed Device,
       ATOM agrees to inform MASIMO of a description and model number of the
       product, and agrees to provide MASIMO with all customer product
       literature and technical specifications on each Licensed Device.

              3.7 Engineering Support. MASIMO will provide customary and
       reasonable integration support without charge, at its discretion. At
       ATOM's request and with MASIMO's approval, MASIMO shall provide
       additional engineering support to ATOM for the integration of MASIMO SET
       into Licensed Devices, at a cost of $150.00 per hour. Such support and
       payment by ATOM shall be authorized in advance, in writing by ATOM. Such
       services shall be provided at MASIMO's facility unless travel is
       required, in which event ATOM shall additionally pay for necessary travel
       expenses.

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              3.8 Delivery of ATOM Systems to MASIMO. ATOM agrees to deliver
       free of charge, one (1) complete system to MASIMO which demonstrates the
       final integration of the MS Board into each Licensed Device, MASIMO may
       test and make recommendations for improvements to the Licensed Devices
       for compliance with the specifications of Exhibit E. MASIMO makes no
       warranties or representations with respect to this testing. Such Licensed
       Devices shall remain with MASIMO for further technical assistance and as
       a demonstration unit. Title to such systems shall transfer to MASIMO.

              3.9 License Fee. ATOM shall pay a license fee to MASIMO in the
       amount of [*] payable upon execution of this Agreement.

              3.10 Training. ATOM agrees to allow Masimo to support ATOM's sales
       training on MASIMO SET, with appropriate prior notice and mutual
       agreement of the Parties to the training agenda and time requirements.

              3.11 Quarterly Accounting. ATOM agrees to provide MASIMO with a
       Quarterly Accounting of total pulse oximetry product shipments, its
       shipments containing MASIMO MS Boards exclusively and other shipments
       containing other means of providing pulse oximetry.

              3.12 Audit Rights. MASIMO shall have the right to verify, at its
       expense, and not more frequently than once per year and upon not less
       than ten (10) business days prior written notice to ATOM, the accuracy of
       the accounting reports provided by ATOM hereunder, through inspection of
       ATOM's pertinent records and books of accounts maintained in the ordinary
       course of business. Such audit shall be conducted by a certified public
       accountant (the "CPA") chosen by MASIMO in its reasonable discretion, and
       which CPA is reasonably acceptable to ATOM. ATOM shall pay all costs,
       expenses and fees of the CPA if (i) ATOM has overstated its Integration
       Commitment to be eighty percent (80%) or greater, and (ii) audit shows
       the Integration Commitment is less than eighty percent (80%) for the
       entire annual period audited.

       4. PURCHASE AND SALE

              4.1 Purchase Orders. During the term of this Agreement and in
       accordance with its provisions, the purchase and sale of Products between
       the Parties shall be made by means of purchase orders placed by ATOM or
       its designee to MASIMO ("Purchase Orders"). The minimum quantity of
       Products that may be purchased on a Purchase Order is 50 units of a
       cable-part number (e.g., PC08) or a reusable sensor (e.g., LNOP-DC1) or
       MS Boards or 500 units of a disposable sensor (e.g., LNOP-Neo). Purchase
       Orders and change orders may be placed by facsimile or mail. A Purchase
       Order issued before normal expiration of this Agreement may provide for
       delivery for a period of up to ninety (90) days following normal
       expiration of this Agreement and all terms and conditions of this
       Agreement shall govern. No Purchase Order must be accepted by MASIMO
       after the expiration or the termination of this Agreement. Any Purchase
       Order issued for any firm commitment or purchase hereunder shall be
       non-cancelable, and ATOM shall be responsible for taking deliveries of
       and paying for all Products set forth in such Purchase Order.

              4.2 Confirmation. MASIMO will notify ATOM of receipt of Purchase
       Orders within five (5) working days after receipt. Confirmation of
       receipt and acceptance by MASIMO may be by facsimile or mail.

              4.3 Contents. All Purchase Orders submitted by ATOM shall state
       the following: (i) price, (ii) the quantities ordered, (iii) the
       requested delivery dates, (iv) destination, (v) requested method of
       shipment, and (vi) model number of the Products in accordance with the
       terms and conditions hereof. Any language on the Purchase Order of ATOM
       or acknowledging form of MASIMO which is inconsistent with any term or
       provision hereof shall be void and without any force or effect.

* Confidential material redacted and filed separately with the Commission.

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              4.4 Initial Commitment. The first Purchase Order submitted by
       ATOM, will include firm quantities for the first six (6) months of
       shipment which are contemplated to begin in April, 1998

              4.5 Ongoing Purchase Orders. After the initial Purchase Order,
       ATOM's Purchase Orders issued to MASIMO calling for delivery in ninety
       (90) days or less are non-cancelable. Purchase Orders to MASIMO calling
       for delivery in more than 90 days shall be alterable and cancelable by
       ATOM up until ninety days prior to the shipment date, after which such
       Purchase Orders become binding.

              4.6 Emergency Orders. Purchase Orders placed by ATOM shall not
       prevent ATOM from placing emergency orders for units of the Products for
       delivery in less than ninety (90) days. MASIMO agrees to use reasonable
       efforts to deliver such units of Products on the requested schedule.
       MASIMO may require a price modification for emergency orders.

       5. PRICES AND PAYMENT

              5.1 Price. MASIMO's transfer prices for the Products delivered to
       ATOM in accordance with the terms of this Agreement shall be as set forth
       on Exhibit D attached hereto. All prices are F.O.B. MASIMO's shipping
       dock. The transfer price for SpO(sub 2) Sensors and Accessories includes
       packaging and labeling with ATOM-supplied artwork and logos complying
       with MASIMO's Standard Packaging Guidelines. The transfer price does not
       include custom packaging or labeling for SpO(sub 2) Sensors, Accessories
       or MS Boards. If custom labeling for SpO(sub 2) Sensors or Accessories is
       desired and feasible as determined by Masimo, all costs associated with
       such labeling will be paid by ATOM. Payment by ATOM to MASIMO shall be
       made thirty (30) days following receipt of invoice by ATOM.

              5.2 Pricing Adjustments. MASIMO shall have the right to adjust
       prices for the Products annually, provided that any annual price increase
       shall be limited to the percentage increase in the prior year's U.S.
       Consumer Price Index.

              5.3 Currency Basis. Prices for the Products to ATOM shall be in
       U.S. Dollars.

              5.4 F.O.B. Point. Risk of loss for Products shall pass to ATOM,
       F.O.B. MASIMO's manufacturing facility or distribution point, as selected
       by MASIMO.

              5.5 Taxes and Levies. All payments by ATOM to MASIMO under this
       Agreement are exclusive of taxes and ATOM shall be responsible for paying
       all taxes (except taxes based on MASIMO'S income), including but not
       limited to, all sales, use, personal property, customs, duties,
       assessments, levies and other governmental impositions of any nature.

              5.6 Obsolete Packaging Inventory. Should ATOM request changes to
       ATOM's current packaging materials for Products (including but not
       limited to SPO(sub 2) Sensor pouches, boxes and directions for use), ATOM
       will reimburse MASIMO for the direct cost of the obsoleted packaging
       materials, up to a total of [*].

       6. DELIVERY

              6.1 Transportation. The method of transportation and carrier
       selected shall be as specified by ATOM in its Purchase Orders. Unless
       otherwise agreed, all transportation charges, including insurance, levies
       and taxes, shall be paid by ATOM.

* Confidential material redacted and filed separately with the Commission.

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              6.2 Packaging. MASIMO shall package the Products for shipment.
       Each shipment shall include a packing list containing: (i) Purchase Order
       number, (ii) model number of the Products, (iii) quantity, (iv) serial
       number or lot code of shipped products, and (v) certificates of
       compliance for the applicable quality assurance tests performed for the
       Products being shipped.

              6.3 Delivery. MASIMO shall use reasonable commercial efforts to
       fill all Purchase Orders by delivery dates and in the quantities
       specified by ATOM in its Purchase Orders. Notwithstanding the above,
       MASIMO shall have no obligation to deliver in less than ninety (90) days
       from confirmation. If a Purchase Order by ATOM calls for more than a 25%
       increase as compared to the previous 3-month average of Products ordered,
       on a product-by-product basis, MASIMO shall use reasonable commercial
       efforts to deliver an amount at least equal to the previous three month
       average within ninety (90) days, and shall use reasonable commercial
       efforts to ship the remainder within 120 days of receipt of the Purchase
       Order.

       7. COMPATIBILITY

              7.1 Sensor Compatibility. ATOM agrees that its Licensed Devices
       will not be configured to operate with oximetry sensors other than Masimo
       SpO(sub 2) Sensors specifically authorized by MASIMO for use with
       Licensed Devices of ATOM.

              7.2 Instrument Compatibility. ATOM agrees that it will not market
       oximetry instrument(s), or any other device(s) or accessory(ies), except
       Licensed Devices, that operate with or are compatible with any MASIMO
       SpO(sub 2) Sensors.

              7.3 Entire Board. ATOM agrees that by incorporating the MS Board
       and MASIMO SET into its Licensed Devices it will use the MS Board for its
       full functionality of pulse oximetry and that it will not modify the
       functionality of the MS Board. ATOM agrees that it will accept all future
       upgrades or changes to products as long as the upgrades or changes remain
       compatible with previous versions in connections and functionality and
       the upgrades do not increase the transfer price.

              7.4 MASIMO Probes. ATOM agrees that the MS Boards are designed to
       be used with SpO(sub 2) Sensors only, and that if ATOM uses sensors by
       other manufacturers the MS Board may yield different results.
       Accordingly, MASIMO SET will be enabled for SpO(sub 2) Sensors only. ATOM
       agrees to use its best efforts to provide that its customers not use
       SpO(sub 2) Sensors with technology other than MS Boards in Licensed
       Devices. ATOM agrees not to configure or to instruct others how to
       configure any devices other than Licensed Devices to be used in
       connection with SpO(sub 2) Sensors.

       8. INSPECTION AND ACCEPTANCE

              8.1 MASIMO Inspection. MASIMO shall provide and maintain an
       inspection procedure and quality assurance program for the Products and
       its production processes. Complete records of all inspection and quality
       assurance work done by MASIMO shall be made available to ATOM upon its
       request at reasonable times during the term of this Agreement.

              8.2 ATOM Inspection

                     8.2.1 ATOM may inspect the Products upon receipt. Products
              which fail (as defined only as a failure under statistical lot
              sampling standard ANSI/ASQC Z1.4:1993 AQL 1.0, General Inspection
              Level I). Any of the Products or lots of Products ("Lot") which
              materially fail to meet the specifications set forth in Exhibit E
              may be rejected by ATOM and returned to MASIMO for replacement.
              Prior to returning any Products to MASIMO, ATOM shall notify
              MASIMO by facsimile that ATOM has rejected the Products, inclusive
              of the reason or basis of such rejection. Within five (5) working
              days of the receipt of the notification, MASIMO will issue a
              "Return to

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              Vendor" ("RTV") number to ATOM by facsimile, which RTV number will
              be ATOM's authorization to return the Products.

                     8.2.2 ATOM shall promptly notify MASIMO of any incoming Lot
              failure. Products which do not conform to MASIMO's specifications
              shall be returned by ATOM to MASIMO freight collect and insured
              for full replacement value. Within twenty (20) days after the date
              of receipt of the nonconforming Products by MASIMO, replacement
              Product will be shipped to ATOM at MASIMO's expense. Should MASIMO
              fail to replace rejected Products by shipping conforming Products
              to ATOM within thirty (30) days of its receipt of the
              nonconforming Products, ATOM shall have the option to cancel
              without cost or liability the purchase of such Products and
              receive, at ATOM's option, a credit or rebate if payment has been
              made. ATOM shall pay freight charges, insurance and other
              customary charges for transportation for improperly rejected
              Products.

                     8.2.3 All costs to replace including transportation with
              respect to the defective Products shall be the sole responsibility
              of MASIMO.

                     8.2.4 If ATOM attempts to correct deficiencies to the
              Products purchased under this Agreement without prior written
              authorization from MASIMO, then MASIMO shall have no further
              obligations with respect to such Products.

              8.3 Nonconforming Acceptance. ATOM may choose to accept the
       Products which fail to conform in a minor aspect to the specifications
       established by this Agreement without prejudice to its right to reject
       nonconforming items in the future. If ATOM so chooses, ATOM will notify
       MASIMO of its intent to accept nonconforming items. However, MASIMO
       accepts no responsibility for nonconforming items accepted by ATOM.

       9. CONFIDENTIALITY

              9.1 MASIMO's Confidential Information. ATOM shall not use MASIMO's
       Confidential Information for any purpose other than performance of this
       Agreement or the maintenance or repair of the Products in accordance with
       this Agreement. ATOM shall not disclose MASIMO's Confidential Information
       to any third party without the prior written consent of MASIMO.

              9.2 ATOM's Confidential Information. Except as otherwise expressly
       provided in this Agreement, MASIMO shall not use ATOM's Confidential
       Information for any purpose other than performance of this Agreement,
       without the prior written consent of ATOM. MASIMO shall not disclose
       ATOM's Confidential Information to any third party without the prior
       written consent of ATOM.

              9.3 Confidentiality Exemptions. Neither party's obligations under
       Section 9.1 or 9.2 shall apply to information that:

                     9.3.1 prior to the transmittal was of general public
              knowledge;

                     9.3.2 becomes a matter of general public knowledge
              otherwise than as a consequence of a breach under this Agreement;

                     9.3.3 is rightfully communicated to the Party free of any
              obligation of confidence subsequent to the time of communication
              thereof;

                     9.3.4 is made public by the Party claiming confidentiality
              or

                                        9
<PAGE>   13

                     9.3.5 is required to be disclosed by applicable law;
              provided however, that the Party who may be required to disclose
              such information shall notify the other Party in sufficient time
              for the owner of such Confidential Information to file the
              appropriate documents with the court to obtain a protective order
              to enforce the confidentiality requirements of this Agreement;

                     9.3.6 information which the receiving Party can establish
              by competent proof was in its possession at the time of disclosure
              by the disclosing Party and was not acquired, directly or
              indirectly, from the disclosing Party; or

                     9.3.7 information which is received from a third party;
              provided, however, that the receiving Party has no reason to know
              such information was obtained by said third party, directly or
              indirectly, from the other Party under a nondisclosure agreement.

              9.4 Injunctive Relief. The Parties acknowledge that (a) the
       covenants set forth in this Article 9 ("CONFIDENTIALITY") are essential
       elements of this Agreement and that, but for the agreement of the parties
       to comply with such covenants, the Parties would not have entered
       Agreement; (b) neither party will have any adequate remedy at law if the
       other party violates the terms of this Article 9 ("CONFIDENTIALITY"); and
       (c) each party shall have the right, in addition to any other rights it
       may have, to obtain in any court of competent jurisdiction temporary,
       preliminary and permanent injunctive relief to restrain any breach,
       threatened breach, or otherwise to specifically enforce any of the
       covenants in this Article 9 ("CONFIDENTIALITY") if the other party fails
       to perform any of such covenants under this Article 9
       ("CONFIDENTIALITY").

