Document:

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                                  EXHIBIT 10.6
          FORM OF SUBSCRIPTION AGREEMENT FOR PREFERRED STOCK INVESTORS
                       DURING FISCAL 1998 AND FISCAL 1999

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                             SUBSCRIPTION AGREEMENT

                  THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER
                  THE SECURITIES ACT OF 1933 (the "Act"), AS AMENDED, OR THE
                  SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED AND SOLD IN
                  RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF
                  SAID ACT AND SUCH LAWS. THE SECURITIES ARE SUBJECT TO
                  RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
                  TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SAID ACT AND
                  SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE
                  SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
                  SECURITIES COMMISSION OR ANY OTHER REGULATORY AUTHORITY. NOR
                  HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED
                  THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE
                  DISCLOSURE DOCUMENTS. ANY REPRESENTATION TO THE CONTRARY IS
                  UNLAWFUL.

         AGREEMENT, dated as of , by and between Avitar, Inc., a Delaware
corporation (the "Company"), and the undersigned investor (the "Purchaser").

                                   WITNESSETH:

         WHEREAS, the Company is seeking to raise up to $3,000,000 from a
targeted group of potential investors;

         WHEREAS, in order to effectuate such financing, the Company is offering
(the "Offering") for sale shares of its Series B Redeemable Convertible
Preferred Stock, par value $.01 (the "Preferred Stock"), in an aggregate amount
up to $3,000,000 (the "Maximum Amount");

         WHEREAS, as hereinafter provided, a holder will be entitled to convert
one share of the Preferred Stock in to ten shares of Common Stock, and

         WHEREAS, all authorized shares of Common Stock have been issued or
otherwise committed to be issued, including without limitation to be issued upon
the conversion of the Preferred Stock into Common Stock, and

         WHEREAS, subject to the approval of shareholders, the

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Company intends to increase the authorized shares of Common Stock from 25
million to 60 million as soon as practicable, and

         WHEREAS, the Company is making the Offering pursuant to Regulation D
promulgated under the Securities Act of 1933, as amended; and

         WHEREAS, in order to comply with the requirements of Regulation D, the
Company requires the Purchaser to make the representations, warranties and
agreements contained herein to, and for the reliance of, the Company.

          NOW, THEREFORE, in consideration of the mutual agreements contained
herein, and subject to the terms and conditions set forth herein, the Company
and the Purchaser hereby agree as follows:

          1.   Subscription. The Purchaser, intending to be legally bound,
               hereby irrevocably agrees to purchase from the Company the number
               of shares of Preferred Stock (the "Shares") set forth on the
               signature page hereof, at a per share purchase price of the
               average closing price of ten shares of the Company's Common Stock
               for the five prior trading days (the "Offering Price"), together
               with warrant in the form attached hereto as Exhibit A with a
               right to purchase on the terms set forth therein shares of the
               Company's Common _______________________________ Stock at
               an exercise price of $________ per share. The Purchaser hereby
               acknowledges and _____________ agrees that the minimum
               subscription amount for Shares is $25,000 (subject to the right
               of the Company, in its sole discretion, to reduce such minimum
               subscription amount).

          2.   Rights and Preferences. The following rights and preferences have
               been determined by the Company for the Preferred Stock:

               a.   Voting Rights. On all matters submitted to a vote of the
                    holders of the Company's Common Stock, the holders of the
                    Preferred Stock shall be entitled to exercise one vote per
                    share of Preferred Stock.

               b.   Dividends. The holders of the Preferred Stock shall be
                    entitled to receive, at the discretion of theCompany, an
                    annual 8% cash dividend or 10% stock dividend computed on
                    the amount invested under this Subscription Agreement. Any
                    stock dividend shall be paid in shares of the Preferred
                    Stock based on the average closing price of ten shares of
                    the Company's Common Stock for the five days prior to the
                    five days before the dividend is paid. Such dividend shall
                    be payable within 90 days after the anniversary date of the
                    investment made hereunder.

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               c.   Liquidation Preference. Upon any voluntary liquidation,
                    dissolution or winding-up of the Company, the holders of the
                    Preferred Stock shall be entitled to receive out of the
                    assets of the Company which remain after satisfaction in
                    full of all valid claims of creditors of the Company,
                    liquidating distributions of an amount per share equal to
                    the Offering Price. Should these liquidation distributions
                    not be paid in full, the holders of the Preferred Stock
                    shall share ratably in any distribution of assets in
                    proportion to the full respective preferential amount to
                    which they are entitled. The Company may issue shares of
                    other preferred stock which have liquidation, dividend,
                    voting, and/or redemption rights which are senior or junior
                    to, or pari passu with, the Preferred Stock.

               d.   Conversion. A holder of the Preferred Stock shall be
                    entitled, at any time prior to the close of business on any
                    date fixed for the redemption of such shares, to cause any
                    or all such shares to be converted into ten shares of the
                    Company's Common Stock for each share of Preferred Stock (
                    the "Conversion Price"), subject to the anti-dilution
                    provisions provided herein. The issuance by the Company of
                    shares of Common Stock upon any conversion of shares of the
                    Preferred Stock made at the option of the holder thereof,
                    shall be effective as of the earlier of (i) the delivery to
                    such holder or such holders' designee of certificates
                    representing the shares of Common Stock issued upon
                    Conversion thereof or (ii) the commencement of business on
                    the second business day after the surrender of the
                    certificate or certificates for the shares of Preferred
                    Stock to be converted, duly assigned or endorsed for
                    transfer to the Company (or accompanied by duly executed
                    stock powers relating thereto) as provided hereby. On or
                    after the effective date of any Conversion, the converted
                    shares of the Preferred Stock shall no longer be deemed to
                    be outstanding and all rights whatsoever with respect
                    thereto shall terminate, and the person or persons entitled
                    to receive the Common Stock issuable upon such Conversion
                    shall be treated for all purposes as the record holder or
                    holders of such shares of Common Stock. All shares of the
                    Preferred Stock upon Conversion shall be restored to the
                    status of authorized but unissued shares of preferred stock
                    without designation as to Class, and may be issued
                    thereafter. The Conversion Price shall be

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                    subject to adjustment in the event of (i) any subdivision or
                    combination of the Company's outstanding Common Stock, (ii)
                    any payment by the Company of a stock dividend to the
                    holders of the Company's Common Stock holders or holders of
                    any other of stock convertible into Common Stock, or (iii)
                    any future issue of stock or securities convertible into the
                    Common Stock of the Company at a price less than the
                    Offering Price.

               e.   Redemption. In the event that after one year of date of
                    issuance of Preferred Stock, that the average closing price
                    of ten shares of Company's Common Stock shall equal or
                    exceed 300% of the Offering Price for any twenty (20)
                    consecutive trading days prior to the notice of redemption,
                    the Company shall have the right, at any time, to redeem all
                    or any portion of, the outstanding shares of the Preferred
                    Stock, at the Offering Price. If less than all outstanding
                    shares of the Preferred Stock shall be redeemed, the Company
                    shall redeem a pro rata portion of the shares of each
                    holder. Notice of any redemption shall be sent to the
                    holders of the Preferred Stock at the address shown on the
                    books of the Company or its transfer agent by first class
                    mail, postage prepaid, mailed not less than thirty (30)
                    days' prior to the redemption date.

          3.   Payment. The Purchaser encloses herewith a check payable to the
               order of, or will immediately make a wire transfer payment to,
               "Avitar, Inc." in the full amount of the purchase price of the
               Shares being subscribed for. To request wire transfer
               instructions, please contact Jay Leatherman, Jr., Chief Financial
               Officer of the Company, at (203) 453-2126 or (781) 821-2440. Such
               funds will be held for the Purchaser's benefit, and will be
               returned promptly, without interest, penalty, expense or
               deduction if this Subscription Agreement is not accepted by the
               Company, or the Offering is terminated pursuant to its terms or
               by the Company.

          4.   Acceptance of Subscription. The Purchaser understands and agrees
               that the Company, in its sole discretion, reserves the right to
               accept or reject this or any other subscription for Shares, in
               whole or in part and in any order, notwithstanding prior receipt
               by the Purchaser of notice of acceptance of this subscription.
               The Company shall have no obligation hereunder until the Company
               shall execute and deliver to the Purchaser an executed copy of
               this Subscription Agreement. If this subscription is rejected in
               whole

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               or the Offering is terminated, all funds received from the
               Purchaser will be returned without interest, penalty, expense or
               deduction, and this Subscription Agreement shall thereafter be of
               no further force or effect. If this subscription is rejected in
               part, the funds for the rejected portion of this subscription
               will be returned without interest, penalty, expense or deduction,
               and this Subscription Agreement will continue in full force and
               effect to the extent this subscription was accepted. The Company
               reserves the right to, in its sole discretion and without notice
               to the Purchaser or any other subscribers, increase or decrease
               the Maximum Amount.

          5.   Representations, Warranties and Agreements of the Company. The
               Company hereby represents and warrants to the Purchaser, and
               covenants and agrees with the Purchaser, as follows:

               a.   The Company has been duly organized, is validly existing and
                    is in good standing under the laws of the State of Delaware.

               b.   This Agreement and the issuance of the Shares have been duly
                    authorized by the Company.

               c.   The Company is in compliance in all material respects with
                    the Federal securities laws applicable to the issuance of
                    the Shares to the Purchaser; provided, however, that in
                    making such representation and warranty, the Company is
                    relying upon the truth and accuracy of the Purchaser's
                    representations and warranties set forth in this Agreement.

               d.   The Shares, when issued upon payment of the appropriate
                    purchase price, will be validly issued, fully paid and
                    non-assessable and free from preemptive rights.

               e.   (i) The Common Stock is registered pursuant to Section 12(g)
                    of the Securities Exchange Act of 1934, as amended (the
                    "Exchange Act"), (ii) the Company files periodic reports
                    pursuant to the Exchange Act and has filed all reports
                    required to be filed thereunder and (iii) the Common Stock
                    is quoted on the NASD OTC Bulletin Board.

          6.   Representations, Warranties and Agreements of the Purchaser. The
               Purchaser hereby represents and warrants to the Company, and
               covenants and agrees with the Company, as follows:

               a.   The Purchaser understands and acknowledges that

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                    none of the Shares offered by the Company pursuant to the
                    Offering are registered under the Securities Act of 1933, as
                    amended (the "Securities Act"), or any state securities
                    laws. The Purchaser understands that the offering and sale
                    of the Shares is intended to be exempt from registration
                    under the Securities Act, by virtue of Section 4(2) and/or
                    Section 4(6) thereof and the provisions of Regulation D
                    promulgated thereunder, based, in substantial part, upon the
                    representations, warranties and agreements of the Purchaser
                    contained in this Subscription Agreement.

               b.   The Purchaser and the Purchaser's attorney, accountant,
                    purchaser representative and/or tax advisor, if any
                    (collectively, the "Advisors") have received, or had made
                    available to it, copies of the following documents of the
                    Company (the "Disclosure Documents"): the Annual Report on
                    Form 10-KSB of the Company for its fiscal year ended
                    September 30, 1998, the Quarterly Report on Form 10-QSB of
                    the Company for the fiscal quarter ended December 31, 1998
                    and all other documents reasonably requested by the
                    Purchaser. The Purchaser has carefully reviewed the
                    Disclosure Documents and understands the information
                    contained therein.

               c.   Neither the Securities and Exchange Commission
                    ("Commission") nor any state securities commission has
                    approved the Shares or the Offering, or passed upon or
                    endorsed the merits of the Offering or confirmed the
                    accuracy or determined the adequacy of this Subscription
                    Agreement. This Subscription Agreement has not been reviewed
                    by any Federal, state or other regulatory authority.

               d.   The Purchaser acknowledges that all documents, records, and
                    books pertaining to an investment in the Shares have been
                    made available for inspection by such Purchaser and the
                    Advisors, if any.

               e.   The Purchaser and the Advisors, if any, have had a
                    reasonable opportunity to ask questions of and receive
                    satisfactory answers from a person or persons acting on
                    behalf of the Company concerning the Offering, the Shares
                    and the Company and all such questions have been answered to
                    the full satisfaction of the Purchasers and the Advisors, if
                    any.

