<PAGE>

                           KNOW-HOW LICENSE AGREEMENT
                           --------------------------


     This agreement ("Agreement"), having an Effective Date of _______________,
2001, is by and between Hydromer, Inc., a New Jersey corporation, having a place
of business at 35 Industrial Parkway, Branchburg, New Jersey 08876 ("Licensor"),
and Tyco Healthcare Group LP, a Delaware limited partnership, having a place of
business at 15 Hampshire Street, Mansfield, Massachusetts 02048 ("Licensee").
Licensor and Licensee may at times be referred to individually as a Party or
collectively as the Parties.

     WHEREAS, Licensor has developed and owns certain information, know-how,
trade secrets, inventions and data relating to coatings for medical products,
including urology products ("Know-How," as defined below);

     WHEREAS, Licensee manufactures, markets and sells certain medical products,
including urology products;

     WHEREAS, Licensor and Licensee are parties to a Coating Services Agreement
dated as of ________________ ___, 2001, pursuant to which Licensor will perform
certain services using its proprietary Know-How in connection with the
application of Licensor's Coating (as defined below) to certain of Licensee's
urology products;

     WHEREAS, Licensee desires to acquire a license to use the Know-How in
connection with certain of its urology products, and Licensor is willing to
grant a license under suitable conditions as set forth herein.

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, and other valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Parties, intending to be legally bound,
agree as follows:

1.   DEFINITIONS

     (a) "Affiliate" shall mean any individual, corporation, liability company,
partnership, association, trust or any other entity or organization directly or
indirectly controlling, controlled by, or under common control with, Licensee.
For purposes of this definition, one entity shall be deemed to control another
entity only if the first entity owns, directly or indirectly, more than fifty
percent (50%) of the outstanding voting equity of another company.

     (b) "Coating" shall mean the coating composition defined as the "Primer"
used to

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<PAGE>


allow a hydrophilic coating to be attached to silicone polymer surfaces (for
example: silicone Foley catheters used for urinary drainage; silicone balloons,
silicone components used for urinary drainage in connection with a Foley
catheter). The Primer formulation is specifically defined
_________________________

     (c) "Effective Date" shall mean the date first written above.

     (d) "Know-How" shall mean all confidential or proprietary information,
inventions, know-how, trade secrets, and data relating to the Coating relative
to the Licensed Products, including, but not limited to, materials, ingredients,
formulations, processes, methods, manufacturing technology, and performance
characteristics, which Licensor has heretofore developed or acquired, or may
hereafter develop or acquire, and possess at any time during the Term (as
defined below) of this Agreement. The Parties agree that certain of the
Know-How, sufficient in detail to provide for the manufacture and application of
a coating comparable in quality and performance to the Coating licensed
hereunder, shall be deposited in Escrow pursuant to Article 14.

     (e) "Net Sales" shall mean gross sales of the Licensed Products (as defined
below) less ordinary trade quantity discounts, cash discounts, promotional
allowances and returns actually taken.

     (f) "Licensed Products" shall mean _______________________BUT EXCLUDING ANY
__________________ AS SET FORTH IN  EXHIBIT A ATTACHED HERETO.

     (g)"Term" shall have the meaning set forth in Section 3.(g)

     (h) "Territory" shall mean the world.

     (i) "Validation" shall mean the pre-determined criteria and test methods by
which to establish repeatable coating manufacturing processes at Licensor's
facility. Validation will be documented in the form of a protocol. The
Validation protocol will be developed and approved by Licensor and reviewed for
comment by Licensee. Licensor will take responsibility for executing the
Validation. Validation involves and is specific to the Primer and topcoat
coating processes. Validation will not involve the Tyco-supplied ______________,
the independent ___________material or the independent packaging components.

     (j) "Manual Dipping Process" shall mean ______________


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     2. LICENSE GRANT

     (a) Licensor hereby grants to Licensee and Licensee hereby accepts from
Licensor, a royalty-bearing, exclusive right and license to use the Know-How in
connection with the manufacture, use, distribution, and sale of Licensed
Products during the Term in the Territory.

     (b) The exclusive license granted to Licensee shall include the right to
grant sublicenses to any other licensee that may be authorized by Licensee,
provided such licensees agree to be bound by all the terms of this Agreement.
Licensee shall guarantee the performance of all sub-licensees.

     (c) The exclusive license granted to Licensee shall become fully paid-up
with no further payments of any kind due Licensor in the event that the Know-How
enters the public domain through no fault of Licensee. Any and all payment
obligations shall terminate on the date of entry of the Know-How into the public
domain, and any payments paid to Licensor by Licensee after the date of entry
shall be refunded to Licensee.

3.   TERM

     The Term of this Agreement shall commence on the Effective Date and shall
terminate on June 4, 2006 unless earlier terminated pursuant to the provisions
of Section 10 of this Agreement. This Agreement shall then self-renew for
successive one year periods beginning June 5, 2006, unless either Party notifies
the other in writing to the contrary on or before the preceding March 4.

