Document:

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                                                                    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.
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                   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.

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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

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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

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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.

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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

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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.

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                        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

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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.

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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

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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.

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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.

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     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.

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     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.

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     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.

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     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.

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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

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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

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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

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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

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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

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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

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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 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>   44

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>   45

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>   46

                                   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>   1

                                                                  EXHIBIT 10.3

PURCHASING AND LICENSING AGREEMENT, DATED APRIL 17, 1997, BETWEEN ZOLL MEDICAL
CORPORATION AND MASIMO CORPORATION.

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

                       PURCHASING AND LICENSING AGREEMENT

                                     BETWEEN

                            ZOLL MEDICAL CORPORATION

                                       AND

                               MASIMO CORPORATION

                              DATED: APRIL 17,1997

<PAGE>   3

                                   EXHIBITS

Exhibit A.   MASIMO SET(R) Definition
Exhibit B.   Licensed Trademark
Exhibit C.   List of Patents and Patent Applications
Exhibit D.   Price of Products
Exhibit E.   ZOLL Product Line
Exhibit F.   Form of Purchase Order
Exhibit G.   Specifications for Products
Exhibit H.   End-User License Agreement
Exhibit I.   Zoll Distributors

                                       i

<PAGE>   4

                       PURCHASING AND LICENSING AGREEMENT

      THIS PURCHASING AND LICENSING AGREEMENT ("Agreement") is made and entered
into as of this 17th day of April, 1997 by and between ZOLL Medical Corporation,
a Massachusetts corporation ("ZOLL"), 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 oxygen
saturation and pulse rate values from such signals.

      B. ZOLL is engaged in the design, development and manufacturing of medical
equipment and desires to incorporate MASIMO SET for SpO2 into its medical
equipment for distribution by ZOLL throughout the world.

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

      D. MASIMO and ZOLL have acquired and expect to continue to acquire a
reputation for excellence, and their trademarks have and will continue to
acquire valuable goodwill.

      NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, ZOLL 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 PC 12 8 ft. and 12 ft. patient cables) or any other accessory
      manufactured by MASIMO and used with any of the SpO, Sensors or Licensed
      Devices.

            1.2 Improvement means any invention, adaptation, modification or
      change made to the MASIMO Technology.

            1.3 Licensed Devices means ZOLL's products incorporating MASIMO SET
      whether made in circuit board, software or integrated circuit form for
      SP02 Measurements. Licensed Devices shall not include ZOLL products which
      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.

             1.4 Licensed Reviver Devices means ZOLL's line of
      pacemaker/defibrillator/patient monitor products designated ZOLL's Reviver
      (and related platform derivatives), incorporating MASIMO SET whether made
      in circuit board, software or integrated circuit form for SpO2,
      Measurements. The Licensed Reviver Device is only one of a series of
      devices within ZOLL's Reviver series. Licensed Reviver Devices shall not
      include ZOLL products which include any methods other than MASIMO SET for
      calculating arterial blood oxygen saturation.

             1.5 Licensed Trademark means the MASIMO SET product designation set
      forth on Exhibit B to this Agreement.

             1.6 MASIMO confidential Information means information and
      proprietary materials designated by MASIMO as Confidential Information and
      which ZOLL may obtain as a result of MASIMO's relationship with ZOLL or
      access to MASIMO's premises. Confidential Information includes, but is not
      limited to, the following types of information and other information of a
      similar nature: ideas, concepts,

                                       1
<PAGE>   5

  materials, techniques, models, data, designs, documentation, flow charts,
  budgets, projections, forecasts, marketing, manufacturing and development
  plans, the Masimo Technology, the Software, MASIMO's communication protocols,
  and MASIMO's testing procedures.

         1.7 MASIMO Products means SpO(sub 2), Sensors, Accessories and MS-1
Boards.

         1.8 MASIMO Technology means technical information, inventions,
  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 owned by MASIMO and relating to
  MASIMO SET alone or incorporated in MS-1 Boards, SpO(sub 2), Sensors,
  Improvements and related documentation generated prior to or pursuant to this
  Agreement.

         1.9 MS-1 Boards means MASIMO's standard circuit board or chip set
  (manufactured now or in the future) 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  Panel has the meaning set forth in Section 3.10 ("Excuses from
  Integration Commitment").

         1.11  Party means ZOLL or MASIMO; Parties means ZOLL and MASIMO.

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

        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 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 adult,
  pediatric or neonatal probes which together with the accessories and when
  affixed to a human subject projects light on one side of the tissue and
  detects the specific emitted light on the opposite side of the tissue
  (transluminance) or on the same side of the tissue (reflectance) and transmits
  this data to the MS-1 Board or any other pulse oximetry board supplied by
  MASIMO for processing and display. SpO(sub 2), Sensors currently manufactured
  by MASIMO have the following model numbers:

           LNOP(R) o Neo-Pt;      Disposable Neonatal Sensor (Pre-Term)
           LNOP(R) o Neo;         Disposable Neonatal Sensor
           LNOP(R) o Adt;         Disposable Adult Sensor
           LNOP(R) o Pdt          Pediatric/Slender Digit Sensor
           LNOP(R) o 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. While this Agreement is in effect,
ZOLL shall have the right to purchase any such additional standard models of
SpO(sub 2), Sensors on the same material terms contained in this Agreement.

         1.17 ZOLL Confidential Information means information and proprietary
  material designated by ZOLL as Confidential Information and which MASIMO may
  obtain as a result of MASIMO's

                                       2
<PAGE>   6

relationship with ZOLL 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, distributors lists and sales reports.