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               f.   In evaluating the suitability of an investment in the
                    Company, the Purchaser has not relied upon any
                    representation or other information (oral or written) other
                    than as stated in this Subscription Agreement and/or as
                    contained in the Disclosure Documents.

               g.   The Purchaser is unaware of, is no way relying on, and did
                    not become aware of the Offering of the Shares through or as
                    a result of any form of general solicitation or general
                    advertising, including, without limitation, any article,
                    notice, advertisement or other communication published in
                    any newspaper, magazine or similar media or broadcast over
                    television or radio, in connection with the Offering and is
                    not subscribing for the Shares and did not become aware of
                    the Offering through or as a result of any seminar or
                    meeting to which the Purchaser was invited by, or any
                    solicitation of a subscription by, a person not previously
                    known to the Purchaser in connection with investments in
                    securities generally.

               h.   The Purchaser has taken no action which would give rise to
                    any claim by any person for brokerage commissions, finders'
                    fees or the like relating to this Subscription Agreement or
                    the transactions contemplated hereby.

               i.   The Purchaser, together with the Advisors, have such
                    knowledge and experience in financial, tax, and business
                    matters, and, in particular, investments in securities, so
                    as to enable them to utilize the information made available
                    to them in connection with the Offering to evaluate the
                    merits and risks of an investment in the Shares and to make
                    an informed investment decision with respect thereto.

               j.   The Purchaser is not relying on the Company or any of its
                    officers, directors, employees or agents with respect to the
                    legal, tax, economic and related considerations of an
                    investment in the Shares, and the Purchaser has relied on
                    the advice of, or has consulted with, only his own Advisors
                    (if any).

               k.   The Purchaser is acquiring the Shares solely for such
                    Purchaser's own account for investment and not with a view
                    to resale or distribution

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                    thereof, in whole or in part. The Purchaser has no agreement
                    or arrangement, formal or informal, with any person to sell
                    or transfer all or any part of the Shares, and the Purchaser
                    has no plans to enter into any such agreement or
                    arrangement.

               l.   The Purchaser must bear the substantial economic risks of an
                    investment in the Shares indefinitely because the Shares may
                    not be sold, hypothecated or otherwise disposed of unless
                    subsequently registered under the Securities Act and
                    applicable state securities laws or an exemption from such
                    registration is available. The Purchaser acknowledges that
                    legends shall be placed on the shares of Common Stock,
                    issued pursuant to the conversion of the Preferred Stock, to
                    the effect that they have not been registered under the
                    Securities Act or applicable state securities laws and
                    appropriate notations thereof will be made in the Company's
                    stock books. Stop transfer instructions will be placed with
                    the transfer agent of the Company.

               m.   The Purchaser has adequate means of providing for such
                    Purchaser's current financial needs and foreseeable
                    contingencies and has no need for liquidity of the
                    investment in the Shares for an indefinite period of time.

               n.   The Purchaser is aware that an investment in the Shares
                    involves a number of very significant risks and investment
                    considerations.

               o.   The Purchaser meets the requirements of at least one of the
                    suitability standards for an "accredited investor" under
                    Regulation D promulgated under the Securities Act and as set
                    forth on the Accredited Investor Certification contained
                    herein.

               p.   The Purchaser: (i) if a natural person represents that the
                    Purchaser has reached the age of 21 and has full power and
                    authority to execute and deliver this Subscription Agreement
                    and all other related agreements or certificates and to
                    carry out the provisions hereof and thereof and has adequate
                    means for providing for his or her current financial needs
                    and anticipated future needs and possible personal
                    contingencies and emergencies and has no need for liquidity
                    in the investment in the Shares; (ii) if a corporation,
                    partnership, limited liability company or

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                    partnership, association, joint stock company, trust,
                    unincorporated organization or other entity represents that
                    such entity was not formed for the specific purpose of
                    acquiring the Shares, such entity is duly organized, validly
                    existing and in good standing under the laws of the state of
                    its organization, the consummation of the transactions
                    contemplated hereby is authorized by, and will not result in
                    a violation or breach of any law, regulation, agreement to
                    which it is a party or is otherwise bound or of its charter
                    or other organizational documents; such entity has full
                    power and authority to execute and deliver this Subscription
                    Agreement and all other related agreements or certificates
                    and to carry out the provisions hereof and thereof and to
                    purchase and hold the Shares; the execution and delivery of
                    this Subscription Agreement has been duly authorized by all
                    necessary action; this Subscription Agreement has been duly
                    executed and delivered on behalf of such entity and is a
                    legal, valid and binding obligation of such entity; and
                    (iii) if executing this Subscription Agreement in a
                    representative or fiduciary capacity, represents that it has
                    full power and authority to execute and deliver this
                    Subscription Agreement in such capacity and on behalf of the
                    subscribing individual, ward, partnership, trust, estate,
                    corporation, limited liability company or partnership, or
                    other entity for whom the Purchaser is executing this
                    Subscription Agreement, and such individual, ward,
                    partnership, trust, estate, corporation, limited liability
                    company or partnership, or other entity has full right and
                    power to perform pursuant to this Subscription Agreement and
                    make an investment in the Company; and that this
                    Subscription Agreement constitutes a legal, valid and
                    binding obligation of such entity. The execution and
                    delivery of this Subscription Agreement will not violate or
                    be in conflict with any order, judgment, injunction,
                    agreement or document to which the Purchaser is a party or
                    by which it is bound.

               q.   Any information which the Purchaser has heretofore furnished
                    or furnishes herewith to the Company is complete and
                    accurate and may be relied upon by the Company in
                    determining the availability of an exemption from
                    registration under Federal and state securities laws in
                    connection with the Offering. The Purchaser will notify and
                    supply corrective information to the Company immediately
                    (and without a specific

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                    request therefor) upon the occurrence of any change therein
                    occurring prior to the Company's issuance of the Shares.

               r.   The Purchaser has significant prior investment experience,
                    including investment in non-registered securities. The
                    Purchaser has a sufficient net worth to sustain a loss of
                    its entire investment in the Company in the event such a
                    loss should occur. The Purchaser's overall commitment to
                    investments which are not readily marketable is not
                    excessive in view of his/its net worth and financial
                    circumstances and the purchase of the Shares will not cause
                    such commitment to become excessive. The investment is a
                    suitable one for the Purchaser.

               s.   No oral or written representations have been made, or oral
                    or written information furnished, to the Purchaser in
                    connection with the Offering which are in any way
                    inconsistent with the information contained herein.

               t.   The Purchaser acknowledges that, even if the Maximum Amount
                    is raised from the sale of the Shares, the net proceeds
                    thereof will provide the Company with the funds to meet only
                    its most immediate needs and that additional funds will be
                    required by the Company (with the consequent dilution of
                    value and/or ownership) through additional equity and/or
                    debt financing(s), and no assurance can be given as to the
                    availability or adequacy of terms of any such financing(s).
                    In the event that the Company does not obtain the requisite
                    funds, it may be necessary for the Company to reduce,
                    suspend or cease certain of its operations. The Purchaser
                    acknowledges that the Company intends to use the net
                    proceeds of the offering for its working capital
                    requirements.

               u.   Blue Sky Information:

                          FOR RESIDENTS OF ALL STATES:

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1993, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED
AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID
ACT AND SUCH LAWS. THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY
AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED

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UNDER SAID ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
COMMISSION OR ANY OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING
AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY
OR ADEQUACY OF THE MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

                           FOR CONNECTICUT RESIDENTS:

THE SECURITIES HAVE NOT BEEN REGISTERED UNDER SECTION 36-485 OF THE CONNECTICUT
UNIFORM SECURITIES ACT AND THEREFORE CANNOT BE RESOLD UNLESS THEY ARE REGISTERED
UNDER THE CONNECTICUT UNIFORM SECURITIES ACT OR UNLESS AN EXEMPTION FROM
REGISTRATION IS AVAILABLE.

                             FOR FLORIDA RESIDENTS:

IF SALES OF THESE SECURITIES ARE CONSUMMATED WITH FIVE OR MORE OFFEREES IN THE
STATE OF FLORIDA, ANY SUCH OFFEREE MAY, AT SUCH OFFEREE'S OPTION, VOID ANY
PURCHASE HEREUNDER WITHIN THREE DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS
MADE BY THE PURCHASER TO THE COMPANY, AN AGENT OF THE COMPANY OR AN ESCROW
AGENT, OR WITHIN THREE DAYS AFTER THE AVAILABILITY OF THAT PRIVILEGE IS
COMMUNICATED TO THE PURCHASER, WHICHEVER OCCURS LATER.

                             FOR VERMONT RESIDENTS:

EACH PERSON WHO ACCEPTS AN OFFER TO PURCHASE SECURITIES DIRECTLY FROM THE ISSUER
OR AN AFFILIATE OF THE ISSUER SHALL HAVE THE RIGHT TO WITHDRAW HIS ACCEPTANCE
WITHOUT INCURRING ANY LIABILITY TO THE SELLER, UNDERWRITER (IF ANY) OR ANY OTHER
PERSON WITHIN THREE BUSINESS DAYS AFTER HE MAKES THE INITIAL PAYMENT FOR THE
SECURITIES BEING OFFERED.

          7.   Indemnification. The Purchaser hereby agrees to indemnify and
               hold harmless the Company and its officers, directors, employees,
               agents, control persons and affiliates against all losses,
               liabilities, claims, damages, and expenses whatsoever (including,
               but not limited to, any and all expenses incurred in
               investigating, preparing, or defending against any litigation
               commenced or threatened) based upon or arising out of any actual
               or alleged false acknowledgment, representation or warranty, or
               misrepresentation or omission to state a material fact, or breach
               by the Purchaser of any covenant or agreement made by the
               Purchaser herein or any other document delivered in connection
               with this Subscription Agreement.

          8    Irrevocability; Binding Effect. The Purchaser hereby acknowledges
               and agrees that the subscription hereunder is irrevocable by the
               Purchaser, except as

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               required by applicable law, and that this Subscription Agreement
               shall survive the death, disability or bankruptcy, as the case
               may be, of the Purchaser and shall be binding upon and inure to
               the benefit of the parties hereto and their respective heirs,
               executors, administrators, successors, legal representatives, and
               permitted assigns. If the Purchaser is more than one person, the
               obligations of the Purchaser hereunder shall be joint and several
               and the agreements, representations, warranties, and
               acknowledgments herein shall be deemed to be made by and be
               binding upon each such person and such person's heirs, executors,
               administrators, successors, legal representatives, and permitted
               assigns.

          9.   Modification. This Subscription Agreement shall not be modified
               or waived except by an instrument in writing signed by the party
               against whom any such modification or waiver is sought.

          10.  Notices. Any notice or other communication required or permitted
               to be given hereunder shall be in writing and shall be mailed by
               certified mail, return receipt requested, or delivered against
               receipt to the party to whom it is to be given (a) if to Company,
               at 65 Dan Road, Canton, Massachusetts 02021, Attn.: Peter P.
               Phildius, Chairman of the Board, or (b) if to the Purchaser, at
               the address set forth on the signature page hereof (or, in either
               case, to such other address as the party shall have furnished in
               writing in accordance with the provisions of this Section 10).
               Any notice or other communication given by certified mail shall
               be deemed given at the time of certification thereof, except for
               a notice changing a party's address which shall be deemed given
               at the time of receipt thereof.

          11.  Assignability. This Subscription Agreement and he rights,
               interests and obligations hereunder are not transferable,
               assignable or delegable by the Purchaser and the transfer or
               assignment of the Shares shall be made only in accordance with
               all applicable laws and this Subscription Agreement.

          12.  Applicable Law. This Subscription Agreement shall be governed by
               and construed in accordance with the laws of the State of New
               York without regard to its conflicts of laws principles. The
               Purchaser hereby irrevocably submits to the non-exclusive
               jurisdiction of any New York State court or United States Federal
               court sitting in New York County over any action or proceeding
               arising out of or relating to this Subscription Agreement or any
               agreement contemplated hereby, and the Purchaser hereby

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               irrevocably agrees that all claims in respect of such action or
               proceeding may be heard and determined in such New York State or
               Federal court. The Purchaser further waives any objection to
               venues in such State on the basis of a non-convenient forum. The
               Purchaser further agrees that any action or proceeding brought
               against the Company shall be brought only in New York State or
               United States Federal courts sitting in New York County. THE
               PURCHASER HEREBY AGREES TO WAIVE ITS RIGHTS TO A JURY TRIAL OF
               ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
               SUBSCRIPTION AGREEMENT OR ANY DOCUMENT OR AGREEMENT CONTEMPLATED
               HEREBY.

          13.  Blue Sky Qualification. The purchase of the Shares under this
               Subscription Agreement is expressly conditioned upon the
               exemption from registration and/or qualification of the offer and
               sale of the Shares from applicable Federal and state securities
               laws. The Company shall not be required to qualify this
               transaction under the securities laws of any jurisdiction and,
               should qualification be necessary, the Company shall be released
               from any and all obligations to maintain the Offering, and may
               rescind any sale contracted, in the jurisdiction.