              9.5 Press Release. Within 15 days of the execution of this
       Agreement, MASIMO and ATOM agree to issue a joint press release
       announcing the existence and general content of the Agreement. Except for
       the press release, neither Party shall, without the other's prior written
       approval, disclose any terms of this Agreement. This provision shall not
       be interpreted to bar either Party from making any disclosure required of
       it by law, but if such disclosure includes the terms or provisions of
       this Agreement, then the other Party shall be given the opportunity to
       review the disclosure prior to its release.

       10. PROPRIETARY RIGHTS

              10.1 MASIMO Inventions and Improvements. Any Improvement made by
       ATOM, made jointly by ATOM and MASIMO, or made solely by MASIMO shall be
       the sole property of MASIMO, and MASIMO has the right to apply for
       copyrights, patents (including utility and design patents), or other
       protection for intellectual property rights anywhere in the world under
       its own name and at its own expense. If such invention or Improvement is
       owned by MASIMO and is applicable to the MS Boards for SpO(sub 2)
       Measurement only, SpO(sub 2) Sensors or Accessories, and if ATOM has, and
       continues to meet the Integration Commitment and its obligations under
       Section 3.2 ("Best Efforts"), MASIMO will grant ATOM, without additional
       compensation, a non-exclusive, non-transferable license to use such
       Improvement to incorporate the MS Boards having the Improvement into the
       Licensed Devices, to demonstrate Licensed Devices and to distribute
       Licensed Devices to (i) End User customers and (ii) to ATOM Distributors.

                                       10
<PAGE>   14
              10.2 ATOM Inventions. Subject to the license rights granted to
       ATOM herein, MASIMO retains all right, title and interest in and to
       Masimo Technology and all Improvements. If ATOM makes any Improvement,
       ATOM shall, and hereby does, transfer all right, title and interest in
       and to all such Improvements, whether or not they have application to
       MASIMO. ATOM agrees that it shall promptly notify MASIMO of any
       Improvement and disclose such Improvement in detail. ATOM agrees that it
       shall take all actions and execute all documents, at MASIMO's expense and
       as MASIMO may reasonably request, to effectuate the acknowledgment of
       MASIMO's ownership contained herein and the vesting in MASIMO of complete
       and exclusive ownership of any Improvement. ATOM shall, at MASIMO's
       expense, secure, maintain and defend for MASIMO's benefit all rights
       therein, including the right to submit any patent, copyright or trademark
       application or registration.

       11. WARRANTY

              11.1 MASIMO Warranty

                     11.1.1 MASIMO warrants the MS Boards supplied by MASIMO to
              ATOM under normal use and care for a period of [*] following
              receipt by ATOM to be free from defects in workmanship or material
              and to be in material conformity with MASIMO's specifications.
              Masimo bears all replacement costs if MASIMO reasonably determines
              that the unit must be replaced under this Warranty. Units returned
              to MASIMO for warranty repairs shall be shipped to MASIMO freight
              collect according to MASIMO's instruction. Within thirty (30) days
              of the receipt of MS Boards, MASIMO shall replace or repair such
              units and shall ship them to ATOM's designated return destination
              freight prepaid. The foregoing warranties extend to the MS Boards
              returned by ATOM's customers.

                     11.1.2 MASIMO warrants that for a period of [*] following
             receipt by ATOM, the re-usable probes LNOP-DCl, the PC08 and PC12
             product cables supplied by MASIMO to ATOM will be, under normal use
             and care, free to ATOM from any defect in workmanship or material
             and to be in material conformity with MASIMO's specifications.
             MASIMO bears all replacement costs under this warranty if MASIMO
             reasonably determines that the unit must be replaced under this
             Warranty. Units returned to MASIMO for warranty repairs shall be
             shipped to MASIMO freight collect according to MASIMO's
             instruction. Within thirty (30) days of the receipt of reusable
             probes MASIMO shall replace or repair such units and shall ship
             them to ATOM's designated return destination freight prepaid. The
             foregoing warranties extend to the covered items returned by ATOM's
             customers.

                     11.1.3 MASIMO warrants that for a period of [*] following
              receipt by ATOM, and only on first use, the disposable probes
              (e.g., LNOP-Neo, LNOP-NeoPt, LNOP-Pdt and LNOP-Adt) supplied by
              MASIMO to ATOM hereunder will be, under normal use and care, and
              only upon first use, free from any defect in workmanship or
              material and to be in material conformity with MASIMO's
              specifications therefor. Masimo bears all replacement costs under
              this warranty if MASIMO reasonably determines that the unit must
              be replaced under this Warranty. Units returned to MASIMO for
              warranty repairs shall be shipped to MASIMO freight collect
              according to MASIMO's instruction. Within thirty (30) days of the
              receipt of disposable probes. MASIMO shall replace or repair such
              units and shall ship them to ATOM's designated return destination
              freight prepaid. The foregoing warranties extend to the covered
              items returned by ATOM's customers.

                     11.1.4 This warranty does not extend to any unit that has
              been subject to misuse, neglect or accident; that has been damaged
              by causes external to the unit; that has been used in violation of
              MASIMO's instructions; that has been affixed to any nonstandard
              Accessory attachment; that has been modified, disassembled, or
              reassembled by anyone other than MASIMO.

* Confidential material redacted and filed separately with the Commission.

                                       11
<PAGE>   15

              11.2 Limitation of Liability. EXCEPT FOR THE EXPRESS WARRANTIES
       SET FORTH ABOVE, MASIMO GRANTS NO WARRANTIES, EITHER EXPRESS OR IMPLIED,
       ON THE PRODUCTS, INCLUDING ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND
       FITNESS FOR A PARTICULAR PURPOSE, AND THE STATED EXPRESS WARRANTY IS IN
       LIEU OF ALL LIABILITIES OR OBLIGATIONS OF MASIMO FOR DAMAGES, INCLUDING
       BUT NOT LIMITED TO, CONSEQUENTIAL DAMAGES OCCURRING OUT OF OR IN
       CONJUNCTION WITH THE USE OR PERFORMANCE OF SUCH UNIT OF PRODUCTS. IN NO
       EVENT SHALL MASIMO BE RESPONSIBLE FOR CONSEQUENTIAL, INCIDENTAL, SPECIAL
       DAMAGES, LOSS OF PROFIT, OR EXPENSE SUFFERED BY THE OTHER PARTY IN
       CONNECTION WITH THIS AGREEMENT.

       12. INDEMNIFICATION

              12.1 Notice. Recognizing the objectives of this Agreement, ATOM
       agrees that if it knows of or becomes aware of any patents that may be
       infringed by the manufacture and sale of the Products, it will promptly
       disclose such information to MASIMO.

              12.2 By Masimo--Bodily Injury. MASIMO will defend, indemnify and
       hold ATOM harmless against any and all liability, loss, damages, costs or
       expenses which ATOM may hereafter incur, as a result of any injury,
       illness or death of any person which is caused by any Product, to the
       extent that such injury, illness or death resulted from (i) MASIMO's
       design or manufacture of the Masimo Products or (ii) failure of the
       Masimo Products at the time of shipment to ATOM to materially comply with
       the specification of Exhibit E. MASIMO shall have no liability or
       responsibility of any kind to ATOM under this Section unless ATOM (a)
       promptly notifies MASIMO of such claims, (b) gives MASIMO an adequate
       opportunity to defend, including complete control of such defense, and
       (c) provides reasonable assistance to MASIMO, at MASIMO's expense, in
       connection with the defense and settlement of any such claim. MASIMO
       shall have no liability for settlements made without MASIMO's express
       written consent. Should ATOM desire to have its own counsel participate
       in any such action, the cost of such counsel shall be exclusively ATOM's.

              12.3 By Masimo--Infringement. MASIMO will defend, indemnify and
       hold ATOM harmless against infringement or alleged infringement by
       standard Products furnished under this Agreement, of any patent,
       copyright, trademark, trade secret, or any other proprietary right of any
       third party. MASIMO shall have no liability or responsibility of any kind
       to ATOM under this Section unless ATOM (a) promptly notifies MASIMO of
       such claim, (b) gives MASIMO an adequate opportunity to defend, including
       complete control of such defense, and (c) provides reasonable assistance
       to MASIMO, at MASIMO's expense, in connection with the defense and
       settlement of any such claim including, but not limited to, where
       practical, to modify the Products to make them noninfringing or, where
       practical, to obtain licenses under such intellectual property rights.
       MASIMO shall have no liability for settlements made without its express
       written consent. Should ATOM desire to have its own counsel participate
       in any such action, the cost of such counsel shall be exclusively ATOM's.
       MASIMO may, at its sole discretion, modify the particular Product to make
       it noninfringing, obtain a license to allow the continued use of the
       Product, or discontinue shipment of the Product to ATOM.

              12.4 By ATOM. ATOM will defend, indemnify and hold MASIMO harmless
       against any and all liability, loss, damages, costs or expenses which
       MASIMO may hereafter incur, as a result of any injury, illness or death
       of any person which is caused by any Licensed Device, or as a result of
       infringement or claims of infringement related to the Licensed Devices of
       any patent copyright, trademark, trade secret, or any other proprietary
       right of any third party, to the extent that such injury, illness or
       death or infringement results from (i) any portion of the Licensed
       Devices which is supplied to ATOM by any person other than MASIMO, (ii)
       any combination of the Product with items not furnished by MASIMO, (iii)
       any inadequacy of the labeling or use-manuals for such Licensed Device or
       SpO(sub 2) Sensors (unless such inadequacy consists of inaccurate
       information supplied by MASIMO), (iv) any act or omission to act of ATOM
       or any party other than MASIMO who designed or manufactured any portion
       of the Licensed

                                       12
<PAGE>   16
       Devices, or (v) any modifications to the Products or MASIMO Technology
       made by ATOM, by others or by MASIMO at ATOM's request. ATOM shall have
       no liability or responsibility of any kind to MASIMO under this Section
       unless MASIMO (a) promptly notifies ATOM of such claims, (b) gives ATOM
       an adequate opportunity to defend, including complete control of such
       defense and (c) provides reasonable assistance to ATOM, at ATOM's
       expense, in connection with the defense and settlement of such claim.
       ATOM shall have no liability for settlements made without its express
       written consent. Should MASIMO desire to have its own counsel participate
       in any such action, the cost of such counsel shall be exclusively
       MASIMO's.

              12.5 Notwithstanding the above, MASIMO shall not be liable for any
       infringement of intellectual property rights of third parties or for any
       liability, loss, damages, costs or expenses which ATOM may incur as a
       result of any injury, illness or death resulting from (a) modifications
       to Masimo Technology or the Products made by ATOM, by others, or by
       MASIMO at ATOM's request, (b) electrical/electronics, software/firmware,
       sensors, or product interface not furnished by MASIMO, (c) combination of
       the Products with other apparatus not furnished by MASIMO, (d) use of
       products or components not supplied by MASIMO, (e) use of MASIMO
       technology and Products not permitted by the License granted herein, (f)
       the combination of Masimo Technology with other technology not furnished
       by MASIMO, or (g) for any claims not related directly to Masimo
       Technology or the MASIMO Products, (h) any alterations or modifications
       to the Products which are requested by ATOM.

              12.6 Patent Defense. ATOM agrees that it shall notify MASIMO any
       claim by a third party that such third party believes that MASIMO Patents
       or Patent Rights are invalid. ATOM agrees to promptly notify MASIMO of
       any such claim whether or not such claim is asserted in court by such
       third party.

                     12.6.1 During and after the term of this Agreement, ATOM
              agrees not to challenge the validity of any of the Patent Rights.
              During the term of this Agreement, ATOM agrees to disclose to
              MASIMO any prior art or any other information that is material to
              the validity of any Licensed Patent or to the patentability of any
              pending MASIMO patent application of which ATOM is aware.

       13. REGULATORY COMPLIANCE

              13.1 ATOM shall be solely responsible for identifying and
       obtaining, at its sole cost and expense, all FDA and United States safety
       agency approvals and any other agency or regulatory approvals which are
       required for the development manufacture or sale of the ATOM Products.
       MASIMO will reasonably cooperate with ATOM by providing at no charge to
       ATOM any MASIMO data in its possession that is reasonably required to
       obtain the regulatory approvals, including but not limited to 510(k)
       application materials submitted by MASIMO for its own products that
       incorporate MASIMO SET. Disclosure by ATOM of any such data shall be
       subject to the confidentiality provisions of Article 9
       ("CONFIDENTIALITY").

              13.2 ATOM shall be solely responsible, at its sole cost and
       expenses, (i) for identifying and obtaining any necessary approvals or
       certifications by any non-U.S. governmental, safety or regulatory entity,
       including testing or other procedures, for the sale by ATOM of ATOM
       Products, (ii) for identifying and complying with any safety precautions,
       safety markings, labels or consumer notices required for ATOM Product
       sales in any country other then the United States, and (iii) for
       assessing the appropriateness of the ATOM Product for any particular
       Customer application. MASIMO will cooperate with ATOM by providing any
       data in its possession that is reasonably required to obtain such
       approvals or certifications. Disclosure by ATOM of any such data to any
       third party shall be subject to the confidentiality provisions of Article
       9 ("CONFIDENTIALITY").

                                       13
<PAGE>   17

              13.3 In the event of any recall of any product incorporating
       Products, the parties shall cooperate to the extent reasonably necessary
       to conduct such recall in accordance with ATOM's policies and procedures.

              13.4 Regardless of any disclosure to MASIMO by ATOM of an ultimate
       destination of the Licensed Devices or the Software, ATOM shall not
       transfer or re-export, whether directly or indirectly, the Software, the
       Products or Licensed Devices containing the Software, the related
       documentation, or other related proprietary information to anyone outside
       the U.S. as to which export may be in violation of the United States
       Export Laws or regulations without first obtaining the appropriate
       license from the U.S. Department of Commerce and/or any agency or
       department of the U.S. government, as required.

       14. INCIDENT REPORTING

              14.1 MASIMO Reporting. MASIMO represents and warrants that all
       Products manufactured and sold to ATOM pursuant to this Agreement shall
       be manufactured materially in conformance with all applicable
       requirements of the FDA and in accordance with all United States federal,
       state and local statutes, ordinances and regulations, including, but not
       limited to, the Federal Food, Drug and Cosmetic Act (21 U.S.C. 301 at
       seq.).

              14.2 ATOM Reporting. ATOM represents that in addition to being
       responsible for all regulatory approvals that should any incidents of
       failure of the Products or injury be reported to ATOM that it will
       promptly (i.e., within two (2) business days) notify MASIMO of any such
       field performance problems or deficiencies.

