Document:

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                                                                    Exhibit 10.5

                                                CONFIDENTIAL TREATMENT REQUESTED

                                LICENSE AGREEMENT

                                     BETWEEN

                                -----------------

                          ADEZA BIOMEDICAL CORPORATION

                                       AND

                 THE TRUSTEES OF THE UNIVERSITY OF PENNSYLVANIA

                                     (PENN)

                                      L217

                                  JULY 25, 1997

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
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                                                CONFIDENTIAL TREATMENT REQUESTED

                           EXCLUSIVE LICENSE AGREEMENT

            This Exclusive License Agreement ("AGREEMENT") is between The
Trustees of the University of Pennsylvania, a Pennsylvania nonprofit
corporation, with offices located at 3700 Market Street, Suite 300,
Philadelphia, Pennsylvania 19104-3147 ("PENN") and Adeza Biomedical Corporation,
a corporation organized and existing under the laws of California ("ADEZA")
having a place of business at 1240 Elko Drive, Sunnyvale, CA 94089 and Dr. Bruce
Lessey, formerly of PENN's School of Medicine and now with the University of
North Carolina, Department of Obstetrics and Gynecology ("LESSEY").

            This AGREEMENT is effective as of July 1, 1997 ("EFFECTIVE DATE").

                                    RECITALS

WHEREAS, LESSEY has developed certain technologies described as: [***] and
[***] and related U.S. and foreign patent filing for diagnostic applications;
and

WHEREAS, PENN has developed antibodies against the [***] and other PENN
antibodies (attachment 1) against the [***] owned by PENN (collectively, the
"PENN ANTIBODIES"); and

WHEREAS, PENN has developed viable cell lines with titer capable of producing
sufficient quantities of the PENN ANTIBODIES which ADEZA wishes to utilize for
the purpose of ADEZA's commercialization hereunder (collectively, the "PENN CELL
LINES" (see attachment 1); and

WHEREAS, PENN owns [***], [***], the PENN ANTIBODIES and the PENN CELL LINES;

and

WHEREAS, PENN desires such technology to be commercially used for the benefit of
the public good, and wishes to grant an exclusive worldwide license; and

WHEREAS, LESSEY is an employee of the University of North Carolina and is not
currently an employee or agent of PENN.

NOW, THEREFORE, in consideration of the mutual covenants and promises herein
contained, the parties hereto agree as follows:

1. DEFINITIONS

                                       1

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
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                                                CONFIDENTIAL TREATMENT REQUESTED

      1.1   DEVELOPMENT and MARKETING PLAN means ADEZA's plan for the
development and marketing of the PENN PATENT RIGHTS that demonstrate ADEZA's
capability to bring the PENN PATENT RIGHTS to practical application and is
described in summary fashion in Attachment 2.

      1.2   FAIR MARKET VALUE means the cash consideration which ADEZA or its
sublicensee would realize from an unaffiliated, unrelated buyer in an arm's
length sale of in identical item sold in the same quantity and at the same time
and place of the transaction.

      1.3   FIELD means diagnostic applications or uses of PENN PATENT RIGHTS
involving dysfunctions or diseases of the female reproductive system; provided,
however, that applications or uses of the PENN ANTIBODIES and the PENN CELL
LINES capable of producing such PENN ANTIBODIES shall be limited to the specific
claims of the patents included within the definition of PENN PATENT RIGHTS.

      1.4   ADEZA means ADEZA and its AFFILIATES.

      1.5   AFFILIATE means, any legal entity directly or indirectly
      controlling, controlled by or under common control with ADEZA. For
      purposes of this AGREEMENT, "control" means the direct or indirect
      ownership of more than fifty percent (50%) of the outstanding voting
      securities of a legal entity or the right to receive more than fifty
      percent (50%) of the profits or earnings of a legal entity, or the right
      to control the policy decisions of a legal entity.

      1.6   NET SALES means the greater of the consideration or FAIR MARKET
            VALUE attributable to the SALE of any PENN LICENSED PRODUCT, or the
            provision of any PENN LICENSED SERVICE less qualifying costs
            directly attributable to such SALE and actually identified on the
            invoice and borne by ADEZA or its sublicensee.

            1.6.1 Such qualifying costs shall be limited to the following:

                  1.6.1.1 [***]

                  1.6.1.2 [***]

                  1.6.1.3 [***]

                  1.6.1.4 [***]

                                       2

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
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                                                CONFIDENTIAL TREATMENT REQUESTED

      1.7   PENN LICENSED PRODUCT means any product which is made, made for,
used or sold or otherwise distributed by ADEZA, or any sublicensees and which:
(1) in the absence of this AGREEMENT would infringe at least one claim of PENN
PATENT RIGHTS or. (2) use a process or machine covered by a claim of PENN PATENT
RIGHTS.

      1.8   PENN LICENSED SERVICE means the provision of any service by ADEZA or
any sublicensee which, (1) in the absence of this AGREEMENT would infringe at
least one claim of PENN PATENT RIGHTS or (2) use a process or machine covered by
a claim of PENN PATENT RIGHTS.

      1.9   PENN PATENT RIGHTS means all patents issuing from those United
States patent applications, and any foreign counterpart and extension, including
continuation, continuation-in-part, divisional and re-issue application listed
in Attachment 1.

      1.10  SALE means any bona fide transaction for which consideration is
received for the sale, use, lease, transfer or other disposition of any PENN
LICENSED PRODUCT or for the provision of any PENN LICENSED SERVICE
notwithstanding any PENN LICENSED PRODUCT or PENN LICENSED SERVICE for market
research, market promotion, and clinical trials. A SALE of any PENN LICENSED
PRODUCT or PENN LICENSED SERVICE shall be deemed completed at the time ADEZA or
its sublicensee receives payment for such PENN LICENSED PRODUCT or PENN LICENSED
SERVICE.

2.    LICENSE GRANT

      2.1   PENN grants to ADEZA for the term of this AGREEMENT an exclusive,
world-wide right and license, with the right to grant sublicenses, to make, have
made, use, import, sell and otherwise distribute and offer for sale PENN
LICENSED PRODUCT(S) and to provide or have provided PENN LICENSED SERVICES in
the FIELD. No other rights or licenses are granted.

      2.2   PENN agrees to provide ADEZA [***] within twenty-one (21) days of
the EFFECTIVE DATE of this AGREEMENT and other PENN CELL LINES from time to time
at ADEZA's request if PENN is reasonably able to do so.

      2.3   This license grant is exclusive except that PENN may use and permit
other nonprofit organizations to use the PENN PATENT RIGHTS for educational and
research purposes.

      2.4   ADEZA acknowledges that pursuant to Public Laws 96-517, 97-256 and
98-620, codified at 35 U.S.C. 200-212, the United States government retains
certain rights in intellectual property funded in whole or part under any
contract, grant or similar agreement with a Federal agency. Pursuant to these
laws, the government may

                                       3

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
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                                                CONFIDENTIAL TREATMENT REQUESTED

impose certain requirements regarding such intellectual property, including but
not limited to the requirement that products resulting from such intellectual
property sold in the United States must be substantially manufactured in the
United States. This license grant is expressly subject to all applicable United
States government rights as provided in the above-mentioned laws and any
regulations issued under those laws, as those laws or regulations may be amended
from time to time.

      2.5   The right to sublicense granted to ADEZA under this AGREEMENT is
subject to the following conditions:

            2.5.1 In each such sublicense, ADEZA must prohibit the sublicensee
from further sublicensing and require that the sublicensee is subject to the
terms and conditions of the license granted to ADEZA under this AGREEMENT.

            2.5.2 Within thirty (30) days after ADEZA enters into any
sublicense, ADEZA must send to PENN a complete copy of the sublicense written in
the English language.

            2.5.3 If ADEZA enters bankruptcy proceedings, voluntarily or
involuntarily, all payments of sublicense royalties due PENN from ADEZA then or
thereafter, pursuant to Sections 3.1.3, 3.1.4 and 3.1.5 herein shall be paid by
ADEZA's sublicensee(s) directly to PENN. Such direct payment(s) shall be made
incumbent upon ADEZA's sublicensee(s) by express written terms within ADEZA's
sublicense agreement(s) which shall include reporting requirements similar to
Section 3.4 herein, and shall name PENN as a direct recipient of such reports
during ADEZA's bankruptcy term. Such direct payments shall continue until the
bankruptcy trustee arranges otherwise or ADEZA has cleared its responsibilities
to the bankruptcy court.

                                       4

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
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                                                CONFIDENTIAL TREATMENT REQUESTED

            2.5.4 Even if ADEZA enters into sublicenses, ADEZA remains primarily
liable to PENN for all of ADEZA's duties and obligations contained in this
AGREEMENT and any act or omission of a sublicensee, which would be a breach of
this AGREEMENT if performed by ADEZA, shall be deemed to be a breach by ADEZA of
this AGREEMENT. If ADEZA is unable to cure such breach within the sixty (60) day
period pursuant to Section 5.3.2, ADEZA may cure such breach by termination of
the sublicense with such sublicencee. ADEZA will contractually require its
sublicensees to act in a manner consistent with ADEZA's duties and obligations
under this AGREEMENT.

3.    FEES AND ROYALTIES

      3.1   LICENSE INITIATION FEE AND ROYALTIES

            3.1.1 In partial consideration of the exclusive license granted to
ADEZA, ADEZA must pay to PENN a non-refundable license initiation fee of [***]
less a credit of the total monthly option fees paid by ADEZA to PENN under the
EXCLUSIVE OPTION AGREEMENT between the parties effective as of June 3, 1996.

            3.1.2 In further consideration of the exclusive license granted to
ADEZA, ADEZA must pay to PENN a royalty of [***] of the NET SALES of PENN
LICENSED PRODUCTS or PENN LICENSED SERVICE sold by ADEZA or any of its agents
(excluding sublicenses). PENN shall not be due any royalty on any part of a PENN
LICENSED PRODUCT or PENN LICENSED SERVICE which does not infringe PENN PATENT
RIGHTS.

            3.1.3 With respect to any PENN LICENSED PRODUCT which is sold in
combination with other products which are made without using the PENN PATENT
RIGHTS (collectively, a "Combination Product"). ADEZA shall pay PENN a reduced
royalty which shall be calculated by [***]. If any portion of any Combination
Product does not have a readily ascertainable list price, then the parties shall
negotiate in good faith to determine fair value therefor. Such reduced royalty
shall in no event be less than the product of the royalty rate set forth in
section 3.1.2 and the actual cost to ADEZA of such PENN LICENSED PRODUCT
included in such Combination Product. ADEZA shall allocate its profit on
each-product included in the Combination Product in a fair and equitable manner
in proportion to tile contribution of each product.

            With respect to any PENN LICENSED SERVICE which is provided in
combination with other services which are provided without using the PENN PATENT
RIGHTS (collectively, a "Combination Service"), ADEZA shall pay PENN a reduced
royalty which shall be calculated by [***]. If any portion of any Combination
Service does not have a readily ascertainable list price, then the parties shall
negotiate in good faith to determine fair value therefor. Such reduced royalty
shall in no event be less than the product of the royalty rate set forth in
section 3.1.2 and the actual cost to ADEZA of such PENN LICENSED SERVICE
included in such Combination Service.

                                       5

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
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                                                CONFIDENTIAL TREATMENT REQUESTED

ADEZA shall allocate its profit on each service included in the Combination
Service in a fair and equitable manner in proportion to the contribution of each
service.

            3.1.4 ADEZA must pay to PENN [***] of any royalty fees ADEZA
receives from any sublicensee in connection with the sale of any PENN LICENSED
PRODUCT and any PENN LICENSED SERVICE (such payments to PENN hereinafter
referred to as "SUBLICENSE ROYALTIES"); provided that, for each sublicensee, the
SUBLICENSE ROYALTIES shall be paid in an amount not less than [***] of any
sublicensee's NET SALES. If ADEZA receives consideration from any sublicensee in
lieu of royalties, ADEZA must pay to PENN an amount equal to the SUBLICENSE
ROYALTIES that ADEZA would have paid had such consideration been received by
ADEZA in cash (in accordance with section 3.1.6).

            3.1.5 ADEZA must pay to PENN [***] of all non-royalty sublicense
fees or consideration received by ADEZA from its sublicensees.

            3.1.6 Any non-cash consideration received by ADEZA under Sections
3.1.2, 3.1.3 and 3.1.4 shall be valued at its FAIR MARKET VALUE as of the date
of receipt.

            3.1.7 NET SALES of any PENN LICENSED PRODUCT or any PENN LICENSED
SERVICE shall not be subject to more than one assessment of the scheduled
royalty; such assessment shall be the highest applicable royalty.

            3.1.8 No royalty shall be payable under this Section 3.1 with
respect to SALES of any PENN LICENSED PRODUCT or any PENN LICENSED SERVICE among
ADEZA and its sublicensees, nor shall a royalty be payable under this Article 3
with respect to any PENN LICENSED PRODUCT or any PENN LICENSED SERVICE for which
no consideration is received in excess of fully burdened costs and which are
distributed (i) for use in research and/or development, (ii) for use in clinical
trials by or on behalf of ADEZA or its sublicensees, or (iii) as promotional
Samples.

      3.2   ANNUAL LICENSE MAINTENANCE FEE

            ADEZA shall pay to PENN an annual license maintenance fee of [***]
on the first anniversary of the EFFECTIVE DATE and [***] dollars on each
anniversary of the EFFECTIVE DATE thereafter. Royalty Payments, including annual
minimum royalties, shall be fully creditable against the annual license
maintenance fee.

            3.2.1 ADEZA must use commercially reasonable efforts to develop for
commercial use and to market PENN LICENSED PRODUCTS and/or PENN LICENSED
SERVICES as soon as practicable, consistent with the DEVELOPMENT and MARKETING
PLAN. ADEZA must provide PENN with annual updates of the

                                       6

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
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                                                CONFIDENTIAL TREATMENT REQUESTED

DEVELOPMENT and MARKETING PLAN beginning on the fifteenth (15th) day of August
1999 and continuing annually thereafter until August 15, 2000.