          14.  Piggyback Registration. If, at any time commencing after the date
               hereof until such time as the Purchaser has sold or otherwise
               disposed of the Shares, the holders of shares of the Preferred
               Stock shall be entitled to "piggyback" registration rights with
               respect to such shares on each occasion that the Company shall
               propose to file a registration statement on Form S-3 ( the
               "Registration Statement") under the Securities Act of 1933, as
               amended, covering any shares of Common Stock. The Company shall,
               at least thirty (30) days before filing any such Registration
               Statement, notify the holders of the Preferred Stock in writing
               of such filing. For a period of ten (10) days from the receipt of
               such notice, each holder of the Preferred Stock shall be entitled
               to provide written notice to the Company of such holder's
               election to include in the Registration Statement up to the
               number of shares of Common Stock covered by his/her Preferred
               Stock; provided, however, that simultaneously with such notice
               such holder shall agree to convert his/her Preferred Stock into
               Common Stock upon effectiveness of the Registration Statement.
               The Company shall have the right at any time thereafter to elect
               not to file any such Registration Statement or to withdraw the
               same after filing but prior to the effective date thereof. The
               Company shall pay all expenses relating to the Registration
               Statement except sales commissions

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               attributable to these securities and except expenses incurred by
               the Purchaser such as counsel for the Purchaser. Such sale
               commissions and other expenses incurred by the Purchaser will be
               borne by the Purchaser.

          15.  Use of Pronouns. All pronouns and any variations thereof used
               herein shall be deemed to refer to the masculine, feminine,
               neuter, singular or plural as the identity of the person or
               persons referred to may require.

          16.  Miscellaneous.

               a.   This Agreement constitutes the entire agreement between the
                    Purchaser and the Company with respect to the subject matter
                    hereof and supersedes all prior oral or written agreements
                    and understandings, if any, relating to the subject matter
                    hereof. The terms and provisions of this Agreement may be
                    waived, or consent for the departure therefrom granted, only
                    by a written document executed by the party entitled to the
                    benefits of such terms or provisions.

               b.   The Purchaser's representations and warranties made in this
                    Agreement shall survive the execution and delivery hereof
                    and the sale and delivery of the Shares.

               c.   Each of the parties hereto shall pay its own fees and
                    expenses (including the fees of any attorneys, accountants,
                    advisors, appraisers or others engaged by such party) in
                    connection with this Agreement and the transactions
                    contemplated hereby whether or not the transactions
                    contemplated hereby are consummated.

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

               e.   Paragraph titles are for descriptive purposes only and shall
                    not control or alter the meaning of this Subscription
                    Agreement as set forth in the text.

                        Accredited Investor Certification
                         (Check the appropriate line(s)

         ____(i) I am a natural person who had individual income of more than
$200,000 in each of the most recent two years or joint

                                       15
<PAGE>

income with my spouse in excess of $300,000 in each of the most recent two years
and reasonably expect to reach that same income level for the current year
("income", for purposes hereof, should be computed as follows: individual
adjusted gross income, as reported (or to be reported) on a Federal income tax
return, increased by (1) any deduction of long-term capital gains under section
1202 of the Internal Revenue Code of 1986, as amended (the "Code"),(2) any
deduction for depletion under Section 611 et seq. of the Code, (3) any exclusion
for interest under Section 103 of the Code and (4) any losses of a partnership
as reported on Schedule E of Form 1040);

         ____(ii) I am a natural person whose individual net worth (i.e., total
assets in excess of total liabilities), or joint net worth with my spouse, will
at the time of purchase of the Shares be in excess of $1,000,000;

         ____(iii) The Purchaser is an investor satisfying the requirements of
Section 501(a)(1), (2) or (3) of Regulation D promulgated under the Securities
Act, which includes but is not limited to, a self-directed employee benefit plan
where investment decisions are made solely by persons who are "accredited
investors" as otherwise defined in Regulation D;

         ____(iv) The Purchaser is a trust, which trust has total assets in
excess of $5,000,000, which is not formed for the specific purpose of acquiring
the Shares offered hereby and whose purchase is directed by a sophisticated
person as described in Rule 506(b)(ii) of Regulation D and who has such
knowledge and experience in financial and business matters that he is capable of
evaluating the risks and merits of an investment in the Shares;

         ____(v) I am a director or executive officer of the Company; or

         ____(vi) The Purchaser is an entity (other than a trust) in which all
of the equity owners meet the requirements of at least one of the above
subparagraphs.

                          FOR MASSACHUSETTS RESIDENTS:

         MY INVESTMENT IN THE SHARES DOES NOT EXCEED 25% OF MY AND MY SPOUSE'S
JOINT NET WORTH (EXCLUDING OUR PRINCIPAL RESIDENCE AND FURNISHINGS).

IN WITNESS WHEREOF, the Purchaser has executed this Subscription Agreement this
____ day of ____________, 1999.

          Preferred Stock*
          ______________     x    __________________     $__________________
          (Shares being            (Share Price)            Subscription
          purchased)                                        (Minimum of
                                                            $25,000)

*Convertible into____________ shares of Common Stock

                                       16

<PAGE>

If the purchaser is an INDIVIDUAL, and if purchased as JOINT TENANTS, as TENANTS
IN COMMON, or as COMMUNITY PROPERTY:

_______________________________
Print Name(s)                                 Social Security Number

_______________________________               _______________________________
Signature(s) of Purchaser(s)

_______________________________
Date

If the purchaser is a PARTNERSHIP, CORPORATION, or TRUST:

_______________________________               _______________________________
Name of Partnership,                          Federal Taxpayer
Corporation or Trust                          Indemnification Number

_______________________________
Date

By:____________________________               _______________________________
Name                                          State of Organization

Title:_________________________

Address:_______________________
        _______________________

                                       17
<PAGE>

SUBSCRIPTION ACCEPTED AND AGREED TO this______ day of _____, 1999.

AVITAR, INC.

By:__________________________________

Title:_______________________________

                                       18
<PAGE>

                              (EXHIBIT A ATTACHED)

                                       19
<PAGE>

                                                                       EXHIBIT A

                    Void after 5:00 p.m. New York City Time,
                               on _________, 2000

               Warrant to Purchase an Aggregate of _______ Shares
                                 of Common Stock

                        WARRANT TO PURCHASE COMMON STOCK

                                       OF

                                  AVITAR, INC.

                             a Delaware Corporation

                    THIS WARRANT AND THE SHARES OF COMMON STOCK
                    UNDERLYING THIS WARRANT (collectively, the
                    "Securities") HAVE NOT BEEN REGISTERED UNDER THE
                    SECURITIES ACT OF 1933, AS AMENDED (the "Act") OR
                    THE SECURITIES LAWS OF ANY STATE AND ARE BEING
                    OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM
                    REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH
                    LAWS. THIS WARRANT MAY NOT BE EXERCISED UNLESS THE
                    SECURITIES ARE REGISTERED UNDER THE ACT OR
                    EXEMPTION FROM SUCH REGISTRATION UNDER THE ACT IS
                    APPLICABLE. THE SECURITIES ARE SUBJECT TO
                    RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY
                    NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED
                    UNDER SAID ACT AND SUCH LAWS PURSUANT TO
                    REGISTRATION OR EXEMPTION THEREFROM. THE
                    SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
                    BY THE SECURITIES COMMISSION OR ANY OTHER
                    REGULATORY AUTHORITY. NOR HAVE ANY OF THE
                    FOREGOING AUTHORITIES

                                       20
<PAGE>

                    PASSED UPON OR ENDORSED THE MERITS OF THIS
                    OFFERING OR THE ACCURACY OR ADEQUACY OF THE
                    DISCLOSURE DOCUMENTS. ANY REPRESENTATION TO THE
                    CONTRARY IS UNLAWFUL.

         This is to certify that, FOR VALUE RECEIVED, or assigns (the "Holder"),
is entitled to purchase, subject to the provisions of this Warrant, from AVITAR,
INC. a Delaware Corporation (the "Company"),
_____________________________________ fully paid, validly issued and
non-assessable shares of Common Stock, $0.01 par value, of the Company ("Common
Stock") at any time or from time to time from the date hereof, through and
including _____________, 2000, (the "Termination Date") but not later than 5:00
p.m. New York City, New York Time on the Termination Date (the "Exercise
Period") at an initial exercise price equal to $______ per share. The number of
shares of Common Stock to be received upon the exercise of this Warrant and the
price to be paid for each share of Common Stock may be adjusted from time to
time as hereinafter set forth. The shares of Common Stock deliverable upon such
exercise, and as adjusted from time to time, are hereinafter sometimes referred
to as "Warrant Shares" and the exercise price of a share of Common Stock in
effect at any time and as adjusted from time to time is hereinafter sometimes
referred to as the "Exercise Price".

               (a) Exercise of Warrant. This Warrant may be exercised in whole
or in part at any time during the Exercise Period. This Warrant, subject to the
provisions hereof, may be exercised by presentation and surrender hereof to the
Company at its principal office, or at the office of its stock transfer agent,
if any, with the Purchase Form annexed hereto duly executed and accompanied by
payment of the Exercise Price for the number of Warrant Shares specified in such
exercise. The Company shall issue and deliver to the Holder a certificate or
certificates for the Warrant Shares issuable upon such exercise, registered in
the name of the Holder or its designee. If this Warrant should be exercised in
part only, the Company shall, upon surrender of this Warrant for cancellation,
execute and deliver a new Warrant evidencing the rights of the Holder thereof to
purchase the balance of the Warrant Shares purchasable thereunder. Upon receipt
by the Company of this Warrant at its office, or by the stock transfer agent of
the Company at its office, in proper form for exercise shall be deemed to be the
holder of record of the shares of Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of the Company shall then be
closed or that certificates representing such shares of Common Stock shall not
then be physically delivered to the Holder.

               (b) Reservation of Shares. The Company shall at all

                                       21
<PAGE>

times reserve for issuance and/or delivery upon exercise of this Warrant such
number of shares of its Common Stock as shall be required for issuance and
delivery upon exercise of this Warrant.

               (c) Fractional Shares. No fractional shares or script
representing fractional shares shall be issued upon the exercise of this
Warrant. All fractional shares shall be eliminated by rounding any fraction up
to the nearest whole number of shares of Common Stock.

               (d) Exchange, Transfer, Assignment or Loss of Warrant. Subject to
the legend first appearing above, this Warrant is exchangeable, without expense,
at the option of the Holder, upon presentation and surrender hereof to the
Company or at the office of its stock transfer agent, if any, for other warrants
of different denominations entitling the Holder thereof to purchase in the
aggregate the same number of shares of Common Stock purchasable hereunder.
Subject to the legend first appearing above, upon surrender of this Warrant to
the Company at is principal office or at the office of its stock transfer agent,
if any, with the Assignment Form annexed hereto duly executed and funds
sufficient to pay any transfer tax, the Company shall, without charge, execute
and deliver a new Warrant in the name of the assignee named in such instrument
of assignment and this Warrant shall promptly be canceled. This Warrant may be
divided or combined with other Warrants which carry the same rights upon
presentation hereof at the principal office of the Company or at the office of
its stock transfer agent, if any, together with a written notice specifying the
names and denominations in which new Warrants are to be issued and signed by the
Holder hereof. The term "Warrant" as used herein includes any Warrant into which
this Warrant may be divided or exchanged. Upon receipt by the Company of
evidence satisfactory to it of the loss, destruction) of reasonably satisfactory
indemnification, and upon surrender and cancellation of this Warrant, if
mutilated, the Company will execute and deliver a new Warrant of like tenor and
date.

               (e) Rights of the Holder. The Holder shall not, by virtue hereof,
be entitled to any rights of a shareholder in the Company, either at law or
equity, and the rights of the Holder are limited to those expressed in this
Warrant and are not enforceable against the Company except to the extent set
forth herein.

               (f) Anti-Dilution Provisions. The Exercise Price in effect at any
time and the number and kind of securities purchasable upon the exercise of this
Warrant shall be subject to adjustment from time to time upon the happening of
certain events as follows:

                      (1) In case the Company shall (i) declare a dividend or
make a distribution on its outstanding shares of Common Stock in shares of
Common Stock, or (ii) subdivide or reclassify its outstanding shares of Common
Stock into a greater

                                       22
<PAGE>

number of shares of Common Stock or into a smaller number of shares, the
Exercise Price immediately prior to such adjustment shall be adjusted by
multiplying it by a fraction, the denominator of which shall be the number of
shares of Common Stock outstanding after giving effect to such action, and the
numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such action. Such adjustment shall be made successively
whenever any event listed above shall occur.

                      (2) Whenever the Exercise Price payable upon exercise of
each Warrant is adjusted pursuant to Subsection (1) above, the number of shares
purchasable upon exercise of this Warrant shall simultaneously be adjusted by
multiplying the number of shares initially issuable upon exercise of this
Warrant by the Exercise Price in effect on the date hereof and dividing the
product so obtained by Exercise Price, as adjusted.

                      (3) Whenever the Exercise Price is adjusted, as herein
provided, the Company shall promptly cause a notice setting forth the adjusted
Exercise Price and adjusted number of shares issuable upon exercise of each
Warrant to be mailed to the Holders, at their last addresses appearing in the
Warrant Register, and shall cause a certified copy thereof to be mailed to its
transfer agent, if any. The Company may retain a firm of independent certified
public accountants selected by the Board of Directors (who may be the regular
accountants employed shall be conclusive evidence of the correctness of such
adjustment.