              14.3 Recall. If for any reason MASIMO determines that a recall of
       Product(s) is (are) necessary, MASIMO shall notify ATOM of the
       possibility of Product recall. If MASIMO notifies ATOM that the Product
       must be recalled, ATOM agrees that it shall as expediently as possible
       issue a recall notice to all its customers recalling the Products in
       question. Provided that the Products meet the specifications specified in
       Exhibit E, MASIMO's liability for a Product recall shall be the repair or
       replacement of the part that causes the recall. If the Products fail to
       meet MASIMO's specifications as set forth in Exhibit E, then MASIMO's
       sole responsibility shall be the cost which it incurs for repairing
       and/or replacing the Product in question and for the payment of all
       freight or shipping charges involved with such recall.

       15. TERM AND TERMINATION

              15.1 Term. This Agreement shall become effective as of the
       effective date first set forth above, and shall remain in effect for ten
       (10) years. Thereafter, this Agreement is renewable for one-year periods
       with mutual consent.

              15.2 Termination for Breach. The default by one Party on a
       material obligation of such Party under this Agreement shall entitle the
       other Party to give the Party in default written notice describing such
       default in detail (including all supporting documentation) and requiring
       it to remedy such default. If such default is not fully remedied within
       ninety (90) days after the date of such notice, the notifying Party shall
       be entitled to, in addition to all other remedies available to such
       party, terminate this Agreement by a written notice to the defaulting
       Party.

                                       14
<PAGE>   18

              15.3 Termination on Insolvency. Either Party may terminate this
       Agreement at any time upon or after the filing against the other Party by
       any third party of a petition in bankruptcy or insolvency, or upon or
       after any adjudication that the other Party is insolvent, or upon or
       after the filing by the other Party of any petition or answer seeking
       reorganization, readjustment or arrangement of the business of the other
       Party under any law relating to bankruptcy or insolvency, or upon or
       after the appointment of a receiver for all or substantially all of the
       property of the other Parry of any assignment or attempted assignment for
       the benefit of creditors, or upon or after the institution of any
       proceedings for the liquidation or winding up of the other Party's
       business.

              15.4 Rights Upon Termination. In the event of any valid
       termination of this Agreement under Section 15.2 hereof ("Termination"),
       all of ATOM's rights under this Agreement shall be terminated. The
       termination of ATOM's rights shall include the termination of any rights
       of ATOM to continue to use MASIMO Technology, even though such technology
       may have entered the public domain prior to or subsequent to termination.
       This restraint is agreed to be reasonable as consideration for MASIMO's
       disclosing know-how to ATOM prior to it entering the public domain. No
       termination shall impact MASIMO's rights to collect for accrued royalties
       and payment for ordered Product, or either Party's rights to pursue all
       available remedies in addition to those stated herein.

       16. DISPUTE

              If any dispute or difference shall arise between the parties
       concerning the construction of this Agreement or the rights or
       obligations of either Party, the Parties shall strive to settle the same
       amicably, but if they are unable to do so within ninety (90) days after
       such dispute or difference has arisen and any claim or cause of action
       shall be filed in any court in Orange County, California, U.S.A. MASIMO
       and ATOM each consents to personal jurisdiction in any action brought in
       the United States District Court for the Central District of California
       and to service of process upon it in the manner set forth in Section 17.5
       ("Notice"). In the event that such action should be brought in a state
       court, ATOM and MASIMO each consents to personal jurisdiction in any
       action brought in Municipal Court or Superior Court of the State of
       California in the County of Orange and to service of process upon it in
       the manner set forth in Section 17.5 ("Notice") of this Agreement.

       17. MISCELLANEOUS

              17.1 Nonassignability. Except in connection with the sale of all
       or substantially all of the assets or business of ATOM, ATOM may not
       assign, transfer or sublicense any of the rights or obligations under
       this Agreement, without the prior written consent of MASIMO. For any
       successor or assign of ATOM that is in the pulse oximetry business, ATOM
       shall promptly notify MASIMO of such successor and such successor shall
       acquire ATOM'S interest in this Agreement, unless MASIMO objects to such
       successor within 30 days of notice. MASIMO may freely assign this
       Agreement. This Agreement will inure to the benefit of and bind each
       Party's successors and assigns.

              17.2 Failure to Enforce. The failure of either Party to enforce at
       any time or for any period of time the provisions of this Agreement shall
       not be construed to be a waiver of such provisions or of the right of
       such Parry to enforce each and every such provision.

              17.3 Governing Law. This Agreement shall be deemed to have been
       made in the State of California, United States of America, and shall be
       governed by and construed according to the laws of the State of
       California.

              17.4 Severability. In the event that any of the provisions of this
       Agreement shall be held by a court or other tribunal of competent
       jurisdiction to be unenforceable, such provisions shall be deleted from
       this Agreement and the remaining portions of this Agreement shall remain
       in full force and effect, except where economic equity of both parties
       hereto is materially affected by such unenforceability.

                                       15
<PAGE>   19

              17.5 Notice. Except as either Party may hereafter notify the other
       with respect to itself, the addresses of the Parties for all purposes of
       this Agreement shall be:

             MASIMO:              MASIMO CORPORATION
                                  2852 Kelvin Avenue
                                  Irvine, CA 92614
                                  Attention: Chief Executive Officer

             ATOM:                ATOM MEDICAL CORPORATION
                                  3-18-15, Hongo, Bunkyo-Ku
                                  Tokyo, Japan
                                  Attention: Chief Executive Officer

       All notices and communications pursuant to this Agreement shall be
       addressed as set forth above and shall be delivered to the Party for whom
       intended by hand or by postage prepaid, first class, registered or
       certified mail, return receipt requested. Such notices and
       recommendations shall be deemed to have been given and delivered as of
       the date of receipt.

              17.6 Force Majeure. Neither Party shall be liable to the other
       Party hereto for any loss, injury, delay, damages or other casualties
       suffered or incurred by such other Party due to strikes, riots, storms,
       fires, acts of God, or war or any other cause beyond the reasonable
       control of either Party.

              17.7 Headings. Headings to paragraphs and sections of this
       Agreement are to facilitate reference only, do not form a part of this
       Agreement, and shall not in any way affect the interpretation hereof.

              17.8 Survival From This Agreement. The rights and obligations of
       the parties hereto under Articles 9-14 of this Agreement shall survive
       and continue after any expiration or termination of this Agreement and
       shall bind the Parties and their representatives, successors, heirs and
       assignees.

              17.9 Exhibits. All exhibits to which this Agreement refers are
       hereby incorporated into and made a part of this Agreement.

              17.10 Entire Agreement. This Agreement constitutes the entire
       agreement between ATOM and MASIMO, and there are no other understandings,
       agreements or representations, express or implied, written or oral, not
       specified herein. This Agreement may only be amended by express written
       agreement and signed by authorized representatives of both Parties.

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

MASIMO CORPORATION                          ATOM MEDICAL CORPORATION

By: /s/ WILLIAM H. MARKLE                  By: /s/ KAZUO MATSUBARA
   ----------------------                     ----------------------------------
   William H. Markle                          Kazuo Matsubara, President and CEO
   Vice President, Business Development
   and Marketing

                                       16
<PAGE>   20

                                   EXHIBIT A

                            MASIMO SET(R) DEFINITION

For the purpose of this agreement, MASIMO SET(R) is defined to include all
MASIMO Technology including LNOP(R), AutoProCal(TM), ProCal(TM), DST(TM), and
FST(TM) Technology. MASIMO SET(R) is further described as follows:

Transducers (sensor/probe), cables and connectors, designed to reduce cost,
reduce noise and improve accuracy;

The technique of building a reference generator for calculating substantially a
noise or signal reference;

Use of noise reference or signal reference with or without an adaptive filter
or correlation canceller to minimize the effect of unwanted noise components
(e.g., motion artifacts) from the physiological waveforms (e.g.,
photo-plethysmographic waveforms);

Use of Saturation Transform: Mapping plethysmographic wave forms into
saturation space (e.g., saturation vs. power or probability and/or saturation
vs. pulse rate); and/or

Use of Pulse Rate Transform: Mapping plethysmographic wave forms into pulse
rate space (e.g., pulse rate versus saturation).

                                      [*]

* Confidential material redacted and filed separately with the Commission.

<PAGE>   21

                                   EXHIBIT B

                           TRADEMARKS, LEGENDS, LOGOS

I.      MASIMO SET(R) PRODUCT DESIGNATION:

                                [MASIMO SET(R) LOGO]
                                Panatone Red / PMS Black
                                185C MAT

II.     LICENSED TRADEMARKS:

                                [MASIMO SET(R) LOGO]

                                [MASIMO SET(R) LOGO]

                                [MASIMO SET(R) LOGO]

            (MASIMO WILL PROVIDE CAMERA READY ARTWORK UPON REQUEST)

III.    PATENT MARKING:

                                      [*]

* Confidential material redacted and filed separately with the Commission.

<PAGE>   22

                                   EXHIBIT D
                               PRICE OF PRODUCTS

Price for MS-1 Boards: MASIMO's transfer price to ATOM for the MS-1 Boards
(including the Masimo MS-3 Boards) delivered in accordance with this Agreement
will be [*] each.

Transfer Price for Sensors and Accessories: MASIMO's transfer prices to ATOM
for the SpO2 Sensors and Accessories delivered in accordance with this
Agreement are as follows:

Product                                              Part #   Price Each
-------                                              ------   ----------

LNOP(R).Adt (Adult Disposable Probe)                  1001        [*]
LNOP(R).Pdt (Pediatric Disposable Probe)              1025        [*]
LNOP(R).Neo (Neonatal Disposable Probe)               1002        [*]
LNOP(R).NeoPt (Pre-Term Neonatal Disposable Probe)    1003        [*]
LNOP(R).DC-1 (Adult Re-usable Probe)                  1004        [*]
PC-08 (8 Ft. Patient Cable)                           1005        [*]
PC-12 (12 Ft. Patient Cable)                          1006        [*]

                                      [*]

* Confidential material redacted and filed separately with the Commission.

<PAGE>   23

                                   EXHIBIT E

                          SPECIFICATIONS FOR PRODUCTS

MS-1 is a complete pulse oximeter, based on Masimo SET, on a circuit board. The
circuit board interfaces directly to LNOP sensors, driving the LEDs in the
sensor to acquire the patient signal, calculates SpO2 and Pulse Rate, and
communicate the information off board.

PERFORMANCE SPECIFICATION:

<TABLE>
<S>             <C>                                             <C>                     <C>
RANGE
                Saturation (SpO2):                              1-100%
                Pulse Rate:                                     25-240 BPM (Beats Per Minute)

                Signal Strength (SS):                           Transmission (dB)
                greater than or equal to 0.2%                   greater than or equal to -50 dB
                0.02 - 0.2%                                     greater than or equal to -100.0-SS (%) - 30.0 dB

ACCURACY

                Adults

                SpO2 Range                                      70%-100%                0% to 69%
                Accuracy (plus or minus 1 Std. Dev.)*           plus or minus 2 digits  Unspecified

                Pulse Rate Range                                25-240 BPM
                Accuracy (plus or minus 1 Std. Dev.)*           plus or minus 4 BPM

                Neonates

                SpO2 Range                                      70%-95%                 0% to 69%
                Accuracy (plus or minus 1 Std. Dev.)*           plus or minus 3 digits  Unspecified

                Pulse Rate Range                                25-240 BPM
                Accuracy (plus or minus 1 Std. Dev.)*           plus or minus 4 BPM
</TABLE>

NOTE: The MS-1 pulse oximeter board is calibrated to read oxyhemoglobin
saturation (%SpO2) of functional hemoglobin as compared to a Nellcor N-200
pulse oximeter and/or a CO-Oximeter. Significant levels of dysfunctional
hemoglobin (e.g., methemoglobin, carboxyhemoglobin) may affect the accuracy of
the instrument. Indocynnine green, methylene blue, and other intra-vascular
dyes, depending upon their concentrations, may interfere with the accuracy of
the instrument. MS-1 performance will be compromised if there is no arterial
blood at the test site due to excessive patient motion (e.g., squeezing at a
pressure close to subject's diastolic blood pressure), ultra low perfusion,
excessive electrosurgical interference, or intense environmental illumination.

*   Testing is based on healthy adult volunteers in induced hypoxia studies with
    LNOP(R) Adt sensors; during no motion. Testing to verify saturation
    specification is done against a Nellcor N-200 pulse oximeter and/or a
    CO-Oximeter. Testing to verify pulse rate specification is done against a
    Nellcor N-200 pulse oximeter and/or an ECG.

                                      [**]

** Confidential material redacted and filed separately with the Commission.

<PAGE>   24

MS-1 HARDWARE:

      POWER CONSUMPTION                 less than or equal to 2.3 Watts (typ)
                                        = 2.5 Watts (max)
      STORAGE ENVIRONMENT
              Temperature Range         -50 - 100 degrees C
              Relative Humidity           0 - 97% non-condensing
              Atmospheric Pressure       50 - 113 kPa

      OPERATING ENVIRONMENT
              Temperature Range          0 - 70 degrees C
              Relative Humidity          0 - 97% non-condensing
              Atmospheric Pressure      68 - 113 kPa

      MTBF                              150,000 hours minimum
                                        (Ground Benign)
      FAILURE COVERAGE                  Single Fault Coverage

PLETHYSMOGRAPHIC WAVEFORM SPECS

<TABLE>
<CAPTION>

WAVEFORM TYPE            RANGE             RESOLUTION                    DELAY
-------------            -----             ----------                    -----
<S>                     <C>          <C>                        <C>

Raw Signal               0 to 1      2(-7), 2(-15), 2(-31)      less than or equal to 1 sec
Band Pass Signal        -1 to 1      2(-7), 2(-15), 2(-31)      less than or equal to 2.5 sec
Autoscaled Signal       -1 to 1      2(-7), 2(-15), 2(-31)      less than or equal to 3 sec
</TABLE>

LNOP(R) SENSOR SPECIFICATIONS

<TABLE>
<CAPTION>
                                                TYPICAL HEAT
  SENSOR          DESCRIPTION                   DISSIPATION                             MAXIMUM SKIN TEMP AT SITE
  ------          -----------                   ------------                            -------------------------
<S>             <C>                    <C>                              <C>

LNOP(R) DC-1    Adult Reusable         less than or equal to 50 mW   less than or equal to 41 degrees C @ 37 degrees C Ambient
LNOP(R) Adt     Adult Disposable       less than or equal to 50 mW   less than or equal to 41 degrees C @ 37 degrees C Ambient
LNOP(R) Neo     Neonatal Disposable    less than or equal to 50 mW   less than or equal to 39 degrees C @ 37 degrees C Ambient
LNOP(R) NeoPt   Neonatal Disposable
                (Pre-Term)             less than or equal to 50 mW   less than or equal to 39 degrees C @ 37 degrees C Ambient
LNOP(R) Pdt     Pediatric Disposable   less than or equal to 50 mW   less than or equal to 41 degrees C @ 37 degrees C Ambient
</TABLE>

                                      [*]

* Confidential material redacted and filed separately with the Commission.