            3.2.2 ADEZA must provide PENN on the fifteenth (15th) day of August
1998 and continuing annually thereafter, written progress reports, setting forth
in such detail as PENN may reasonably request, the progress of the development,
evaluation, testing and commercialization of each PENN LICENSED PRODUCT and each
PENN LICENSED SERVICE. ADEZA shall also notify PENN, within thirty (30) days of
the first commercial sale of each PENN LICENSED PRODUCT or PENN LICENSED
SERVICE, that such sale has occurred.

      3.3   MINIMUM ROYALTIES

            3.3.1 PENN LICENSED PRODUCT.

                  ADEZA must pay to PENN a non-refundable minimum royalty for
each PENN LICENCED PRODUCT made, made for, used or sold by ADEZA., its agents or
sublicensees for the following periods in the corresponding amounts:

                                       7

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
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                                                CONFIDENTIAL TREATMENT REQUESTED

<TABLE>
<CAPTION>
                                  Due Date - within
                                forty-five (45) days
          Period              after the following dates:      Minimum Royalty
          ------              --------------------------      ---------------
<S>                           <C>                          <C>
1. July 1 - June 30 of the    The first June 30th after    [***]  This payment
   period which includes      the first commercial sale.   shall be prorated
   the first commercial                                    beginning from the date
   sale.                                                   of the first commercial
                                                           sale.

2. July 1 - June 30 of the    June 30th at the end of      [***]
   period following Period    Period 2.
   1.

3. July 1 - June 30 of the    June 30th at the end of      [***]
   period following Period    Period 3.
   2.

4. July 1 - June 30 of the    June 30th at the end of      [***]
   period following Period    Period 4 and each
   3.                         successive anniversary
                              thereafter for the term
                              of this AGREEMENT.
</TABLE>

            3.3.2 PENN LICENSED SERVICE

            ADEZA must pay to PENN a non-refundable minimum royalty for each
PENN LICENSED SERVICE provided by ADEZA, its agents or sublicensees for the
following periods in the corresponding amounts:

<TABLE>
<CAPTION>
                                  Due Date - within
                                forty-five (45) days
          Period              after the following dates:      Minimum Royalty
          ------              --------------------------      ---------------
<S>                           <C>                          <C>
July 1, 1997 - June 30,       June 30, 1998                [***]  This payment
   1998                                                    shall be prorated
                                                           beginning from the date
                                                           of the first commercial
                                                           sale.

July 1, 1998 - June 30,       June 30, 1998                [***]
   1999

July 1, 1999 - June 30,       June 30, 2000                [***]
   2000

July 1, 2000 - June 30,       June 30, 2001 and each       [***]
   2001                       successive anniversary
                              thereafter for the term
                              of this AGREEMENT.
</TABLE>

                                       8

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
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                                                CONFIDENTIAL TREATMENT REQUESTED

                                  Due Date - within
                                forty-five (45) days
          Period              after the following dates:      Minimum Royalty
          ------              --------------------------      ---------------

            3.3.3 For any PENN LICENSED PRODUCT or PENN LICENSED SERVICE, no
separate minimum royalty payment will be made for any twelve (12) month period
referred to in Section 3.3.1 and 3.3.2, as applicable, in the event that for
such twelve (12) month period royalties payable under Section 3.4 exceed the
applicable minimum royalty payable under Section 3.3.1 or 3.3.2. For any PENN
LICENSED PRODUCT or PENN LICENSED SERVICE, in the event that royalties payable
under Section 3.4 for any such twelve (12) month period are less than the
minimum royalty payable under Section 3.3.1 or 3.3.2, as applicable, for such
twelve (12) month Period, ADEZA shall pay PENN the difference on or prior to the
applicable due date set forth in Section 3.3.1 or 3.3.2. For each PENN LICENSED
PRODUCT or PENN LICENSED SERVICE, all minimum royalty payments under Section
3.3.1 or 3.3.2 are paid for the year preceding the Due Date of that PENN
LICENSED PRODUCT or PENN LICENSED SERVICE. The minimum royalty payments due for
the year in which the AGREEMENT terminates under Article 5 shall be pro-rated
for the period between the most recent anniversary of that first commercial sale
and the date of termination.

      3.4   REPORTS AND RECORDS

            3.4.1 ADEZA must deliver to PENN within forty-five (45) days after
the end of each six (6)-month period starting on January 1, 1998 a report,
certified by the chief financial officer of ADEZA, setting forth the calculation
of the royalties due to PENN for such six (6)-month period, including without
limitation:

                  3.4.1.1 Number of PENN LICENSED PRODUCTS and PENN LICENSED
                        SERVICES involved in SALES, listed by country.

                  3.4.1.2 Gross consideration for SALES of PENN LICENSED
                        PRODUCTS and PENN LICENSED SERVICES, including all
                        amounts invoiced or received.

                  3.4.1.3 Qualifying costs, as defined in Section 1.7, listed by
                        category of cost.

                  3.4.1.4 NET SALES of PENN LICENSED PRODUCTS and PENN LICENSED
                        SERVICES listed by country.

                  3.4.1.5 Royalties owed to PENN, listed by category, including
                        without limitation earned sublicensee-derived, and
                        minimum royalty categories.

                  3.4.1.6 Earned royalty amounts credited against minimum
                        royalty payments.

                                       9

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
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                                                CONFIDENTIAL TREATMENT REQUESTED

            3.4.2 ADEZA must pay the royalties due under Sections 3.1 within
forty-five (45) days following the last day of the six (6)-month period, in
which the royalties payable for such six (6) month period accrue. ADEZA must
send with the royalties the report described in Section 3.4.1 starting on
January 1, 1998.

            3.4.3 ADEZA must maintain and cause its sublicensees to maintain,
complete and accurate books and records which enable the royalties payable under
this AGREEMENT to be verified. The records for each six (6)-month period,
starting after January 1, 1998, must be maintained for three years after the
submission of each report under Article 3. Upon reasonable prior notice to
ADEZA, ADEZA must provide PENN with access to all books and records relating to
the SALES of any PENN LICENSED PRODUCT and any PENN LICENSED SERVICE by ADEZA
and its sublicensees to conduct a review or audit of those books and records.
Access to ADEZA's books and records must be available at least once each
CALENDAR YEAR, during normal business hours, and for each of three years after
the expiration or termination of this AGREEMENT. If PENN determines that ADEZA
has underpaid royalties by eight percent (8%) or more, ADEZA must pay the costs
and expenses of PENN and its accountants in connection with their review or
audit.

      3.5   CURRENCY, PLACE OF PAYMENT, INTEREST

            3.5.1 All dollar amounts referred to in this AGREEMENT are expressed
in United States dollars. All payments to PENN under this AGREEMENT must be made
in United States dollars by check payable to "The Trustees of the University of
Pennsylvania." If ADEZA receives revenues from SALES of any PENN LICENSED
PRODUCT or any PENN LICENSED SERVICE in currency other than United States
dollars, revenues shall be converted into United States dollars at the
conversion rate for the foreign currency as published in the eastern edition of
The Wall Street Journal as of the last business day of the applicable six (6)
month period, starting on January 1 or July 1, in which the royalty accrued.

            3.5.2 Amounts that are not paid when due shall accrue interest from
the due date until paid, at a rate equal to one and one-half percent (1.5%) per
month (or the maximum allowed by law, if less).

4.    CONFIDENTIALITY

      4.1   CONFIDENTIAL INFORMATION means and includes all technical
information, inventions, developments, discoveries, software, know-how, methods,
techniques, formulae, data, processes and other proprietary ideas whether or not
patentable or copyrightable, that any party identifies as confidential or
proprietary at the time it is delivered or communicated to the receiving
party(s).

      4.2   Subject to Section 4.3, any party hereto receiving CONFIDENTIAL
INFORMATION hereunder from any other party hereto agrees to maintain in
confidence and not disclose to any third party such

                                       10

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
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                                                CONFIDENTIAL TREATMENT REQUESTED

CONFIDENTIAL INFORMATION. Each party hereto agrees to ensure that its employees
or agents have access to CONFIDENTIAL INFORMATION received from another party
hereto only on a need-to-know basis and are obligated in writing to abide by its
obligations under this AGREEMENT. The foregoing obligation shall not apply to:

            4.2.1 information that is known to the receiving party or
independently developed by the receiving party prior to the time of disclosure,
in each case, to the extent evidenced by written records promptly disclosed to
the disclosing party upon receipt of the CONFIDENTIAL INFORMATION;

            4.2.2 information disclosed to the receiving party by a third party
that has a right to make such disclosure;

            4.2.3 information that becomes patented, published or otherwise part
of the public domain as a result of acts by PENN or a third person obtaining
such information as a matter of right; or

            4.2.4 information that is required to be disclosed by order of
United States governmental authority or a court of competent jurisdiction;
provided that the receiving party must use best efforts to obtain confidential
treatment of such information by the agency or court.

      4.3   PENN shall not be obligated to accept any confidential information
from ADEZA except for the information required to be sent to PENN in Sections
2.5.2, 3.2.1, 3.2.2, 3.2.3, 3.4, 8.9.4, 10 and the DEVELOPMENT and MARKETING
PLAN in Attachment 2. PENN shall use reasonable efforts not to disclose those
reports to any third party (subject to the exceptions of Section 4.2). PENN
bears no institutional responsibility for maintaining the confidentiality of any
other information of ADEZA other than financial records and projections required
in Sections 2.5.2, 3.2.1, 3.2.2, 3.2.3, 3.4, 8.9.4, 10, and the DEVELOPMENT and
MARKETING PLAN in Attachment 2 provided by ADEZA.

5.    TERM AND TERMINATION

      5.1   This AGREEMENT, unless sooner terminated as provided in this
AGREEMENT, terminates upon: expiration of the last to expire or become abandoned
of the PENN PATENT RIGHTS.

      5.2   ADEZA may, upon thirty (30) days written notice to PENN, terminate
this AGREEMENT by doing all of the following:

            5.2.1 ceasing to make, have made, performed or have performed, use,
import, sell and offer for sale all PENN LICENSED PRODUCTS and PENN LICENSED
SERVICES; and

                                       11

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
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                                                CONFIDENTIAL TREATMENT REQUESTED

            5.2.2 terminating all sublicenses, and causing all sublicensees to
cease making, having made, using, importing, selling and offering for sale all
PENN LICENSED PRODUCTS and PENN LICENSED SERVICES; and

            5.2.3 paying all monies owed to PENN under this AGREEMENT.

      5.3   PENN may terminate this AGREEMENT upon written notice if any of the
following occur:

            5.3.1 ADEZA is more than sixty (60) days late in paying to PENN
royalties, expenses, or any other monies due under this AGREEMENT and ADEZA does
not pay PENN in full within seven (7) days of receiving notice of the amount
due, or

            5.3.2 ADEZA breaches this AGREEMENT and does not cure the breach
within sixty (60) days after written notice of the breach.

      5.4   If ADEZA enters bankruptcy proceedings under Chapter 7 of the U.S.
Bankruptcy Act, PENN may terminate this AGREEMENT upon written notice.

      5.5   Upon termination of this AGREEMENT, the recipient party must, at the
provider party's request, return all CONFIDENTIAL INFORMATION received by the
recipient party from the provider party. PENN may notify ADEZA within a period
of thirty (30) days after termination of this AGREEMENT that PENN wishes to
obtain a nonexclusive, royalty-bearing license to use data generated by ADEZA
during the term of this AGREEMENT utilizing the technology licensed under this
AGREEMENT, and the parties will negotiate the terms of such license for a period
of up to sixty (60) days after ADEZA's receipt of such notification from PENN.

      5.6   ADEZA's obligation to pay all monies owed accruing under this
AGREEMENT shall survive termination of this AGREEMENT. In addition, the
provisions of Article 4 - Confidentiality, Article 5 - Term and Termination,
Article 9 - Disclaimer of Warranties; Indemnification, Article 9 - Use of Penn's
Name and Article 11 - Additional Provisions shall survive such termination.

6.    PATENT MAINTENANCE AND REIMBURSEMENT

      6.1   PENN shall control, with input from ADEZA, the prosecution and
maintenance of PENN PATENT RIGHTS. PENN's Patent Counsel shall be selected and
agreed upon to the satisfaction of PENN and ADEZA. ADEZA shall be permitted to
communicate directly with PENN's Patent Counsel to maintain and prosecute the
PENN PATENT RIGHTS provided that ADEZA, PENN, and PENN's Patent Counsel shall
copy one another on all correspondence and documents pertaining to the PENN
PATENT RIGHTS within the FIELD and

                                       12

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OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
<PAGE>
                                                CONFIDENTIAL TREATMENT REQUESTED

shall not file any document pertaining to the PENN PATENT RIGHTS within the
FIELD with the U.S. or any other country patent office without PENN's prior
review and approval.

      6.2   ADEZA shall enter into a billing agreement, in form and substance
reasonably satisfactory to PENN, ADEZA, and PENN's Patent Counsel with respect
to all of the PENN PATENT RIGHTS within the FIELD, pursuant to which ADEZA shall
agree to pay directly to such counsel on behalf of PENN such counsel's
attorneys' fees, expenses, official fees and other charges in connection with
the filing and prosecution of the patent applications and maintenance of PENN
PATENT RIGHTS within the FIELD that PENN and ADEZA have mutually agreed to
prosecute and maintain. PENN may at PENN's own expense continue to prosecute
such claims that ADEZA does not decide to pursue.

      6.3   PENN shall retain all right, title and interest in and to the PENN
PATENT RIGHTS and other intellectual property protection related thereto except
those rights of ADEZA pursuant to this AGREEMENT.

7.    INFRINGEMENT AND LITIGATION

      7.1   PENN and ADEZA are responsible for notifying each other promptly of
any infringement of PENN PATENT RIGHTS which may come to their attention. PENN
and ADEZA shall consult one another in a timely manner concerning any
appropriate response to the infringement.

      7.2   ADEZA may prosecute such infringement at its own expense. ADEZA must
not settle or compromise any such suit in a manner that imposes any obligations
or restrictions on PENN or grants any rights to the PENN PATENT RIGHTS, without
PENN's prior written permission. Financial recoveries from any such litigation
will first be retained by ADEZA; provided, that ADEZA will pay PENN a royalty on
that portion of the financial recoveries which corresponds to ADEZA's lost
SUBLICENSE ROYALTIES or ADEZA's lost profits from the foregone distribution of
PENN LICENSED PRODUCTS or from the foregone provision of PENN LICENSED SERVICES.
Such royalty shall be based on the provisions of Section 3.1, taking into
account the fact that royalties specified in Section 3.1 are expressed in terms
of revenues received by ADEZA instead of profits made by ADEZA.