        1.18 ZOLL Subsidiary means any majority owned subsidiary of ZOLL or any
of ZOLL's wholly owned subsidiaries.

2.    LICENSES GRANTED

      2.1   Licenses Granted to Licensee.

            2.1.1 MASIMO grants to ZOLL a personal, non-transferable, and
      non-exclusive worldwide license to incorporate the MS-1 Boards into the
      Licensed Devices, to demonstrate Licensed Devices, and to distribute
      Licensed Devices to (i) end user customers (not to an OEM or other medical
      equipment manufacturer) and (ii) ZOLL distributors and other medical
      equipment manufacturers specifically set forth on Exhibit I. This license
      includes the right of ZOLL to have the Licensed Devices manufactured by a
      third party for ZOLL; however, such Licensed Devices may only be supplied
      to the marketplace with ZOLL's or ZOLL's and ZOLL's distributors' private
      label and logo exclusively and distributed exclusively through ZOLL
      distribution channels. Nothing in this Agreement shall be construed to
      grant any rights to ZOLL in fetal oximetry, venous oximetry or any other
      application of MASIMO SET other than the use of the Licensed Devices to
      make SpO(sub2), Measurements as defined in 1.15, and nothing in this
      Agreement shall be construed to grant any rights to Zoll to distribute or
      otherwise market MS-1 Boards separate from Licensed Devices.

            2.1.2 Zoll may add distributors to Exhibit I, and agrees to promptly
      notify MASIMO of such additions. Notwithstanding the above, ZOLL may not
      distribute or otherwise sell Licensed Devices to [*] or [*] without the
      prior written consent of MASIMO.

            2.1.3 ZOLL agrees that it will not reproduce or disclose to any
      third party any portion of the Software and that it may transfer the
      Software only in conjunction with a transfer of a Licensed Device to end
      users and distributors listed on Exhibit I. ZOLL agrees to include the
      terms of the End-User License Agreement attached as Exhibit H in
      documentation shipped with the Licensed Devices.

            2.1.4 MASIMO retains all rights, title, and interest in the Software
      and in all patents, copyright, trade secret, and any other intellectual
      property and proprietary rights applicable to the Masimo Technology.
      Nothing in this Agreement should be construed as a sale of the Software or
      any copy of the Software.

            2.1.5 ZOLL agrees that the Masimo Technology contains trade secrets
      and proprietary information belonging to MASIMO. ZOLL 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 except in accordance with
      this Agreement. ZOLL will not be provided access to source code for MASIMO
      SET. ZOLL agrees not to attempt to decipher, decompile, or modify the
      Software or develop source code for the Software or allow others to do so.

            2.1.6 No Implied License.  ZOLL agrees to include the following
      legend in the users manual for 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.

* Confidential material redacted and filed separately with the Commission.

                                       3
<PAGE>   7

  2.2   Limitation of Licenses Granted

        2.2.1 No license is granted under this Agreement with respect to the
  MS-1 Boards other than as integrated parts of the Licensed Devices. ZOLL shall
  not have the right to manufacture MS-1 Boards or SpO(sub2), Sensors or any
  circuity or software that performs the functions of the MS-1 Boards for the
  Licensed Devices.

        2.2.2 Except for a license to end users and distributors on Exhibit I,
  no right to grant sublicenses is granted under this Agreement.

  2.3   Use of Licensed Trademark.

        2.3.1 Grant by Masimo. MASIMO hereby grants to ZOLL 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.

        2.3.2 Quality Control. In order for ZOLL to maintain its trademark
  license hereunder, ZOLL agrees that the Licensed Devices bearing the Licensed
  Trademark shall be of a high standard of quality, at least as high as ZOLL's
  historical products, so as to protect and enhance the goodwill pertaining to
  the MS-1 Boards and SpO(sub2) Sensors. MASIMO has the right to inspect, at its
  own expense, the manufacturing points of ZOLL 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 the quality standards set forth in the first section of this Section
  2.3.2. MASIMO will provide written notice to ZOLL. ZOLL 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.

        2.3.3 Trademark Marking. ZOLL agrees that it shall use the MASIMO
  Product Designation as set forth in Exhibit B on all Licensed Devices. This
  obligation shall be excused for any period for which Masimo has indicated to
  ZOLL that ZOLL has failed to comply with the quality standards set forth in
  Section 2.3.2. ZOLL shall place the Product Designation of Exhibit B on or
  near the sensor interface (connector), in a space no smaller than 1/2" x 1/4"
  so long as it is in a plainly visible site.

        2.3.4 Advertising. All advertising for Licensed Devices must include one
  or more of the Licensed Trademarks. ZOLL shall accurately reproduce the
  Licensed Trademark, and shall refrain from inappropriate or inaccurate claims
  about Masimo SET, and improper trademark usage as defined in Sections 2.3.5
  and 2.3.6.

        2.3.5 The Licensed Trademarks may not be used on or in reference to any
  products other than the family of Licensed Devices.

        2.3.6 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 or of a third party.

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

        2.3.8 The expense of obtaining and maintaining Licensed Trademark
  registrations shall be borne by MASIMO.

                                       4
<PAGE>   8

             2.3.9 Patent Marking. ZOLL agrees to mark each Licensed Device
        manufactured or sold by it in accordance with the patent marking shown
        in Exhibit B. MASIMO will, from time to time, update the patent marking
        for ZOLL as patents issue. Provided, however, ZOLL's obligation to
        update its product marking shall not exceed once every two years and
        shall never exceed six MASIMO, patents. Initial Patent marking is shown
        in Exhibit B.