<PAGE>   25

                                   EXHIBIT F

                           END USER LICENSE AGREEMENT

THIS DOCUMENT IS A LEGAL AGREEMENT BETWEEN YOU, THE "PURCHASER", AND ATOM. IF
YOU DO NOT AGREE TO THE TERMS OF THIS AGREEMENT, PROMPTLY RETURN THE ENTIRE
PACKAGE, INCLUDING ALL ACCESSORIES, IN THEIR ORIGINAL PACKAGE, WITH YOUR SALES
RECEIPT TO ATOM FOR A FULL REFUND.

1.      Grant of License. In consideration of payment of the license fee, which
is part of the price paid for this product, ATOM grants to Purchaser a
nonexclusive, nontransferable license, without right to sublicense, to use the
copy of the incorporated software/firmware, and documentation in connection with
Purchaser's use of the Products for their labeled purpose. ATOM reserves all
rights not expressly granted to Purchaser.

2.      Ownership of Software/Firmware. Title to, ownership of, and all rights
and interests in, any MASIMO software and/or firmware and the documentation, and
all copies thereof, remain at all times vested in MASIMO Corporation, licensor
to ATOM, and they do not pass to Purchaser.

3.      Assignment. Purchaser shall not assign or transfer this License, in
whole or in part, by operation of law or otherwise, without ATOM's prior written
consent; any attempt without such consent, to assign any rights, duties or
obligations arising hereunder shall be void.

4.      Copy Restrictions. The software/firmware and the accompanying written
materials are copyrighted. Unauthorized copying of the software, including
software that has been modified, merged, or included with other software, or
other written materials is expressly forbidden. You may be held legally
responsible for any copyright infringement that is cause or incurred by your
failure to abide by the terms of this license. Nothing in this license provides
any rights beyond those provided by 17 U.S.C. Section 117.

5.      Use Restriction. As the Purchaser, you may physically transfer the
products from one location to another provided that the software/firmware is not
copied. You may not electronically transfer the software/firmware from the
products to any other device. You may not disclose, publish, translate, release
or distribute copies of the software/firmware or accompanying written materials
to others. You may not modify, adapt, translate, reverse engineer, decompile,
disassemble, or create derivative works based on the software/firmware. You may
not modify, adapt, translate, or create derivative works based on the written
materials without the prior written consent of ATOM.

6.      Transfer Restrictions. The software/firmware is licensed to the
Purchaser, and may not be transferred to anyone, except other end-users, without
the prior written consent of ATOM. In no event may you transfer, assign, rent,
lease, sell, or otherwise dispose of the software/firmware or the products on a
temporary basis.

7.      Beneficiary. Masimo Corporation is a Beneficiary of this Agreement and
has the right to enforce its provisions.

8.      U.S. Government Rights. If you are acquiring software (including the
related documentation) on behalf of any part of the United States Government,
the following provisions apply: the software is deemed to be "commercial
software" and "commercial computer software documentation," respectively
pursuant to DFAR Section 227.7202 FAR 12.212, as applicable. Any use,
modification, reproduction, release, performance, display or disclosure of the
software (including the related documentation) by the U.S. Government or any of
its agencies shall be governed solely by the terms of this Agreement and shall
be prohibited except to the extent expressly permitted by the terms of this
agreement.<PAGE>   1
                                                                    EXHIBIT 10.2

RESTATED PURCHASING AND LICENSING AGREEMENT, DATED AUGUST 19, 1997, BETWEEN
DATASCOPE CORP. AND MASIMO CORPORATION.

CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION.
<PAGE>   2

                   RESTATED PURCHASING AND LICENSING AGREEMENT

     THIS AGREEMENT is effective as of August 19, 1997 (the "Effective Date"),
by and between MASIMO CORPORATION, a California corporation having an office at
2852 Kelvin Ave., Irvine, California 92614 ("Masimo"), and DATASCOPE CORP., a
Delaware corporation having an office at 14 Philips Parkway, Montvale, New
Jersey 07645 ("Datascope").

                                   WITNESSETH:

     WHEREAS, Masimo has developed technology known as Signal Extraction
Technology as defined in Exhibit A ("Masimo SET") for acquiring and detecting
signals generated by red and infrared LEDs to extract oxygen saturation and
pulse rate values from such signals;

     WHEREAS, Masimo has substantial knowledge in extracting the desired signals
from signals contaminated by noise ("Know-How"); and

     WHEREAS, Datascope is a manufacturer of medical equipment and desires to
incorporate Masimo SET for Sp02 Measurement into its medical instruments for
sale and distribution to Datascope Customers throughout the world;

     NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein and intending to be legally bound, the parties hereby agree as
follows.

                                 1. DEFINITIONS

1.1 "Accessory" shall mean standard cables and parts manufactured by Masimo for
use with Sp02 Sensors or Licensed Devices.

                                        1
<PAGE>   3

1.2 "Affiliate" or "Affiliates" or "Subsidiary" shall mean any corporation,
firm, partnership, or other entity, whether de jure or de facto, that directly
or indirectly owns, is owned by, or is under common ownership with a party to
this Agreement.

1.3 "Average Selling Price" shall mean the total sales amount, in dollars (based
upon the price paid by the first sale to arms length customers) for specific
Sp02 Sensors or specific Accessories, per quarter, divided by the number of
specific Sp02 Sensors or specific Accessories sold that quarter.

1.4 "Customer" shall mean persons or entities to which Datascope distributes or
sells its medical products in its normal course of business, but does not
include medical equipment manufacturers other than those listed in Exhibit D.

1.5 "Improvement" shall mean any invention, adaptation, modification or change
relating to the Masimo Technology.

1.6 "Integration Commitment Products" shall mean all Datascope's products listed
in Section 4.

1.7 "Licensed Devices" shall mean medical products manufactured and distributed
by Datascope which incorporate MS Boards for the purpose of providing one or
more of the following results:

     a. arterial blood oxygen saturation (using Masimo SET for Hb and Hb02 only)
and

     b. pulse rate and/or photo plethysmographic waveforms. Licensed Devices
shall not include medical products manufactured and distributed or sold by
Datascope which include any methods for calculating arterial blood oxygen other
than Masimo SET or

                                       2
<PAGE>   4

CAWF using Masimo Technology. Licensed Devices specifically exclude all fetal
oximetry applications and venous oxygen saturation applications of Masimo
Technology.

1.8 "Licensed Trademarks" shall mean the marks set forth on Exhibit B attached
hereto.

1.9 "Masimo Products" are MS Boards, Sp02 Sensors and Accessories.

1.10 "Masimo Technology" shall mean technical information, inventions, concepts,
techniques, products, components, trade secrets, Know-How, designs, processes,
communications protocols, the Software, whether patentable or not, patent
applications, copyright applications, the Patent Rights, and copyrights and all
other intellectual property rights relating to the Masimo SET alone or
incorporated in Masimo Products, Improvements generated and owned by Masimo or
generated by Datascope pursuant to and during the term of this Agreement and not
generally known in the medical device trade and related documentation.

1.11 "MS Boards" shall mean Masimo's Standard circuit boards or chipsets which
contain Masimo SET and algorithms necessary to process the information
transmitted from an Sp02 sensor and convert it into Sp02 Measurement as
described in Exhibit H attached hereto.

1.12 "Patent Rights" shall mean all patents owned by Masimo on Masimo Technology
required for Sp02 Measurement by the Licensed Devices. The present United States
patent numbers and patent applications related to the Licensed Devices are set
forth on

                                       3
<PAGE>   5

Exhibit C attached hereto.

1.13 "Software" shall mean any and all computer/instrument language and/or
firmware developed by Masimo that is used or useful in connection with Masimo
Technology and related to the Licensed Devices.

1.14 "Sp02 Measurements" shall mean non-invasive measurement of arterial oxygen
saturation (in any embodiment that accounts for at least Hb and Hb02) and/or
pulse rate from neonate, pediatric and adult subjects, excluding fetal and
venous oxygen saturation measurements.

1.15 "Sp02 Sensor" means Masimo's standard reusable and disposable adult,
pediatric and neonatal sensors for use with making Sp02 Measurements. Standard
Sp02 Sensors currently manufactured by MASIMO have the following model numbers:

          LNOP(R)*Neo-Pt; Disposable Neonatal Sensor (Pre-Term)

          LNOP(R)*Neo; Disposable Neonatal Sensor

          LNOP(R)*-Adt; Disposable Adult Sensor

          LNOP(R)*Pdt; Disposable Pediatric/Slender Digit Sensor

          LNOP(R)*DCl; Reusable Adult/Pediatric Digit Clip Sensor

     Masimo intends to produce additional standard models of Sp02 Sensors. As
MASIMO produces such additional models the Parties agree to negotiate in good
faith their inclusion in this Agreement.

1.16 "Standard Cost" shall mean the cost for direct materials and labor,
overhead and administration, in accordance with generally accepted accounting
principles.

                                       4
<PAGE>   6

1.17 "FlexiSensor" shall mean current Datascope proprietary sensors, including
but not limited to Large Adult (LA), FlexiSensor S.D., Adult (A) FlexiSensor
S.D., Pediatric (P) FlexiSensor S.D., Neonate (N) FlexiSensor S.D., Adult Ear
(AE) FlexiSensor S.D., Ear Clip, Datasensor 3' Cable, and Datasensor 12' Cable.

1.18 "XG Penetration" shall mean the number of Passport XG units sold with
Masimo MS Boards divided by the total number of Passport XG sold during a
specified period, multiplied by one hundred (100).

1.19 "Best Efforts" shall mean efforts beyond reasonable business efforts, but
shall not require a Party to lose money on an ongoing basis or enter into a
course of action without a reasonable possibility of financial return within
three (3) years. A Party's opportunity cost shall not be considered a loss.

1.20 "Nellcor Sensor" shall mean a probe apparatus for use with an optical
oximeter as disclosed and claimed in U.S. Patents 4,621,643 and 4,700,708.

                                 2. APPOINTMENT

2.1 Appointment. Masimo hereby appoints Datascope, its Affiliates and
Subsidiaries as a nonexclusive, worldwide licensee, with the personal,
nontransferable right to incorporate MS Boards into Licensed Devices, and to
distribute Licensed Devices to Datascope's Customers. Masimo also grants
Datascope, its Affiliates and Subsidiaries, the nonexclusive, nontransferable,
worldwide right to distribute SpO2 Sensors for use with Licensed Devices and
Datascope's installed base of

                                       5
<PAGE>   7

products which provide SpO2 Measurement.

2.2 Acceptance. Datascope hereby accepts, on its own behalf and on behalf of its
Affiliates and Subsidiaries, the appointment given in section 2.1 above.

2.3 Nature of Relationship. The relationship established between Masimo and
Datascope by this Agreement is that of licensor and licensee and/or vendor and
vendee. Both Masimo and Datascope are independent contractors under this
Agreement and neither has the right to assume or create any obligation of any
kind, either express or implied, on behalf of the other, except as expressly
provided for in this Agreement. Nothing in this Agreement shall be deemed to
establish or otherwise create a relationship of principal and agent, employer
and employee, or otherwise between Masimo and Datascope.

2.4 Limitations of License Grants.

     a. Datascope will sell the Licensed Devices but will sublicense the
Software. Except for such sublicense to Customers under the End-User License
Agreement (Exhibit I), Datascope has no right to grant sublicenses under this
Agreement.

     b. Nothing in this Agreement shall be construed to grant any right to
Datascope in fetal oximetry uses, venous oxygen uses, or any other application
of Masimo SET or Masimo Technology other than SpO2 Measurements in Licensed
Devices. Furthermore, nothing in this Agreement shall be construed to grant
Datascope any right to use Masimo SET to account for anything other than Hb and
HbO2 for SpO2 Measurement and pulse rate.

                                       6
<PAGE>   8

                        3. TRADEMARKS, LEGENDS AND LOGOS

3.1 Grants by Masimo. Datascope shall place, and Masimo grants Datascope the
right to place, the Masimo product designation Licensed Trademark, as shown on
Exhibit B attached hereto, on all Licensed Devices manufactured, distributed or
sold by Datascope and the Licensed Trademarks on advertising featuring SpO2
Measurement in the Licensed Devices.

3.2 Trademark Marking. Datascope shall mark the Licensed Devices with the Masimo
product designation logo standing independently in a plainly visible connector
panel location on each Licensed Device. If such panel location is not on the
front of the device, demonstration units for such Licensed Devices will have a
plainly visible sticker on the front panel with the Masimo product designation
logo.

3.3 Advertising. All advertising for the Licensed Devices featuring SpO2
Measurement must include either or both of the Licensed Trademarks. Prior to any
use or publication, all advertising copy shall be forwarded to Masimo for its
approval which shall not be unreasonably withheld. Unless Masimo objects to
advertising copy within 24 hours of receipt, approval will be deemed to have
been provided by Masimo. Such approval shall continue to apply to all subsequent
printing of the same advertising copy unless Masimo informs Datascope within
(30) days of receipt of the original advertising copy that it will not so apply.

3.4 The Licensed Trademark may not be used on or in reference to

                                       7
<PAGE>   9

any products other than the Licensed Devices, SpO2 Sensors and Accessories.

3.5 The trade names, trademarks, or symbols of either party to this Agreement
shall not be used in any way by the other party which may suggest that one party
is a division, affiliate, or subsidiary of the other party or in any way which
might endanger the other party's rights in and ownership of the trade names,
trademarks or symbols.

3.6 Quality Control. With respect to all Licensed Devices promoted, used or
distributed under or in any way identified with the Licensed Trademarks,
Datascope shall maintain a high standard of quality equivalent to Datascope's
handling of its other trademarks. In the event of failure by Datascope to comply
with this quality standard in connection with any specific Licensed Device,
Masimo shall give Datascope written notice of that failure, and Datascope shall
have three (3) months from such notice within which either to bring the quality
of such Licensed Device with respect to the Masimo Technology up to standard or
to cease any further use of the Licensed Trademark in connection with the
promotion, use or distribution of such Licensed Device until Masimo has
indicated that it is satisfied that the deficiencies in quality of the specific
Licensed Device have been corrected.

3.7 Patent Marking. Datascope agrees to mark each Licensed Device manufactured
or sold by it in accordance with the Statutes of the United States relating to
marking of patented articles.

                                       8
<PAGE>   10

Masimo will, from time to time, update its patent numbers for Datascope as
patents issue. When Masimo updates its patent numbers, Datascope's obligation to
update its product marking shall occur upon the earlier of the exhaustion of
labels for Licensed Devices bearing the current patent numbers or one year from
the update by Masimo.

3.8 Acknowledged Right. Datascope expressly acknowledges that Datascope does not
have and shall not acquire under this Agreement any rights in or to any of
Masimo's patents, trademarks, trade names or copyrights other than as expressly
stated in this Agreement.