      7.3   ADEZA's rights under Section 7.2 are subject to the continuing right
of PENN to intervene at PENN's own expense and assert separately PENN's claim
for infringement of the PENN PATENT RIGHTS or PENN may join ADEZA in any claim
or suit for infringement of the PENN PATENT RIGHTS, subject to ADEZA's control
of such claim or suit. Any consideration received by either party in settlement
of any claim or suit shall first be used to reimburse the parties for their
respective litigation expenses. Any excess over the total litigation expenses of
both parties shall be shared in accordance with Section 7.2. In the event that
the total consideration

                                       13

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OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
<PAGE>
                                                CONFIDENTIAL TREATMENT REQUESTED

received by the parties in settlement of any claim or suit is less than the
total litigation expenses of both parties, the consideration will be allocated
between the parties in proportion to their respective litigation expense.

      7.4   If ADEZA fails to prosecute any infringement, PENN may prosecute
such infringement at its own expense. In such event financial recoveries will be
entirely retained by PENN.

      7.5   In any action to enforce any of the PENN PATENT RIGHTS, either
party, at the request and expense of the other party shall cooperate to the
fullest extent reasonably possible. This provision shall not be construed to
require either party to undertake any activities. including legal discovery, at
the request of any third party except as may be required by lawful process of a
court of competent jurisdiction.

8.    DISCLAIMER OF WARRANTIES; INDEMNIFICATION

      8.1   THE PENN PATENT RIGHTS, PENN LICENSED PRODUCTS, PENN LICENSED
SERVICES, AND ALL OTHER TECHNOLOGY LICENSED UNDER THIS AGREEMENT, ARE PROVIDED
ON AN "AS IS" BASIS AND PENN MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR
IMPLIED, WITH RESPECT THERETO. BY WAY OF EXAMPLE BUT NOT OF LIMITATION, PENN
MAKES NO REPRESENTATIONS OR WARRANTIES (i) OF COMMERCIAL UTILITY; (ii) OF
MERCHANTABILlTY OR FITNESS FOR A PARTICULAR PURPOSE; OR (iii) THAT THE USE OF
THE PENN PATENT RIGHTS, PENN LICENSED PRODUCTS, PENN LICENSED SERVICES, AND ALL
TECHNOLOGY LICENSED UNDER THIS AGREEMENT WILL NOT INFRINGE ANY PATENT, COPYRIGHT
OR TRADEMARK OR OTHER PROPRIETARY RIGHTS OF OTHERS. PENN shall NOT BE LIABLE TO
ADEZA, ADEZA's SUCCESSORS OR ASSIGNS OR ANY THIRD PARTY WITH RESPECT TO ANY
CLAIM ARISING FROM ADEZA'S USE OF THE PENN PATENT RIGHTS, PENN LICENSED
PRODUCTS, PENN LICENSED SERVICES, AND ALL TECHNOLOGY LICENSED UNDER THIS
AGREEMENT OR FROM THE MANUFACTURE, USE OR SALE OF PENN LICENSED PRODUCTS OR PENN
LICENSED SERVICES; OR ANY CLAIM FOR LOSS OF PROFITS, LOSS OR INTERRUPTION OF
business OR FOR INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OF ANY KIND.

      8.2   Lessey personally represents and warrants that he has assigned his
entire right, title, and interest in and to the PENN PATENT RIGHTS to PENN and
that he has not assigned and will not assign any interest in the PENN PATENT
RIGHTS to any other party. Lessey further represents that he has the right to
make such assignment to PENN.

      8.3   Lessey personally represents and warrants that Lessey has no actual
knowledge that any claim has been asserted against Lessey concerning the PENN
PATENT RIGHTS, and Lessey has no reason to believe that ADEZA's use of the PENN
PATENT RIGHTS hereunder infringes any third party proprietary rights.

                                       14

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
<PAGE>
                                                CONFIDENTIAL TREATMENT REQUESTED

      8.4   Lessey personally represents and warrants that his entire right,
title and interest in and to the PENN PATENT RIGHTS has been assigned to PENN,
and Lessey has not granted and will not grant any interest in the PENN PATENT
RIGHTS to any third party that conflicts with the LICENSE granted to ADEZA under
this AGREEMENT.

      8.5   To the actual knowledge of PENN, without independent investigation,
the entire right, title and interest in and to the PENN PATENT RIGHTS has been
assigned to PENN, and PENN has not granted and will not grant any interest in
the PENN PATENT RIGHTS to any third party that conflicts with the LICENSE
granted to ADEZA under this AGREEMENT. PENN represents and warrants to ADEZA
that PENN has the right to grant exclusive licenses to the PENN PATENT RIGHTS.

      8.6   To the actual knowledge of PENN's Center for Technology Transfer and
PENN's Office of the General Counsel, without independent investigation, PENN
has not received any written notice or claim contesting PENN's rights in the
PENN PATENT RIGHTS asserted against PENN concerning the PENN PATENT RIGHTS, and,
based upon ADEZA's disclosure to PENN regarding ADEZA's permitted use of the
PENN PATENT RIGHTS, PENN has no reason to believe that ADEZA's use of the PENN
PATENT RIGHTS hereunder infringes any third party proprietary rights.

      8.7   ADEZA must defend, indemnify and hold harmless PENN, its trustees,
officers, agents and employees (individually, an "Indemnified Party", and
collectively, the "Indemnified Parties"), from and against any and all
liability, loss, damage, action, claim or expense suffered or incurred by the
Indemnified Parties (including attorney's fees) (individually, a "Liability",
and collectively, the "Liabilities") that result from or arise out of (a) the
development, use, manufacture, promotion, sale or other disposition of any PENN
PATENT RIGHTS, PENN LICENSED PRODUCT or PENN LICENSED SERVICE by ADEZA, its
assignees, sublicensees, vendors or other third parties; (b) any breach by ADEZA
of this AGREEMENT; and (c) the enforcement by an Indemnified Party of this
Section. Without limiting the foregoing. ADEZA must defend, indemnify and hold
harmless the Indemnified Parties from and against any Liabilities resulting
from:

            8.7.1 any product liability or other claim of any kind related to
the use by a third party of a PENN LICENSED PRODUCT that was manufactured, sold
or otherwise disposed by ADEZA, its assignees, sublicensees, vendors or other
third parties;

            8.7.2 a claim by a third party that ADEZA's design, composition,
manufacture, use, sale or other disposition of any PENN LICENSED PRODUCT or the
provisions of any PENN LICENSED SERVICE infringes or violates any patent,
copyright, trademark or other intellectual property rights of such third party;
provided, that ADEZA shall have no obligation to defend or indemnify PENN to the
extent that such claim is due to the sole negligence or willful misconduct of
PENN.

                                       15

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
<PAGE>
                                                CONFIDENTIAL TREATMENT REQUESTED

            8.7.3 clinical trials or studies conducted by or on behalf of ADEZA
relating to the PENN PATENT RIGHTS, PENN LICENSED PRODUCT or PENN LICENSED
SERVICE, including, without limitation, any claim by or on behalf of a human
subject of any such clinical trial or study.

      8.8   ADEZA is not permitted to settle or compromise any claim or action
giving rise to Liabilities in a manner that imposes any restrictions or
obligations on PENN or grants any rights to the PENN PATENT RIGHTS. PENN
LICENSED PRODUCT or PENN LICENSED SERVICE without PENN's prior written consent,
which shall not be unreasonably withheld. If ADEZA fails or declines to assume
the defense of any such claim or action within thirty (30) days after notice
thereof, PENN may assume the defense of such claim or action for the account and
at the risk of ADEZA, and any Liabilities related thereto shall be conclusively
deemed a liability of ADEZA if such claim or action is held by a court of
competent jurisdiction to be within ADEZA's indemnification obligation. The
indemnification rights of PENN or other Indemnified Party contained herein are
in addition to all other rights which such Indemnified Party may have at law or
in equity or otherwise.

      8.9   INSURANCE

            8.9.1 ADEZA must procure and maintain a policy or policies of
comprehensive general liability insurance, including broad form and contractual
liability, in a minimum amount of [***] combined single limit per occurrence and
in the aggregate as respects personal injury, bodily injury and property damage
arising out of ADEZA's performance of this AGREEMENT.

            8.9.2 ADEZA must, upon commencement of clinical trials involving
PENN LICENSED PRODUCTS, procure and maintain a policy or policies of product
liability insurance in a minimum amount of [***] combined single limit per
occurrence and in the aggregate as respects bodily injury and property damage
arising out of ADEZA's performance of this AGREEMENT.

            8.9.3 The policy or policies of insurance described in this Section
8.4 must be issued by an insurance carrier with an A.M. Best rating of "A" or
better. ADEZA must provide PENN with certificates evidencing the insurance
coverage required herein and all subsequent renewals thereof.

            8.9.4 PENN may periodically review the adequacy of the minimum
limits of liability insurance specified in this Section. At PENN's request,
ADEZA and PENN shall confer to discus the adequacy of the coverage figures in
Sections 8.9.1 and 8.9.2 and shall adjust those coverage figures together to a
commercially reasonable level as circumstances warrant. The specified minimum
insurance amounts do not constitute a limitation on ADEZA's obligation to
indemnify PENN under this AGREEMENT.

9.    USE OF PENN'S NAME

                                       16

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OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
<PAGE>
                                                CONFIDENTIAL TREATMENT REQUESTED

            ADEZA and its employees and agents must not use and ADEZA must not
permit its sublicensees to use PENN's name or any adaptation thereof, or any
PENN seal, logotype, trademark or service mark, or the name, mark, or logotype
of any PENN representative or organization in any way without the prior written
consent of PENN.

10.   ADEZA is not permitted to assign this AGREEMENT or any part of it, either
directly or by merger or other operation of law, without the prior written
consent of PENN which shall not be unreasonably withheld. To the extent
permitted by ADEZA's Confidential Disclosure Agreement with the proposed
ASSIGNEE, ADEZA shall provide to PENN under a confidentiality agreement, at
least 120 days prior to such proposed assignment background, information
reasonably sufficient for PENN to make an initial assessment of the proposed
assignment for a period of thirty (30) days and any further information
regarding such proposed assignment as PENN may reasonably request to make a
final decision in a timely manner not to exceed forty-five (45) days from the
completion of the initial assessment. Any prohibited assignment of this
AGREEMENT or the rights hereunder shall be null and void. No assignment relieves
ADEZA of responsibility for the performance of any accrued obligations which it
has prior to such assignment.

11.   ADDITIONAL PROVISIONS

      11.1  Nothing in this AGREEMENT shall be deemed to establish a
relationship of principal and agent between PENN and ADEZA, nor any of their
agents or employees for any purpose whatsoever, nor shall this AGREEMENT be
construed as creating any other form of legal association or arrangement which
would impose liability upon one party for the act or failure to act of the other
party.

      11.2  A waiver by either party of a breach of any provision of this
AGREEMENT will not constitute a waiver of any subsequent breach of that
provision or a waiver of any breach of any other provision of this AGREEMENT.

      11.3  If any provision of this AGREEMENT is found by a court to be void,
invalid or unenforceable, that provision shall be reformed to comply with
applicable law or stricken if not so conformable, so as not to affect the
validity or enforceability of the remainder of this AGREEMENT.

      11.4  Notices, payments, statements reports and other communications under
this AGREEMENT shall be in writing and shall be deemed to have been received as
of the date sent if sent by public courier (e.g. Federal Express), or by Express
Mail, receipt requested, and addressed as follows:

                                       17

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OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
<PAGE>
                                                CONFIDENTIAL TREATMENT REQUESTED

If for PENN:                                with a copy to:
      University of Pennsylvania               Office of General Counsel
      Center for Technology Transfer           University of Pennsylvania
      3700 Market Street, Suite 300            221 College Hall
      Philadelphia, PA 19104-3147              Philadelphia, PA 19104-6303
      Attention: Managing Director             Attention; General Counsel

If for ADEZA:
      Attention: The President
      Adeza Biomedical Corporation
      1240 Elko Drive
      Sunnyvale, CA 94089
      Attention:

Either party may change its official address upon written notice to the other
party.

      11.5  This AGREEMENT shall be construed and governed in accordance with
the laws of the Commonwealth of Pennsylvania, without giving effect to conflict
of law provisions. In the event that a party to this AGREEMENT perceives the
existence of a dispute with the other party concerning any right or duty
provided for herein, the parties will, as soon as practicable, confer in an
attempt to resolve the dispute. If the parties are unable to resolve such
dispute amicably within thirty (30) days of the inception of the dispute, then
the parties hereby submit to the exclusive jurisdiction of and venue in the
courts located in the Eastern District of the Commonwealth of Pennsylvania with
respect to any and all disputes concerning the subject of this AGREEMENT.

      11.6  PENN and ADEZA shall not discriminate against any employee or
applicant for employment because of race, color, sex, sexual or affectional
preference, age, religion, national or ethnic origin, handicap, of because he or
she is a disabled veteran or a veteran of the Vietnam Era.

      11.7  ADEZA must comply with all prevailing laws, rules and regulations
that apply to its activities or obligations under this AGREEMENT. Without
limiting the foregoing, it is understood that this AGREEMENT may be subject to
United States laws and regulations controlling the export of technical data,
computer software, laboratory prototypes and other commodities, articles and
information, including the Arms Export Control Act as

                                       18

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OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
<PAGE>
                                                CONFIDENTIAL TREATMENT REQUESTED

amended in the Export Administration Act of 1979, and that the parties'
obligations are contingent upon compliance with applicable United States export
laws and regulations. The transfer of certain technical data and commodities may
require a license from the cognizant agency of the United States Government
and/or written assurances by ADEZA that ADEZA shall not export data or
commodities to certain foreign countries without prior approval of such agency.
PENN neither represents that a license is not required nor that, if required, it
will issue.

      11.8  This AGREEMENT constitutes the entire agreement of the parties. Any
modification of this AGREEMENT must be in writing and signed by an authorized
representative of each party.

            IN WITNESS WHEREOF, the parties have caused duly authorized
representatives to execute this Agreement.