               (g) Officer's Certificate. Whenever the Exercise Price shall be
adjusted as required by the provisions of Section (f), the Company shall
forthwith file in the custody of its Secretary or an Assistant Secretary at its
principal office and with its stock transfer agent, if any, an officer's
certificate showing the adjusted Exercise Price determined as herein provided,
setting forth in reasonable detail the facts requiring such adjustment,
including a statement of the number of additional shares of Common Stock, if
any, and such other facts as shall be necessary to show the reason for and the
manner computing such adjustment.

               (h) Notices to Warrant Holders. So long as this Warrant shall be
outstanding, (1) if the Company shall pay any dividend or make any distribution
upon the Common Stock or (2) if the Company shall offer to the holders of Common
Stock for subscription or purchase by them any share of any class or any other
rights or (3) if the capital reorganization of the Company, reclassification or
merger of the Company with or into another corporation, sale of all or
substantially all of the property and assets of the Company or voluntary or
involuntary dissolution, liquidation or winding up of the Company shall be
effected, then in any such case, the Company shall cause to be mailed by
certified mail to the Holder, at least ten (10) days prior to the date specified
in (x) or (y) below, as the case may be, a notice

                                       23
<PAGE>

containing a brief description of the proposed action and stating the date on
which (x) a record is to be taken for the purpose of such dividend, distribution
or rights, or (y) such reclassification, reorganization, consolidation, merger,
conveyance, lease, dissolution, liquidation or winding up is to take place and
the date, if any, is to be fixed, as of which the holders of Common Stock or
other securities shall receive cash or other property deliverable upon such
reclassification, reorganization, consolidation, merger, conveyance,
dissolution, liquidation or winding up.

               (i) Piggyback Registration. If, at any time commencing after the
date hereof until such time as the Holder has sold or otherwise disposed all of
the Warrant Shares, the Company proposes to register any of its equity
securities under the Act (other than in connection with a merger or
consolidation or pursuant to a Registration Statement on Form S-3 or S-4 or
comparable registration statement) it will give written notice, at least thirty
(30)days prior to the filing of such registration statement, to the Holder and
to all other holders of Warrants and Warrant Shares (collectively, "Warrant
Securities") of its intention to do so. If the Holder and/or other holders of
Warrant Securities notify the Company within twenty (20) days after receipt of
such notice of its or their desire to include any Warrants (including the shares
of Common Stock underlying any such Warrants) and/or Warrant Shares (whether
issued or issuable) in such proposed registration statement, the Company shall,
subject to the provisions set forth below, afford the Holder and such holders of
Warrant Securities the opportunity to have any such securities registered under
such registration statement. If such registration is an underwritten
registration, and the managing underwriters advise the Company that in their
opinion the number of securities requested to be included in such registration
exceeds the number which can be sold in such offering without materially
adversely affecting such underwriters' ability to effect an orderly distribution
of such securities, the Company will include in such registration first, the
securities proposed to be sold thereunder and, second, the Warrant Securities
and such other securities of the Company having registration rights requested to
be included in such registration registered on a pro-rata basis. The Company
shall have the right at any time thereafter it shall give written notice to
elect not to file any such proposed registration statement or to withdraw the
same after filing but prior to the effective date thereof. The Company shall pay
all such expenses relating to registration except sales commissions attributable
to Warrant Securities requested to be offered by the holders thereof and except
expenses incurred by the holders such as counsel for the holders. Such sales
commissions and other such expenses will be borne by the holders requesting
inclusion in such registration.

               (j) Indemnification. In the event Warrant Securities are included
in a registration statement by the Company, the

                                       24
<PAGE>

Company will indemnify and hold harmless each holder of registered Warrant
Securities against all claims and losses arising out of securities law
violations by the Company and each holder of registered Warrant Securities will
indemnify and hold harmless the Company against all claims and losses arising
out of the information supplied to the Company by such holder for use in
connection with such registration.

               (k) Reclassification, Reorganization or Merger. In case of any
reclassification, capital reorganization or other change of outstanding shares
of Common Stock of the Company, or in case of any consolidation or merger of the
Company with or in which merger the Company is the continuing corporation and
which does not result in any reclassification, capital reorganization or other
change of outstanding shares of Common Stock of the class issuable upon exercise
of this Warrant or in case of any sale to another corporation of the property of
the Company as an entirety, the Company shall, as a condition precedent to such
transaction, cause effective provisions to be made so that the Holder shall have
the right thereafter by exercising this Warrant at any time prior to the
expiration of the Warrant, to purchase the kind and amount of shares upon
exercise of this Warrant immediately prior to such reclassification, change,
consolidation, merger or sale. Any such transaction shall include provision for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Warrant. The foregoing provisions of this
Section (k) shall similarly apply to successive reclassifications, capital
reorganizations and changes of shares of Common Stock and to successive
consolidations, mergers or sales. In the event that in connection with any such
capital reorganization, a share of Common Stock shall be issued in exchange,
conversion, substitution or payment, in whole or in part, for a security of the
Company other than Common Stock, any such issue shall be treated as an issue of
Common Stock covered by the provisions of Subsection (1) of Section (f) hereof.

               (l) Redemption.

                      (1) Commencing one year after the date hereof (the
"Initial Warrant Redemption Date") the Company may, on 30 days prior written
notice redeem all the Warrants at $0.01 provided, however, that before any such
call for redemption of Warrants can take place, the (A) high closing bid price
for the Common Stock in the over-the-counter market as reported by the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") or (B)
the closing sale price on the primary exchange on which the Common Stock is
traded, if the Common Stock is traded on a national securities exchange or if
the Common Stock is a National Market Security on NASDAQ, shall have for five
(5) consecutive trading days within a period of thirty (30) consecutive trading
days ending on the fifth trading day prior to the date on which the notice
contemplated by (2)and (3) below is given, equaled or exceeded $0.75 per share
(subject to adjustment

                                       25
<PAGE>

in the event of any stock splits or other similar events as provided in Section
(f) hereof).

                      (2) In case the Company shall exercise its right to redeem
all of the Warrants, it shall give or cause to be given notice to the registered
Holders of the Warrants by mailing to such registered Holders a notice of
redemption, first class, postage prepaid, at their last address as shall appear
on the records of the Company. Any notice mailed in the manner provided herein
shall be conclusively presumed to have been duly given whether or not the
registered Holder receives such notice.

                      (3) The notice of redemption shall specify (i) the
redemption price, (ii) the date fixed for redemption, which shall in no event be
less than thirty (30) days after the date of mailing of such notice, (iii) the
place where the Warrant Certificate shall be delivered and the redemption price
shall be paid and (iv) that the right to exercise the Warrant shall terminate at
5:00 p.m. (New York time) on the business day immediately preceding the date
fixed for redemption. The date fixed for the redemption of the Warrants shall be
the Redemption Date. No failure to mail such notice nor any defect therein or in
the mailing thereof shall affect the validity of the proceedings for such
redemption except as to a Holder (a) to whom notice was not mailed or (b) w of
the Company that notice of redemption has been mailed shall, in the absence of
fraud, be prima facie evidence of the facts stated therein.

                      (4) Any right to exercise a Warrant shall terminate at
5:00 p.m. (New York time) on the business day immediately preceding the
Redemption Date. The redemption price payable to the registered Holders shall be
mailed to such persons at their addresses of record.

               (m) Addresses for Notices.Any notices to be given to the Company
or to the Holder pursuant hereto shall be delivered personally or sent by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:

                      (1) If to the Company, until another address is supplied
by the Company to the Holder, in accordance with the provisions of this Section
(m):

                           Avitar, Inc.
                           65 Dan Road
                           Canton, Massachusetts  02021
                           Attn.:  Secretary

                      (2) If to the Holder, until another address is supplied by
the Holder to the Company, in accordance with the provisions of this Section
(k), at the address specified on the transfer books of the Company.

               (n) Governing Law. This Warrant shall be governed

                                       26
<PAGE>

by and construed in accordance with the law of the State of New York, without
reference to any choice of law provisions thereof.

          IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
and attested by the undersigned, each being duly authorized, as of the date
below.

                                              AVITAR, INC.,
                                              a Delaware Corporation

                                              By:____________________
                                              Chief Executive Officer

Dated:_______________________________, 1999

Attest:

By:_______________________________
            Secretary

                                  PURCHASE FORM

                            Dated:______________, 199

          The undersigned hereby irrevocably elects to exercise the within
Warrant to the extent of purchasing _________ Shares of Common Stock and hereby
makes payment of $________ in payment of the actual exercise price thereof.

                                       27
<PAGE>

                     INSTRUCTIONS FOR REGISTRATION OF STOCK

         Name:______________________________________________________________
                  (Please typewrite or print in block letters)

         Address:___________________________________________________________

         Signature:_________________________________________________________

                                 ASSIGNMENT FORM

         FOR VALUE RECEIVED, _________________________ hereby sells, assigns
and transfers unto

Name: _________________________________________________

                  (Please typewrite or print in block letters)

                                       28
<PAGE>

Social Security or Taxpayer I.D. No.:  _________________

Address: _______________________________________________

the right to purchase Common Stock represented by this Warrant to the extent of
__________ shares as to which such right is exercisable and does irrevocably
constitute and appoint ___________, Attorney, to transfer the same on the books
of the Company with full power of substitution in the premises.

Date:___________________________________________, 199

Signature: _______________________________________

                                       29<PAGE>   1
                                                                   EXHIBIT 10.05

Confidential Treatment Requested

                        DEVELOPMENT AND LICENSE AGREEMENT

        This Development and License Agreement (the "Agreement") is made and
entered into as of the 14 day of May, 1999, by and between Neoforma, Inc., a
corporation organized and existing pursuant to the laws of the State of
Delaware, with principal offices at 3255-7 Scott Boulevard, Santa Clara,
California 95054 ("Neoforma") and Emergency Care Research Institute, a nonprofit
corporation organized and existing pursuant to the laws of the Commonwealth of
Pennsylvania, with principal offices at 5200 Butler Pike, Plymouth Meeting,
Pennsylvania 19462-1298 ("ECRI").

                                    RECITALS

        WHEREAS, ECRI is an international nonprofit health services research
agency which is extensively involved in various aspects of healthcare, and
particularly in the review, categorization, assessment, evaluation, rating,
organization and monitoring of healthcare and medical technology;

        WHEREAS, ECRI owns and maintains an extensive coding system known as the
Universal Medical Devices Nomenclature System (hereinafter called "UMDNS") and
an extensive international database of medical device manufacturers, products,
and related data elements known as Sourcebase, both of which constitute
valuable, proprietary intellectual property rights of ECRI;

        WHEREAS, Neoforma is in the business of providing medical product and
technology-related information to users of medical products and technology
through its Internet web site;

        WHEREAS, Neoforma wishes to obtain and ECRI wishes to grant
non-exclusive rights to Neoforma to use certain data elements of the Sourcebase
and certain ECRI Content and Services (as hereinafter defined) for the purpose
of promoting the use of this information through and by way of Neoforma's
Internet web site; and

        WHEREAS, Neoforma and ECRI (each a "Party" and collectively, the
"Parties") wish to jointly develop and market an equipment Planning System (as
defined below) and to use such in accordance with the terms of this Agreement;

        NOW THEREFORE, with the foregoing recital incorporated by reference, in
consideration of the premises and mutual covenants hereinafter contained, the
Parties hereto agree as follows:

        1.      DEFINITIONS.

                1.1     "Deliverables" means the various content, databases,
data, product information and similar materials being provided by ECRI to
Neoforma (including the ECRI Content and Services to the extent actually
delivered to Neoforma) for use or incorporation in

<PAGE>   2

the Planning System, or otherwise incorporated into or linked to the Neoforma
Web Site (defined below), as are more further and specifically set forth in the
Development Schedule.

                1.2     "Development Schedule" means the development schedule
for developing, producing and commencing operation of the Planning System set
forth in Exhibit A.

                1.3     "ECRI Content and Services" means databases, written
content, study and survey results, analysis and similar information relating to
healthcare and medical products created and maintained by ECRI, whether
currently in existence or developed in the future, consisting of the information
set forth in Exhibit D.

                1.4     "ECRI Web Site" means ECRI's Internet web sites
accessible through the URLs www.ECRI.org, www.healthcare.ecri.org and
www.ecriy2k.org or such other URL or URLs as ECRI may in its discretion
determine and any other web sites which may be developed and owned by ECRI
hereafter which serve essentially the same function as such existing ECRI Web
Site.

                1.5     "Effective Date" means the date of this Agreement.

                1.6     "Integration" means the integration of selected and
agreed upon ECRI Content and Services into the Neoforma Web Site.

                1.7     "Intellectual Property Rights" means all current and
future patent rights, copyrights, mask work rights, trade secrets and other
intellectual property rights.