3.9 Trademark Maintenance. Masimo shall bear the expense of obtaining and
maintaining its Licensed Trademarks.

3.10 No Implied Licenses. Datascope shall include the following legend on the
exterior of Licensed Devices and/or in the operator's manual delivered with each
Licensed Device:

     No Implied Licenses.

     Possession or purchase of this Licensed Device does not convey any express
or implied license to use this device with non-authorized SpO2 sensors which
would, alone or in combination with this device, fall within the scope of one or
more of the patents relating to this device.

                               4. RESPONSIBILITIES

4.1 Datascope General Responsibilities. Datascope shall make Masimo SET its
primary pulse oximetry technology/platform in accordance with Article 4.
Datascope will also distribute and

                                       9
<PAGE>   11

promote SpO2 Sensors and FlexiSensors only, except Datascope may [*] to
Customers that (i) [*] or (ii) have a contractual commitment to buy [*];
however, the intent of the Parties is to persuade national buying groups and
those Customers that [*] to convert to SpO2 Sensors. Datascope agrees to give no
less efforts to persuade all Customers (including those [*]) to purchase SpO2
Sensors that it currently expends with respect to its FlexiSensors. In regard to
[*], Datascope shall grant to Masimo the right of first refusal to provide to
Datascope, [*] when manufacturers of sensors become free to make, use and sell
[*].

4.2 Integration Commitments. Datascope agrees to integrate MS Boards into all
Integration Commitment Products and to configure such MS Boards to function only
with SpO2 Sensors if the following conditions are met:

     a. Masimo submits an FDA 510K that demonstrates superior pulse oximetry
performance on patients subject to motion artifact, by October 10, 1997
(hereinafter, "Motion 510K"), and the performance claims are timely reviewed by
Datascope Regulatory Affairs. The Parties agree that the submission has been
made as indicated by Datascope's Letter of October 9, 1997 to James Cronin of
Masimo, and by the receipt of the FDA's assignment of number K973887 to the
Motion 510K submission; and

     b. The XG Penetration is twenty percent (20%) or more in

* Confidential material redacted and filed separately with the Commission.

                                       10
<PAGE>   12

the first twelve months of commercial sales of Passport XGs with MS Boards
(hereinafter "20% XG Penetration"). Such sales are anticipated to begin on or
before March, 1998. If these conditions are not met, MS Boards will be
configured to function both with Datascope FlexiSensors using Masimo's
conventional pulse oximetry algorithm designated "CAWF," and with SpO2 Sensors
using Masimo SET. Masimo will complete necessary modifications to the MS Boards,
at no charge to Datascope, within six (6) months of the above conditions not
being met. Masimo guarantees that CAWF driving FlexiSensors will not adversely
affect Datascope's current pulse oximetry accuracy and precision claims (as
approved in Datascope's present 510K).

4.3 Specific Commitments For All Passport Product. Subject to its receipt of the
nonrecurring engineering support of Section 4.9, Datascope agrees to use best
efforts to integrate MS Boards into all Passport products with SpO2 in
accordance with Exhibit F (except that this obligation does not apply (i) to the
Passport 5L, so long as the unit volume of Passport 5Ls is less than twenty
percent (20%) of Datascope's total Passport shipments or five hundred (500)
units per year, whichever is smaller, or (ii) to Passport products sold to
customers that demand [*].) Datascope also agrees to the following:

     a. to demonstrate the Passport XG with Masimo SET under a meaningful
marketing campaign, as described in Schedule J, beginning at the October 1997
ASA meeting if Masimo submits its Motion 510K prior to the ASA meeting;

* Confidential material redacted and filed separately with the Commission.

                                       11
<PAGE>   13

     b. to distribute the Masimo/Passport XG products on a worldwide basis
starting in March of 1998.

     c. the Passport XG products with MS Boards will be functional with SpO2
Sensors only, unless the 20% XG penetration is not achieved.

     d. to integrate the MS Boards into all Passport products (except the
Passport 5L, so long as the unit volume is less than twenty percent (20%) of the
total Passport shipments of Datascope or 500 units per year whichever is smaller
or Passport products sold to customers that demand [*]) if 20% XG Penetration is
met. Datascope, however, during a one year evaluation period ending March 1,
1999, may continue to manufacture Passport products that use only Datascope
proprietary pulse oximetry technology.

     e. to provide meaningful sales incentives to its marketing and sales
Personnel and distributors to promote sale of Passport products incorporating MS
Boards over Passport products not incorporating MS Boards.

4.4 Specific Commitment For Datascope Enterprise Products. Datascope agrees to
integrate the MS Boards into all of its Enterprise products (excluding
Enterprise products sold to customers that demand [*]) beginning with
Datascope's first commercial sale of such products, in accordance with the
following terms:

     a. Datascope will utilize reasonable business efforts to launch the
Enterprise product by [*];

* Confidential material redacted and filed separately with the Commission.

                                       12
<PAGE>   14

     b. If 20% XG Penetration is met, the Enterprise products will use, except
as above stated, SpO2 Sensors only;

     c. Enterprise [*], however, will be excluded from the commitment of 4.4b
until a Masimo SET solution is available that provides continuous SpO2
Measurement (based upon Hb and HbO2) while Datascope's ECG is also active [*].
Datascope agrees to assist Masimo with such solution. In addition, upon
Datascope's providing Masimo with its desired specifications for the [*]
product, Masimo shall have a right of first refusal to develop a pulse oximetry
board that will meet such specifications. This right of refusal shall include,
but not be limited to, giving Masimo a reasonable time period, not more than two
years from its receipt of the specification from Datascope, to meet the
specification. Furthermore, if Masimo determines that the specifications cannot
be met with Masimo SET performance (e.g., motion artifact performance), and
existing technology also does not provide such motion resistance that meets
Datascope's specifications, Datascope grants Masimo a right of first refusal to
develop boards that compete with existing performance levels.

4.5 Specific Commitment For Datascope's Accutorr Plus Product. Datascope agrees
to integrate the MS Boards into all of its Accutorr Plus products with SpO2
(excluding Accutorr Plus products sold to customers that [*]), as follows:

* Confidential material redacted and filed separately with the Commission.

                                       13
<PAGE>   15

     a. to use best efforts to begin meaningful marketing and distribution of
Accutorr Plus SpO2 products incorporating MS Boards by June 1, 1999; and

     b. if 20% XG Penetration is met Accutorr Plus SpO2 products will use,
excepted as stated above, SpO2 Sensors only.

4.6 Specific Commitment for Future Datascope Products. Datascope agrees to the
following integration commitments for future products:

     a. to make Masimo SET for SpO2 Measurement its primary pulse oximetry
technology for all future Datascope products that utilize at least SpO2
Measurement as follows: For all future Datascope products which utilize SpO2
Measurement for which Masimo is able to meet Datascope's performance
specifications, Datascope shall use best efforts to integrate Masimo SET into
all such products; for all future Datascope products which utilize SpO2
Measurement for which Masimo is not able to meet the required specifications,
Masimo shall have a right of first refusal to develop a pulse oximetry board
which will meet such specifications. Masimo shall have a reasonable time period,
no more than two years from its receipt of the specification from Datascope, to
meet the specification. If Masimo determines that the specifications cannot be
met with Masimo SET (e.g., motion artifact performance), and existing technology
also does not provide such motion resistance that meets Datascope's
specification, Masimo shall have, a right of first refusal to develop boards
that compete with existing performance levels.

                                       14
<PAGE>   16

     b. if 20% XG Penetration is met, Datascope agrees that all future Datascope
products that utilize MS Boards shall use, except as stated above, SpO2 Sensors
only, and

     c. agrees to use best efforts to assist Masimo with Masimo SET being
integrated into all products which require SpO2 Measurement from Datascope's
other OEM and/or distribution partners (e.g., Fukuda Denshi).

4.7 Manufacturing Rights. In the event Datascope has made Masimo SET its primary
pulse oximetry platform and is ordering the Masimo Products pursuant to this
Agreement, and Masimo fails to provide any particular Masimo Product under this
Agreement for a period of more that ninety (90) days past the date such Masimo
Product should have been delivered to Datascope, Datascope shall have the right
to manufacture those particular Masimo Products that are not being supplied to
Datascope for use in Licensed Devices. Any such manufacturing shall be subject
to a [*] royalty for each MS Board and a [*] for SpO2 Sensors and Accessories as
set forth in Exhibit E. The Parties agree that the right to manufacture will
trigger a right in Datascope to receive from an escrow set up with appropriate
instructions consistent with this provision, sufficient documentation to permit
the manufacture of the Masimo Product in question. Datascope shall pay for the
escrow agent's fee and Masimo shall provide sufficient documentation into the
escrow to permit the manufacture of Masimo Products by the time the first
commercial quantities of Licensed Devices are shipped to customers and shall

* Confidential material redacted and filed separately with the Commission.

                                       15
<PAGE>   17

be responsible for updating the escrow with new released versions.

4.8 Further Responsibilities of Datascope. Datascope further agrees that it
will:

     a. immediately notify Masimo in writing of any claim that the Licensed
Trademark, Masimo Technology, a Licensed Device, an SpO2 Sensor or Accessory
infringes any patent, trademark, copyright, trade secret, or similar
intellectual property rights of a third party;

     b. upon receiving or becoming aware of any complaints concerning the
Licensed Devices and relating to Masimo Products, promptly report them to Masimo
as well as provide all reasonable assistance in connection with Masimo's
investigation of the complaint. Any determination of corrective action as to
Masimo Products shall be made by Masimo in its sole discretion, unless it
significantly affects Datascope's ability to sell the Licensed Devices; any
determination of corrective action as to the Licensed Devices shall be made by
Datascope;

     c. comply with all applicable laws, rules and regulations governing the
manufacture, use, sale, distribution, shipment, import and export of the
Licensed Devices, SpO2 Sensors and Accessories;

     d. prior to the projected launch date of each Licensed Device, provide
Masimo any available description and model number of the product, and provide
Masimo with all available customer product literature and technical
specifications on the Licensed

                                       16
<PAGE>   18

Device; and

     e. at Masimo's option deliver one (1) complete system to Masimo for each
Licensed Device which demonstrates the integration of the MS Board into each
Datascope product line. Title to such demonstration equipment shall be
transferred to Masimo and shall be at Datascope's Standard Cost for the
particular product.

4.9 Masimo Nonrecurring Engineering Services. Masimo will use best efforts to
complete the design, development, and initial validation of the MS Board
integrated into Datascope's current Passport XG products as set forth in Exhibit
F. Datascope will provide, at no charge, all necessary documentation and ongoing
technical consulting reasonably required to assist Masimo. Masimo will deliver a
complete and documented manufacturable solution for the Passport XG
incorporating MS Boards, as well as ten (10) prototype Masimo SET-Passport XG
products demonstrating the appropriate integration of the MS Boards into the
existing Passport XG Products, by December 31, 1997, as long as Datascope timely
meets its commitments under Exhibit F. Masimo's time for nonrecurring
engineering related to this project will accrue at a rate of $75.00 per hour AND
will not exceed $50,000 (excluding EMC testing costs). Masimo will purchase
these ten (10) Passport XGs for $40,000 and bear all material costs necessary to
implement the MS Boards and related components needed to enable the Masimo SET
in the Passport XG prototypes. The accrued nonrecurring engineering and the cost
of the ten prototypes will

                                       17
<PAGE>   19

be accounted for in increased pricing as set forth in Exhibit E. If the total
accrued nonrecurring engineering and the cost of the ten (l0) Passport
prototypes is not fully paid to Masimo as accounted for by the increase in
pricing for SpO2 Sensors during the eighteen (18) months of commercial sales of
Passport XGs, Datascope agrees to pay the balance to Masimo at the conclusion of
the first eighteen (18) months of commercial sales.

4.10 Further Masimo Responsibilities. Masimo shall, during the term of this
Agreement:

     a. provide to Datascope, without charge, sufficient information with
respect to all Masimo SET specification changes to permit Datascope to decide
whether to alter its Licensed Devices to incorporate specification changes
(and/or Improvements) for SpO2 Measurements;

     b. provide Datascope, at its request with samples of available marketing or
promotional literature, without charge;

     c. provide Datascope with normal and customary engineering and integration
support for Licensed Devices other than the Passport XG at no charge; and

     d. comply with all applicable laws, rules and regulations governing the
use, sale, distribution, shipment of MS Boards, Spot Sensors and Accessories.

                                5. COMPATIBILITY

5.1 SpO2 Sensors for Installed Base. If technically feasible, Datascope agrees
to make SpO2 Sensors compatible with Datascope's current installed base of
instruments which provide SpO2

                                       18
<PAGE>   20

Measurement and to make such SpO2 Sensors available to customers in its current
installed base on the following terms:

     a. Masimo will conduct a feasibility analysis to evaluate and make a
recommendation as to a cost effective plan to make Datascope's current installed
base of instruments compatible with SpO2 Sensors. The Parties agree to use best
efforts to formulate and execute a strategy to implement the approach.

     b. If the SpO2 Sensors can be reasonably made compatible with Datascope's
current installed base, Datascope agrees to discontinue the usage of its own
pulse oximetry board, except for service purposes, as soon as all Datascope
products requiring SpO2 Measurements can utilize the MS Boards.

5.2 Masimo and Datascope agree that the SpO2 Sensors supplied by Masimo to
Datascope will include Masimo's generic sensor identifier. Such identifier may
function only with other products which utilize Masimo's generic identifier.

5.3 Datascope agrees that its Licensed Devices will not be configured to operate
with Masimo SET active with oximetry sensors other than SpO2 Sensors supplied by
Masimo to Datascope unless otherwise permitted under this Agreement. Datascope
agrees that it will not market Licensed Devices or any other devices which
operate with any Masimo sensor identifier, except the probe identifier
specifically supplied by Masimo to Datascope.

5.4 Datascope understands that the SpO2 Sensors sold to Datascope by Masimo are
designed to be used with the MS Boards only, and

                                       19
<PAGE>   21

that if Datascope uses sensors by other manufacturers, the MS Boards with Masimo
Technology active may yield different results. Accordingly, Datascope agrees to
use its reasonable efforts to have only SpO2 Sensors used in connection with
Licensed Devices when Masimo SET is active unless otherwise agreed to by Masimo.

                        6. TERMS OF SALE OF PRODUCTS

6.1 Orders. Datascope shall order Masimo Products under the terms of this
Agreement. Once Datascope begins selling Licensed Device, SpO2 Sensors and
Accessories, Datascope shall provide Masimo with six-month forecasts (updated
monthly) on anticipated MS Board, SpO2 Sensors and Accessory needs to assist
Masimo in planning the manufacture of such Masimo Products for shipment to
Datascope. Forecasts for the first three (3) months of a forecast are firm
commitments between Masimo and Datascope, and cannot be altered in a subsequent
forecast without the written acceptance of the parties. The fourth month may
provide no more than a 50% increase from the third month of the forecast. The
forecast for the fifth and sixth months shall be for planning purposes only, and
shall not be a firm commitment. Masimo agrees to cover emergency orders up to
twenty-five percent (25%) of the next monthly order.