  3.    ZOLL COMMITMENTS/LICENSE FEE

        3.1  ZOLL agrees to purchase all SpO(sub 2) Sensors from MASIMO.

        3.2 Best Efforts. ZOLL agrees to use its best efforts to make MASIMO SET
its primary pulse oximetry technology, including, but not limited to by
integrating SET into its products for SpO(sub 2), Measurement and by promoting
the sale of such Licensed Devices over devices which do not incorporate MASIMO,
SET. MASIMO expressly acknowledges and agrees that ZOLL intends, and shall have
the right, to incorporate products from manufacturers of pulse oximetry products
other than MASIMO.

        3.3 Product Lines. Set forth on Exhibit E hereto are ZOLL's current
product lines (Licensed Devices) into which the MASIMO SET or MS-1 Boards will
be integrated together with the corresponding projected market release dates. In
the event ZOLL elects to integrate the MS-1 Boards into additional Licensed
Devices, at least ninety (90) days prior to the projected launch date of any
such product into which the MS-1 Boards are being integrated, ZOLL agrees to
inform MASIMO of its intent to integrate it into the product together with a
description and model number of the product. ZOLL agrees to provide MASIMO with
all customer product literature and published technical specifications on each
unit into which the MS-1 Boards are integrated.

        3.4 Delivery of ZOLL Systems to MASIMO. ZOLL agrees to deliver free of
charge, one (1) complete prototype system to MASIMO which demonstrates the final
integration of the MS-1 Board into each ZOLL product line. In order to ensure
the quality of the Licensed Devices, MASIMO will have the right to test and make
recommendations for improvements to the Licensed Devices, at its own expense,
for compliance with the specifications of Exhibit G. After such testing, the
Licensed Device shall remain with MASIMO for further technical assistance and as
a demonstration unit. Title to this system shall remain vested in ZOLL.

        3.5 License Fee. As additional consideration for the license granted to
ZOLL hereunder, ZOLL shall pay a license fee to MASIMO in the amount of [*],
payable upon execution of this Agreement.

        3.6 Integration Commitment. ZOLL agrees that throughout the term of this
Agreement, ZOLL will adopt MASIMO SET as the primary pulse oximetry technology
in its Licensed Reviver Devices, and agrees to an integration plan such that, at
a minimum, Licensed Reviver Devices exclusively containing MASIMO SET for blood
oxygen saturation calculation will constitute eighty percent (80%) of ZOLL's
annual shipments of products within ZOLL's entire Reviver series of products
which incorporate SpO(sub 2), Measurement. The foregoing commitment is subject
to the continuing viability of MASIMO SET technology as determined pursuant to
Section 3.10 excuses from ("Integration Commitment") below.

        3.7 Quarterly Accounting. In order to insure compliance with the
integration commitment as specified in Section 3.6 ("Integration Commitment")
above, ZOLL agrees to provide MASIMO with a Quarterly Accounting of total pulse
oximetry product shipments and its shipments containing MASIMO MS-1 Boards.

        3.8    LIQUIDATED DAMAGES.  IF ZOLL SHOULD FAIL TO MEET THE INTEGRATION
CONDITIONS AS SPECIFIED IN 3.6 ABOVE, ZOLL AND MASIMO AGREE THAT THE AMOUNT OF
DAMAGES WHICH MASIMO WILL SUFFER WILL BE EXTREMELY DIFFICULT AND IMPRACTICAL TO
ASCERTAIN, THEREFORE, IF ZOLL SHALL FAIL TO MEET

* Confidential material redacted and filed separately with the Commission.

                                       5
<PAGE>   9

  THE INTEGRATION COMMITMENT AS SPECIFIED IN 3.6 ABOVE, AND SUCH FAILURE IS NOT
  EXCUSED PURSUANT TO THE TERMS OF SECTION 3.10 ("EXCUSES FROM INTEGRATION
  COMMITMENT"). BELOW, MASIMO'S SOLE AND EXCLUSIVE REMEDY FOR SUCH DEFAULT BY
  ZOLL SHALL BE THE PAYMENT BY ZOLL TO MASIMO OF [*] (THE "PAYMENT") AT THE END
  OF EACH YEAR IN WHICH IT FAILS TO MEET ITS INTEGRATION COMMITMENT WHILE THIS
  AGREEMENT IS IN EFFECT; PROVIDED THAT TOTAL PAYMENTS TO MASIMO PURSUANT TO
  THIS LIQUIDATED DAMAGES PROVISION SHALL NOT EXCEED [*]. TO FURTHER EVIDENCE
  THAT THIS IS AN APPROPRIATE CASE FOR LIQUIDATED DAMAGES TO SELLER AND THAT THE
  SUM SET FORTH HEREIN IS A REASONABLE ESTIMATE OF MASIMO'S DAMAGES, MASIMO AND
  ZOLL HAVE SET FORTH THEIR INITIALS TO THIS PARAGRAPH.

                /s/ DRB                   /s/ JEK
               ---------                 ----------
                  ZOLL                     MASIMO

        3.9 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 ZOLL, the accuracy of the accounting
  reports provided by ZOLL hereunder, through inspection of ZOLL'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 it reasonable discretion, and which CPA is reasonably
  acceptable to ZOLL. MASIMO shall pay all costs, expenses and fees of the CPA
  unless (i) ZOLL has overstated its integration commitment as set forth in
  Section 3.6 by more than 10% and (ii) the corrected level of integration as
  described in Section 3.6 ("Integration Commitment") above is less than eighty
  percent (80%) for the entire annual period audited, in which event the CPA's
  costs, fees and expenses shall be paid by ZOLL.