<TABLE>
<S>                                                        <C>
THE TRUSTEES OF THE UNIVERSITY                             ADEZA BIOMEDICAL CORPORATION
OF PENNSYLVANIA

By: /s/ Louis P. Berneman                                  By: /s/ Emory Anderson

Name: Louis P. Berneman                                    Name: Emory Anderson

Title: Managing Director, Center for Technology Transfer   Title: President

Date:                                                      Date: 8/22/97

DR. BRUCE A. LESSEY

By: /s/ Bruce A. Lessey

Name: Bruce A. Lessey, Ph.D., M.D.

Title: Associate Professor & Medical Doctor

Date:
</Table>

                                       19

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OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
<PAGE>
                                                CONFIDENTIAL TREATMENT REQUESTED

                                  ATTACHMENT 1

                               PENN PATENT RIGHTS

PATENTS

Domestic

1. U. S. Serial No. [***].

2. U. S. Serial No. [***].

3. U.S. Serial No. [***].

4. U.S. Serial No. [***].

5. U.S. Serial No. [***].

6. U.S. Serial No. [***].

Foreign

 U.S. - Serial No. [***] was foreign filed as follows:

                   Penn Ref.: [***]     PCT                  Germany

                                        filed 11/19/94       Greece

                                        PCT/US94/13299       Ireland

                                        Abstract             Italy

                                        Canada               Luxembourg

                                        EPO                  Monaco

                                        95902592.5           Netherlands

                                        Australia            Portugal

                                        Belgium              Spain

                                        Denmark              Sweden

                                       20

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OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
<PAGE>
                                                CONFIDENTIAL TREATMENT REQUESTED

                                        France               Switzerland

                                        G. Britain           Japan

PENN ANTIBODIES and CELL LINES

I.    PENN ANTIBODIES

      [***]

      Other ANTIBODIES against the [***] owned by PENN which use of such
      ANTIBODIES shall be limited to the claims of the patents included in the
      definition of PENN PATENT RIGHTS under Section 1.10 of this AGREEMENT.

II.   CELL LINES

      1.    Cell Line producing [***]

      2.    Cell lines producing [***] owned by PENN as of the EFFECTIVE DATE of
this AGREEMENT, which use of such call line shall be limited to the claims of
the patents included in the definition of PENN PATENT RIGHTS under Section 1.10
of this AGREEMENT.

                                       21

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OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
<PAGE>
                                                CONFIDENTIAL TREATMENT REQUESTED

                                  ATTACHMENT 2

                          ADEZA BIOMEDICAL CORPORATION

                         DEVELOPMENT AND MARKETING PLAN

[***] has already been transferred and approved by the Laboratory Director, CLIA
and the State of California. The following action items are listed below.

-      [***]

-      [***]

      -     [***]

      -     [***]

-      [***]

-      [***]

      -     [***]

      -     [***]

-      [***]

-      [***]

-      [***]

-      [***]

-      [***]

      -     [***]

                                       22

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OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.<PAGE>
                                                                    Exhibit 10.6

                                                CONFIDENTIAL TREATMENT REQUESTED

                              AGREEMENT AND RELEASE

      THIS AGREEMENT AND RELEASE ("Agreement and Release") is made and entered
into as of March 3, 1998 (the "Effective Date"), by and between Adeza Biomedical
Corporation, a Delaware corporation ("Adeza"), and Matria Healthcare, Inc., a
Delaware corporation ("Matria").

                                    RECITALS

      WHEREAS, Adeza has developed and manufactures certain fetal fibronectin
pre-term delivery tests (the "fFN Tests"), which are useful in the diagnosis of
pre-term delivery risks for pregnant women;

      WHEREAS, Adeza and Matria's predecessor, Tokos Medical Corporation
("Tokos"), entered into an Exclusive Marketing Agreement with respect to the fFN
Tests effective as of December 31, 1991 (the "Exclusive Marketing Agreement");

      WHEREAS, under the Exclusive Marketing Agreement, Tokos was granted the
exclusive right to market, sell, use and otherwise dispose of the fFN Tests in
the United States, Puerto Rico and Canada (the "Territory");

      WHEREAS, Adeza and Tokos entered into amendments of the Exclusive
Marketing Agreement dated December 20, 1994 and January 13, 1995;

      WHEREAS, on March 8, 1996, Tokos and Healthdyne, Inc. ("Healthdyne")
merged with and into Matria, a newly-formed Delaware corporation. Pursuant to
the merger agreement between Tokos and Healthdyne, Matria assumed all of Tokos'
rights and obligations under the Exclusive Marketing Agreement;

      WHEREAS, on May 8, 1996, Adeza and Matria entered into an amendment to the
Exclusive Marketing Agreement (hereafter, the term "Exclusive Marketing
Agreement" shall mean the Exclusive Marketing Agreement, as amended to date);

      WHEREAS, disputes have arisen under the Exclusive Marketing Agreement
between Adeza and Matria;

      WHEREAS, on February 20, 1997, Adeza served notice of termination of the
Exclusive Marketing Agreement to Matria;

      WHEREAS, on March 7, 1997, Adeza served Matria with a complaint for
damages declaratory relief and injunctive relief naming Matria and various
unnamed defendants, Docs 1-100, which complaint has been amended subsequent to
March 7, 1997 (as amended to date, the "Complaint") in the Superior Court of the
State of California in the County of Santa Clara in Adeza Biomedical Corporation
v. Matria Healthcare, Inc., Case No. CV 764258 (the "Litigation") in which Adeza
pled, inter alia, that it was entitled to terminate the Exclusive Marketing
Agreement as a result of Matria's breach of the terms thereof;

                                      -1-

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OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
<PAGE>
                                                CONFIDENTIAL TREATMENT REQUESTED

         WHEREAS, Matria has brought counterclaims against Adeza with respect to
the claims asserted by Adeza in the Litigation (the "Counterclaims");

      WHEREAS, the parties in entering into this Agreement and Release do not
admit any liability or obligation to the other party arising out of, in
connection with, or in any way related to the facts, actions, failures to act,
transactions or occurrences alleged or which could have been alleged in the
Complaint or the Counterclaims, as the case may be; and

      WHEREAS, without admitting any issue of fact, law or equity, Matria and
Adeza agree that the settlement of this matter and entry of this Agreement and
Release are in good faith, in an effort to avoid expensive and protracted
litigation, and in the public interest.

                                    AGREEMENT

      NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:

                                   ARTICLE 1

                               MARKETING AGREEMENT

      1.1 Termination. As of the Effective Date, the Exclusive Marketing
Agreement, together with all rights and obligations contained therein or related
thereto, is terminated and is of no further force or effect and, except as
otherwise set forth in Section 1.2 below, as between the parties, all rights to
promote, market and sell the fFN Tests and related services will have reverted
to Adeza, and Matria shall retain no such rights under the Exclusive Marketing
Agreement or otherwise.

      1.2 Transition.

            (a) The parties agree to perform in good faith the duties and
responsibilities set forth in the attached Exhibit A (the "Transition
Responsibilities") during the period of time commencing upon the Effective Date
and concluding on the earlier of August 31, 1998 or the Acceleration Date (as
defined below) (the "Transition Period").

            (b) Matria shall, at least thirty (30) days (but no more than ninety
(90) days) prior to the conclusion of the Transition Period, send written
notification to all third parties with which it has an agreement related to the
fFN Tests at the address maintained by Matria that Matria will, effective upon
the conclusion of the Transition Period, cease to be a distributor of fFN Tests.
Adeza may, in its sole discretion, elect to conclude the Transition Period prior
to August 31, 1998, in which case Adeza will give Matria notice at least
forty-five (45) days prior to the desired date of conclusion (which desired date
of conclusion shall be referred to herein as the "Accelerated Date"), whereupon
Matria shall, within fifteen (15) days following receipt of such notice from
Adeza, notify in the manner described above in this subsection 1.2(b) all third
parties with which it has an agreement related to the fFN Tests that Matria
will, effective upon the Accelerated Date, cease to be a distributor of fFN
Tests. If Adeza determines that Matria's obligation to perform any specific
Transition Responsibility should be terminated at least thirty (30) days prior
to the conclusion of the Transition Period as a result of a good faith
determination

                                      -2-

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OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
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                                                CONFIDENTIAL TREATMENT REQUESTED

that such termination is necessary or appropriate to effect the orderly
transition of the fFN business to Adeza, Adeza may terminate Matria's obligation
to perform such Transition Responsibility upon forty-five (45) days written
notice to Matria. Matria shall, within fifteen (15) days following receipt of
such notice, notify all third parties with which Matria has an agreement that
are affected by such change that Matria. will, effective upon the expiration of
such forty-five (45) day period, cease to be responsible for the performance of
such Transition Responsibility. Under no circumstances shall Matria be required
to provide more than two (2) such notices of partial termination (unless
required to be given to less than fifty (50) entities or individuals) unless
Adeza reimburses Matria for the cost and expense of such additional notices.
Notwithstanding the foregoing, in the event that Adeza elects to terminate,
pursuant to this Section 1.2(b), all or any portion of the Transition
Responsibilities prior to August 31, 1998, Matria shall continue to perform its
Transition Responsibilities with respect to any of Matria's contractual
relationships that require ninety (90) days notice for termination until the
earlier of (i) one hundred (100) days following Matria's receipt of written
notice from Adeza regarding the intended termination of the applicable
Transition Responsibilities, (ii) the actual termination of such relationship or
(iii) August 31, 1998.

            (c) In the event that either party believes, in good faith, that the
other party is in material default with respect to the performance of its
Transition Responsibilities, such party may provide written notice of default to
the other party describing in sufficient detail the alleged deficiencies in
performance, whereupon the allegedly defaulting party shall have a period of
fifteen (15) days in which to cure such default. If the alleged breach is not
cured within such fifteen (15) day period, the party providing notice thereof
may request, upon further written notice by electronic mail or facsimile (with
original to follow via U.S. mail) to the allegedly defaulting party, the
initiation of arbitration proceedings, which arbitration proceedings shall be
conducted in accordance with the rules of the American Arbitration Association.
In the event that the parties cannot agree on an appropriate arbitrator within
five (5) business days following the date of the written request, then an
arbitrator shall be appointed pursuant to the rules of the American Arbitration
Association. All such arbitration proceedings shall take place at a mutually
convenient time and place in Chicago, Illinois and a decision shall be rendered
within thirty (30) days of the commencement of such proceeding. Any decision by
such arbitrator shall be final and binding upon the parties. If the arbitrator
determines that Matria has materially defaulted in its performance of the
Transition Responsibilities, the parties acknowledge that the arbitrator may, as
one of its available remedies, reduce all further percentage royalty payment
obligations of Adeza to Matria as set forth in subsections 3.2(a) and (b) below;
provided, however, that the arbitrator shall not reduce the royalty payment
obligations under Section 3.2(a) to an amount less than [***] of Net Sales and
shall not reduce the royalty payment obligation under Section 3.2(a) to an
amount less than [***] of Net Sales. If the arbitrator determines that Adeza has
materially defaulted in its performance of the Transition Responsibilities, the
parties acknowledge that the arbitrator may, as one of its available remedies,
terminate Adeza's right to receive payment of any revenues from Matria that have
accrued, but have not yet been paid, as of the date of such determination, along
with any revenues that accrue thereafter during the Transition Period.

            (d) The party asserting any claim pursuant to (c) above shall bear
(i) its own attorney's fees arising out of the proceedings described in
subsection 12(c) and (ii) the costs of arbitration; provided, however, that in
the event that a party is determined by the arbitrator to be the prevailing
party in such proceedings, the arbitrator, at its discretion, may recommend that
the

                                      -3-

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
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                                                CONFIDENTIAL TREATMENT REQUESTED

prevailing party be reimbursed by the non-prevailing party for all reasonable
expenses and costs incurred by the prevailing party in protecting or enforcing
its rights hereunder, including, without limitation, its reasonable attorneys'
fees. The parties shall direct the arbitrator to have the time and expense of
the arbitration minimized to the maximum extent practicable under the
circumstances.

            (e) The remedies set forth in this Section 1.2 shall be the
exclusive remedy of the parties with respect to any alleged failure on the part
of any such party to fulfill its Transition Responsibilities. Unless a party
shall have notified the other party of any alleged default by such other party
in the performance of its Transition Responsibilities (other than a payment
default with respect to payments due after the end of the Transition Period)
during the Transition Period or during the fifty (50) day period immediately
following the conclusion of the Transition Period, that party shall be deemed to
have waived all rights with respect to any such default by such other party.
Notwithstanding the foregoing, nothing in this Section 1.2(e) shall limit either
party's rights and obligations under Article 13 of this Agreement and Release.

                                   ARTICLE 2

                          SURRENDER OF ADEZA SECURITIES

      2.1 Surrender and Cancellation of Securities. Upon the Effective Date,
Matria shall surrender to Adeza for cancellation (a) certificates representing
(i) [***] shares of Adeza's Series E Preferred Stock, no par value, and (ii)
[***] shares of Adeza's Series 2 Preferred Stock, par value $0.001 per share,
and (b) a Warrant to purchase [***] shares of Adeza's Series 2 Preferred Stock
(collectively, the "Surrendered Securities"), which securities represent all of
the Adeza capital stock, or rights to acquire Adeza capital stock, held
beneficially or of record by Matria or its affiliates. Matria acknowledges and
agrees that following the Effective Date it will have no right to receive any
shares of the Adeza Series 1 Preferred Stock for which the Adeza Series E
Preferred Stock was to be exchanged. To properly effect the surrender of the
Preferred Stock, Matria shall, on or prior to the Effective Date, complete,
execute and deliver to Adeza the assignments separate from certificate attached
as Exhibit B hereto.