                1.8     "Neoforma Web Site" means Neoforma's Internet web site
accessible through the URL www.neoforma.com or such other URL or URLs as
Neoforma may in its discretion determine and any other web sites which may be
developed and owned by Neoforma hereafter which serve essentially the same
function as such existing Neoforma Web Site.

                1.9     "Neoforma Content" means any text, graphics, design,
photography, artwork, audio, video or other forms of expression which exist now
or in the future on the Neoforma Web Site to the extent they do not consist
solely of data or information provided by ECRI to Neoforma as Deliverables
pursuant to this Agreement.

                1.10    "Planning Advertising Model Projections" means that
percentage of total revenue derived from advertising or other fee generating
activities of Neoforma in operating the Planning System Application Advertising,
 which percentage and manner of calculating the same is set forth in Exhibit B.

                1.11    "Planning Application Advertising Model" means the
planning system as further described in Exhibit C.

                                       2
<PAGE>   3

                1.12    "Planning System" means the jointly owned and developed
database of healthcare facility planning information and it does not include the
software applications built off the Planning System.

                1.13    "Planning Application Subscription Model" means the
CD-ROM or web based customizable software.

                1.14    "Sourcebase" means ECRI's proprietary product known as
Sourcebase, which consists of an international database of medical device
manufacturers and suppliers along with an extensive set of data elements, such
as company names, addresses, telephone numbers, facsimile numbers, URLs and
e-mail addresses of such manufacturers and lists of their respective products
indexed according to UMDNS-related synonyms, as such database may be revised,
updated and improved from time to time by ECRI.

                1.15    "Sourcebase CD-ROM" means the CD-ROM version of the
Sourcebase with such additional data elements as may be added to the Sourcebase
from time to time by ECRI.

                1.16    "Sourcebook" means the hard copy printed version of the
Sourcebase in its current form and in such future forms as may exist, published
by ECRI which includes listings of medical device manufacturers and suppliers
with such data elements as it currently includes and as may be added from time
to time.

                1.17    "Specifications" means any and all specifications
provided by Neoforma to ECRI relating to the form, format, arrangement,
configuration, layout, code type, etc. of the ECRI Content and Services being
provided by ECRI to Neoforma to carry out the purposes of this Agreement,
including but not limited to, those for the Sourcebase, which are set forth in
Exhibit D and those for the Deliverables relating to the Planning System, which
are as set forth in Exhibit A.

        2.      SOURCEBASE.

                2.1     Sourcebase Delivery Obligations. ECRI will deliver the
agreed upon data elements of Sourcebase to Neoforma in such format and together
with such ancillary materials as are set forth in Exhibit D as soon as
practicable, but in no event not later than 60 calendar days following the
execution of this Agreement. Following the date of this Agreement, ECRI agrees
that it shall deliver to Neoforma, any and all revisions, updates or
improvements to such data elements of the Sourcebase at mutually agreed upon
times.

                2.2     Vendor Information for Sourcebase Received Through
Neoforma Web Site. Neoforma shall provide to ECRI all information which it
receives through the Neoforma Web Site which it, or the party supplying such
information, desires be included in the Sourcebase for ECRI's review, analysis
and approval for inclusion in the Sourcebase. ECRI agrees to use its best
efforts to review and analyze such information promptly and to notify

                                       3
<PAGE>   4

Neoforma as to whether or not such information will be included in the
Sourcebase, and if the information is included in the Sourcebase, to provide
Neoforma with any revisions, updates or improvements to the Sourcebase which is
necessitated by such information as provided for in Section 2.1 hereof. Neoforma
shall be permitted to assign special temporary vendor numbers which are
compatible with ECRI vendor numbers to vendors who have not yet been approved
for inclusion in the Sourcebase which permit Neoforma to include such vendors in
its database pending ECRI's approval of such vendors or products for inclusion
in the Sourcebase or with respect to vendors that are enrolled in Neoforma and
not included in the Sourcebase.

                2.3     License Grant. ECRI hereby grants Neoforma a
non-exclusive, non-transferable license to use, replicate, copy and display the
data elements from the Sourcebase listed in Exhibit D on the Neoforma Web Site.
Notwithstanding the foregoing, in order to increase traffic to the Neoforma Web
Site and increase revenue for the Planning System and recognizing that Neoforma
will be contributing content included in Sourcebase, ECRI agrees that during the
term of this Agreement and any extensions it shall not directly or through any
third party disseminate the agreed upon data elements of the Sourcebase through
the Internet in furtherance of any e-commerce business engaged in hosting a web
site that processes Internet transactions for selling new or used medical
products that directly competes with Neoforma except through those organizations
with which ECRI has documented preexisting relations as of the Effective Date of
this Agreement. ECRI shall have the right to terminate the restriction contained
in this subsection regarding the limitation on the use of the Sourcebase in
e-commerce (i) following Neoforma's failure to develop Planning System in a
manner consistent with the Development Schedule, (ii) following Neoforma's
failure to use and promote the Planning System, subject to its having a sixty
(60) day period in which to cure such deficiency, (iii) in the event Neoforma is
involved in any bankruptcy proceeding pursuant to Section 7.2 hereof, (iv) in
the event that Neoforma fails to make payments in accordance with Section 6 of
this Agreement, (v) in the event that Neoforma violates the obligations in
Section 6.3 of this Agreement or (vi) if ECRI elects and Neoforma agrees to a
termination or partial termination of such restriction. Notwithstanding the
above, after the first six (6) months of this Agreement, ECRI may at its option
terminate the restriction contained in this subsection for any reason upon
giving Neoforma six (6) months notice prior to any display of the agreed upon
data elements in which event the Annual Fees listed under Section 6.2 shall be
reduced by fifty (50) percent starting at the date of such notice. The Parties
agree that the Neoforma Web Site may include Neoforma's vendors not listed in
Sourcebase provided that Neoforma shall take sufficient steps to assure that any
vendors which shall not have been evaluated or approved by ECRI shall be clearly
delineated from those that have.

                2.4     Sourcebook and Sourcebase CD-ROM Promotion. Neoforma
agrees to promote ECRI's sales of the printed Sourcebook and Sourcebase CD-ROM
on the Neoforma Web Site through its displaying references to its availability
and the manner of obtaining it from ECRI on the Neoforma Web Site. ECRI agrees
to promote the Sourcebook and Sourcebase CD-ROM as accessible on the Neoforma
Web Site.

                                       4
<PAGE>   5

        3.      OTHER ECRI CONTENT AND SERVICES.

                3.1     Use of ECRI Content and Services. The Parties agree that
Neoforma will reference or promote the ECRI Content and Services on the Neoforma
Web Site. Following the date of this Agreement, ECRI agrees that it shall notify
Neoforma of appropriate new developments of the ECRI Content and Services and
the parties will mutually determine whether such materials will be included on
the Neoforma Web Site.

                3.2     Promotion of UMDNS. Neoforma and ECRI agree to work
closely together to continue the development of and to promote the Universal
Medical Device Nomenclature System ("UMDNS"). Neoforma shall map its
categorization scheme on the Neoforma Web Site using the UMDNS and promote UMDNS
on the Neoforma Web Site as being the desired standard. Neoforma shall be
permitted to use the UMDNS definitions to enhance and augment its database
usage. ECRI and Neoforma shall work together to develop new terms and codes
within UMDNS and to improve and refine existing terms and codes , subject to
limits imposed by ECRI's agreements with various third parties,
quasi-governmental and governmental agencies.

        4.      CO-BRANDING OF PRODUCTS AND SERVICES.

                4.1     Co-Branding of Products and Services. ECRI and Neoforma
hereafter agree that they shall work jointly to promote and sell various of the
ECRI Content and Services on the Neoforma Web Site ("Co-branding"). The terms
and conditions of any such Co-Branding arrangements shall be mutually agreed to
in writing by ECRI and Neoforma in the future and copies of such agreements
shall be appended as Exhibit G to this Agreement from time to time hereafter.

                4.2     Consideration for Co-branding. The amount of fee payable
to Neoforma for any goods or services sold through Co-branding may vary based
upon various factors to be mutually agreed upon by the parties, including which
party processes the payment for the transaction and the level of participation
of each party in consummating the particular transaction. In the event Neoforma
processes the payment for any transaction it agrees to remit to ECRI such
payment net of any fee it is entitled to no later that thirty (30) days
following the receipt of such payment. Similarly, in the event ECRI processes
the payment for any transaction it agrees to remit any fee owing to Neoforma as
a result of such transaction no later that thirty (30) days following the
receipt of such payment. The party which collected any payments pursuant to this
Co-branding arrangement during the prior month shall remit the aggregate payment
net of any fee (if Neoforma) or fee (if ECRI) along with and sufficient
supporting books and reports for such consideration to the other party together
with such payment or fee.

                                       5
<PAGE>   6

                4.3     Non-Exclusive Provider. ECRI acknowledges that Neoforma,
without notice to, or consent from ECRI, may enter into other co-brand and
content purchase agreements with providers of healthcare and medical information
or other similar content to that provided by ECRI for purchase, display and/or
access on the Neoforma Web Site except as specified under Section 6.3 of this
Agreement.

        5.      PLANNING SYSTEM DEVELOPMENT.

                5.1     Initial Development. Each Party agrees to work with the
other to design, develop and commence operation of the Planning System and to
provide any Deliverables relating to the Planning System for which it
responsible pursuant to the Development Schedule, which is attached as Exhibit A
and the parties shall mutually develop a schedule for future applications
including but not limited to the Planning Application Subscription Model, which
shall be appended as Exhibits hereto.

                5.2     Change Orders. All changes to Specifications relating to
the Planning System will be subject to the mutual agreement of the Parties. The
Parties agree that the Planning System may be implemented over time in
conjunction with the various phases of the Integration. Accordingly, the Parties
agree to periodically update or revise the Specifications and the Development
Schedule to coincide with various phases of the Integration.

                5.3     Planning System Fees. The portion of user fees,
advertising revenue or other revenue which ECRI shall be entitled to for the
initial phases of the Planning System are set forth on Exhibit B hereto. The
Parties shall mutually agree in advance as to the such amounts for each future
applications of the Planning System, such as the Planning Application
Subscription Model, such amounts which shall not be less than [*] nor greater
than [*] of subscription, advertising, or other revenue.

                5.4     Ownership rights and License Grant. The Planning System
shall be jointly owned by Neoforma and ECRI, and each party shall have the right
to exploit such system subject to the terms and conditions of this Agreement.
Subject to the licenses granted under this section, Neoforma reserves all title
and ownership to the Planning System software and web technology and its
associated intellectual property rights and ECRI reserves all title and
ownership to its internal applications based on the Planning System. During the
term of this Agreement and any extensions and for two (2) years thereafter,
Neoforma grants to ECRI a worldwide, nonassignable, nonexclusive right to use
any and all planning application models and programs developed under this
Agreement, any extensions thereof, or described in any Exhibits hereto.

*       Certain information on this page has been omitted and filed separately
        with the Commission. Confidential treatment has been requested with
        respect to the omitted portions.

                                       6
<PAGE>   7

        6.      ADDITIONAL OBLIGATIONS OF THE PARTIES.

                6.1     Business practices. To protect and preserve the goodwill
and image of each Party and its respective products, each Party shall (i)
conduct business in a manner that reflects favorably at all times on the other
Party or such Party's products, business reputation or image, and (ii) make no
false or misleading representations regarding the other Party or such Party's
products, business reputation or image. Neoforma agrees to refrain from using or
displaying ECRI's name or any ECRI trademark in a manner that would suggest that
ECRI endorses any medical product or endorses, funds, or accepts funding from
any medical device or pharmaceutical manufacturer. In addition to the foregoing,
each Party's web site shall prominently display a notice regarding the other
Party's conflict-of-interest policies, if any, in a manner and form that is
mutually agreed upon by the Parties.

                6.2     Payments. From the date of this Agreement until the one
year anniversary of this Agreement, Neoforma's obligations to pay ECRI shall be
limited to revenue sharing as provided for under this Agreement. During the
second and third years of the term of this Agreement, Neoforma shall pay to ECRI
a nonrefundable fee equal to Six Hundred Thousand Dollars ($600,000) per year
(the "Annual Fee"), which shall be credited against any revenue sharing payments
accruing to ECRI under this Agreement. Such Annual Fee shall be payable by
Neoforma to ECRI in equal monthly installments commencing thirty days after the
first year anniversary of the Effective Date of this Agreement. Revenue sharing
payments shall be payable by Neoforma to ECRI no later than thirty (30) days
following the receipt of any such payment, subject to the aforementioned credit
of the Annual Fee. For a two (2) year period following termination or expiration
of this Agreement, Neoforma shall make royalty payments to ECRI in an amount
equal to and in accordance with the terms of the revenue sharing arrangement
hereunder.