      3.10 Excuses from Integration Commitment and Best Efforts. ZOLL will be
excused from its commitment set forth in Section 3.6 ("Integration Commitment")
and Section 3.2 ("Best Efforts"), if any of the following events occurs:

             3.10.1 [*]

             3.10.2 [*]

             3.10.3 MASIMO is prevented from delivering MASIMO Products or ZOLL
        is unable to ship Licensed Devices due to regulatory restrictions placed
        upon MASIMO or the MASIMO Products; or

             3.10.4 MASIMO breaches any material term of this Agreement with
        respect to the MASIMO Products; or

             3.10.5 Masimo fails to deliver Exhibit G compliant MASIMO Products
        according to the schedule stated in purchase orders accepted by Masimo,
        and as a Result ZOLL is unable to meet its commitments to deliver
        Licensed Devices or SpO(sub 2) Sensors to its customers for a period of
        45 days or more.

Upon the occurrence of any of the foregoing events, ZOLL's obligations pursuant
to Section 3.6 ("Integration Commitment") and Section 3.2 ("Best Efforts") shall
be excused for the duration of such foregoing event plus six (6) months, and
MASIMO shall not be entitled to any liquidated damage or other penalty for
ZOLL's failure to meet its commitment as set forth in Section 3.6 ("Integration
Commitment") during such period. Whether one of the events of Section 3.10.1
or 3.10.2 has occurred, shall be

* Confidential material redacted and filed separately with the Commission.

                                       6
<PAGE>   10

determined by an independent three (3) member clinical evaluation panel (the
"Panel"). Each party shall select one member of the Panel, and the two Panel
members shall select a third member. No panel member may be an employee,
officer, director, or owner of five percent (5%) or more of the shares of either
Party, or related to any employee, officer, director or owner of five percent
(5%) or more of the shares of either Party, or otherwise affiliate with either
party such that such affiliation would tend to influence such persons ability to
independently evaluate the foregoing events.

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 MASIMO Products between the
Parties shall be made by means of purchase orders placed by ZOLL or its designee
to MASIMO ("Purchase Orders"). Except for the initial Purchase Order, the
minimum quantity of MASIMO 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-1 Boards or 200 units of a disposable sensor (e.g., LNOP-Neo).
Purchase Orders and change orders may be placed by facsimile or mail. A Purchase
Order 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, or
to be issued, for any firm commitment or purchase hereunder shall be
non-cancelable, and ZOLL shall be responsible for taking deliveries of and
paying for all MASIMO Products set forth in such Purchase Order.

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

      4.3 Contents. All Purchase Orders submitted by ZOLL 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 or
number of the MASIMO Products in accordance with the terms and conditions
hereof, ZOLL shall use the form of Purchase Order attached hereto as Exhibit F.
Any language on the Purchase Order of ZOLL or acknowledging form of MASIMO which
is inconsistent with any term or provision hereof shall be void and without any
force or effect.

      4.4 Initial Commitment. The first Purchase Order submitted by ZOLL will
include a non-binding forecast for 180 days, in addition to ZOLL's first firm
order, with shipments contemplated to begin on November 1, 1997.

      4.5 Ongoing Purchase Orders. After the initial Purchase Order ZOLL's
Purchase Orders issued as needed 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 ZOLL up until ninety
days prior to the shipment date, after which such Purchase Orders become
binding.

      4.6 Emergency Orders. Any Purchase Orders placed by ZOLL calling for
delivery of MASIMO Products in less than ninety (90) days shall be considered
emergency Purchase Orders. MASIMO agrees to use reasonable efforts to deliver
such units of MASIMO 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 MASIMO Products delivered to
ZOLL in accordance with the terms of this Agreement shall be as set forth at
Exhibit D attached hereto. All prices are F.O.B. MASIMO's shipping dock and are
inclusive of each MS-1 Board, SpO(sub 2), Sensor or Accessory. Each SpO(sub 2),
Sensor is individually packaged and labeled per MASIMO guidelines with
ZOLL-supplied artwork and logos. Payment by ZOLL to MASIMO shall be made thirty
(30) days following receipt of invoice by ZOLL.

                                       7
<PAGE>   11

      5.2 Pricing Adjustments. MASIMO shall have the right to adjust prices for
the MS-1 Boards 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 MASIMO Products to ZOLL shall be in
U.S. Dollars.

      5.4 F.O.B. Point. Risk of loss for MS-1 Boards, SpO(sub 2), Sensors and
Accessories shall pass to ZOLL, F.O.B. MASIMO's manufacturing facility or
distribution point, as selected by MASIMO.

6.    DELIVERY

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

      6.2 Packaging. MASIMO shall package the SpO(sub 2) Sensors, MS-1 Boards
and Accessories for shipment. Each shipment shall include a packing list
containing: (i) Purchase Order number, (ii) model number of the MASIMO Products,
(iii) quantity, (iv) serial number or date code of shipped products, and (v) the
results of applicable quality assurance and other tests performed with respect
to the MASIMO Products being shipped.

      6.3 Delivery. MASIMO shall use best efforts to fill all Purchaser Orders
by delivery dates and in the quantities specified by ZOLL in its Purchase
Orders. If a Purchase Order by ZOLL calls for more than a 25% increase as
compared to the previous 3-month average of MASIMO Products ordered, on a
product-by-product basis, MASIMO shall use best efforts to deliver an amount at
least equal to the previous three month average within ninety (90) days, and
shall use best efforts to ship the remainder within 120 days of receipt of the
Purchase Order.

7. COMPATIBILITY

      7.1 ZOLL agrees that its Licensed Devices will not be configured to
operate with oximetry sensors other than authorized Masimo SpO(sub 2) Sensors.
ZOLL agrees that it will not market Licensed Devices which operate with any
MASIMO probe except probes referenced in Section 1.16 hereof manufactured now or
in the future by MASIMO.