6.2 Price. The transfer price of Masimo Products is stated on Exhibit E attached
hereto. The transfer price for SpO2 Sensors and Accessories includes packaging
and labeling with Datascope-supplied artwork and logos complying with Masimo's
Standard Packaging Guidelines. The transfer price does not include custom
packaging or labeling for SpO2 Sensors, Accessories or MS Boards. If custom

                                       20
<PAGE>   22
labeling for SpO2 Sensors or Accessories is desired and feasible as determined
by Masimo, all packaging costs including, but not limited to, nonrecurring
engineering costs and packaging materials will be paid in advance by Datascope.

6.3 Sales. All sales shall be F.O.B. Masimo's United States shipping facility.
Datascope shall select a carrier of its own choice. All risk of loss or damage
to the Masimo Products pass to Datascope upon Masimo's delivery of such sensors
to such carrier at Masimo's facility.

6.4 Purchase Orders. During the term of this Agreement and in accordance with
its provisions, the purchase and sale of Masimo Products between Masimo and
Datascope shall be made by means of purchase orders placed by Datascope to
Masimo. The terms and conditions on the back of any Datascope purchase order
shall have no effect for orders placed if in conflict with this Agreement.
Unless otherwise agreed to by the parties in writing, the minimum quantity of
Products that may be purchased per order is fifty (50) MS Boards, fifty (50)
units of any Accessory, or reusable sensor, or five hundred (500) units of a
disposable sensor. Purchase orders and change orders may be placed by facsimile.
Any purchase order issued or to be issued, for any firm commitment (with the
guidelines of Section 6.1), shall be noncancellable by Datascope and accepted by
Masimo, and Datascope shall be responsible for taking delivery of and paying for
all Masimo Products set forth in such purchase order. Datascope shall indicate
on each purchase order the price of

                                       21

<PAGE>   23

the items ordered, the quantities ordered, the required delivery date, the
destination, requested method of shipment and the model or identification number
for the item. Masimo, should it decide to decline to fill a purchase order
outside the firm commitments of Section 6.1, must do so within ten (10) days of
receipt or the purchase order shall be deemed accepted by Masimo; however,
Datascope may accept manufacturing rights under the conditions (including
timing) specified in Section 4.7.

6.5 Payment Terms. Datascope shall pay all Masimo invoices for delivered Masimo
Products no later than forty-five (45) days from the date of Masimo's invoice.
Any requests for credit or deduction by Datascope (e.g., due to shortage in
shipment quantity, quality defects, damaged in transit, or related matters)
shall be processed in the form of a separate invoice to Masimo. Payments of any
royalties due shall be made within sixty (60) days following the end of each
quarter and shall be accompanied by a report detailing the basis for such
royalty Payment.

6.6 Currency. All transactions between Masimo and Datascope shall be
denominated in U.S. dollars.

6.7 Sales Data. Datascope shall maintain complete and accurate records of its
sales of Licensed Devices. Masimo shall have the right to verify, at its expense
and not more frequently than once per year and upon not less than ten (10)
business days' prior written notice to Datascope, the accuracy of the accounting
reports provided by Datascope hereunder, through inspection of

                                       22
<PAGE>   24

Datascope's pertinent records and books of account maintained in the ordinary
course of business. Such audits shall be conducted by a certified public
accountant (the "CPA") chosen by Masimo in its reasonable discretion and which
CPA is reasonably acceptable to Datascope. If the CPA determines that Datascope
has underpaid Masimo, Datascope shall promptly pay Masimo the amount of any such
underpayment or explain to Masimo the reasons for not accepting the amount of
the underpayment propounded by the auditor.

6.8 Returns. Datascope may return Masimo Products to Masimo only with Masimo's
prior written consent and only on such terms as Datascope and Masimo agree in
writing. Consent of Masimo will not be withheld if the reason for the return
falls within the terms of Section 6.10 of this Agreement. Datascope shall
promptly notify Masimo of any incoming lot failure. SpO2 Sensors which do not
conform to Masimo's specifications shall be returned by Datascope to Masimo
freight collect and insured for full replacement value.

6.9 Inspections. Masimo shall be responsible for inspecting Product to be
shipped to Datascope to determine that it meets the agreed specification.
Anything less than a recurring (after notice by Datascope) [*] failure rate (to
meet functional specifications) shall not be considered a breach of this
Agreement. Masimo will include in the shipping documents (i) the purchase order
number, (ii) model or identification number of the items being shipped, (iii)
quantity shipped, (iv) date code, and

* Confidential material redacted and filed separately with the Commission.

                                       23
<PAGE>   25

(v) a certificate of compliance for the shipped Products.

6.10 Compliance with Specifications. In the event that items shipped from Masimo
to Datascope do not materially meet the specifications contained in Exhibit H,
or arrive damaged due to the fault of Masimo, Masimo shall, upon notice and
return of the item, repair or replace such returned item and pay all cost
involved in the return and reshipping of the item.

                        7. WARRANTIES AND REPRESENTATIONS

7.1 Of Masimo. Masimo represents and warrants that:

      a. it has the right to transfer full title to all Masimo Products to be
sold to Datascope and to license Datascope under the terms of this Agreement;

      b. it will extend to Datascope and its Customers the Masimo warranties set
forth in Exhibit G for the Masimo Products sold to Datascope under the terms of
this Agreement, and these warranties in Exhibit G are all the warranties
provided to Masimo's licensees for the products involved, and

      c. it has the right and authority to enter into this Agreement.

7.2 Limitation of Liability. EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN
EXHIBIT G, MASIMO GRANTS NO WARRANTIES, EITHER EXPRESS OR IMPLIED, ON THE MASIMO
PRODUCTS, INCLUDING ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, AND THE STATED EXPRESS WARRANTY OF EXHIBIT G IS IN LIEU OF
ALL LIABILITIES OR OBLIGATIONS OF MASIMO FOR DAMAGES, INCLUDING, BUT NOT LIMITED
TO, CONSEQUENTIAL DAMAGES OCCURRING

                                       24

<PAGE>   26

OUT OF OR IN CONNECTION WITH THE USE OR PERFORMANCE OF THE MASIMO PRODUCTS. IN
NO EVENT SHALL MASIMO BE RESPONSIBLE FOR CONSEQUENTIAL INCIDENTAL, SPECIAL
DAMAGES, LOSS OF PROFIT, OR EXPENSE SUFFERED BY THE OTHER PARTY IN CONNECTION
WITH THIS AGREEMENT.

7.3   Of Datascope. Datascope represents and warrants that:

      a. it has the right and authority to enter into Agreement;

      b. it will advise Masimo of any claim, against Masimo, for damages or
breach of warranty in respect to the Masimo Products or Licensed Devices
asserted by a Customer and will cooperate with Masimo in the defense or handling
of such claims;

      c. it will promptly furnish Masimo with samples of any Masimo Product or
Licensed Devices and any related information that are specific to any warranty
claims made by a Customer;

      d. it shall not at any time do or cause to be done, or fail to do, any act
or thing, directly or indirectly, contesting or in any way impairing Masimo's
right, title, or interest in the Licensed Trademark; and

      e. during the term of this Agreement, it shall not challenge the validity
of any of the Patent Rights. During the term of this Agreement, Datascope will
make reasonable efforts to disclose to Masimo any prior art or any other
information of which Datascope is aware that is material to the validity or
patentability of any of the Masimo Patent Rights. This section shall not place
upon Datascope or its personnel any obligation to seek out such information.

                                       25

<PAGE>   27

                               8. INDEMNIFICATION

8.1 Indemnification by Masimo. Masimo shall settle or defend, at its own
expense, any action against Datascope and pay any damages, costs, or expense
including reasonable attorneys' fees, resulting from either a claim or action
for infringement of any existing or future patent, copyright, or trademark, or
misappropriation of any trade secret or other intellectual property right or any
general claim for damages with respect to unmodified Masimo Products. Masimo
shall settle or defend any such claim or action at its own cost provided that
Datascope promptly notifies Masimo on learning of any such claim or action,
allows Masimo complete control over any such proceeding or claim, and provides
reasonable assistance to Masimo in any such claim or action. Datascope shall
have the right to consult with Masimo on the choice of counsel for the defense
of any such claims and consent by Datascope to Masimo's choice of counsel shall
not be unreasonably withheld.

8.2 Maximum Indemnity. Masimo's obligation for damages under Section 8.1 shall
not exceed the sum of (i) the total of all amounts paid under this Agreement by
Datascope to Masimo. Notwithstanding Section 8.1, Masimo shall not have the
right to settle claims in a way that would obligate Datascope to pay damages,
unless consented to by Datascope. At any point during the defense of any claim
against Datascope, Masimo shall have the option of paying to Datascope its
maximum indemnity obligation under the first sentence of this Section and will
then have no

                                       26

<PAGE>   28

further obligation to defend the claim.

8.3 Infringement. If it is determined that there is an infringement to which the
indemnification of Section 8.1 applies or it is determined by Masimo that there
may be an infringement to which the indemnification of Section 8.1 may apply,
then Masimo will use reasonable business effort to (i) modify the infringing or
potential infringing item to make it noninfringing, or (ii) obtain a license,
free of charge to Datascope, to continue to use the infringing or potentially
infringing item. In the event neither option (i) nor (ii) are reasonably
feasible, Masimo shall have the option to discontinue shipment of the Masimo
Products to Datascope and Datascope shall have the option to terminate or accept
manufacturing rights at Datascope's own risk. Should Datascope continue
manufacturing, no further indemnity or liability obligations of Masimo shall
apply. Damages for breach of Section 8 shall in no event exceed the total of all
amounts paid under this Agreement by Datascope to Masimo.

8.4 Indemnification. Notwithstanding the above, Masimo shall not be liable for
any claims resulting from modifications by Datascope or any others to any Masimo
Technology or Masimo Products or claims or actions resulting from
electrical/electronics, software/firmware, or product interface developed and
supplied by Datascope, or the combination of the Products with apparatus not
furnished by Masimo, or use in the Licensed Devices of components not supplied
by Masimo, or the

                                       27

<PAGE>   29

combination of Products with other technology not furnished by Masimo, or use of
Masimo Products in products not permitted by the license granted herein or for
any claims not directed to Masimo Technology or the Masimo Products. In such
case, Datascope shall settle or defend, at its own expense, and pay any damages,
costs, or fines resulting from such proceedings, threat of proceedings, or claim
against Masimo for infringement of any intellectual property rights or any
general claim for damages. Masimo agrees to notify Datascope promptly in writing
of such proceedings or claim and to give, at Datascope's expense, reasonable
assistance to Datascope.

                               9. CONFIDENTIALITY

9.1 Confidential Information. Datascope and Masimo shall treat all confidential
information, which includes, but is not limited to ideas, concepts, materials
techniques, models, data, designs, documentation, flow charts, budgets,
projections, forecasts, marketing and development plans, technology and know-how
(Confidential Information) it receives from the other as secret and proprietary
and shall not disclose or use such information except as provided in this
Agreement.

9.2 Handling Procedures. Datascope and Masimo shall develop and implement such
procedures as may be required to prevent the intentional or negligent disclosure
to third parties of Confidential Information communicated to either party and
its employees by the other party, including, but not limited to, advising each
of its employees having access to such information

                                       28

<PAGE>   30

under this Agreement as to their obligations of confidentiality.

9.3 Disclosure. Nothing in this Agreement shall prevent the disclosure by
Datascope or Masimo or their employees of the other's information or
Confidential Information that:

      a. prior to the transmittal thereof was of general public knowledge;

      b. becomes, subsequent to the time of transmittal, a matter of general
public knowledge, otherwise than as a consequence of a breach of any obligation
under this Agreement;

      c. is made public by the disclosing party;

      d. was in the possession of the recipient of the Confidential Information
in documentary form prior to the time of disclosure thereof, and is held by
recipient free of any obligation of confidence to any third party;

      e. is received in good faith from a third party having the right to
disclose it, who, to the best of the recipient's knowledge, did not obtain such
information from discloser and who imposes no obligation of secrecy on the
recipient with respect to such information; or

      f. is required to be disclosed by applicable law; provided, however, that
the party who may be required to Disclose such information shall notify the
other party in sufficient time for the owner of such Confidential Information to
take steps necessary to enforce the confidentiality requirements of this
Agreement.

9.4 Essential Elements. Both Datascope and Masimo acknowledge

                                       29

<PAGE>   31

that the covenants set forth in this Section are essential elements of this
Agreement and that, but for the agreement of both to comply with such covenants,
this Agreement would not have been entered into and that neither will have an
adequate remedy at law if the other breaches the term of the covenants.
Therefore, in the event of any breach or threatened right, in addition to any
other rights it may have, it shall have the right to obtain in any court of
competent jurisdiction injunctive relief to restrain any breach or threatened
breach.

                            10. TERM AND TERMINATION

10.1 Term. This Agreement shall remain in effect until terminated.

10.2 Termination. Either party shall have the right to terminate this Agreement
on ninety (90) days' notice, by giving written notice to the other party of the
occurrence of any of the following events:

     a. [*] and the SpO2 Sensors, because of their product characteristics, such
as the combination of performance and price, [*]; however, before any such
termination, the parties agree to meet to reasonably discuss alternatives to
termination. This provision is also subject to Section 15.2.

     b. any determination, filing, judgment, declaration, notice, appointment of
receiver or trustee, failure to pay debts, or other events under any law
applicable to a party that establishes the insolvency or bankruptcy of such
party. This right of

* Confidential material redacted and filed separately with the Commission.

                                       30

<PAGE>   32

termination, however, shall not be exercised by the party in such a financial
situation; or

      c. a material breach of this Agreement that is not cured with ninety (90)
days of written notice of such a breach detailing specifically the alleged
breach; this right of termination, however, shall not be exercised by the
breaching Party.

10.3 Rights and Duties on Termination. On termination of this Agreement.

      a. if the termination is based on other than a material breach by
Datascope, Datascope shall have the right to continue to purchase SpO(sub 2)
Sensors and Accessories for a period not to exceed five (5) years after
termination, and distribute Licensed Devices for a period not to exceed one (1)
year from termination;

      b. Datascope shall pay all sums to Masimo that are then due under this
Agreement and continue to pay any sums (e.g., all royalties and transfer
pricing) due as a result of continued sales under subparagraph a. above;

      c. Datascope shall, subject to the terms of subparagraph a above,
discontinue all use of the Licensed Trademark and shall have no further right to
use any Licensed Trademark;

      d. Datascope and Masimo shall both fulfill all of their outstanding
obligations with regard to confirmed purchase orders;

      e. Datascope shall retain sufficient information about the Masimo
Technology and its Customers' purchases of SpO(sub 2) Sensors and Accessories
and Licensed Devices to ensure that Datascope or

                                       31

<PAGE>   33

Masimo is able to provide said Customers with continuous service;

      f. All rights and duties on termination are in addition to all other
remedies available to the Parties; and

      g. the provisions of Sections 4.7, 6, 7, 8, 9, 11 and 12 shall survive
termination of this Agreement, for acts arising prior to the termination.