                6.3     Restrictions. Neoforma agrees that (i) during the term
of this Agreement, any extension thereof, and sixth (6) months thereafter it
will not directly or indirectly display, license, sell, or otherwise
commercially exploit any medical device nomenclature, coding, product comparison
or product evaluation information that directly compete with ECRI (other than
that created by Neoforma and ECRI under this Agreement), (ii) during the term of
this Agreement, any extensions, and for two (2) years thereafter it shall not
provide or attempt to provide a paper based directory or CD-ROM that competes
with the Sourcebook or Sourcebase, and (iii) in the event that Neoforma is
acquired by or otherwise affiliated with a direct competitor of ECRI during the
two year period following termination or expiration hereof, then the parties
will agree on mutually agreeable compensation formula in addition to all other
rights and remedies under this Agreement; provided that ECRI has performed it
obligations under this Agreement.

                                       7
<PAGE>   8

        7.      TRADEMARK LICENSES.

                7.1     Trademark License Grant. ECRI grants to Neoforma a
world-wide, non-exclusive, nontransferable license to use ECRI's trademarks
and/or service marks set forth on Exhibit E.1 (the "ECRI Trademarks") in the
Neoforma Web Site and in any promotional materials distributed by Neoforma with
respect thereto. Neoforma grants to ECRI a world-wide, non-exclusive,
nontransferable license to use Neoforma's trademarks and/or service marks set
forth on Exhibit E.2 (the "Neoforma Trademarks") in the ECRI Web Site and in any
promotional materials distributed by ECRI with respect to the Neoforma Web Site
or any portion thereof or any links to the Neoforma Web Site contained on the
ECRI Web Site.

                7.2     ECRI's Rights. Neoforma acknowledges that it has no
proprietary interest in the ECRI Trademarks (other than the license granted
herein). Neoforma's use of the ECRI Trademarks will not create any right, title
or interest of Neoforma in or to the ECRI Trademarks. Neoforma agrees that it
will do nothing inconsistent with ECRI's ownership of the ECRI Trademarks and
that all use of the ECRI Trademarks by Neoforma shall inure to the benefit of
ECRI. Neoforma shall not register or attempt to register the ECRI Trademarks in
any jurisdiction without the prior written permission of an officer of ECRI.
Neoforma agrees to keep ECRI appraised of its manner of using of the ECRI
Trademarks other than as is obvious from a review of the Neoforma Web Site.

                7.3     Neoforma's Rights. ECRI acknowledges that it has no
proprietary interest in the Neoforma Trademarks (other than the license granted
herein). ECRI's use of the Neoforma Trademarks will not create any right, title
or interest of ECRI in or to the Neoforma Trademarks. ECRI agrees that it will
do nothing inconsistent with Neoforma's ownership of the Neoforma Trademarks and
that all use of the Neoforma Trademarks by ECRI shall inure to the benefit of
Neoforma. ECRI shall not register or attempt to register the Neoforma Trademarks
in any jurisdiction without the prior written permission of an officer of
Neoforma. ECRI agrees to keep Neoforma appraised of its manner of using the
Neoforma Trademarks.

        8.      TERM AND TERMINATION.

                8.1     Term. This Agreement shall become effective on the
Effective Date and shall remain in full force and effective for a period of
three (3) years from the Effective Date or until terminated pursuant to this
Section 8.

                8.2     Events of Default by ECRI. Neoforma shall have the right
to terminate this Agreement and its further obligations hereunder upon the
occurrence of any of the following events of default (subject to ECRI's ability
to cure or remedy such event as described in Section 8.4):

                                       8
<PAGE>   9

                        (a)     ECRI is involved in any voluntary or involuntary
bankruptcy proceeding, or any other proceeding concerning insolvency,
dissolution, cessation of operations, or reorganization of indebtedness or has a
receiver appointed over its affairs and the proceeding or appointment is not
dismissed within 60 days;

                        (b)     ECRI becomes unable to pay its debts as they
mature in the ordinary course of business or makes an assignment for the benefit
of its creditors; or

                        (c)     ECRI is in material default of any provision of
this Agreement.

                8.3     Events of Default by Neoforma. ECRI shall have the right
to terminate this Agreement and its further obligations hereunder upon the
occurrence of any of the following events (subject to Neoforma's ability to cure
or remedy such events as described in Section 8.4):

                        (a)     Neoforma becomes involved in any voluntary or
involuntary bankruptcy proceeding or any other proceeding concerning insolvency,
dissolution, cessation of operations, or reorganization of indebtedness, or has
a receiver appointed over its affairs and the proceeding or appointment is not
dismissed within 60 days;

                        (b)     Neoforma becomes insolvent or unable to pay its
debts as they mature in the ordinary course of business or makes an assignment
for the benefit of its creditors; or

                        (c)     Neoforma is in material default of any provision
of this Agreement; or

                        (d)     Neoforma transfers its license to, or otherwise
becomes affiliated with, any direct competitor of ECRI, either in the normal
course of business or through the sale of its assets to a third party

                8.4     Right to Cure Event of Default. Upon the occurrence of
any event of default entitling a Party to terminate this Agreement (excepting
those events set forth under subsections 8.2 (a) or (b) and 8.3 (a) or (b)
hereof), the non-defaulting Party may send notice of termination, specifying the
nature of the default, to the other Party. The non-defaulting Party shall permit
60 calendar days, following the date of such notice to enable the other Party to
cure the default to the non-defaulting Party's satisfaction. Failure to cure the
default shall result in termination without further notice by the non-defaulting
Party, unless such non-defaulting Party extends the cure period by written
notice or withdraws the default notice; however, in no event shall any such
termination relieve ECRI of its obligations under Section 2.1 of this Agreement.

                8.5     Duties Upon Termination. Upon expiration or termination
of this Agreement, each Party shall return or destroy the Confidential
Information (defined below) of the other Party and the trademark and service
mark licenses granted in Section 7 hereof shall

                                       9
<PAGE>   10

terminate. All amounts owing shall be accelerated and shall become immediately
payable; however, in the event of termination under Section 8 (d) or in the
event that Neoforma fails to make payments as specified under this Agreement,
Neoforma shall be responsible for the balance of any and all unpaid Annual Fees
set forth and as specified. Either Party may request in writing that the other
Party certifies that it has complied with its obligations hereunder. Upon the
termination of this Agreement Neoforma shall have the right to continue using
the UMDNS device terms and codes, Sourcebase manufacturer names, product codes,
and manufacturer street address, e-mail, URL, and phone numbers, but will not
have the right to continue using any other Sourcebase data elements without the
prior written permission of ECRI and the payment of an agreed upon licensing
fee. Following any termination of this Agreement, each Party shall cease in
making any representation or statement to the effect that they remain affiliated
with one another.

                8.6     Survival. The rights and obligations of the Parties
pursuant to the following Sections shall survive termination or expiration of
this Agreement for any reason, 5.4, 6.2, 6.3, 8.5, 9.1, 9.2, 10.3, 10.4, 10.5,
11 and 12.

        9.      OWNERSHIP.

                9.1     Neoforma Intellectual Property Rights. Except as
otherwise provided herein, Neoforma shall own and retain all right, title, and
interest in and to any technology or information otherwise developed or created
solely by Neoforma.

                9.2     ECRI Intellectual Property Rights. Except as otherwise
provided herein, ECRI shall own and retain all right, title, and interest in and
to any technology, content, data or information otherwise developed or created
solely by ECRI. ECRI grants to Neoforma a perpetual license to use the UMDNS
device terms and codes. ECRI shall be the sole owner of the UMDNS and the
Sourcebase, including but not limited to any adaptations thereof under this
Agreement, and any rights granted to Neoforma herein are for the sole purpose of
allowing Neoforma to exercise its rights under this Agreement. Neoforma shall
place ECRI copyright notices and/or other proprietary legends on the Neoforma
Web Site in a form and manner acceptable to ECRI.

        10.     WARRANTIES AND INDEMNIFICATION.

                10.1    Limited Warranty. Each Party warrants to the other that
the Deliverables made by it to the other will substantially conform to their
relevant Specifications.

                10.2    Disclaimer of Warranties. THE FOREGOING WARRANTIES ARE
THE SOLE WARRANTIES EXPRESS OR IMPLIED GIVEN BY EACH PARTY TO THE OTHER IN
CONNECTION WITH ITS DELIVERABLES AND EACH PARTY DISCLAIMS ALL OTHER WARRANTIES
TO THE OTHER, INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.

                                       10
<PAGE>   11

                10.3    Proprietary Rights Warranties. Each Party warrants to
the other that it has the necessary rights to grant the licenses granted herein
without violating or infringing upon the patents, trade secrets, trademarks,
service marks or copyrights of third parties.

                10.4    ECRI Intellectual Property Rights Indemnity.

                        (a)     ECRI shall indemnify and hold harmless Neoforma,
its officers, directors, and employees against any claims, actions or demands
arising from the breach of the warranty in Section 10.3.

                        (b)     This obligation is contingent upon (1) Neoforma
giving prompt written notice to ECRI of any such claim, action or demand, (2)
Neoforma allowing ECRI to control the defense and related settlement
negotiations and (3) Neoforma fully assisting in the defense so long as ECRI
reimburses Neoforma for its reasonable expenses and employee time.

                        (c)     In the event that any such claim, action, or
demand is made against Neoforma, Neoforma will promptly furnish ECRI with copies
of any and all documents (inclusive of all correspondence and pleadings other
than attorney-client communications) pertaining thereto. Neoforma will also keep
ECRI continuously and fully informed in a timely manner as to the status of the
same and will provide ECRI with copies of any additional documents pertaining
thereto.

                10.5    Neoforma Intellectual Property Right Indemnity.

                        (a)     Neoforma shall indemnify and hold harmless ECRI,
its officers, directors, and employees against any claims, actions or demands
arising actual or alleged infringement of any patent, trade secret, trademark
service mark, copyright or other proprietary right by Neoforma or Neoforma's Web
Site.

                        (b)     This obligation is contingent upon (1) ECRI
giving prompt written notice to Neoforma of any such claim, action or demand,
(2) ECRI allowing Neoforma to control the defense and related settlement
negotiations and (3) ECRI fully assisting in the defense so long as Neoforma
reimburses ECRI for its reasonable expenses and employee time.

                        (c)     In the event that any such claim, action, or
demand is made against ECRI, ECRI will promptly furnish Neoforma with copies of
any and all documents (inclusive of all correspondence and pleadings other than
attorney-client communications) pertaining thereto. ECRI will also keep Neoforma
continuously and fully informed in a timely manner as to the status of the same
and will provide Neoforma with copies of any additional documents.

                                       11
<PAGE>   12

        11.     LIMITATION OF LIABILITY. EXCEPT FOR ANY LIABILITY ARISING OUT OF
A BREACH OF THE CONFIDENTIALITY PROVISIONS OF THIS AGREEMENT SET FORTH IN
SECTION 12 HEREOF, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY LOST
PROFITS, LOSS OF MARKET OR OPPORTUNITY AND/OR INCIDENTAL OR CONSEQUENTIAL LOSS
OR DAMAGE HOWSOEVER ARISING IN CONNECTION WITH THE SUBJECT MATTER OF THIS
AGREEMENT, PURSUANT TO ANY CLAIM IN CONTRACT, NEGLIGENCE, TORT, STRICT
LIABILITY, OR OTHER THEORY.

        12.     CONFIDENTIALITY.

                12.1    Confidentiality.

                        (a)     "Confidential Information" is any information
disclosed by one Party to the other in connection with this Agreement and which
the receiving Party knows or has reason to know is regarded as confidential
information by the disclosing Party. The Confidential Information will include,
but will not be limited to, trade secrets, the structure, sequence and
organization of the source code of computer software, marketing plans,
techniques, processes, procedures and formulae. For each item of Confidential
Information, the Party disclosing the item shall be called the "Disclosing
Party," and the Party receiving the item shall be called the "Receiving Party."

                        (b)     The Receiving Party shall hold all Confidential
Information of the Disclosing Party in trust and confidence, and protect it as
the Receiving Party would protect its own confidential information (which, in
any event, shall not be less than reasonable protection) and shall not use such
Confidential Information for any purpose other than that contemplated by this
Agreement. Unless agreed by the Disclosing Party in writing, the Receiving Party
shall not disclose any Confidential Information of the Disclosing Party, by
publication or otherwise, to any person other than employees and contractors
(such as contract manufacturers or software developers) who (i) are bound to
written confidentiality obligations consistent with and at least as restrictive
as those set forth herein and (ii) have a need to know such Confidential
Information for purposes of enabling a Party to exercise its rights and perform
its obligations pursuant to this Agreement. The foregoing confidentiality
obligation shall be effective for a period of five (5) years after first
disclosure of the Confidential Information pursuant to the terms of this
Agreement, provided however, that each Party will comply with any obligations of
confidentiality as may be imposed pursuant to agreements with third parties for
longer periods (each Party hereby shall disclose to the other in writing such
obligations of confidentiality that may be imposed pursuant to such agreements
with third parties at the time of disclosure).