      7.2 ZOLL 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 Future Upgrades. ZOLL agrees that by incorporating the MS-1 Board and
MASIMO SET into its Licensed Devices that it will not modify the functionality
of the MS-1 Board. ZOLL agrees that it will accept all future upgrades or
changes to products as long as (i) the upgrades or changes remain compatible
with previous versions in connections and functionality; (ii) the upgrade does
not increase the transfer price; (iii) such upgrades and changes do not result
in material degradation in performance or functionality of the MASIMO Products;
(iv) such upgrades and changes meet and continue to meet all applicable
regulatory requirements; and (v) such upgrades and changes are compatible with
ZOLL's current products.

      7.4 MASIMO Probes. ZOLL agrees that the SpO(sub 2) Sensors are designed to
be used with the MS-1 Board only, and that if ZOLL uses sensors by other
manufacturers that the MS-1 Board may yield different results. MASIMO SET will
be enabled for SpO(sub 2) Sensors only. ZOLL agrees to use its best efforts to
provide that its customers not use SpO(sub 2) Sensors with non-MS-1 Boards. ZOLL
agrees not to configure any non-MS-1 Boards in order for them to be used in
connection with SpO(sub 2) Sensors and agrees not to promote or instruct others
to so configure non-MS-1 Boards.

                                       8
<PAGE>   12

        7.5 Engineering Support. MASIMO shall provide reasonable engineering
  support to ZOLL for the integration of MASIMO SET into Licensed Devices, at
  the cost of $150.00 per hour. Such support and payment by ZOLL shall be
  authorized in advance, in writing by ZOLL. Such services shall be provided at
  MASIMO's facility unless travel is required, in which event ZOLL shall
  additionally pay for necessary travel expenses.

8.      INSPECTION AND ACCEPTANCE

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

        8.2    ZOLL Inspection

             8.2.1 ZOLL may inspect the products upon receipt. For SpO(sub 2),
        Sensors, any lots of MASIMO Products ("Lot") which fail (as defined only
        as a failure under statistical lot sampling standard ANSI/ASQC Z1.4:1993
        AQL 1.0), or for MS-1 Boards, any board which fails, to meet MASIMO's
        written specifications as set forth in Exhibit G, may be rejected by
        ZOLL and returned to MASIMO for replacement; provided however, that ZOLL
        shall have the right to reject and return to MASIMO for replacement any
        MASIMO Products which fails to meet MASIMO's specification as set forth
        in Exhibit G. Prior to returning any MASIMO Products to MASIMO, ZOLL
        shall notify MASIMO by facsimile that ZOLL has rejected the MASIMO
        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 Vendor" ("RTV") number to ZOLL by facsimile, which
        RTV number will be ZOLL's authorization to return the MASIMO Products.

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

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

      8.3 Nonconforming Acceptance. ZOLL may choose to accept the MASIMO
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 ZOLL so chooses, ZOLL will notify MASIMO
of its intent to accept nonconforming items. However, MASIMO accepts no
responsibility for nonconforming items accepted by ZOLL.

9.    CONFIDENTIALITY

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

                                       9
<PAGE>   13

      9.2 ZOLL's Confidential Information. MASIMO shall not use ZOLL's
Confidential Information, specifically and without limitation ZOLL's sales
reports, for any purpose other than performance of this Agreement, without the
prior written consent of ZOLL. MASIMO shall not disclose ZOLL's Confidential
Information to any third party without the prior written consent of ZOLL.

        9.3  Neither party's obligations under this confidentiality provision
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 made public by the Party claiming confidentiality;

              9.3.4 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;

             9.3.5 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;

             9.3.6 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; or

             9.3.7 can be documented was independently developed without
        reference to or reliance upon the other party's confidential
        information.

      9.4 Injunctive Relief. The Parties acknowledge that (a) the covenants set
forth in this Section 9 ("CONFIDENTIALITY") are essential elements of this
Agreement and that, but for the agreement of the parties to comply with such
covenants, this Agreement would not have been entered into; (b) neither party
will have any adequate remedy at law if the other party violates the terms of
this Section 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 Section 9 ("CONFIDENTIALITY") if the other party fails to
perform any of such covenants under this Section 9 ("CONFIDENTIALITY").

        9.5  Press Release

             9.5.1 Within 30 days following the signing of a definitive
        Agreement, MASIMO and ZOLL agree to issue a joint press release
        announcing the existence and general content of the Agreement. Except
        for the press release and discussing the existence and general nature of
        the Agreement, 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 ZOLL,
made jointly by ZOLL 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

                                       10
<PAGE>   14
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-1 Boards, SpO(sub 2), Sensors or Accessories,
provided that ZOLL has, and for so long as ZOLL continues to meet the eighty
percent (80%) integration commitment set forth in Section 3.6 ("Integration
Commitment") and its obligations under Section 3.2 ("Best Efforts"), MASIMO will
grant ZOLL, without additional compensation, a non-exclusive, non-transferable
license to use such Improvement to incorporate the MS-1 Boards having the
Improvement into the Licensed Devices, to demonstrate Licensed Devices and to
distribute Licensed Device to (i) end user customers (not to OEM or other
medical equipment manufacturer) and (ii) ZOLL distributors and other medical
equipment manufacturers specifically set forth on Exhibit I.

        10.2 ZOLL Inventions. Subject to the license rights granted to ZOLL
herein, MASIMO retains all right, title and interest in and to Masimo Technology
and all Improvements. If ZOLL makes any Improvement, ZOLL shall, and hereby
does, transfer all right, title and interest in and to all such Improvements.
ZOLL agrees that it shall promptly notify MASIMO of any Improvement. ZOLL 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. ZOLL shall, at MASIMOs 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.
Notwithstanding anything contained in this Agreement to the contrary, MASIMO
expressly acknowledges and agrees that ZOLL is engaged in the business of
designing, developing and selling medical technology devices, and as such ZOLL
shall have the right at all times during and after this Agreement to design,
develop, sell, market and distribute medical technology and products relating to
pulse oximetry, provided that such technology or products are not based upon
non-public proprietary or confidential information owned by MASIMO and disclosed
to ZOLL under this Agreement, and MASIMO expressly acknowledges and agrees that
ZOLL shall own all proprietary rights in and to all such technology and
products.