      2.2 Representations Regarding Ownership. Matria hereby represents and
warrants that, as of the Effective Date:

            (a) It is the sole record and beneficial owner of the Surrendered
Securities and has good and valid title to such Surrendered Securities free and
clear of all restrictions, claims, liens, charges, pledges and encumbrances
whatsoever, except for such restrictions, claims, liens, charges, pledges or
encumbrances as may have been created by Adeza;

            (b) It has full right, power and authority to transfer and deliver
such Surrendered Securities to Adeza, and, upon delivery of the securities or
any certificates therefor along with the executed assignments separate from
certificate attached hereto as Exhibit B, and following Adeza's acceptance
thereof, will transfer to Adeza good and valid title thereto free and clear of
any restriction, claim, lien, charge or encumbrance whatsoever;

                                      -4-

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
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                                                CONFIDENTIAL TREATMENT REQUESTED

            (c) It is not a party to any voting trust, voting proxy, agreement
or arrangement affecting the exercise of the voting rights of the Surrendered
Securities;

            (d) Other than the Litigation, there is no action, proceeding, claim
or, to its knowledge, investigation or threatened investigation against it or
its assets or properties, at law or in equity, or before any court, arbitrator
or other tribunal, or before any administrative law judge, hearing officer or
administrative agency relating to or in any other manner impacting upon the
Surrendered Securities and the cancellation of the Surrendered Securities
contemplated hereby; and

            (e) With the exception of the Surrendered Securities, it, together
with its affiliates, does not hold any interest in any capital stock of Adeza or
any securities convertible into or exercisable for the capital stock of Adeza.

                                    ARTICLE 3

                                    ROYALTIES

      3.1 Certain Definitions. As used in this Agreement, the following terms
shall have the meanings set forth below:

            (a) "fFN ELISA Test" shall mean Adeza's fFN qualitative,
enzyme-linked immunosorbant assay diagnostic test, in such form as it shall
exist during the period that royalties are due hereunder, as used to measure the
presence of fetal fibronectin in the vaginal fluid of pregnant women in order to
assess the likelihood of birth.

            (b) "fFN Rapid Assay Test" shall mean the disposable, dry chemistry
derivative of the fFN ELISA Test, in such form as it shall exist during the
period that royalties are due hereunder. For the purposes of this Article 3, the
term "fFN Rapid Assay Test" shall include any biochemical diagnostic test
incorporating any material portion of Adeza's fFN technology as contained in the
fFN ELISA Test or fFN Rapid Assay Test as of the Effective Date.

      The terms fFN ELISA Test or fFN Rapid Assay Test shall include: fFN
specimen collection kits, fFN control kits and fFN analyzers distributed for fFN
ELISA Test and fFN Rapid Assay Test-specific uses; products that are directly
and integrally related to the obtaining of a fFN ELISA Test result or a fFN
Rapid Assay Test result; and the processing and analyzing of a specimen, but
shall exclude printers and other peripherals attached to the analyzers.

            (c) "Net Sales" for a fFN ELISA Test or a fFN Rapid Assay Test shall
mean all amounts actually received by Adeza, any Adeza Affiliate (as defined
below) or any successor-in-interest to all or substantially all of Adeza's fFN
ELISA Test business and/or fFN Rapid Assay Test business (a "Successor"), from
the sale, processing or analyzing of such test by Adeza and such Adeza Affiliate
(or such Successor and its affiliates) in the Territory to any unaffiliated
third party, whether or not for resale to others, less the following deductions
actually paid or allowed by Adeza or such Adeza Affiliate (or such Successor):
quantity and cash discounts normal and customary in the trade; sales, use and
other similar taxes; amounts repaid or credited by reason of rejection or
return; and any transportation, delivery and insurance charges related thereto
paid by Adeza or such Adeza Affiliate (or such Successor); provided, however,
that to

                                      -5-

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
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                                                CONFIDENTIAL TREATMENT REQUESTED

the extent that the fFN ELISA Tests or the fFN Rapid Assay Tests are sold in the
form of bundling with other products or services which are also sold by Adeza or
an Adeza Affiliate (or such Successor) in material quantities on a stand alone
basis for use other than with an fFN Test (other than the service performed in
processing such fFN ELISA Tests or fFN Rapid Assay Tests), the Net Sales for the
fFN ELISA Test or fFN Rapid Assay Test included therein shall be the sum
obtained by multiplying the Net Sales for the sale of the bundled package as a
whole by a fraction, the numerator of which shall be the list price of such fFN
ELISA Test or fFN Rapid Assay Test (calculated as set forth above in this
subsection 3.1(c)) and the denominator of which shall be the sum of the list
prices of each component included within such bundled package. Amounts received
upon sales of fFN ELISA Tests and fFN Rapid Assay Tests (including the
processing and analyzing of tests) to an Adeza Affiliate shall not be included
within the definition of Net Sales and shall be disregarded for purposes of
determining the amounts due Matria under this Article 3.

            (d) "Marketing Fee" shall mean the portion of any up-front or lump
sum payment (either in the form of cash or property) from a third party received
by Adeza or an Adeza Affiliate (or any Successor) that would appropriately be
characterized as a payment made by such third party in consideration for the
granting of rights to such third party by Adeza or an Adeza Affiliate (or such
Successor) to market, sell, distribute or provide to patients the fFN ELISA
Tests or fFN Rapid Assay Tests, less sales or use taxes actually paid by Adeza
or such Adeza Affiliate (or such Successor) on such portion and any amount of
such portion subsequently forfeited by Adeza or such Adeza Affiliate (or such
Successor). In the event that a Marketing Fee is paid in the form of property,
that Marketing Fee shall be deemed to be the fair market value of such property
on the date of transfer for purposes of Section 3.2. All payments received upon
the granting to an Adeza Affiliate (after becoming an Adeza Affiliate) of rights
to market, sell, distribute or provide to patients the fFN ELISA Tests or fFN
Rapid Assay Tests shall not be deemed a Marketing Fee and shall be disregarded
for purposes of determining the amounts due Matria under this Article 3.

            (e) "Adeza Affiliate" shall mean any corporation, company or other
entity controlling, controlled by, or under common control with Adeza, where
control means the ownership of thirty percent (30%) or more of an entity's
outstanding voting securities; provided, however, that such corporation, company
or other entity shall be considered an Adeza Affiliate only for the time during
which such control exists.

      3.2 Royalty Obligations. Adeza shall pay to Matria a royalty equal to:

            (a) [***] of (i) the Net Sales from all fFN ELISA Tests sold to an
unaffiliated third party following the Effective Date and (ii) the Marketing
Fees with respect to the grant of rights to the fFN ELISA Tests (which grant is
independent from a grant of rights to the fFN Rapid Assay Tests) following the
Effective Date;

            (b) [***] of (i) the Net Sales from all fFN Rapid Assay Tests sold
to an unaffiliated third party following the Effective Date and (ii) the
Marketing Fees with respect to the grant of rights to the fFN Rapid Assay Tests
(which grant is independent from a grant of rights to the fFN ELISA Tests)
following the Effective Date; and

                                      -6-

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
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                                                CONFIDENTIAL TREATMENT REQUESTED

            (c) [***] of the Marketing Fees with respect to the grant, in a
single transaction, of rights to both the fFN ELISA Tests and the fFN Rapid
Assay Tests;

      provided, however, that in the event that Adeza's or an Adeza Affiliate's
(or any Successor's) aggregate royalty obligations hereunder for sales of any
fFN ELISA Test or fFN Rapid Assay Test, when combined with (i) [***] and (ii)
[***], as the case may be, exceed [***] of the Net Sales from such test, the
royalty payment obligations set forth in subsections 3.2(a) and (b) above shall
be reduced pro rata with the [***] for the sale of such test shall not exceed
[***] of the Net Sales for such test sale [***]; and, provided, further that in
no event shall the aggregate royalties payable to Matria under this Section 3.2
exceed [***]. The foregoing example is presented for illustration purposes only
and is not intended to imply that any royalties are actually owing to third
parties or that the amount of any such royalty, if deemed to be owing, is or
should be equal to the percentages set forth above.

      3.3 Payment; Reports. Until such time as Matria has been paid aggregate
royalties in the amount of [***] pursuant to Section 3.2 above (the "Royalty
Period"), Adeza shall submit to Matria, and shall require each Successor to
submit to Matria, within thirty (30) days following each March 31, June 30,
September 30 and December 31 hereafter, (a) the royalties payable under Section
3.2 above on all fFN ELISA Tests and fFN Rapid Assay Tests sold by Adeza, Adeza
Affiliates and Successors during the three (3) month period preceding such date
and (b) a report identifying (i) the aggregate Net Sales on such tests and (ii)
the royalties payable to Matria as a result of the fFN ELISA Test and fFN Rapid
Assay Test sales during such period determined in accordance with Section 3.2
above. In the event that the royalties payable to Matria are prorated in
accordance with Section 3.2 above, Adeza shall, upon Matria's request, certify
that such proration was appropriate under Section 3.2 as a result of royalties
paid, or to be paid, on the fFN Test sales by Adeza to third parties holding
rights in the patents set forth on Schedule 3.2. Adeza represents to Matria
that, as of the Effective Date, Adeza is obligated pursuant to the FHCRC
Agreement to pay to FHCRC a royalty of [***] of the net sales from the fFN ELISA
Tests and fFN Rapid Assay Tests and Adeza, to its knowledge, does not have any
obligation to pay royalties to any other third party on sales of the fFN ELISA
Tests or fFN Rapid Assay Tests. If no royalties are due Matria for any reporting
period, the report shall so indicate. Adeza shall cause the Successors, if any,
to assume their obligations under this Article 3 expressly in writing and shall
deliver the same to Matria.

      3.4 Audit Rights. During the Royalty Period and for a period of one (1)
year thereafter, Adeza (and any Successor) shall maintain complete and accurate
records in accordance with generally accepted methods of accounting for all
transactions which would require a royalty payment to Matria pursuant to Section
3.2. An independent accounting firm retained by Matria and reasonably acceptable
to Adeza shall have access to such records (including agreements setting forth
any third party royalty payment obligations that necessitate proration in
accordance with Section 3.2 above) no more than once per year, upon reasonable
notice and during Adeza's, or such Successor's (as the case may be), normal
business hours, for the purposes of auditing such records for so long as such
records are required to be maintained hereunder. As a condition to such audit,
the independent accountant selected by Matria shall execute a written agreement,
reasonable satisfactory to Adeza, to maintain in confidence all information
obtained during the course of any such audit except for disclosure to Matria
regarding the existence or non-existence and amount, if applicable, of any
discrepancy between Adeza's or its Successor's records and

                                      -7-

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
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                                                CONFIDENTIAL TREATMENT REQUESTED

their payment of royalties to Matria under this Agreement and Release. Adeza (or
such Successor) shall pay to Matria the amount of any underpayment so discovered
and Matria shall refund the amount of any overpayment so discovered. Matria
shall pay the expenses of the audit, unless the audit reveals an underpayment of
royalties in excess of ten percent (10%) during the audited period, in which
case Adeza (or such Successor) shall pay Matria the reasonable fees and expenses
of such audit, and shall pay the amount of any underpayment so revealed.

                                   ARTICLE 4

                                 NON-COMPETITION

      During the period of time from the Effective Date up to and including
December 31, 1998, Matria shall not, directly or indirectly, develop, market,
sell or otherwise distribute any biochemical markers or biochemical tests that
are competitive with fFN Tests (e.g., salivary estriol).

                                   ARTICLE 5

                        FULL CONSIDERATION AND SETTLEMENT

      5.1 Settlement of Adeza Claims. Adeza, for itself and its successors,
subsidiaries, directors, officers, stockholders, employees, representatives,
distributors, agents, legal representatives and assigns (the "Adeza Affiliated
Entities"), does hereby agree that the obligations and restrictions imposed upon
Matria pursuant to the terms of this Agreement and Release represent settlement
in full of any and all Adeza and Adeza Affiliated Entity claims, assertions of
claims, demands, actions, causes of action, suits, debts, losses, executions,
judgments, settlements, liabilities, damages, costs and expenses (including
attorney's fees) of any nature, direct or indirect, known or unknown, suspected
or unsuspected, matured or unmatured, past, present and future, or any other
form of legal or equitable relief, arising from or relating to the Exclusive
Marketing Agreement and/or the matters set forth in the Complaint (collectively,
the "Adeza Claims"); provided, however, that nothing contained in this Section
5.1 shall relieve Matria of its obligations under this Agreement and Release
including, without limitation, Section 13.2 below.

      5.2 Settlement of Matria Claims. Matria for itself and its successors,
subsidiaries, predecessors, directors, officers, stockholders, employees,
representatives, distributors, agents, legal representatives and assigns (the
"Matria Affiliated Entities"), does hereby agree that the obligations and
restrictions imposed upon Adeza pursuant to the terms of this Agreement and
Release represent settlement in full of any and all Matria and Matria Affiliated
Entity claims, assertions of claims, demands, actions, causes of action, suits,
debts, losses, executions, judgments, settlements, liabilities, damages, costs
and expenses (including attorney's fees) of any nature, direct or indirect,
known or unknown, suspected or unsuspected, matured or unmatured, past present
and future, or any other form of legal or equitable relief, arising from or
relating to the Exclusive Marketing Agreement and/or the matters set forth in
the Counterclaims (collectively, the "Matria Claims"); provided, however, that
nothing contained in this Section 5.2 shall relieve Adeza of its obligations
under this Agreement and Release including, without limitation, Section 13.1
below.

                                      -8-

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
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                                   ARTICLE 6

                         RELEASE AND COVENANT NOT TO SUE

      6.1 Release and Covenant Not to Sue by Adeza. With the exception of the
obligations of Matria set forth in this Agreement and Release, Adeza, on behalf
of itself, the Adeza Affiliated Entities, and any other persons or entities
which may or could assert claims by or through it, hereby agrees to release,
covenant not to sue, acquit and forever discharge, both individually and
collectively, Matria as well as any Matria Affiliated Entity of and from any and
all Adeza Claims.

      6.2 Release and Covenant Not to Sue by Matria. With the exception of the
obligations of Adeza set forth in this Agreement and Release, Matria, on behalf
of itself, the Matria Affiliated Entities and any other persons or entities
which may or could assert claims by or through it, hereby agree to release,
covenant not to sue, acquit and forever discharge, both individually and
collectively, Adeza as well as any Adeza Affiliated Entity of and from any and
all Matria Claims.

      6.3 California Civil Code Section 1542 and Related Statutes. Adeza and
Matria each understand, and for valuable consideration do hereby waive, all of
the rights and benefits they may have under Section 1542 of the California Civil
Code, which section reads as follows:

      "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED THIS SETTLEMENT WITH THE
DEBTOR;"

along with all rights and benefits they may have under analogous provisions of
the laws of the State of Georgia.