                12.2    Exceptions. The obligations specified in this Section 12
shall not apply to any Confidential Information to the extent that:

                        (a)     it is already known to the Receiving Party
without restriction prior to the time of disclosure by the Disclosing Party;

                                       12
<PAGE>   13

                        (b)     it is acquired by the Receiving Party from a
third party without confidentiality restriction and does not originate with the
Disclosing Party;

                        (c)     it is independently developed or acquired by the
Receiving Party by employees or contractors without access to such Confidential
Information;

                        (d)     it is approved for release by written
authorization of the Disclosing Party;

                        (e)     it is in the public domain at the time it is
disclosed or subsequently falls within the public domain through no wrongful
action of the Receiving Party;

                        (f)     it is furnished to a third party by the
Disclosing Party without a similar restriction on that third party's right of
disclosure;

                        (g)     it is disclosed pursuant to the requirement of a
governmental agency or disclosure is permitted or required by operation of law,
provided that the Receiving Party uses its best efforts to notify the Disclosing
Party in advance of such disclosure and seeks confidential treatment for such
Confidential Information.

                12.3    Confidentiality of Agreement. Each Party agrees that the
terms and conditions of this Agreement shall be treated as Confidential
Information; provided that each Party may disclose the terms and conditions of
this Agreement: (a) to legal counsel; (b) in confidence, to accountants, banks,
and financing sources and their advisors; and (c) in confidence, in connection
with the enforcement of this Agreement or rights under this Agreement.

        13.     JURISDICTION AND APPLICABLE LAW.

                13.1    Arbitration. Any claim, dispute, or controversy arising
out of or in connection with or relating to this Agreement or the breach or
alleged breach thereof will be submitted by the Parties to arbitration by the
American Arbitration Association in the County of Santa Clara, State of
California, United States of America under the commercial rules then in effect
for that Association, except as provided herein. The Parties hereby submit to
the jurisdiction of, and waive any venue objections against such tribunal. Each
Party will choose one arbitrator within 30 days of receipt of the notice of
intent to arbitrate. Within 60 days of receipt of the notice of intent to
arbitrate, the two arbitrators will choose a neutral third arbitrator who will
act as chairman. If no arbitrator is appointed within the times herein provided,
or any extension of time which is mutually agreed upon, the Association will
make such appointment within 30 days of such failure. The Parties will be
entitled to discovery as provided in Sections 1283.05 and 1283.1 of the Code of
Civil Procedure of the State of California or any successor provision, whether
or not the California Arbitration Act is deemed to apply to the arbitration. The
award rendered by the arbitrators will include costs of arbitration, reasonable
attorneys' fees, and reasonable costs for expert and other witnesses,

                                       13
<PAGE>   14

and judgment on such award may be entered in any court having jurisdiction
thereof. Nothing in this Agreement will be deemed as preventing either Party
from seeking injunctive relief (or any other provisional remedy) from any court
having jurisdiction over the Parties and the subject matter of the dispute as
necessary to protect either Party's name, proprietary information, trade
secrets, know how, or any other proprietary rights.

                13.2    Governing Law. This Agreement shall be governed by and
construed under the laws of the United States and the State of California.

        14.     FORCE MAJEURE.

        If the performance of this Agreement or any obligations hereunder is
prevented, restricted, or interfered with by the reasons of acts of God, acts of
an governmental authority, riot, revolution, fires, or war, or other cause
beyond the reasonable control of the Parties hereto ("Force Majeure"), the Party
so effected shall be excused from such performance until such Force Majeure is
removed, provided that the Party so effected shall use its best efforts to avoid
or remove such causes of non-performance and shall continue performance
hereunder with the utmost dispatch whenever such causes are removed.

        15.     MISCELLANEOUS.

                15.1    Audit Rights. Each Party shall retain the supporting
books and records for each period for at least three (3) years after the
submission of the corresponding payment referenced in this Agreement. Upon ten
(10) business days prior notice to a Party (the "Examined Party"), the other
Party ("Examining Party") and its representatives may have access to the
Examined Party's books and records to conduct an audit (an "Examination") on a
semi-annual basis during the term of the Agreement, for the purpose of verifying
the accuracy of payments and compliance with this Agreement. Examinations shall
be conducted during regular business hours, shall not unreasonably interfere
with an Examined Party's normal business and shall last no longer than three (3)
business days. Prior to conducting an Examination, each auditor shall sign any
confidentiality agreement reasonably requested by the Examined Party. The
auditors shall report to both Parties only whether there has been any
underpayment and, if so, the amount thereof. Such Examination shall be solely at
the Examining Party's expense. However, if the Examined Party has underpaid the
Examining Party by more than five percent (5%) for any continuous three (3)
month period under Examination, then the Examined Party shall be responsible for
prompt payment of the cost of such Examination, in addition to payment of the
discrepancy amount.

                15.2    Compliance with Export Control. The Parties agree not to
export or re-export, directly or indirectly, (i) any technical data received
from the other Party pursuant to this Agreement, or (ii) any product, process,
or technical data using such received technical data, to any country to which
such export or re-export is restricted or prohibited by United

                                       14
<PAGE>   15

States or other relevant laws, without obtaining prior written authorization
from the relevant government authorities as required by such laws.

                15.2    Waiver. Any waiver of breach or default pursuant to this
Agreement shall not be a waiver of any other subsequent breach or default.
Failure or delay by either Party to enforce any term or condition of this
Agreement shall not constitute a waiver of such term or condition.

                15.3    Severability. To the extent that any provision of this
Agreement is found by a court of competent jurisdiction to be invalid or
unenforceable, that provision notwithstanding, the remaining provisions of this
Agreement shall remain in full force and effect and such invalid or
unenforceable provision shall be deleted.

                15.4    Assignment. Neither party may assign, voluntarily, by
operation of law, or otherwise, any rights or delegate any duties under this
Agreement (other than the right to receive payments) without the other Party's
prior written consent, and any attempt to do so without that consent will be
void. This Agreement will bind and inure to the benefit of the Parties and their
respective successors and permitted assigns.

                15.5    Authority. Each Party warrants to the other Party that
it has the authority to enter into this Agreement and that all necessary
corporate or other approvals have been or will be obtained.

                15.6    Notices. Any notice required or permitted pursuant to
this Agreement shall be in writing delivered by hand, overnight courier,
telecopy, facsimile, or certified or registered mail to the address listed below
and shall be effective upon receipt:

Notices to Neoforma:

        Neoforma, Inc.
        3255-7 Scott Boulevard
        Santa Clara, California 95054

With a copy to:

        John A. Kostrubanic, Esq.
        Pepe & Hazard LLP
        150 Federal Street, 28th Floor
        Boston, Massachusetts 02110-1745

Notices to ECRI

        Emergency Care Research Institute
        5200 Butler Pike
        Plymouth Meeting, Pennsylvania 19462-1298

                                       15
<PAGE>   16

With a copy to:

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

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

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

                15.7    Amendment. No alternation, waiver, cancellation, or any
other change or modification in any term or condition of this Agreement, or any
agreement contemplated to be negotiated or reached pursuant to the terms of this
Agreement, shall be valid or binding on either Party unless made in writing and
signed by duly authorized representatives of both Parties.

                15.8    Counterparts. This Agreement may be executed in one or
more counterparts, including facsimiles, each of which shall be deemed to be a
duplicate original, but all of which, taken together, shall be deemed to
constitute a single instrument.

                15.9    Entire Agreement. The terms and conditions herein
contained, including all Exhibits hereto, constitute the entire agreement
between the Parties with respect to the subject matter of this Agreement and
supersede any previous agreements and understandings, whether oral or written,
between the Parties hereto with respect to the subject matter hereof.

                15.10   Construction. This Agreement is the product of
negotiation between the Parties and their respective counsel. This Agreement
will be interpreted fairly in accordance with its terms and conditions and
without any strict construction in favor of either Party. Any ambiguity shall
not be interpreted against the drafting Party.

                15.11   Press Releases. The parties agree that they will
cooperate in preparing and releasing a joint press release, at the launch of the
developments provided for in this Agreement and in connection with the release
of any new significant development, that will include, among other things, the
following: a quote from an officer of each Party, standard language as is
customarily required by ECRI in such press releases, a Press contact and ECRI
and Neoforma trademark and service mark information. Each party must provide
prior approval of any such release.

                                       16
<PAGE>   17

        IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their respective duly authorized representatives as of the Effective
Date.

Neoforma, Inc.                          Emergency Care Research Institute

By: /s/ Wayne McVicker                  By: /s/ Ronni P. Solomon
   --------------------------------        -------------------------------------
Name:  Wayne McVicker                   Name: Ronni P. Solomon
Title: Vice President                         Title: Vice President
Date:  May 14, 1999                           Date:  May 14, 1999

                                       17
<PAGE>   18

                                 NEOFORMA, INC.
                             3255-7 SCOTT BOULEVARD
                          SANTA CLARA, CALIFORNIA 95054

                                 August 23, 1999

VIA FACSIMILE

Anthony J. Montagnolo, Vice President
   of Technology Planning
Ronni P. Solomon, Vice President
   of Legal Affairs and Risk Management Services
Emergency Care Research Institute
5200 Butler Pike
Plymouth Meeting, Pennsylvania  19462-1298
Fax No. 610-834-1275

        Re:     Modification to Development and License Agreement

Dear Tony and Ronni:

        This letter is intended as an offer to modify the Development and
License Agreement by and between Emergency Care Research Institute ("ECRI") and
Neoforma, Inc. ("Neoforma") dated May 14, 1999 (the "Agreement"). This offer is
entirely subject to the approval of Neoforma's board of directors. In the event
you are agreeable to the terms of this letter, please execute a copy of it and
return it to me. I will then present it to Neoforma's board of directors for
approval, and if such approval is given this letter shall serve to modify the
agreement.

        Defined terms which are not defined in this letter shall have the same
meanings as were given to them in the Agreement.

        At such time as this offer is accepted by ECRI and approved by
Neoforma's board of directors, the Agreement shall be modified to expand the
definition of ECRI Content and Services and develop the terms of the Co-branding
arrangement as follows:

                (i)     Exhibit F to the Agreement shall be replaced by the
        revised Exhibit F, attached hereto, which expands the definition of
        "ECRI Content and Services" contained in Section 1.3 of the Agreement to
        include the ECRI products listed on the attached Exhibit F.

<PAGE>   19

Anthony J. Montagnolo, Vice President
Ronni P. Solomon, Vice President
August 23, 1999
Page 2

                (ii)    The attached Exhibit G.1 shall be added as Exhibit G.1
        to the Agreement so as to set forth additional terms and conditions of
        the Co-branding arrangements between ECRI and Neoforma.

        Should you wish to accept this offer please execute a copy of this
letter below and return it to me no later than 5:00 p.m. Eastern Time on August
24, 1999. Please do not hesitate to call me should you have any questions
regarding this offer.

                                        Sincerely,

                                        Frederick Ruegsegger
                                        Chief Financial Officer

Emergency Care Research Institute

By: /s/ Ronni P. Solomon
   ----------------------------------
   Ronni P. Solomon
   Vice President, duly authorized

<PAGE>   20
                                   EXHIBIT A

                NEOFORMA - PLANNING SYSTEM DEVELOPMENT SCHEDULE
                      ADVERTISING REVENUE APPLICATION [*]

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
DELIVERABLE              DUE DATE       ECRI ACCEPTANCE CRITERIA              ACCEPTANCE PERIOD
-----------------------------------------------------------------------------------------------
<S>                      <S>            <S>                                   <S>
[*]                      [*]            None                                  N/A
[*]                      [*]            None                                  N/A
[*]                      [*]            Review how ECRI fields are mapped to
                                        Neoforma fields                       1 week
[*]                      [*]            None                                  N/A
[*]                      [*]            None                                  N/A
</TABLE>

                  ECRI - PLANNING SYSTEM DEVELOPMENT SCHEDULE
                      ADVERTISING REVENUE APPLICATION [*]

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
DELIVERABLE              DUE DATE       NEOFORMA ACCEPTANCE CRITERIA                ACCEPTANCE PERIOD
-----------------------------------------------------------------------------------------------------
<S>                      <S>            <S>                                         <S>
[*]                      [*]            Review all fields and tables                [*]
[*]                      [*]            Able to export data into Neoforma system    [*]
</TABLE>

* Certain information on this page has been omitted and filed
  separately with the Commission. Confidential treatment has
  been requested with respect to the omitted portions.
<PAGE>   21
EXHIBIT B: PLANNING ADVERTISING MODEL PROJECTION

DRAFT COPY     NEOFORMA CONFIDENTIAL

5/4/99

FEATURED PRODUCTS REVENUE

<TABLE>
<CAPTION>
FEATURED PRODUCTS                            APR-99    MAY-99    JUN-99    JUL-99    AUG-99    SEP-99   OCT-99   NOV-99   DEC-99
-----------------                            ------    ------    ------    ------    ------    ------   ------   ------   ------
<S>                                  <C>     <C>       <C>       <C>       <C>       <C>       <C>      <C>      <C>      <C>
Unique room types                    [*]       [*]       [*]       [*]       [*]       [*]      [*]      [*]      [*]      [*]
Featured products per room
Price per product per month
Occupancy rate
Featured services per room
Price per service per month
Occupancy rate
Unique department types
Featured products per department
Price per product per month
Occupancy rate
Featured services per department
Price per service per month
Occupancy rate

NOTED PRODUCTS
Specific rooms
Featured products per room
Price per product per month
Occupancy rate

Total advertising revenue
ECRI partner revenue share
Contingent partner revenue share
TOTAL REVENUE AFTER PARTNERS
                                                                                                  TOTAL [*] 1999:
</TABLE>

SUBJECT TO ADJUSTMENT BASED ON THE FINAL DELIVERY SCHEDULE

* Certain information on this page has been omitted and filed separately with
  the Commission. Confidential treatment has been requested with respect to the
  omitted portions.
<PAGE>   22
NOEFORMA CONFIDENTIAL

<TABLE>
<CAPTION>
JAN-00    FEB-00    MAR-00    APR-00    MAY-00    JUN-00    JUL-00    AUG-00    SEP-00    OCT-00    NOV-00   DEC-00
-------------------------------------------------------------------------------------------------------------------
<S>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>
 [*]       [*]       [*]       [*]       [*]       [*]       [*]       [*]       [*]       [*]       [*]       [*]
</TABLE>

* Certain information on this page has been omitted and filed
  separately with the Commission. Confidential treatment has
  been requested with respect to the omitted portions.