11.   WARRANTIES

      11.1  MASIMO Warranties

             11.1.1 MASIMO warrants the MS-1 Boards supplied by MASIMO to ZOLL
      for a period of [*] following receipt by ZOLL, or [*] following receipt by
      an End-User, whichever is earlier, to be free, under normal use and care,
      from defects in workmanship and material and to be in material conformity
      with MASIMO's specifications. Units returned to MASIMO for warranty
      repairs shall be shipped to MASIMO freight collect according to MASIMO's
      instruction. Within [*] of the receipt of MS-1 Boards, MASIMO shall
      replace or repair such units and shall ship them to ZOLL's designated
      return destination freight prepaid, if MASIMO reasonably determines that
      the unit is covered under this Warranty. The foregoing warranties extend
      to the MS-1 Boards returned by ZOLL's customers.

             11.1.2 MASIMO warrants that for a period of [*] following receipt
      by ZOLL or [*] following receipt by the End-User, whichever is earlier,
      the reusable probes LNOP-DCl, the PC08 and PC12 product cables supplied by
      MASIMO to ZOLL will be, under normal use and care, free from any defect in
      workmanship and material and to be in material conformity with MASIMO's
      specifications. 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 ZOLL's designated
      return destination freight prepaid, if MASIMO reasonably determines that
      the unit is covered under this Warranty. The foregoing warranties extend
      to the covered items returned by ZOLL's customers.

             11.1.3 MASIMO warrants that for a period of [*] following receipt
      by ZOLL, or [*] following receipt by the End-User, or until [*],

* Confidential material redacted and filed separately with the Commission.

                                       11
<PAGE>   15

        whichever is earliest, the disposable probes (e.g., LNOP-Neo, LNOP-NeoPt
        and LNOP-Adt) supplied by MASIMO to ZOLL hereunder will be, under normal
        use and care, and only upon first use, free from any defect in
        workmanship and material and to be in material conformity with MASIMO's
        specifications therefor. 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
        ZOLL's designated return destination freight prepaid, if MASIMO
        reasonably determines that the unit is covered under this Warranty. The
        foregoing warranties extend to the covered items returned by ZOLL'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.

               11.1.5 MASIMO represents and warrants to ZOLL that MASIMO has no
        knowledge that the use of MASIMO Products in compliance with the terms
        of this Agreement would infringe any patent, copyright, trademark, trade
        secret or any other proprietary right of any third party.

      11.2 MASIMO Maintenance and Repairs. For a period of three (3) years after
the expiration or termination of the warranty set forth in Sections 11.1
("MASIMO Warranties") of this Agreement, MASIMO agrees to replace MASIMO
Products at the original unit price of the MASIMO Products

        11.3 Limitation of Liability. EXCEPT FOR THE EXPRESS WARRANTIES SET
FORTH ABOVE, 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 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 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.

12.     INDEMNIFICATION

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

        12.2 MASIMO will defend, indemnify and hold ZOLL harmless against any
and all liability, loss, damages, costs or expenses which ZOLL may hereafter
incur, as a result of any injury, illness or death of any person which is caused
by any MASIMO 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 ZOLL to materially comply with
the specification. MASIMO shall have no liability or responsibility of any kind
to ZOLL under this Section 12 to the extent that MASIMO's ability to defend or
settle any such claim is prejudiced by ZOLL's failure to (a) promptly notify
MASIMO in writing of any claim relating to this section, (b) provide reasonable
assistance to MASIMO, at MASIMO's expense, in connection with the defense and
settlement of any such claim, and (c) permit MASIMO to control the defense of
any such claim. MASIMO shall have no liability for settlements made without
express written consent. Should ZOLL desire to have its own counsel participate
in any such action, the cost of such counsel shall be exclusively ZOLL's.

      12.3 ZOLL 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

                                       12
<PAGE>   16

death of any persons, or infringement or alleged infringement of any patent,
copyright, trademark, trade secret or any other proprietary right of any third
party, to the extent that such illness, injury, death or infringement results
from the Licensed Devices and results from technology or products not supplied
by MASIMO. ZOLL shall have no liability under this Section to the extent that
ZOLL's ability to defend or settle any such suit or claim is prejudiced by
MASIMO's failure to (a) promptly notify ZOLL in writing of any claim relating to
this Section, (b) provide reasonable assistance to ZOLL, at ZOLL's expense, in
connection with the defense and settlement of such claim, and (c) permit ZOLL to
control the defense of any such claim. ZOLL shall have no liability for
settlements made without its express written consent. Should MASIMO desire to
have its own counsel participate in any such actions, the cost of such counsel
shall be exclusively MASIMO's.