                                   ARTICLE 7

                                    DISMISSAL

      The Parties agree to take any and all steps necessary to accomplish the
immediate dismissal of the various claims and crossclaims by each of them
against the other in the Litigation within five (5) business days following the
Effective Date. The dismissals shall be with prejudice and with each party to
assume responsibility for its own costs.

                                   ARTICLE 8

                                  NO ADMISSION

      8.1 No Admission by Matria. Adeza acknowledges that Matria's agreement to
be bound by the obligations and restrictions set forth in this Agreement and
Release does not constitute an admission of liability, express or implied, on
the part of Matria with respect to any fact or matter alleged in the Complaint
and that such agreement is being provided solely for the purpose of amicably
resolving the claims by Adeza against Matria.

                                      -9-

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
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      8.2 No Admission by Adeza. Matria acknowledges that Adeza's agreement to
be bound by the obligations and restrictions set forth in this Agreement and
Release does not constitute an admission of liability, express or implied, on
the part of Adeza with respect to any, fact or matter alleged in the
Counterclaims and that such agreement is being provided solely for the purpose
of amicably resolving the claims by Matria against Adeza.

                                   ARTICLE 9

                               NO PRIOR ASSIGNMENT

      9.1 No Prior Assignment by Adeza. Adeza represents and warrants that no
portion of any Adeza Claim to which Adeza might be entitled has been assigned,
subrogated or transferred to any other person, firm, corporation or other
entity, by operation of law or otherwise. In the event that any Adeza Claim
should be made or instituted against Matria or a Matria Affiliated Entity
because of any such purported assignment or subrogation or transfer, Adeza
agrees to indemnify and hold harmless Matria and the Matria Affiliated Entities,
as the case may be, against any such Adeza Claim, and to pay and satisfy any
such Adeza Claim, including necessary expenses of investigation, attorneys' fees
and costs.

      9.2 No Prior Assignment by Matria. Except for any assignment or transfer
that may be deemed to have occurred from Tokos to Matria in connection with the
merger of Tokos and Healthdyne into Matria, Matria represents and warrants that
no portion of any Matria Claim to which Matria might be entitled has been
assigned, subrogated or transferred to any other person, firm, corporation or
other entity, by operation of law or otherwise. In the event that any Matria
Claim should be made or instituted against Adeza or an Adeza Affiliated Entity
because of any such purported assignment or subrogation or transfer, Matria
agrees to indemnify and hold harmless Adeza and the Adeza Affiliated Entities,
as the case may be, against any such Matria Claim, and to pay and satisfy any
such Matria Claim, including necessary expenses of investigation, attorneys'
fees and costs.

                                   ARTICLE 10

                        NON-DISPARAGEMENT; PRESS RELEASES

      10.1 Non-Disparagement. Each party agrees not to disparage the other
party, its directors, officers, employees, contractors, agents, products or
services. Each party shall institute appropriate policies and guidelines
(collectively "Policies") for its directors, officers, employees, contractors,
agents and other representatives that prohibit the disparagement of the other
party, its directors, officers, employees, contractors, agents, products or
services, and shall use reasonable efforts to disseminate copies of all such
Policies to such persons and to instruct such persons in good faith on the
importance of adhering to such Policies. Each party agrees that, in the event an
alleged violation of such party's Policies is brought to the attention of such
party's management, such management will again instruct in good faith the person
alleged to have violated such Policies as to the existence of the Policies and
the importance of his or her adherence thereto. So long as a party has complied
with its obligations as specifically set forth in this Section 10.2, such party
shall not be obligated to take any other measures by way of enforcing such
Policies, nor be liable in any respect for any violation of the Policies. The
parties

                                      -10-

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OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
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acknowledge and agree, however, that, on and after January 1, 1999, either party
may, as otherwise permitted by this Agreement and Release, make accurate,
non-misleading factual statements regarding the other party's products or
services that may have a disparaging effect.

      10.2 Press Releases. On the Effective Date or shortly thereafter, the
parties shall issue a joint press release in the form attached as Exhibit C
hereto; provided, however, that in the event that a third party publishes or
broadcasts information that, in the good faith judgment of a party, necessitates
the disclosure of more specific information concerning the financial terms of
this Agreement and Release than was set forth in such press release, such party
shall notify the other party of its intent to respond to such publication or
broadcast, the timing of its response and the specific manner in which it
intends to respond, and may thereafter disclose the additional information
regarding the financial terms of this Agreement and Release as limited by
Article 12 hereof. Except as permitted by the preceding sentence, neither party
shall distribute or publish any press release during the initial thirty (30) day
period following the Effective Date regarding the Litigation, this Agreement and
Release or any dispute between the parties with respect to the matters set forth
in the Complaint or the Counterclaims, as the case may be. After the initial
thirty (30) day period following the Effective Date up until the one (1) year
anniversary of the Effective Date, neither party shall distribute or publish any
press release (a) regarding the Litigation or any dispute between the parties
with respect to the matters set forth in the Complaint or the Counterclaims, as
the case may be, or (b) that references the other party or its products and
services in a manner that could reasonably be deemed to be derogatory or
disparaging, without first obtaining such other party's consent to the contents
of such press release, which consent shall not be unreasonably withheld or
delayed; provided, however, that either party shall be entitled to issue a press
release regarding, the matters set forth in (a) or (b) above without the other
party's consent so long as the description of such matters conforms in general
terms to the description set forth in the joint press release attached as
Exhibit C hereto. Notwithstanding the foregoing, either party shall have the
right to file reports with the Securities and Exchange Commission ("SEC") and
the National Association of Securities Dealers, Inc. ("NASD") regarding the
execution and effect of this Agreement and Release as such party deems necessary
to comply with the rules and regulations of the SEC and the NASD, as the case
may be, without the other party's consent; provided, however, that under no
circumstances shall Matria disclose the information contained in the following
portions of the Agreement and Release: (1) clauses (i) and (ii) in the fourth
paragraph of Section 3.2 (in lieu thereof the parties may simply refer to
"certain royalties"); (2) the example set forth in parentheses in the
penultimate sentence of Section 3.2; (3) the representation set forth in the
third sentence of Section 3.3; (4) Schedule 3.2; and (5) clauses (i), (ii) and
(iii) in the second paragraph of Exhibit A and the numerical reference in the
subsequent sentence of such second paragraph (the "Adeza-Specific Information").
In the event that Matria intends to file this Agreement and Release as an
exhibit to any SEC or other government agency filing, Matria shall so notify
Adeza and shall work with Adeza to file a Confidential Treatment Request with
respect to the Adeza-Specific Information, seeking to preserve the
confidentiality of such Adeza-Specific Information.

                                   ARTICLE 11

                         REPRESENTATIONS AND WARRANTIES

                                      -11-

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
<PAGE>
                                                CONFIDENTIAL TREATMENT REQUESTED

      11.1 Mutual Representations. Adeza and Matria each hereby represent and
warrant that:

            (a) it has the authority to execute, deliver and perform this
Agreement and Release and bind the entity on whose behalf it purports to execute
this Agreement and Release;

            (b) this Agreement and Release is the result of arms' length
negotiations among the parties, who were each represented by counsel;

            (c) it intends this Agreement and Release to be final and binding
between the parties hereto, including their respective predecessors, successors
and assigns; and

            (d) it will not take, intentionally, any action that would interfere
with or impair the performance of this Agreement and Release, or the
transactions contemplated hereby by any other party hereto.

      11.2 Matria Representations. Matria further represents and warrants that,
as of the date hereof, to the knowledge of its management staff:

            (a) except for the Litigation, there are no claims, actions, suits,
inquiries, proceedings, or investigations pending or threatened, at law or in
equity, or by any federal, state, local or foreign government agency (including,
without limitation, the Food and Drug Administration ("FDA"), the Centers for
Disease Control and Prevention, and the Health Care Finance Administration) or
professional organization (including, without limitation, the American Medical
Association and the College of American Pathologists) against Matria or any of
the Matria Affiliated Entities resulting from or arising out of (i) the use,
sale, distribution or marketing of, or reimbursement, regulatory matters or
clinical trials with respect to, Adeza's products or services or (ii) Matria's
or a Matria, Affiliated Entity's performance under the Exclusive Marketing
Agreement; and

            (b) neither Matria nor any Matria Affiliated Entity has violated any
material provision of an applicable federal, state, local or foreign law,
statute, rule, regulation or guideline (including, without limitation, the
United States Food and Drug Act, good manufacturing practices as outlined by the
FDA, and the United States Clinical Laboratory Improvement Act of 1989, as
amended) (collectively "Violations") in connection with its performance under
the Exclusive Marketing Agreement, performance of fFN Tests, or the use
(internally by Matria or a Matria Affiliated Entity for testing or
demonstrational purposes), sale, distribution, marketing or manufacture of, or
reimbursement, regulatory matters or clinical trials with respect to, Adeza's
products or services; provided, however, that notwithstanding the
representations set forth in Sections 11.2(a) or (b), Matria makes no
representation hereunder with respect to any Violation resulting from (i)
actions taken at the specific request of Adeza or (ii) Adeza's failure to
package materials delivered by Adeza to Matria in accordance with FDA
regulations.

      11.3 Adeza Representations. Adeza further represents and warrants that, as
of the date hereof, to the knowledge of its management staff:

            (a) except for the Litigation, there are no claims, actions, suits,
inquiries, proceedings, or investigations pending or threatened, at law or in
equity, or by any federal, state,

                                      -12-

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
<PAGE>
                                                CONFIDENTIAL TREATMENT REQUESTED

local or foreign government agency (including, without limitation, the FDA, the
Centers for Disease Control and Prevention, and the Health Care Finance
Administration) or professional organization (including, without limitation, the
American Medical Association and the College of American Pathologists) against
Adeza or any of the Adeza Affiliated Entities resulting from or arising out of
(i) the use, sale, marketing, distribution, development, or manufacture of, or
reimbursement, regulatory matters or conduct of clinical trials with respect to,
Adeza's products or services or (ii) Adeza's or an Adeza Affiliated Entity's
performance under the Exclusive Marketing Agreement; and

            (b) neither Adeza nor any Adeza Affiliated Entity has committed a
Violation in connection with its performance under the Exclusive Marketing
Agreement, performance of fFN Tests, or the use, sale, marketing, distribution,
development, or manufacture of, or reimbursement, regulatory matters or conduct
of clinical trials with respect to, Adeza's fFN products or services.

                                   ARTICLE 12

                                 CONFIDENTIALITY

      The terms of this Agreement and Release shall be considered strictly
confidential and shall not be disclosed by the parties or their attorneys or
agents to any person or entity not named as a party herein, except: (a) as
necessary for compliance and implementation of the terms of this Agreement and
Release; (b) to the parties' accountants, attorneys or tax advisors who have a
need to know; (c) to the extent that the disclosing party deems it necessary to
comply with the information disclosure requirements under federal and state
securities laws or the rules and regulations of the NASD; (d) to its employees;
(e) as may be appropriately disclosed at that time in a press release permitted
by this Agreement and Release; (f) during the thirty (30) day period immediately
following the Effective Date to investors, securities analysts and others in the
securities business in direct response to specific questions and, following the
initial thirty (30) day period after the Effective Date, to investors,
securities analysts and others in the securities business and (g) as may be
required by applicable law or judicial or government order; provided, however,
that upon receipt of any such legal request to disclose the terms of this
Agreement and Release, the party receiving such request shall promptly notify
the other party of the terms of such request and shall cooperate with the other
party to limit disclosure to the minimum extent necessary to comply with such
law or order. Notwithstanding the foregoing, under no circumstances shall
Matria, its attorneys or agents disclose any Adeza-Specific Information other
than pursuant to subsections (a), (b) or (g) of the immediately preceding
sentence. The parties further acknowledge that the parties shall be entitled to
disclose to parties with whom they have, or are negotiating for, contractual
relationships or customers or potential customers of fFN Tests that upon the
conclusion of the Transition Period Matria will no longer be marketing fFN
products or services.

                                   ARTICLE 13

                                 INDEMNIFICATION

                                      -13-

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
<PAGE>
                                                CONFIDENTIAL TREATMENT REQUESTED

      13.1 Adeza Obligations. Adeza shall defend, indemnify and hold Matria and
the Matria Affiliated Entities harmless from and against any and all claims,
actions, damages, liabilities, judgments, costs and expenses (including, without
limitation, reasonable attorney's fees and expenses) in connection with,
relating to or arising from: (a) any third party claim alleging (i) that the
use, sale, distribution or marketing of the fFN ELISA Tests or fFN Rapid Assay
Tests infringes the patent, copyright, trademark, trade secret or other
intellectual property right of such third party, except to the extent that such
alleged infringement arises or results from (A) any unauthorized modification or
combination of the fFN ELISA Tests or fFN Rapid Assay Tests as delivered to
Matria by Adeza or (B) any failure by Matria or a Matria Affiliated Entity to
follow the use and distribution guidelines provided by Adeza relating to the fFN
ELISA Tests or fFN Rapid Assay Tests, or (ii) that the use of the fFN ELISA
Tests or fFN Rapid Assay Tests has resulted in property damage or bodily injury
to such third party, except to the extent that such damage or injury arises or
results from (A) Matria's, or a Matria Affiliated Entity's, unauthorized
modification or combination of the fFN ELISA Tests or fFN Rapid Assay Tests as
delivered to Matria by Adeza, (B) any failure by Matria or a Matria Affiliated
Entity to follow the use and distribution guidelines provided by Adeza relating
to the fFN ELISA Tests or fFN Rapid Assay Tests or (C) any reckless or negligent
act or failure to act on the part of Matria or a Matria. Affiliated Entity; (b)
damages resulting from a defect in the design or manufacture of an Adeza product
supplied to Matria by Adeza or the failure of any such product, in the form
provided by Adeza, to perform in accordance with Adeza's published
specifications when used in accordance with Adeza's instructions and/or
guidelines; (c) the acts of any third party distributor other than a Matria
Affiliated Entity in selling or distributing Adeza's products and services; (d)
Adeza's breach of its representations, warranties or covenants under this
Agreement and Release; provided, however, that Matria's sole remedy with respect
to a breach by Adeza of its Transition Responsibilities (other than a payment
default with respect to payments due after the end of the Transition Period)
shall be as set forth in Section 1.2 hereof; or (e) a Violation resulting from
or arising out of Adeza's (i) development, manufacture, packaging or processing
of any Adeza fFN products or services or (ii) performance under the Exclusive
Marketing Agreement.