                                  11. SOFTWARE

11.1 Software. Datascope agrees to maintain the confidential nature of the
Software and agrees not to make available, in whole or in part, any portion of
the Software or related materials except in accordance with this Agreement.
Datascope agrees that it will not reproduce, decipher, decompile or modify the
Software, and only transfer the Software in conjunction with the distribution of
a Licensed Device to its Customers. As part of the distribution, Datascope will
provide the Customer with a copy of the License Agreement attached hereto as
Exhibit I.

11.2 Export of Software. Regardless of any disclosure, to Masimo by Datascope of
an ultimate destination of a Licensed Device or the Software, Datascope shall
not transfer or reexport, whether directly or indirectly, the Software or
Licensed Devices containing the Software, the related documentation, or other
related proprietary information to anyone outside the United States as to which
export may be in violation of the United States export laws or regulations
without first obtaining the appropriate license from the United States
Department of Commerce and/or any agent or department of the U.S. government, as

                                       32

<PAGE>   34

required. Masimo will provide a listing of the country categories for which
export of the Software may be restricted.

11.3 Escrow. Datascope will not be provided the Software apart from MS Boards.
An escrow will be set up for the Software, at Datascope's cost, with Masimo
having the responsibility to update the Software code with new Masimo released
versions. The source code shall be released to Datascope only upon the execution
of a manufacturing license of Section 4.7. However, as to the contracted
development described in Exhibit P, Masimo will release all documentation to
Datascope immediately after completion

11.4 New Software Releases: Datascope shall have the option of accepting each
new Software release in its entirety or continuing with the previous released
version. Datascope shall not have the option of choosing portions of new
releases of Software.

                        12. INTELLECTUAL PROPERTY RIGHTS

12.1 Improvements. Masimo shall retain all right, title, and interest in and to
the, Masimo Technology and all Improvements. Any Improvement made solely by
Datascope that is (i) based upon Confidential Information of Masimo or
information of Masimo that was once Confidential Information but has become
published in a Masimo patent, or (ii) that relates to SpO(sub 2) Measurement,
blood glucose monitoring or fetal oximetry, and any Improvement made jointly by
Datascope and Masimo, or solely by Masimo shall be the sole property of Masimo.
Other Improvements made by Datascope

                                       33

<PAGE>   35

shall be owned by Datascope. Should any such other Improvement have application
or utility to measurement other than NIBP, ECG or respiration monitoring, Masimo
will receive a non-exclusive, transferable, royalty free license to such
Improvement for those other applications only. Provided that Datascope is
meeting its integration commitments, Masimo will, if such Improvement is own by
Masimo and is applicable to the Licensed Devices, grant Datascope, without
additional compensation, a nonexclusive, nontransferable license to use any such
Improvement for the purpose of making, using, and distributing Licensed Devices
to customers. Datascope agrees to and hereby does transfer all right, title, and
interest in and to all Improvements made by Datascope, which pursuant to this
Section 12.1 are to be the solo property of Masimo, to Masimo.

12.2 Further Action. Datascope agrees that it shall promptly notify Masimo of
any Improvement which it must transfer to Masimo. Datascope agrees that it shall
take all actions and execute all documents, at Masimo's expense and as Masimo
may reasonably request, to effectuate the acknowledgment of Masimo's ownership
contained herein and vesting in Masimo complete and exclusive ownership of any
Improvement.

                               13. PRESS RELEASE

13.1 Voluntary Releases. Masimo and Datascope shall each have the right to
issue releases to the public concerning the existence of this Agreement however,
neither party without the other party's prior written approval may disclose the
terms of this Agreement.

                                       34

<PAGE>   36

13.2 Required Releases. The provisions of Section 13.1 shall not be interpreted
to bar either party from making any disclosure required of it by law, but if
such disclosure includes the terms or provisions of this Agreement, then the
other party shall be given the opportunity to review the disclosure prior to its
release.

                            14. REGULATORY COMPLIANCE

14.1 FDA Approvals. Datascope shall be solely responsible for identifying and
obtaining, at its sole cost and expense, all FDA approvals in the United States
as well as all other governmental approvals or certifications for the
manufacture or distribution of the Licensed Devices in those countries
throughout the world where the Licensed Devices are to be manufactured,
distributed or sold. Masimo has received 510k clearance on its pulse oximetry
system and Accessories, access and reference to which will be made available to
Datascope.

14.2 Approval Assistance, Masimo will assist Datascope in obtaining the
approvals or certifications contemplated in Section 14.1 by providing to
Datascope whatever data is in Masimo's possession or control that may be
required to obtain said approval or certifications.

                                15 MISCELLANEOUS

15.1 Notices, Any and all notices, elections, offers, acceptances, and demands
permitted or required to be made under this Agreement shall be in writing,
signed by the Person giving such notice, election, offer, acceptance, or demand
and shall be

                                       35

<PAGE>   37

delivered personally, or sent by registered or certified mail, to the following
address:

           if to Masimo:
                               MASIMO CORPORATION
                               2852 Kelvin
                               Irvine, CA 92614
                               Attn:     President and CEO

           if to Datascope:
                               DATASCOPE CORP,
                               14 Philips Parkway
                               Montvale, New Jersey 07645
                               Attn: President

Any notice given by certified mail or by any other form of guaranteed delivery
mail will be deemed given on the third day subsequent to the day sent. All other
notices shall be deemed to have been given as of the date of their receipt by
the person to whom they are sent.

15.2     Resolution of Certain Disputes.  If the parties cannot agree
whether one or more of the conditions or obligations of Section 4.2 has been met
or whether a termination under Section 10.2(a) is proper, the parties shall
submit the disagreement to an independent three (3) member clinical evaluation
panel (the "Panel") for its determination. Each party shall select one member of
the Panel, and the two members shall select a third member. No Panel member may
be an employee, officer, director, or owner of any shares of either party, or
related to any employee, officer, director, or owner of any shares of either
party, or otherwise affiliated with

                                       36

<PAGE>   38

either Party in a way that might tend to jeopardize such persons' independence.

15.3 Force Majeure. If the performance of any part of this Agreement by either
party, or of any obligation under this Agreement is prevented, restricted,
interfered with or delayed by reason of any cause beyond the reasonable control
of the party liable to perform, unless conclusive evidence to the contrary is
provided, the party so affected shall, on giving written notice to the other
party, be excused from such performance to the extent of such prevention,
restriction, interference or delay, provided that the affected party shall use
its reasonable business efforts to avoid or remove such causes of nonperformance
and shall continue performance with the utmost dispatch whenever such causes are
removed. When such circumstances arise, the parties shall discuss what if any,
modification of the terms of this Agreement may be required in order to arrive
at an equitable solution.

15.4 Successors and Assigns. Neither party shall assign this Agreement or any
interest in it or otherwise delegate any of its duties or obligations under this
Agreement without prior written consent of the other party, unless said
assignment is related to merger or a sale of substantially all the assets of a
party related to this Agreement. Notwithstanding the foregoing, for any
successor or assign of Datascope that is in the pulse oximetry business and has
a significant disposable sensor business, even in connection with the sale of
substantially all of the assets or business of Datascope to which this Agreement
relates, Datascope

                                       37

<PAGE>   39
shall promptly notify Masimo of such successor and such successor shall acquire
Datascope's interest in this Agreement unless Masimo objects to such successor
within 30 days of notice. If Masimo has an agreement with a successor of
Datascope, Masimo shall, at its sole discretion, have the option of selecting
whether the acquiring entity shall have the benefit of the terms of this
Agreement (except to the extent the Datascope product lines continue, in which
event this Agreement shall continue to apply to those product lines). This
Agreement will inure to the benefit of and bind each party's proper successors
and assigns.

15.5 Amendment. No change, modification, or amendment of this Agreement shall be
valid or binding on the parties unless such modification shall be in writing
signed by the party or parties against whom the same is sought to be enforced.

15.6 Remedies Cumulative. The remedies of the parties under this Agreement are
cumulative and shall not exclude any other remedies to which the party may be
lawfully entitled.

15.7 Further Assurances. Each party hereby covenants and agrees that it shall
execute and deliver any documents as may be required to implement any of the
provisions of this Agreement.

15.8 No Waiver. The failure of any party to insist or restrict performance of a
covenant hereunder or of any obligation hereunder shall not be a waiver of such
party's right to demand strict compliance therewith in the future, nor shall the
same be construed as a novation of this Agreement.

15.9 Integration. This Agreement, including the exhibits

                                       38

<PAGE>   40

constitutes the full and complete agreement of the parties. This Agreement may
only be amended by express written agreement, signed by authorized
representatives of both parties. Execution of this Agreement terminates the June
18, 1996 Agreement between the Parties.

15.10 Captions. Titles or captions of section and paragraphs contained in this
Agreement are inserted only as a matter of convenience and for reference, and in
no way define, limit, extend, or describe the scope of this Agreement or the
intent of any provision hereof.

15.11 Number and Gender, Whenever required by the context, the singular number
shall include the plural, the plural number shall include the singular, and the
gender of any pronoun shall include all genders.

15.12 Counterparts. This Agreement may be executed in multiple copies, each of
which shall for all purposes constitute an Agreement, binding on the parties,
and each party hereby covenants and agrees to execute all duplicates or
replacement counterparts of this Agreement as may be required.

15.13 Applicable Law. If an action is brought by Datascope against Masimo under
this Agreement, it shall be brought in orange County, California and, if an
action is brought by Masimo against Datascope under this Agreement it shall be
brought in New Jersey. In accordance, this Agreement shall be deemed to have
been made in the state in which the action is brought and shall be governed by
the laws of the respective state.

                                       39

<PAGE>   41
 15.14 Computation of Time. Whenever the day for the exercise of any privilege
or the discharge of any duty hereunder shall fall on a Saturday, Sunday, or any
public or legal holiday, whether local or national, the person having such
privilege or duty shall have until 5:00 p.m. on the next succeeding business day
to exercise such privilege or to discharge such duty.

15.15 Severability. In the event any provision, clause, sentence, phrase, or
word hereof, or the application thereof in any circumstances, is held to be
invalid or unenforceable, such invalidity or enforceability shall not affect the
validity or enforceability of the remainder hereof, or of the application of any
such provision, sentence, clause, phrase, or word in any other circumstances.

15.16 Costs and Expenses. Unless otherwise provided in this Agreement, each
party shall bear all fees and expenses incurred by it in performing its
obligations under this Agreement.

15.17 Compliance. Both Datascope and Masimo shall be responsible for compliance
with all applicable United States laws and regulations governing the
manufacture, distribution and sale of sensor, Accessories and Licensed Devices
which are the subject matter of this Agreement. As part of this responsibility
both Datascope and Masimo understand and agree that either may need to audit the
manufacturing facilities of the other in order to comply with its regulatory
obligations.

15.18 Cooperation. Datascope and Masimo shall cooperate in effecting any recall
of any Licensed Products, SpO(sub 2) Sensors or

                                       40

<PAGE>   42

Accessories that both agree is required. If a recall of the Products is based
upon the Software in the Licensed Device and such Product or Software fails to
meet the specifications as set forth in Exhibit H, then Masimo shall be
responsible for the cost which it incurs for repairing and/or replacing the
Product or Software in question and for the payment of all freight or shipping
charges involved with such recall. In addition, where the Product in question
fails to meet the specification, Masimo and Datascope shall in good faith confer
and agree upon an appropriate method of replacement or repair of the Product or
Software in question, and Masimo will pay reasonable replacement costs or repair
in accordance with the agreed-upon method.

15.19 The Parties agree to meet annually to review product development status,
pricing, and marketing plans. Such meetings will alternate between Masimo's and
Datascope's, facilities.

IN WITNESS WHEREOF, the patties have caused this Agreement to be executed on the
day first written above their authorized officers.

 Dated: 2-10-98                     Datascope Corp.

                                    /s/  DONALD SOUTHARD
                                    -------------------------
                                    Donald Southard,
                                    President
                                    Patient Monitoring Division

 Dated: 2-10-98                     Masimo

                                    /s/  JOE E. KIANI
                                    -------------------------
                                    Joe E. Kiani
                                    President and CEO

                                         41

<PAGE>   43

                                   EXHIBIT A

                            MASIMO SET(R) DEFINITION

For the purpose of this agreement, MASIMO SET(R) is defined to include all
MASIMO technology including LNOP(TM), AutoProCal(TM), ProCal(TM), DST(TM), and
FST(TM) Technology. MASIMO SET is further described as follows:

Transducers (sensor/probe) designed to reduce cost, reduce noise and improve
accuracy:

The technique of building a reference generator for calculating substantially a
noise or signal reference;

Use of noise reference or signal reference to minimize the effect of unwanted
noise components (e.g., motion artifacts) from the physiological waveforms
(e.g., photo-plethysmographic waveforms);

Use of reference generator along with a correlation canceler (e.g., Joint
Process Estimator) to map natural photo-plethysmographic waveforms into oxygen
saturation space;

Use of Saturation Transform; which is the technique of mapping plethysmographic
wave forms into saturation space (e.g., saturation vs. power or probability and
saturation vs. pulse rate); and/or

Use of transducers, circuitry, general digital signal processing techniques,
mathematical algorithms for processing physiological signals and providing one
or more final results (e.g., arterial blood oxygen saturation, pulse rate
and/or photo-plethysmographic wave forms).

Technology not included in the above definition shall not be considered MASIMO
SET.

                                       i
<PAGE>   44

                                   EXHIBIT B

                              LICENSED TRADEMARKS

MASIMO SET(R) PRODUCT DESIGNATION:

                                [MASIMO SET(R) LOGO]
                                Panatone Red / PMS Black
                                1850 MAT

MASIMO SET(R) WORDMARK:

                                [MASIMO SET(R) LOGO]
                                PMS Black

            (MASIMO WILL PROVIDE CAMERA READY ARTWORK UPON REQUEST)

                                       i

<PAGE>   45

                                   EXHIBIT D

  SCHEDULE OF MEDICAL EQUIPMENT MANUFACTURER'S CONSIDERED DATASCOPE CUSTOMERS

DANICA - Biomedical A/S

Datascope may amend, with Masimo's consent which shall not be unreasonably
withheld, this Exhibit D from time to time to reflect the addition of other
distributors/manufacturers for whom Datascope manufactures relatively small
quantities of private labeled devices.

                                       i

<PAGE>   46

                                   EXHIBIT E

                               PRICE OF PRODUCTS

Price for MS Boards: MASIMO's transfer prices to Datascope for the MS-1 and
MS-3 Boards are as follows:

     a.   "Passport" Only Reduced Pricing. Until the earlier of January 1, 2000
or the first commercial sale of Enterprise products in the United States
market, all MS-1 or MS-3 Boards purchased for the Passport products will be [*]
each. Datascope agrees that it will not charge its customers a premium for the
Passport XG products over present pricing for Datascope Passport products.

     b.   Long-Term MS Board Pricing. Except for the reduced pricing set forth
above, all MS-1 and MS-3 Boards will be priced at [*].