      12.4 MASIMO will defend, indemnify and hold ZOLL and its customers
harmless against infringement or alleged infringement by the SpO(sub 2), Sensors
furnished under this Agreement, or by the MS-1 Boards or Accessories, of any
patent, copyright, trademark, trade secret or any other proprietary right of any
third party. MASIMO shall have no liability under this section to the extent
that MASIMO's ability to defend or settle any such suit or claim is prejudiced
by ZOLL's failure to (a) promptly notify MASIMO promptly in writing of any such
claim or proceeding, (b) provide MASIMO reasonable assistance, 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 SpO(sub 2) Sensors
and/or the MS-1 Boards to make them non-infringing or, where practical, to
obtain licenses under such intellectual property rights and (c) permit MASIMO to
control the defense of any such claim. MASIMO shall have no liability for
settlements made without its express written consent. MASIMO may, at its sole
discretion, modify the SpO(sub 2), Sensors and/or MS-1 Boards to make them
non-infringing, obtain a license to allow the continued use of the SpO(sub 2)
Sensors and/or MS-1 Boards or discontinue shipment of the SpO(sub 2) Sensors
and/or MS-1 Boards to ZOLL. In the event MASIMO discontinues shipment, and ZOLL
is restricted from selling Licensed Devices with MASIMO Products, ZOLL shall
have the right to terminate this Agreement and MASIMO agrees to buy back ZOLL's
inventory of MASIMO Products at the original transfer price. In the event that
ZOLL's ability to use the MASIMO Products is Genuinely Impaired by such a claim
under this Section and MASIMO does not, within ten (10) days after receipt of
notice of such impairment, procure for ZOLL the right to use such MASIMO
Products or replace such products with functionality equivalent products, ZOLL
shall have the right to terminate this Agreement, effective upon written notice
to MASIMO. "Genuinely Impaired" shall mean that MASIMO is temporarily or
permanently enjoined from selling the MASIMO Products or an equivalent, or that
a substantial volume of orders from ZOLL's customers are canceled due to the
infringement claim, or an infringement claim or allegation which has a material
negative impact on ZOLL's ability to sell Licensed Devices, but shall not be a
mere allegation, claim or filing of an infringement suit.

      12.5 Notwithstanding the above, Masimo shall have no indemnification
obligations under Section 12.4 for any infringement or claims of infringement
relating to Licensed Devices resulting solely from (a) modifications by Zoll or
any others to MASIMO Technology or the MASIMO Products, (b) from
electrical/electronics, software/firmware, sensors or product interface not
furnished by MASIMO, (c) the combination of the MASIMO Products with apparatus
not furnished by MASIMO, (d) use of products or components not supplied by
MASIMO, or the combination of MASIMO Technology with other technology not
furnished by MASIMO, (e) use of MASIMO Technology in products not permitted by
the license granted herein, or (f) for any claims not related directly to MASIMO
Technology or the MASIMO Products.

      12.6 Patent Defense. ZOLL agrees that it shall notify MASIMO of any claim
by a third party that such third party believes that MASIMO Patents or Patent
Rights are invalid. ZOLL 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, ZOLL agrees
        not to challenge the validity of any of the Patent Rights. During the
        term of this Agreement, ZOLL agrees to disclose to MASIMO any prior art
        or any other information that is material to the validity of any of the
        Patent Rights or to the patentability of any pending MASIMO patent
        application of which ZOLL is aware.

                                       13
<PAGE>   17

        12.7 Regulatory Compliance

               12.7.1 ZOLL 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 Licensed
        Devices. MASIMO will reasonably cooperate with ZOLL by providing at no
        charge to ZOLL any MASIMO data in its possession that is reasonably
        required to obtain the regulatory approvals, including but not limited
        to 51O(k) application materials submitted by MASIMO for its own products
        that incorporate MASIMO SET. Disclosure by ZOLL of any such data shall
        be subject to the confidentiality provisions of Article 9
        ("CONFIDENTIALITY"); provided however, that notwithstanding anything to
        the contrary contained in this Agreement, MASIMO expressly acknowledges
        and agrees that ZOLL will be applying for Food and Drug Administration
        ("FDA") approval for the Licensed Devices and ZOLL shall have the right,
        without prior approval from MASIMO, to furnish the FDA any information
        from MASIMO's 510-k submission and any information requested by the FDA
        deemed by ZOLL to be necessary or advisable to secure FDA approvals for
        the ZOLL Products. For additional MASIMO Confidential Information, ZOLL
        shall first seek approval from MASIMO, such approval not to be
        unreasonably withheld.

               12.7.2 ZOLL 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 ZOLL of
        Licensed Devices, (ii) for identifying and complying with any safety
        precautions, safety markings, labels or consumer notices required for
        ZOLL Product sales in any country other than the United States, and
        (iii) for assessing the appropriateness of the ZOLL Product for any
        particular Customer application. MASIMO will cooperate with ZOLL by
        providing any data in its possession that is reasonably required to
        obtain such approvals or certifications. Disclosure by ZOLL of any such
        data to any third party shall be subject to the confidentiality
        provisions of Article 9 ("CONFIDENTIALITY").

               12.7.3 In the event of any recall of any product incorporating
        MS-1 or SpO(sub 2), Sensors, the parties shall cooperate to the extent
        reasonably necessary to conduct such recall in accordance with ZOLL's
        policies and procedures.

               12.7.4 Regardless of any disclosure to MASIMO by ZOLL of an
        ultimate destination of the Licensed Devices or the Software, ZOLL shall
        not transfer or re-export, whether directly or indirectly, the Software,
        the MASIMO 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.

13.   INCIDENT REPORTING

        13.1 MASIMO Reporting. MASIMO represents and warrants that all MASIMO
Products manufactured and sold to ZOLL 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 et seq.). If MASIMO is prevented from
shipping product to ZOLL (for any period of time in excess of 30 days) due to
regulatory actions imposed by FDA, the 80% commitment shall be excused for the
period of shut down plus six months. If ZOLL requests an evaluation and/or
investigation into an alleged failure of a MASIMO device, MASIMO shall promptly
perform such investigation and provide ZOLL with written results of the
investigation within 5 business days after receipt of the defective material.