      13.2 Matria Obligations. Matria shall defend, indemnify and hold Adeza and
the Adeza Affiliated Entities harmless from and against any and all claims,
actions, damages, liabilities, judgments, costs and expenses (including, without
limitation, reasonable attorney's fees and expenses) in connection with,
relating to or arising from: (a) any third party claim alleging (i) that, except
as covered by Adeza's indemnification obligations set forth in Section 13.1
above, the use (internally by Matria or a Matria Affiliated Entity for testing
or demonstrational purposes), sale, distribution or marketing of the fFN ELISA
Tests or fFN Rapid Assay Tests infringes the patent, copyright, trademark, trade
secret or other intellectual property rights of such third party, or (ii) that
modifications or combinations made by Matria or a Matria Affiliated Entity to
the fFN ELISA Tests or fFN Rapid Assay Tests have resulted in, or that any
reckless or negligent act or failure to act on the part of Matria or a Matria
Affiliated Entity in connection with the use, sale, distribution or marketing of
such tests has resulted in, property damage or bodily injury to such third party
or the failure of the Adeza products to perform in accordance with Adeza's
published specifications; (b) any unauthorized representations or warranties
made by Matria or a Matria Affiliated Entity with respect to Adeza or its
products and services; (c) Matria's breach of its representations, warranties or
covenants under this Agreement and Release; provided, however, that Adeza's sole
remedy with respect to a breach by Matria of its Transition Responsibilities
(other than a payment default with respect to payments due after the

                                      -14-

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
<PAGE>
                                                CONFIDENTIAL TREATMENT REQUESTED

end of the Transition Period) shall be as set forth in Section 1.2 hereof; (d)
Matria's, or a Matria Affiliated Entity's, breach of any agreement with, or
unfulfilled commitment to, a third party, which agreement or commitment is
related to the fFN ELISA Tests or fFN Rapid Assay Tests; provided, however, that
Matria shall not be responsible to the extent that such breach or unfulfillment
resulted from an activity or circumstance for which Adeza would be obligated to
indemnify Matria pursuant to Section 13.1 above; or (e) a Violation resulting
from or arising out of Matria's or any Matria Affiliated Entity's (i) use
(internally by Matria or a Matria Affiliated Entity for testing or
demonstrational purposes), sale, distribution or marketing of, or laboratory
analysis, reimbursement or clinical trials with respect to, any Adeza products
or services or (ii) performance under the Exclusive Marketing Agreement;
provided, however, that Matria shall have no responsibility under this Section
13.2 for any Violation resulting from (A) actions taken at the specific request
of Adeza or (B) Adeza's failure to package materials delivered by Adeza to
Matria in accordance with FDA regulations.

      13.3 Procedural Requirements. In the event that a party seeks
indemnification pursuant to Sections 9.1, 9.2, 13.1 or 13.2 above (the
"Indemnified Party"), such Indemnified Party shall (a) provide prompt written
notice to the other party (the "Indemnifying Party") detailing the claim for
which indemnification is being sought hereunder, (b) allow the Indemnifying
Party to have sole control over the defense or settlement of such claim,
provided that the Indemnifying Party agrees in writing to accept a tender of
defense of such claim and assume full responsibility therefor at the time at
which it assumes such control and, provided further, that the Indemnifying Party
shall not settle any such claim without the prior written consent of the
Indemnified Party if such settlement could reasonably be construed as having an
adverse effect on the rights of the Indemnified Party, which consent, if
required, will not be unreasonably withheld or delayed and (c) upon the request
of the Indemnifying Party, and at the Indemnifying Party's request, provide all
reasonable and necessary assistance to the Indemnifying Party for the purpose of
defending or settling such claim.

                                   ARTICLE 14

                      GOVERNING LAW AND DISPUTE RESOLUTION

      14.1 Governing Law. This Agreement and Release shall be governed by and
construed and enforced in accordance with the laws of the State of California,
without regard to its conflicts of law provisions.

      14.2 Dispute Resolution. In the event that either Adeza or Matria shall
have a dispute regarding the interpretation of any provision of, or the other
party's compliance with any term or condition of, this Agreement and Release
(other than with respect to the performance of the Transition Responsibilities,
which shall be governed by subsections 1.2(c) and (d) above), then the following
procedures shall be followed:

            (a) such claim shall be in the form of a written notice by the party
with the claim ("Claiming Party") to the other party ("Responding Party")
setting forth the nature of the claim, including, without limitation, the
alleged legal basis therefor, the persons or entities against which such claim
is made, and the proposed remedy;

                                      -15-

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
<PAGE>
                                                CONFIDENTIAL TREATMENT REQUESTED

            (b) within ten (10) business days after receipt of such notice, the
Responding Party shall respond in writing to the Claiming Party either
accepting, denying or proposing a different remedy;

            (c) the parties may continue in such manner until there is a
mutually acceptable resolution of the matter; provided, however, that after (a)
and (b) have occurred at least once, then either party may request, upon written
notice to the other, for the commencement of mediation by a mutually acceptable
third party in no less than thirty (30) business days from the date of such
notice. In the event that the parties cannot agree on an appropriate third party
within ten (10) business days of the date of the notice, then a mediator shall
be appointed pursuant to the rules of JAMS-Endispute;

            (d) the parties may continue in such mediation until there is a
mutually acceptable resolution of the matter; provided, however, that if such
mediation does not result in such resolution within ten (10) business days after
its commencement, then either party may request, upon written notice to the
other, for the commencement of arbitration by a mutually acceptable third party
in no less than sixty (60) business days from the date of such notice, which
arbitration shall be conducted in accordance with the rules of the American
Arbitration Association. In the event that the parties cannot agree on an
appropriate arbitrator within ten (10) business days of the date of the notice,
then an arbitrator shall be appointed pursuant to the rules of the American
Arbitration Association. Any decision by such arbitrator shall be final and
binding upon the parties. The arbitrator shall be required to provide in writing
to the parties the basis for the arbitrator's decision and award, and a court
reporter shall record all hearings for the arbitration with such record
constituting the official transcript of the arbitration proceedings;

            (e) All such mediation and arbitration proceedings shall take place
at a mutually convenient time and place in Chicago, Illinois; and

            (f) The party asserting any claim pursuant to (a) above shall bear
(i) its own attorney's fees arising out of the proceedings described in this
Section 14.2 and (ii) the costs of mediation and arbitration; provided however,
that in the event that a party is determined by the arbitrator to be the
prevailing party in such proceedings (or, in the event the parties do not take
the claim to arbitration, and a party is determined by the mediator to be the
prevailing party in such proceedings) the mediator or arbitrator, at their
discretion, may recommend that the prevailing party be reimbursed by the
non-prevailing party for all reasonable expenses and costs incurred by the
prevailing party in protecting or enforcing its rights hereunder, including,
without limitation, its reasonable attorneys' fees. The parties seek to have the
time and expense of the mediation or arbitration minimized to the maximum extent
practicable under the circumstances.

                                   ARTICLE 15

                         VOLUNTARY AND INFORMED DECISION

      The advice of legal counsel has been obtained by each party prior to
signing this Agreement and Release. The parties each acknowledge and represent
that it is executing this Agreement and Release voluntarily with full knowledge
of its legal significance. The parties further acknowledge that each party, with
the assistance of counsel, has participated in the

                                      -16-

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
<PAGE>
                                                CONFIDENTIAL TREATMENT REQUESTED

drafting of this Agreement and Release and that any ambiguity should not be
construed for or against any party on account of such drafting. The parties
agree that this Agreement and Release has been negotiated at arms' length by
parties of equal bargaining power, each of whom was represented by competent
counsel of its own choosing. The parties further acknowledge that the
obligations and releases herein described are in good faith and are reasonable
in the context of the matters released.

                                   ARTICLE 16

                             PROPRIETARY INFORMATION

      Matria shall maintain confidential and shall not use for any purpose other
than that stipulated herein any part of the technical information, proprietary
information or trade secrets received from Adeza in connection with the
Exclusive Marketing Agreement and/or this Agreement and Release; provided,
however, that the obligations of this Article 16 shall not apply to information
which: (a) was in the possession of Matria prior to its receipt from Adeza as
evidenced by written documents; (b) is or hereafter becomes publicly known
through no fault of Matria; or (c) is disclosed to Matria by a third party
entitled to disclose it.

                                   ARTICLE 17

                                NON-SOLICITATION

      Each party agrees that, until December 31, 1998, neither it nor its
affiliates shall solicit any employee or consultant of the other party to
terminate his or her relationship with such other party; provided, however, that
in no event shall either party be prohibited from hiring any employee or
consultant of the other party who makes an unsolicited application or inquiry
for employment or engagement.

                                   ARTICLE 18

                               GENERAL PROVISIONS

      18.1 Further Assurances. The parties represent, warrant and agree to
execute all documents and to do all things necessary to fully effectuate the
terms of this Agreement and Release.

      18.2 Binding Nature. This Agreement and Release shall be binding upon the
administrators, successors and assigns of the respective parties hereto.

      18.3 Survival. The representations, warranties, agreements, and promises
made by each party to this Agreement and Release and contained herein shall
survive the execution of this Agreement and Release.

      18.4 Entire Agreement. This Agreement and Release, along with all exhibits
hereto, contains the entire agreement between the parties hereto and supersedes
all prior and contemporaneous agreements, arrangements, negotiations and
understandings between the parties hereto relating to the subject matter hereof.
No representations, warranties, covenants or

                                      -17-

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
<PAGE>
                                                CONFIDENTIAL TREATMENT REQUESTED

conditions, express or implied, whether by statute or otherwise, other than as
set forth herein, have been made by any party hereto regarding the subject
matter hereof.

      18.5 Waiver. The failure to enforce at any time any of the provisions of
this Agreement and Release or to require at any time performance by the other
party of any of the provisions hereof shall in no way be construed to be a
waiver of such provisions or to affect either the validity of this Agreement and
Release, or any part hereof, or the right of any party thereafter to enforce
each and every provision in accordance with the terms of this Agreement and
Release.

      18.6 Severability. If any provision of this Agreement and Release shall be
held to be invalid, illegal or unenforceable by any court of competent
jurisdiction, then such provision shall be limited or eliminated to the minimum
extent necessary so that this Agreement and Release shall otherwise remain in
full force and effect and enforceable.

      18.7 Attorney's Fees. Each parties' attorneys' fees incurred with respect
to the matters resolved hereby, including preparation of this Agreement and
Release, shall be paid by the party incurring the same.

      18.8 Modification. No supplement, modification, amendment, or waiver of
any term, provision or condition of this Agreement and Release shall be binding
or enforceable unless executed in writing by the parties hereto.

      18.9 Headings. The subject headings of the paragraphs and subparagraphs of
this Agreement and Release are included solely for purposes of convenience and
reference only, and shall not be deemed to explain, modify, limit, amplify or
aid in the meaning, construction or interpretation of any of the provisions of
this Agreement and Release.

      18.10 Counterparts. This Agreement and Release may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

      18.11 Satisfaction of Accounts. Adeza shall, within five (5) business days
following the Effective Date, pay to Matria all amounts invoiced to Adeza
pursuant to the Exclusive Marketing Agreement (whether or not such payment is
actually due as of the Effective Date) as itemized on Schedule 18.11 hereto, and
Matria acknowledges and agrees that such payment represents payment-in-full for
all amounts invoiced to Adeza pursuant to the Exclusive Marketing Agreement up
to and including the Effective Date. Matria shall, within five (5) business days
following the Effective Date, pay to Adeza all amounts invoiced to Matria
pursuant to the Exclusive Marketing Agreement (whether or not such payment is
actually due as of the Effective Date) as itemized on Schedule 18.11 hereto, and
Adeza acknowledges and agrees that such payment represents payment-in-full for
all amounts invoiced to Matria, pursuant the Exclusive Marketing Agreement up to
and including the Effective Date.

      18.12 Notice. Any notice required or permitted by this Agreement and
Release shall be in writing and shall be deemed sufficient upon receipt, when
delivered personally or by courier, overnight delivery service or confirmed
facsimile, or three (3) days after being deposited in the regular mail as
certified or registered mail with postage prepaid, if such notice is addressed
to the party to be notified at such party's address or facsimile number as set
forth below, or as

                                      -18-

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
<PAGE>
                                                CONFIDENTIAL TREATMENT REQUESTED

subsequently modified by written notice, and (a) if to Adeza, to the attention
of the Chief Executive Officer, with a copy to Venture Law Group, 2775 Sand Hill
Road, Menlo Park, CA 94025, Attn: Joshua L. Green, or (b) if to Matria, to the
attention of the President, with a copy to the General Counsel.

                                      -19-

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
<PAGE>

                                                CONFIDENTIAL TREATMENT REQUESTED

         THIS AGREEMENT AND RELEASE has been duly executed and authorized by the
parties hereto as of the date set forth below.

Dated: March 3, 1998              ADEZA BIOMEDICAL COPORATION

                                  By:    /s/ Emory V. Anderson
                                      ------------------------------------------

                                  Name:    Emory V. Anderson
                                        ----------------------------------------

                                  Title:   President
                                         ---------------------------------------

                                  Address:     1240 Elko Drive
                                               Sunnyvale, CA  94089
                                               fax:  (408) 745-7074

Dated:  March ___, 1998           MATRIA HEALTHCARE, INC.

                                  By:
                                      ------------------------------------------

                                  Name:
                                        ----------------------------------------

                                  Title:
                                         ---------------------------------------

                                  Address:    1850 Parkway Place, 12th Floor
                                              Marietta, GA  30067
                                              fax:  (770) 423-7769

                     SIGNATURE PAGE TO AGREEMENT AND RELEASE

                                      -20-

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
<PAGE>
                                                CONFIDENTIAL TREATMENT REQUESTED

         THIS AGREEMENT AND RELEASE has been duly executed and authorized by the
parties hereto as of the date set forth below.

Dated: March 3, 1998              ADEZA BIOMEDICAL COPORATION

                                  By:    /s/ Emory V. Anderson
                                      ------------------------------------------

                                  Name:    Emory V. Anderson
                                        ----------------------------------------

                                  Title:   President

                                  Address:     1240 Elko Drive
                                               Sunnyvale, CA  94089
                                               fax:  (408) 745-7074

Dated:  March ___, 1998           MATRIA HEALTHCARE, INC.