Transfer Price for Sensors and Accessories: MASIMO's initial baseline transfer
prices to Datascope for the SpO2 Sensors and Accessories delivered in
accordance with this Agreement are as follows:

Product                                              Part #   Price Each
-------                                              ------   ----------

LNOP(R).Adt (Adult Disposable Probe)                  1001        [*]
LNOP(R).Pdt (Pediatric Disposable Probe)              1025        [*]
LNOP(R).Neo (Neonatal Disposable Probe)               1002        [*]
LNOP(R).NeoPt (Pre-Term Neonatal Disposable Probe)    1003        [*]
PC-08 (8 Ft. Patient Cable)                           1005        [*]
PC-12 (12 Ft. Patient Cable)                          1006        [*]

     The initial baseline pricing for the Masimo LNOP(R)DC1 (Adult Reusable
Probe) will be [*]. On a quarterly basis, Datascope will account for the [*] and
will pay to Masimo the amount of any underpayment or Masimo will pay to
Datascope the amount of any overpayment within thirty (30) days of the end of
the quarter. Prior to March 31, 1999, the transfer price for the LNOP(R).DC1
will, in no event, be below [*] each. [*] is subject to the audit provisions of
Section 6.7.

     After March 31, 1999, Datascope may, at its option, maintain the baseline
pricing or choose an adjusted transfer price for disposable sensors as
exemplified for the LNOP(R)DC1 above. The adjusted transfer price will be [*].
In making this choice, Datascope must choose one method of transfer pricing for
all products. If Datascope chooses a [*], Datascope will use its best efforts to
maximize the [*].

* Confidential material redacted and filed separately with the Commission.

<PAGE>   47

Credit for Nonrecurring Engineering Support by Masimo

     During the first eighteen (18) months following the first launch of the
Passport products with MS Boards, the Parties agree to increase the transfer
pricing set forth in this Exhibit on all SpO2 Sensors and Accessories to
account (through the increase only) for the nonrecurring engineering support
provided by Masimo pursuant to Section 4.9 of the Agreement. During this
period, transfer pricing will be calculated by adding the following amounts to
the baseline transfer price until all nonrecurring engineering expenses of
Masimo have been accounted for or 18 months, whichever is earlier:

                 BASELINE               ADJUSTED
                 TRANSFER   AMORTIZED   TRANSFER
                  PRICE      ADD-ON      PRICE
                 --------   ---------   --------

LNOP(R).Adt         [*]      $  .50       [*]
LNOP(R).Pdt         [*]         .50       [*]
LNOP(R).Neo         [*]        1.00       [*]
LNOP(R).NeoPt       [*]        1.00       [*]
PC08                [*]       25.00       [*]
PC12                [*]       25.00       [*]
LNOP(R).DC-1        [*]       25.00       [*]

Sensor Starter Kit Pricing

     Masimo will provide two (2) disposable sensor starter kits containing the
following products:

     Adult Starter Kit             Neonatal Starter Kit
     -----------------             --------------------

     2    LNOP(R) Adt Sensor       2    LNOP(R) Neo Sensor
     2    LNOP(R) Pdt Sensor       2    LNOP(R) NeoPt Sensor
     1    PC12 Patient Cable       1    PC12 Patient Cable

     The initial baseline transfer price on each sensor starter kit will be [*].
Additionally, Masimo will be paid, on a quarterly basis, [*]. Transfer pricing
for such kits will be adjusted annually.

* Confidential material redacted and filed separately with the Commission.

<PAGE>   48

Installed Base Masimo SpO2 Starter Kits

     If SpO2 Sensors can be made compatible with Datascope's current
installed base, Datascope agrees to provide sensor starter kits to convert the
current installed base of Datascope instruments to SpO2 Sensors and not sell
these sensor starter kits at a price above the transfer price that Masimo
offers for such sensor starter kits (i.e., no margin to Datascope or Masimo).

<PAGE>   49

                                   EXHIBIT G

                                MASIMO WARRANTY

     Masimo warrants that for the earlier of [*] after shipment from Masimo to
Datascope or [*] after shipment to Customer the MS boards, patient cables and
the reusable probes (LNOP DC1) supplied by Masimo to Datascope hereunder will
be, under normal use and care, free from any defect in workmanship or material
and to be in material conformity with Masimo's specifications or thereof. Masimo
bears all replacement costs under this warranty if Masimo reasonably determines
that the unit must be replaced under this Warranty. Units returned to Masimo for
warranty repairs shall be shipped to Masimo freight collect according to
Masimo's instructions. Within thirty (30) days of the receipt of reusable probes
Masimo shall replace or repair such units and shall ship them to Datascope's
designated return destination freight prepaid via two (2) days air. The
foregoing warranties extend to the covered items returned by Datascope's
Customers.

     Masimo warrants that for the earlier of [*] after shipment from Masimo to
Datascope, or [*] after shipment to Customer the disposable probes (e.g., LNOP
Neo, LNOP NeoPt and LNOP Adt) supplied by Masimo to Datascope hereunder will be,
under normal use and care, and only upon first use, free from any defect in
workmanship or material and to be in material conformity with Masimo's
specifications therefor, Masimo shall bear all replacement costs under this
warranty if Masimo reasonably determines that the unit must be replaced under
this Warranty. Units returned to Masimo for warranty repairs shall be shipped to
Masimo freight collect according to Masimo's instruction. With thirty (30) days
of the receipt of disposable probes, Masimo shall replace or repair such units
and shall ship them to Datascope's designated return destination freight prepaid
via two (2) days air. The foregoing warranties extend to the covered items
returned by Datascope's Customers.

     The warranty does not extend to any unit that has been subject to misuse,
neglect, or accident; that has been damaged by causes external to the unit; that
has been used in violation of Masimo's instructions, that has been affixed to
any nonstandard accessory attachment; that has been modified, disassembled, or
reassembled by anyone other than Masimo.

     Masimo Maintenance and Repair. During the term of this Agreement, Masimo
agrees to replace SpO2 Sensors and accessories which are not subject to the
warranty set forth above at the original unit price of the SpO2 Sensors and
accessories. For a period of five (5) years after the expiration or termination
of the warranty set forth above, Masimo agrees to repair or replace SpO2 Sensors
and accessories at a price to be mutually agreed upon by both parties.

* Confidential material redacted and filed separately with the Commission.

<PAGE>   50

                                   EXHIBIT H

                          SPECIFICATIONS FOR PRODUCTS

MS-1 is a complete pulse oximeter, based on Masimo SET, on a circuit board. The
circuit board interfaces directly to LNOP sensors, driving the LEDs in the
sensor to acquire the patient signal, calculates SpO2 and Pulse Rate, and
communicate the information off board.

PERFORMANCE SPECIFICATION:

<TABLE>
<S>             <C>                                             <C>                     <C>
RANGE           Saturation (SpO2):                              1-100%
                Pulse Rate:                                     25-240 BPM (Beats Per Minute)

                Signal Strength (SS):                           Transmission (dB)
                greater than or equal to 0.2%                   greater than or equal to -50 dB
                0.02 - 0.2%                                     greater than or equal to -100.0-SS (%) - 30.0 dB

ACCURACY
                Adults

                SpO2 Range                                      70%-100%                0% to 69%
                Accuracy (plus or minus 1 Std. Dev.)*           plus or minus 2 digits  Unspecified

                Pulse Rate Range                                25-240 BPM
                Accuracy (plus or minus 1 Std. Dev.)*           plus or minus 4 BPM

                Neonates

                SpO2 Range                                      70%-95%                 0% to 69%
                Accuracy (plus or minus 1 Std. Dev.)*           plus or minus 3 digits  Unspecified

                Pulse Rate Range                                25-240 BPM
                Accuracy (plus or minus 1 Std. Dev.)*           plus or minus 4 BPM
</TABLE>

NOTE: The MS-1 pulse oximeter board is calibrated to read oxyhemoglobin
saturation (%SpO2) of functional hemoglobin as compared to a Nellcor N-200
pulse oximeter and/or a CO-Oximeter. Significant levels of dysfunctional
hemoglobin (e.g., methemoglobin, carboxyhemoglobin) may affect the accuracy of
the instrument. Indocyanine green, methylene blue, and other intra-vascular
dyes, depending upon their concentrations, may interfere with the accuracy of
the instrument. MS-1 performance will be compromised if there is no arterial
blood at the test site due to excessive patient motion (e.g., squeezing at a
pressure close to subject's diastolic blood pressure), ultra low perfusion,
excessive electrosurgical interference, or intense environmental illumination.

*   Testing is based on healthy adult volunteers in induced hypoxia studies with
    LNOP(R) Adt sensors; during no motion. Testing to verify saturation
    specification is done against a Nellcor N-200 pulse oximeter and/or a
    CO-Oximeter. Testing to verify pulse rate specification is done against a
    Nellcor N-200 pulse oximeter and/or an ECG.

                                      [**]

** Confidential material redacted and filed separately with the Commission.

                                       1
<PAGE>   51

MS-1 HARDWARE:

      POWER CONSUMPTION                 less than or equal to 2.3 Watts (typ)
                                        = 2.5 Watts (max)
      STORAGE ENVIRONMENT
              Temperature Range         -50 - 100 degrees C
              Relative Humidity           0 - 97% non-condensing
              Atmospheric Pressure       50 - 113 kPa

      OPERATING ENVIRONMENT
              Temperature Range          0 - 70 degrees C
              Relative Humidity          0 - 97% non-condensing
              Atmospheric Pressure      68 - 113 kPa

      MTBF                              150,000 hours minimum
                                        (Ground Benign)
      FAILURE COVERAGE                  Single Fault Coverage

PLETHYSMOGRAPHIC WAVEFORM SPECS

<TABLE>
<CAPTION>

WAVEFORM TYPE            RANGE             RESOLUTION                     DELAY
-------------            -----             ----------                     -----
<S>                     <C>          <C>                        <C>

Raw Signal               0 to 1      2(-7), 2(-15), 2(-31)      less than or equal to 1 sec
Band Pass Signal        -1 to 1      2(-7), 2(-15), 2(-31)      less than or equal to 2.5 sec
Autoscaled Signal       -1 to 1      2(-7), 2(-15), 2(-31)      less than or equal to 3 sec
</TABLE>

LNOP(R) SENSOR SPECIFICATIONS

<TABLE>
<CAPTION>
                                                TYPICAL HEAT
  SENSOR          DESCRIPTION                   DISSIPATION                             MAXIMUM SKIN TEMP AT SITE
  ------          -----------                   ------------                            -------------------------
<S>             <C>                    <C>                              <C>

LNOP(R) DC-1    Adult Reusable         less than or equal to 50 mW   less than or equal to 41 degrees C @ 37 degrees C Ambient
LNOP(R) Adt     Adult Disposable       less than or equal to 50 mW   less than or equal to 41 degrees C @ 37 degrees C Ambient
LNOP(R) Neo     Neonatal Disposable    less than or equal to 50 mW   less than or equal to 39 degrees C @ 37 degrees C Ambient
LNOP(R) NeoPt   Neonatal Disposable
                (Pre-Term)             less than or equal to 50 mW   less than or equal to 39 degrees C @ 37 degrees C Ambient
LNOP(R) Pdt     Pediatric Disposable   less than or equal to 50 mW   less than or equal to 41 degrees C @ 37 degrees C Ambient
</TABLE>

                                      [*]

* Confidential material redacted and filed separately with the Commission.

                                       2
<PAGE>   52

                                   EXHIBIT I

                           END USER LICENSE AGREEMENT

THIS DOCUMENT IS A LEGAL AGREEMENT BETWEEN YOU, THE "PURCHASER", AND DATASCOPE.
IF YOU DO NOT AGREE TO THE TERMS OF THIS AGREEMENT, PROMPTLY RETURN THE ENTIRE
PACKAGE, INCLUDING ALL ACCESSORIES, IN THEIR ORIGINAL PACKAGE, WITH YOUR SALES
RECEIPT TO DATASCOPE FOR A FULL REFUND.

1.      Grant of License. In consideration of payment of the license fee, which
is part of the price paid for this product, Datascope grants to Purchaser a
nonexclusive, nontransferable license, without right to sublicense, to use the
copy of the incorporated software/firmware, and documentation in connection with
Purchaser's use of the Products for their labeled purpose. Datascope reserves
all rights not expressly granted to Purchaser.

2.      Ownership of Software/Firmware. Title to, ownership of, and all rights
and interests in, any MASIMO software and/or firmware and the documentation, and
all copies thereof, remain at all times vested in MASIMO Corporation, licensor
to Datascope, and they do not pass to Purchaser.

3.      Assignment. Purchaser shall not assign or transfer this License, in
whole or in part, by operation of law or otherwise, without Datascope's prior
written consent; any attempt without such consent, to assign any rights, duties
or obligations arising hereunder shall be void.

4.      Copy Restrictions. The software/firmware and the accompanying written
materials are copyrighted. Unauthorized copying of the software, including
software that has been modified, merged, or included with other software, or
other written materials is expressly forbidden. You may be held legally
responsible for any copyright infringement that is cause or incurred by your
failure to abide by the terms of this license. Nothing in this license provides
any rights beyond those provided by 17 U.S.C. Section 117.

5.      Use Restriction. As the Purchaser, you may physically transfer the
products from one location to another provided that the software/firmware is not
copied. You may not electronically transfer the software/firmware from the
products to any other device. You may not disclose, publish, translate, release
or distribute copies of the software/firmware or accompanying written materials
to others. You may not modify, adapt, translate, reverse engineer, decompile,
disassemble, or create derivative works based on the software/firmware. You may
not modify, adapt, translate, or create derivative works based on the written
materials without the prior written consent of Datascope.

6.      Transfer Restrictions. The software/firmware is licensed to the
Purchaser, and may not be transferred to anyone, except other end-users, without
the prior written consent of Datascope. In no event may you transfer, assign,
rent, lease, sell, or otherwise dispose of the software/firmware or the products
on a temporary basis.

7.      Beneficiary. MASIMO Corporation is a Beneficiary of this Agreement and
has the right to enforce its provisions.

8.      U.S. Government Rights. If you are acquiring software (including the
related documentation) on behalf of any part of the United States Government,
the following provisions apply: the software is deemed to be "commercial
software" and "commercial computer software documentation," respectively
pursuant to DFAR Section 227.7202 FAR 12.212, as applicable. Any use,
modification, reproduction, release, performance, display or disclosure of the
software (including the related documentation) by the U.S. Government or any of
its agencies shall be governed solely by the terms of this Agreement and shall
be prohibited except to the extent expressly permitted by the terms of this
agreement.

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