<PAGE>   23
EXHIBIT C:  PLANNING APPLICATION
ADVERTISING MODEL DESCRIPTION

PICASSO SPECIFICATION
Version 2 - 4/22/99 7:00

Table of Contents

1. CURRENT STATUS
   1.1 Background
   1.2 Status

2. PICASSO NEEDS
   2.1 [*]
   2.2 [*]
   2.3 [*]

3. SPECIFICATIONS FOR PICASSO
   3.1 Goals
   3.2 Scope
   3.3 Users
   3.4 List of proposed features
   3.5 Feature description and impact analysis

4. EXTERNAL INTERFACES

5. PERFORMANCE
   5.1 Availability
   5.2 Response time
   5.3 Scalability

6. ROLLOUT
   6.1 Backwards compatibility
   6.2 User notification

7. TEST REQUIREMENTS
   7.1 Test documents
   7.2 Test schedule

* Certain information on this page has been omitted and filed
  separately with the Commission. Confidential treatment has
  been requested with respect to the omitted portions.

                                     Page 1
<PAGE>   24
1.  CURRENT STATUS

1.1 BACKGROUND
Neoforma.com has always been conceived of as a site to display planning
information as a solution for people working throughout the facility life cycle
(design, planning, outfitting, and occupancy). Planning is also a gateway into
product information and purchasing.

1.1.1 Issues
-  [*]
-  [*]
-  [*]
-  [*]
-  [*]

1.2 CURRENT STATUS
Neoforma.com currently displays information for 1000 rooms in the Center for
Advanced Medicine in Chicago (CAM). Information includes panoramic images for
rooms, floor plans, department layouts, room and department descriptions, and
product categories associated with each room. The rooms are searchable; users
can also search for products and find rooms in which those products appear.

2.  PICASSO NEEDS

Picasso must provide a way to:

2.1 [*]
2.2 [*]
2.3 [*]

Business requirements for Picasso will be available from this document in future
revisions.

The outline of the revenue model is:

-  [*]
-  [*]

Attached to this document are suggested business processes and screen
prototypes to help reviewers visualize the application and understand how
Neoforma will support it.

3.  SPECIFICATIONS FOR PICASSO FEATURES

* Certain information on this page has been omitted and filed
  separately with the Commission. Confidential treatment has
  been requested with respect to the omitted portions.

                                     Page 2
<PAGE>   25
3.1 GOALS

The goals for this project are to add planning features and content to
neoforma.com as well, balance load across the site and servers, and develop
revenue streams.

3.2 SCOPE

The scope for this project is substantial and includes:

- [*]
- [*]
- [*]
- [*]
- [*]
- [*]
- [*]

3.3 USERS

The users for this release are all Web site users. A more detailed audience
analysis will be added to this document in later revisions.

3.4 PROPOSED FEATURES

<TABLE>
<S>     <C>
[*]
3.4.1   [*]
3.4.2   [*]
3.4.3   [*]
3.4.4   [*]
3.4.5   [*]
3.4.6   [*]
3.4.7   [*]
3.4.8   [*]
3.4.9   [*]
3.4.10  [*]
3.4.11  [*]
3.4.12  [*]
3.4.13  [*]
3.4.14  [*]
3.4.15  [*]
3.4.16  [*]
3.4.17  [*]
3.4.18  [*]
</TABLE>

FEATURE DESCRIPTION AND IMPACT ANALYSIS

More detailed descriptions of each feature follows [*]

* Certain information on this page has been omitted and filed
  separately with the Commission. Confidential treatment has
  been requested with respect to the omitted portions.

                                     Page 3

<PAGE>   26
[*]

* Certain information on this page has been omitted and filed
  separately with the Commission. Confidential treatment has
  been requested with respect to the omitted portions.

                                     Page 4

<PAGE>   27
[*]

* Certain information on this page has been omitted and filed
  separately with the Commission. Confidential treatment has
  been requested with respect to the omitted portions.

                                     Page 5

<PAGE>   28
[*]

* Certain information on this page has been omitted and filed
  separately with the Commission. Confidential treatment has
  been requested with respect to the omitted portions.

                                     Page 6

<PAGE>   29
[*]

* Certain information on this page has been omitted and filed
  separately with the Commission. Confidential treatment has
  been requested with respect to the omitted portions.

                                     Page 7

<PAGE>   30
[*]

4.   EXTERNAL INTERFACES
There are numerous external interfaces for this project, as each facility
multiple interfaces. In addition, there are 2 new software interfaces. More
detail on this topic will follow in a later revision.

5.   PERFORMANCE

5.1  AVAILABILITY
Picasso must be available from neoforma.com 24x7. Neoforma will develop service
availability requirements and maintenance windows. [*] will operate within
these broader site requirements.

5.2  RESPONSE TIME
Acceptable response time should be measured based on 14.4 connect speeds with
the understanding that our users will be short on time and patience. Queries
should be as rapid as possible and tours should be too, but Engineering will
need to determine acceptable performance times.

5.3  SCALABILITY
Picasso must be able to scale to display thousands of rooms in virtual tours
reasonably quickly. More details on scalability will be available in this
document in future revisions. The number of images and their size will affect
performance and will dictate machine resources.

6.   ROLLOUT

6.1  BACKWARDS COMPATIBILITY
This project must support our existing Planning implementation.

6.2  USER NOTIFICATION
There are no user notification issues, but we should take advantage of this
opportunity to capitalize on partnerships.

* Certain information on this page has been omitted and filed
  separately with the Commission. Confidential treatment has
  been requested with respect to the omitted portions.

                                     Page 8

<PAGE>   31
7.   TEST REQUIREMENTS

7.1  TEST DOCUMENTS
Testing will be based on test documents which will include explicit testing
instructions, site areas to test, features, expected behavior, a description of
how to log bugs, and appropriate contact points for each exercise.

7.2  TEST SCHEDULE
Testing will be conducted over the course of no fewer than 15 business days
with users of varying experience. Exact testing times and the team will be
determined at a later date by QA.

                                     Page 9
<PAGE>   32
                                   EXHIBIT D

                       NEOFORMA - SOURCEBASE DELIVERABLES

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
DELIVERABLE              DUE DATE       ECRI ACCEPTANCE CRITERIA              ACCEPTANCE PERIOD
-----------------------------------------------------------------------------------------------
<S>                      <S>            <S>                                   <S>
[*]                      [*]            None                                  N/A
[*]                      [*]            None                                  N/A
[*]                      [*]            Review how ECRI fields are mapped to
                                        Neoforma fields                       1 week
[*]                      [*]            None                                  N/A
[*]                      [*]            None                                  N/A
[*]                      [*]            Able to export data to ECRI system    N/A
</TABLE>

                         ECRI - SOURCEBASE DELIVERABLES

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
DELIVERABLE              DUE DATE       NEOFORMA ACCEPTANCE CRITERIA              ACCEPTANCE PERIOD
---------------------------------------------------------------------------------------------------
<S>                      <S>            <S>                                       <S>
[*]                      [*]            Review all fields and tables              [*]
[*]                      [*]            Able to export data to Neoforma system    [*]
[*]                      [*]            Able to export data to Neoforma system    [*]
</TABLE>

                                      [*]

* Certain information on this page has been omitted and filed
  separately with the Commission. Confidential treatment has
  been requested with respect to the omitted portions.
<PAGE>   33

                                      [*]

* Certain information on this page has been omitted and filed
  separately with the Commission. Confidential treatment has
  been requested with respect to the omitted portions.
<PAGE>   34

                                      [*]

* Certain information on this page has been omitted and filed
  separately with the Commission. Confidential treatment has
  been requested with respect to the omitted portions.
<PAGE>   35
                              EXHIBIT E: TRADEMARK
E.1. NEOFORMA

Common-law trademarks

      Neoforma
      The Healthcare Business Community
      Statcity
      Statworld
      Neoforma & Design
      Neoforma.com and Design

E.2. ECRI

      ECRI
      Health Devices Sourcebooks
      Health Devices Sourcebase
      MedPlanOne

<PAGE>   36
                                   EXHIBIT F

                           ECRI CONTENT AND SERVICES

<TABLE>
<CAPTION>
                                                                                                 % OF GROSS
                                                                                % OF GROSS       TO NEOFORMA
                                                                                TO NEOFORMA      IF NEOFORMA
                                                                                  IF ECRI          CLOSES
                                                                                   CLOSES        TRANSACTION
                                                 COMMERCE                       TRANSACTION      (AVAILABLE
                                                 QUOTE NOT        QUOTE         (EFFECTIVE       AFTER 9/99
PRODUCT                                           ALLOWED        REQUIRED          9/99)           RELEASE)
-------                                          ---------       --------       ------------     -----------
<S>                                              <C>             <C>            <C>              <C>
Year-2000 Services

Year-2000 Medical Device Assessment
  Planning Support*                                                 [*]             [*]              [*]
Year-2000 Interactive Telephone Seminar Series      [*]                             [*]              [*]
Five Minutes to Midnight: Practical Y2K
  Contingency Plans for Healthcare Facilities       [*]                             [*]              [*]

Technology Assessment, Planning, Procurement,
  and Management

1999 Health Devices Sourcebook                      [*]                             [*]              [*]
Health Devices System*                              [*]                             [*]              [*]
Healthcare Product Comparison System*               [*]                             [*]              [*]
* In Exhibit F of original Partnership Agreement
</TABLE>

* Certain information on this page has been omitted and filed separately with
  the Commission. Confidential treatment has been requested with respect to the
  omitted portions.
<PAGE>   37

                                   EXHIBIT G.1

                       TERMS AND CONDITIONS OF CO-BRANDING

        The terms and conditions of Co-branding contained in this Exhibit G.1
shall apply to all sales of products comprising the ECRI Content and Services
(as listed on Exhibit F to the Agreement) which occur via the Neoforma Web Site.

        In accordance with Section 4.1 of the Agreement, ECRI shall pay to
Neoforma a transaction fee in connection with each sale via the Neoforma Web
Site of each ECRI product appearing on Exhibit F to the Agreement in the amount
(% of Gross) shown on such Exhibit F. The amount of such transaction fee shall
vary in accordance with such Exhibit F depending upon which party processes
payment for such transaction.

[*] For the purposes of this Exhibit G.1, a "renewal" shall be defined as a sale
of any ECRI product which is a continuation of a subscription for such ECRI
product. "Renewal" as used herein shall not include (i) any sale of an ECRI
product made after 120 days of the expiration of the subscription for such
product; or (ii) any sale of an ECRI product to any customer who purchased any
other ECRI product whether such sale occurred prior to or after the date of the
Agreement.

[*] Such agreement shall be evidenced by a contract for the sale of such
product, an invoice for the sale of such product, a purchase order for the sale
of such product, the payment for the sale of such product, or the final
agreement in any other form of ECRI and the party requesting such price quote
for the sale of such product.

        Neoforma shall quote only such prices and terms for the ECRI Content and
Services as ECRI shall designate in writing and shall have no right or authority
to grant any discount or make any adjustments. ECRI reserves the right to modify
any prices at any time and to delete, suspend, or modify any of the ECRI Content
and Services at any time; however ECRI will give Neoforma 90 days written notice
of its intent to delete or suspend any of the ECRI Content and Services.

*       Certain information on this page has been omitted and filed separately
        with the Commission. Confidential treatment has been requested with
        respect to the omitted portions.

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