                                  By:   /s/ Donald R. Millard
                                      ------------------------------------------

                                  Name:
                                        ----------------------------------------

                                  Title:
                                         ---------------------------------------

                                  Address:    1850 Parkway Place, 12th Floor
                                              Marietta, GA  30067
                                              fax:  (770) 423-7769

                     SIGNATURE PAGE TO AGREEMENT AND RELEASE

                                      -21-

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
<PAGE>
                                                CONFIDENTIAL TREATMENT REQUESTED

                                  SCHEDULE 3.2

                                 List of Patents

<TABLE>
<CAPTION>
                          Patent Number                     Author
                          -------------                     ------
<S>                                                         <C>
                          [***]                             [***]
                          [***]                             [***]
                          [***]                             [***]
                          [***]                             [***]
                          [***]                             [***]
                          [***]                             [***]
                          [***]                             [***]
                          [***]                             [***]
                          [***]                             [***]
                          [***]                             [***]
                          [***]                             [***]
                          [***]                             [***]
                          [***]                             [***]
                          [***]                             [***]
                          [***]                             [***]
</TABLE>

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
<PAGE>
                                                CONFIDENTIAL TREATMENT REQUESTED

                                 Schedule 18.11

                           PAYMENTS INVOICED TO MATRIA

<TABLE>
<CAPTION>
                DESCRIPTION          INVOICE #            $ AMOUNT
                -----------          ---------            --------
<S>                                  <C>                  <C>
Lab Tests                              22836              $  [***]
fFN Complete Kit                       22906              $ [***]*
Lab Tests                              22982              $  [***]
Lab Tests                              22942              $  [***]
     TOTAL OUTSTANDING                                    $  [***]
</TABLE>

*INVOICE 22906 = [***]

                           PAYMENTS INVOICED TO ADEZA

<TABLE>
<CAPTION>
                DESCRIPTION         INVOICE DATE         $ AMOUNT
                -----------         ------------         --------
<S>                                 <C>                  <C>
FedEx Charges                         December           $ [***]
FedEx Charges                         January            $ [***]
FedEx Charges                         February           $ [***]
     TOTAL OUTSTANDING                                   $ [***]
</TABLE>

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<PAGE>
                                                CONFIDENTIAL TREATMENT REQUESTED

                                    EXHIBIT A

                           TRANSITION RESPONSIBILITIES

Matria Responsibilities

         Matria shall, during the Transition Period, perform in good faith the
following responsibilities with respect to the fFN ELISA Tests and the fFN Rapid
Assay Tests, in substantially the same manner and with the same degree of care
that it performed such responsibilities during the ninety (90) day period
preceding the Effective Date.

         Matria shall process and fill orders for fFN ELISA Tests and provide
customer service and support. Matria shall pay for the fFN ELISA Tests
distributed by Matria during the Transition Period in accordance with the
payment practices in effect during the ninety (90) day period preceding the
Effective Date, except that (i) the price that Matria will pay for the ELISA
kits purchased during the Transition Period shall be [***], (ii) the price per
fFN ELISA Test shall be [***] plus [***] of all reimbursement amounts in excess
of [***] collected by Matria for such test and (iii) Adeza shall provide to
Matria, at Adeza's expense, [***] individual specimen collection kits for each
fFN ELISA Test sold to Matria or [***] individual specimen collection kits,
whichever is greater. In the event that Matria requires more than [***]
individual specimen collection kits, it shall so notify Adeza, whereupon the
parties shall cooperate to ensure that Matria receives sufficient quantities of
specimen collection kits at no charge to Matria. Notwithstanding the foregoing,
Matria shall not be deemed to be in breach of its Transition Responsibilities to
the extent that such breach resulted from Adeza's failure to provide sufficient
quantities of specimen collection kits to Matria as set forth in this paragraph.

         Following the conclusion of the Transition Period, Matria shall
continue to pursue collections with respect to fFN ELISA Tests sold by Matria
during the Transition Period in accordance with its standard collection
practices and shall continue to remit to Adeza any share of such collections
owed to Adeza in accordance with the payment practices in effect during the
ninety (90) day period preceding the Effective Date. All payments by Matria to
Adeza as part of the Transition Responsibilities shall be made net thirty (30)
days following Matria's receipt of an invoice from Adeza.

         Matria shall, at its expense, continue the two (2) clinical trials
currently in process in Arizona (the Elliot trials) until the conclusion of the
initial phase. As these trials involve Matria's other services in addition to
fFN, Matria will continue these trials at Matria's expense and, upon conclusion
of the initial phase, will provide Adeza a summary of the data and results
therefrom. Matria shall have no other obligations with respect to such clinical
trials and Matria shall own all right in the data and results of such clinical
trials.

         As more fully set forth in Schedule A, Matria shall use commercially
reasonable efforts to facilitate the transfer of its regional laboratory
relationships to Adeza, provided that Matria makes no representation as to the
willingness of any such laboratory to contract with Adeza and shall not be
liable in any respect by virtue of such laboratory's refusal to enter into a
contractual relationship with Adeza. The parties acknowledge that, as of the
date hereof, Penrose lab has announced its intention to discontinue its role as
a regional fFN testing laboratory effective

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<PAGE>
                                                CONFIDENTIAL TREATMENT REQUESTED

March 9, 1998. Moreover, Matria will discontinue its efforts to establish its
own clinical laboratory in New York.

         In addition, in the course of making physician sales calls with respect
to its other products, Matria may market fFN Tests to physicians.
Notwithstanding the foregoing, however, in no event shall Matria be required to
make managed care or physician sales calls (other than in conjunction with Adeza
as specifically outlined on Schedule A hereto), initiate new arrangements with
laboratories, seek Medicaid reimbursement for fFN Test, pursue the assignment of
CPT codes for fFN Tests, or undertake any other forward-looking market
development activities. Moreover, nothing herein shall be deemed to require
Matria to maintain any specific level of fFN Tests per week or month.

         Matria shall not terminate without cause (including constructive
termination) any of its employees or contractors who are, as of the Effective
Date, involved in the marketing or distribution of fFN Tests, nor shall it
reassign any such employees or contractors to a non-fFN related position. In the
event that any such employee or contractor voluntarily terminates his or her
employment or is terminated with cause, Matria shall use commercially reasonable
efforts to temporarily reassign other of its employees or contractors (with
substantially similar skills if possible) as necessary to fulfill its Transition
Responsibilities.

Adeza Responsibilities

         Adeza shall, during the Transition Period, perform in good faith the
following responsibilities with respect to the fFN ELISA Tests and the fFN Rapid
Assay Tests, in substantially the same manner and with the same degree of care
that it performed such responsibilities during the ninety (90) day period
preceding the Effective Date (including, without limitation, its obligations
with respect to product and service shipping charges): laboratory testing
services, reporting of laboratory testing service results, fulfillment of
product orders, regulatory and clinical support. Adeza will reimburse Matria for
actual freight charges related to fFN ELISA Test shipments not to exceed [***]
per shipment. All payments by Adeza to Matria as part of the Transition
Responsibilities shall be made net thirty (30) days following Adeza's receipt of
an invoice from Matria.

         EXCEPT FOR THE WARRANTIES SET FORTH IN THIS AGREEMENT AND RELEASE,
ADEZA MAKE NO WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE fFN ELISA
TESTS OR OTHER MATERIALS SUPPLIED TO MATRIA HEREUNDER AND EXPRESSLY DISCLAIMS
THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

Information Access and Copies

         Within twenty (20) days following the Effective Date, Matria shall,
during Matria's normal business hours, provide Adeza with reasonable access to,
and copies (or, in Adeza's discretion, written summaries in sufficient detail as
to be useful) of, all information within Matria's control, in both electronic
and hard-copy form, that is included within the categories set forth in the
attached Schedule A dating back to September 1, 1995.

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
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<PAGE>
                                                CONFIDENTIAL TREATMENT REQUESTED

         Similarly, within twenty (20) days following the conclusion of the
Transition Period, Matria shall, during Matria's normal business hours, provide
Adeza with reasonable access to, and copies (or, in Adeza's discretion, written
summaries in sufficient detail as to be useful) of, all information within
Matria's control, in both electronic and hard-copy form, that is included within
the categories set forth in the attached Schedule A dating back to the Effective
Date in substantially the same form as provided to Adeza within twenty (20) days
following the Effective Date as required by the preceding paragraph (as updated
to reflect all events occurring during the Transition Period).

Survival of Certain Obligations

         All financial obligations arising from the sale of fFN Tests during the
Transition Period that remain unsatisfied upon the conclusion of the Transition
Period shall survive the conclusion of the Transition Period. Within [***] after
the end of the Transition Period, Adeza shall [***]. Such repurchase shall be
limited to the inventory that was stored properly by Matria or the outside
laboratory in accordance with labeling requirements and not opened, and shall be
repurchased by payment or credit of the applicable amount, depending upon
whether Matria has already paid for such inventory. Such [***] shall be [***] as
soon as possible after the end of the Transition Period at [***]; provided,
however, that Adeza shall have the right to [***].

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.
<PAGE>
                                                CONFIDENTIAL TREATMENT REQUESTED

                                   Schedule A

Physician Sales / Orders

         1.       [***]

         2.       [***]

         3.       [***]

         4.       [***]

         5.       [***]

Laboratory Sales / Orders

         1.       [***]

         2.       [***]

         3.       [***]

         4.       [***]

         5.       [***]

         6.       [***]

Marketing and Trade Show Materials

         1.       [***]

         2.       [***]

         3.       [***]

         4.       [***]

Inventory Status

         1 .      [***]

Customer Service Inquiries

         1.       [***]

         2.       [***]

Reimbursement Activities (Payor Means Commercial Payors and Medicaid)

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
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<PAGE>
                                                CONFIDENTIAL TREATMENT REQUESTED

         1.       [***]

         2.       [***]

         3.       [***]

         4.       [***]

         5.       [***]

         6.       [***]

Clinical Trial Activities    Except with respect to the clinical trials
                             referenced in Exhibit A,

         1.       [***]

         2.       [***]

Regulatory Communications

         1 .      [***]

         2.       [***]

Accounting

         1.       [***]

         2.       [***]

         3.       [***]

         4.       [***]

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<PAGE>
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                                    EXHIBIT B

                      Assignments Separate from Certificate

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<PAGE>
                                                CONFIDENTIAL TREATMENT REQUESTED

                      ASSIGNMENT SEPARATE FROM CERTIFICATE

         FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto Adeza Biomedical Corporation [***] shares of the Series E Preferred Stock
of Adeza Biomedical Corporation, standing in the undersigned's name on the books
of said corporation represented by Certificate No. ___________ - herewith, and
does hereby irrevocably constitute and appoint Venture Law Group as
attorney-in-fact to transfer the said stock on the books of the said corporation
with full power of substitution in the premises.

Dated:
       --------------               --------------------------------------------
                                    Signature

                                    --------------------------------------------
                                    Name

                                    --------------------------------------------
                                    Title

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                      ASSIGNMENT SEPARATE FROM CERTIFICATE

         FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto Adeza Biomedical Corporation [***] shares of the Series 2 Preferred Stock
of Adeza Biomedical Corporation, standing in the undersigned's name on the books
of said corporation represented by Certificate No. ___________ - herewith, and
does hereby irrevocably constitute and appoint Venture Law Group as
attorney-in-fact to transfer the said stock on the books of the said corporation
with full power of substitution in the premises.

Dated:
       --------------               --------------------------------------------
                                    Signature

                                    --------------------------------------------
                                    Name

                                    --------------------------------------------
                                    Title

THE SYMBOL [***] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
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                                    EXHIBIT C

                           Form of Joint Press Release

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<PAGE>
                                                CONFIDENTIAL TREATMENT REQUESTED

FOR RELEASE 8:00 AM, EST (5:00 AM, PST)

Contact:    Donald R. Millard
            Matria Healthcare, Inc.
            (770) 767-4529

            Emory V. Anderson
            Adeza Biomedical Corporation
            (408) 745-0975

               MATRIA AND ADEZA ANNOUNCE SETTLEMENT OF LITIGATION

Marietta, GA and Sunnyvale, CA, March 3, 1998 - Matria Healthcare Inc. (NASDAQ:
MATR) and Adeza Biomedical Corporation announced today that a settlement has
been reached in the litigation over the Exclusive Marketing Agreement under
which Matria, had exclusive distribution rights to Adeza's fetal fibronectin
test ("fFN Test"). The fFN Test is an immunodiagnostic test that assists in
identifying women at risk to give birth prematurely.

Under the term of the settlement, Matria has agreed to relinquish its fFN Test
distribution rights and equity interest in Adeza in exchange for the opportunity
to recoup its investment over time based on future sales of the product. Matria
will continue to distribute the fFN Test during a six-month transition period.
The parties have committed to working together during the transition period to
ensure that there is no disruption to their customers.

With reference to the settlement, Donald R. Millard, president and chief
executive officer of Matria, stated that "The settlement represents a reasonable
compromise of the parties' respective rights and gives Matria an opportunity to
recoup its investment in the product. Additionally, the settlement enables
Matria to focus its energies on its core business, without the expense and
distraction of ongoing litigation."

Emory V. Anderson, president of Adeza, said, "We believe that the resolution of
this litigation is an important step in our ability to serve the patient and
physician community. This settlement allows Adeza to both manufacture and market
the fFN Test, a valuable and cost-effective diagnostic tool for physicians in
their evaluation of expectant mothers."

                                    - more -

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Matria Healthcare, Inc. is the leading provider of Comprehensive obstetrical
homecare and maternity management services to HMO's, indemnity carriers and
employers.

Adeza Biomedical Corporation is a Sunnyvale, California-based biotechnology
company that develops, manufactures and markets diagnostic products and services
specifically for women's pregnancy and reproductive health care problems,
including pre-term and late birth, pre-eclampsia, endometriosis and infertility.

This press release contains forward-looking statements that involve risks and
uncertainties, including developments in the healthcare industry, third-party
actions over which Matria and Adeza do not have control, and regulatory
requirements applicable to Matria's and Adeza's businesses, as well as other
risks detailed from time to time in reports filed by Matria with the Securities
and Exchange Commission.

                                      # # #

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