Natus Medical, Inc. Announces Contract with Novation

SAN CARLOS, CA, Monday, February 28, 2000 - Natus Medical, Inc. has signed an agreement with Novation, the supply company for VHA Inc. and the University HealthSystem Consortium, two national health care alliances. This contract facilitates the purchase of Natus' family of hearing screening products and its breath analyzer at discounted pricing, by any of the 2,000 health care organizations that purchase supplies through Novation. The contract runs from February 2000 to January 2003.

Natus was selected as the sole-source supplier for newborn hearing screening equipment, based on the results of Novation's public competitive bidding process, which included input from VHA and UHC members. The members valued Natus' clinical education and technical service and the best pricing options for product and supplies.

The new contract also extends to more than 4,500 organizations that purchase supplies through HealthCare Purchasing Partners International LLC, a company that markets Novation purchasing agreements to organizations not linked with VHA or UHC.

'We are extremely pleased to be able to offer such high quality products to Novation member hospitals,' said Tim Johnson, President and CEO, Natus Medical, Inc. 'Natus' ALGO™ newborn hearing screeners are the only devices available that have been designed and clinically tested specifically to screen newborns for hearing impairment and are clinically proven to meet the requirements of the American Academy of Pediatrics (AAP). This contract provides excellent pricing options to the hospitals, as they look to establish clinically accurate, successful hearing screening programs,' noted Johnson.

Natus' newest product, the CO-Stat™ End Tidal Breath Analyzer assists clinicians in the identification of newborns at risk for hyperbilirubinemia and hemolytic disease. Early identification assists in early differential diagnosis, leading to more cost-effective care and optimal patient outcomes. The CO-Stat analyzer is the only device that passively and non-invasively identifies the rate of hemolysis, meeting the AAP's recommendation to identify hemolysis in jaundiced babies prior to discharge. Discounted pricing on the CO-Stat analyzer is also available to Novation member hospitals, under this Natus contract.

Natus Medical designs, manufactures and markets non-invasive medical devices designed to rapidly screen for common well-defined disorders in newborns. Natus is currently creating a platform of screening technologies that can be easily used in hospitals and other clinical settings, providing for early detection of medical conditions such as hearing impairment. Additional information is available at www.natus.com

Additional information about Novation can be found at www.novationco.com and about HPPI at www.hppigpo.com.
CONTACT: Emer O'Brien, Natus (650) 801-7283 eobrien@natus.com