      13.2 ZOLL Reporting. ZOLL represents that in addition to being responsible
for all regulatory approvals for the Licensed Devices that should any incidents
of failure of the MASIMO Products which

                                       14
<PAGE>   18

result in bodily injury be reported to ZOLL, that it will promptly (i.e., within
two (2) business days) notify MASIMO of any such field performance problems or
deficiencies. ZOLL agrees to report to MASIMO any other incidents of failure
within a reasonable time.

        13.3 Recall. If for any reason MASIMO determines that a recall of
Product(s) is (are) necessary as defined in FDA regulations (21, CFR Part 7),
MASIMO shall notify ZOLL of the possibility of Product recall. If MASIMO
notifies ZOLL that the Product must be recalled, ZOLL agrees that it shall as
expediently as possible issue a recall notice to all its customers recalling the
MASIMO Products in question. Provided that the MASIMO Products meet the
specifications specified in Exhibit G, MASIMO's liability for a Product recall
shall be the repair or replacement of the part that causes the recall. If the
MASIMO Products fail to meet MASIMO's specifications as set forth in Exhibit G,
then MASIMO's sole responsibility, subject to MASIMO's obligations under this
Agreement, including without limitation, MASIMO's indemnification obligations
under Section 12 hereunder, 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.

14.   TERM AND TERMINATION

        14.1 This Agreement shall become effective as of the effective date
first set forth above, and shall remain in effect for Five (5) years, thereafter
this Agreement is renewable for one-year periods with mutual consent.

        14.2 Termination

             14.2.1 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 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 terminate this Agreement by a
        written notice to the defaulting Party.

             14.2.2 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 Party 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.

      14.3 Rights Upon Termination. In the event of any valid termination of
this Agreement under Section 14.2 hereof ("Termination"), all of ZOLL's rights
under this Agreement shall be terminated. The termination of ZOLL's rights shall
include the termination of any rights of ZOLL 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 ZOLL prior to it entering the
public domain. No termination shall impact MASIMO's rights to collect for
accrued royalties and payment for delivered Product or either Parties rights to
pursue all available remedies in addition to those stated herein. ZOLL may
distribute existing inventory for a period not to exceed 12 months following
termination. Any outstanding purchase orders are automatically canceled on
termination by MASIMO.

15.     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, any
claim or

                                       15
<PAGE>   19

cause of action shall be filed in any court in Orange County, California, U.S.A.
MASIMO and ZOLL each consents to personal jurisdiction in any action brought in
the United States District Court for the Central District of California. In the
event that such action should be brought in a state court, ZOLL 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 ("Notice") of
this Agreement. Notwithstanding the foregoing, any dispute arising out of
Section 2.3.2 or Section 3.10 shall be resolved by binding arbitration in
Boston, Massachusetts and MASIMO and ZOLL each consents to personal jurisdiction
and exclusive venue in any action brought in any court located in the
Commonwealth of Massachusetts. Notwithstanding anything contained in this
Section, either Party shall have the right to apply for injunctive relief for
any breach of the provisions of Section 9.

16.   MISCELLANEOUS

        16.1 Nonassignability. Except in connection with the sale of all or
substantially all of the assets or business of ZOLL, ZOLL may not assign,
transfer or sublicense any of the rights or obligations under this Agreement,
without the prior written consent of MASIMO. Notwithstanding the foregoing if
ZOLL is involved in any assignment or sale to an entity which has a pre-existing
license with MASIMO for SpO(sub 2), Measurement having terms in the aggregate
more favorable to MASIMO than the terms of this Agreement, MASIMO may elect for
the terms of the other License Agreement to apply to the exclusion of this
Agreement. Except in connection with the sale of all or substantially all of the
assets or business of MASIMO to which this license relates, MASIMO may not
assign or transfer any of the rights or obligations under this Agreement,
without prior written consent of ZOLL. This Agreement will inure to the benefit
of and bind the Parties successors and assigns.

        16.2 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 Party to
enforce each and every such provision.

      16.3 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.

      16.4 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 the economic equity of both parties hereto is materially affected
by such unenforceability.

      16.5 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
                            23361 Madero, Suite 100
                            Mission Viejo, CA 92691
                            Attention:Joe E. Kiani

        ZOLL:               ZOLL MEDICAL CORPORATION
                            32 Second Avenue
                            Burlington, MA 01803
                            Attention: Vice President, Research and Development

        With copy to:       Raymond C. Zemlin, P.C.
                            GOODWIN, PROCTER & HOAR, LLP
                            Exchange Place,
                            Boston MA 02109-2881

                                       16
<PAGE>   20

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.

        16.6 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.

        16.7 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.

        16.8 Survival From This Agreement. The rights and obligations of the
parties hereto under Articles 9, 10, 11, 12, 13 and 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.

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

        16.10 Entire Agreement. This Agreement constitutes the entire agreement
between ZOLL 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                  ZOLL MEDICAL CORPORATION

By: /s/ JOE E. KIANI                 By: /s/ DONALD BOUCHER
    ----------------------               ----------------------
Joe E. Kiani                         Donald Boucher
President and CEO                    Vice President, Research & Development

                                       17
<PAGE>   21

                                   EXHIBIT D
                               Price of Products

Price for MS-1 Boards: MASIMO's transfer prices to Zoll for the MS-1 Boards
(including the Masimo MS-3 Boards) delivered in accordance with this Agreement
are as follows:

Quantity Purchased per Year             Unit Price
---------------------------             ----------

Less Than 2500                             [*]
2500 or more                               [*]

In the first twelve month period following the first month after ZOLL places its
first Purchase Order for MASIMO Products, the price for MS-1 Boards shall be
fixed at [*] per unit. For subsequent years, MS-1 Board pricing shall be set at
the pricing for the quantity purchased by Zoll during the entire preceding year.

Transfer Price for Sensors and Accessories: MASIMO's transfer prices to ZOLL 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.

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