4.   ROYALTIES,  PAYMENTS

     (a) In consideration of the rights hereby granted to Licensee in this
Agreement, Licensee agrees to pay Licensor a license fee of fifty thousand
dollars ($50,000.00) payable upon execution of this Agreement. A second license
fee of seventy-five thousand dollars ($75,000.00) will be made to Licensor if
Validation of the Manual Dipping Process is completed no later than 20 weeks
after appropriate payment by Licensee to Licensor of funds (as set forth in (b)
below) to develop the Validation and acquire the equipment necessary to assemble
the Manual Dipping Process as more fully set forth in the definitions above. If
Validation is not completed in this time period then the second license fee of
seventy-five thousand dollars ($75,000.00) shall be reduced to fifty thousand
dollars ($50,000.00) and shall be payable to Licensor upon completion of the
Validation.

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     (b) Licensee shall pay to Licensor a one time fee of twenty thousand
dollars ($20,000.00) prior to Licensor starting the Validation, and Licensee
shall pay to Licensor a one time fee of one hundred thousand dollars
($100,000.00) prior to Licensor starting the design and installation of the
Manual Dipping Process. The unit processing costs of $___ per unit of coated
catheter for validation and qualification will be paid by Licensor.

     (c) For each bi-annual period of Year 1 (as defined below) of this
Agreement, Licensee shall pay to Licensor earned royalties in an amount that is
the greater of $20,000 ("Year 1 Bi-Annual Minimum") or two percent (2%) of the
Net Sales of Licensed Products sold by Licensee or its sublicensees ("Net Sales
Royalty").

     (d) For each bi-annual period of Year 2 of this Agreement, Licensee shall
pay to Licensor earned royalties in an amount that is the greater of $30,000
("Year 2 Bi-Annual Minimum") or two percent (2%) of the Net Sales of Licensed
Products sold by Licensee or its sublicensees (Net Sales Royalty").

     (e) For each bi-annual period of Year 3 and of succeeding years of this
Agreement, Licensee shall pay to Licensor earned royalties in an amount that is
the greater of $40,000 ("Year 3+ Bi-Annual Minimum") or two percent (2%) of the
Net Sales of Licensed Products sold by Licensee or its sublicensees (Net Sales
Royalty").

     (f) The first bi-annual period (beginning of Year 1) of this Agreement
shall commence on the earlier of January 1, 2002 or the first day of the
calendar month in which the first commercial sale of Licensed Products by
Licensee or its sub licensees occurs.

     (g) Royalty payments shall be due on or before the forty-fifth (45th) day
following the end of each bi-annual period of this Agreement in which the
applicable sales of Licensed Products occurred, time being of the essence.

     (h) Licensee shall submit to Licensor with every remittance of royalty
payment hereunder a report stating the total value of all Net Sales of Licensed
Products made during the preceding bi-annual period and the amount of royalty
payment due. Licensee shall maintain adequate books of account on which to base
said report and royalty payment during the Term and for a period of two (2)
years following termination or expiration of this Agreement.

     (i) Licensee, upon reasonable notice by Licensor to Licensee and during
normal business hours, shall allow an independent auditor to examine the books
and records to determine the accuracy of the royalty payments. If there is a
five percent (5%) or more shortage in royalty payments, Licensee shall bear the
cost of that portion of the audit in which the discrepancy is found, else the
cost of any audit shall be borne by Licensor


                                       4
<PAGE>

5.   OWNERSHIP OF RIGHTS

     (a) It is understood and agreed that, as between Licensor and Licensee,
Licensor is the sole and exclusive owner of all right, title and interest in and
to the Know-How.

     (b) Nothing contained in this Agreement shall be construed as a sale,
assignment or other transfer to Licensee of any right, title or interest in and
to the Know-How, it being understood that all right, title and interest relating
thereto are expressly retained by Licensor except for the rights being licensed
hereunder.

6.   REPRESENTATIONS, WARRANTIES

     (a) Licensor represents and warrants that, as of the Effective Date, there
are no outstanding agreements, assignments or encumbrances inconsistent with any
provision of this Agreement and that the execution and delivery of this
Agreement by Licensor and the exercise of the rights granted to Licensee under
this Agreement have not resulted, do not result, and to the best of Licensor's
knowledge, will not foreseeably result in the infringement of any intellectual
property rights, including issued patents and published patent applications, of
third parties existing as of the Effective Date. Licensor further represents and
warrants that it is not aware of any adverse action, including patent
infringement suits or asserted patent infringement claims, pertaining to the
subject matter of this Agreement as of the Effective Date.

     (b) Licensor represents and warrants that it has no obligations to third
parties in conflict with any of the provisions hereof. Licensor shall not assume
obligations to third parties in conflict with any of the provisions hereof.

7.   INDEMNIFICATION

     (a) Each Party shall indemnify and hold harmless the other Party from and
against all losses, claims, damages, liabilities, demands, proceedings and costs
(including reasonable legal costs incident thereto) ("Damages") relating to or
arising out of a breach of this Agreement by the indemnifying Party, except to
the extent such Damages are the result of or are caused by the negligence of the
indemnified Party. Each Party will maintain adequate insurance to cover any such
Damages.

     (b) Licensee shall indemnify and hold harmless Licensor from and against
all claims

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<PAGE>

of third parties relating to the use of Licensed Products, unless such claims
relate to a defect in the Licensed Products which arises or results from
defective Coatings, or in the event Section 14 (b) is in effect, unless such
claims relate to a defect in the Licensed Products which arises or results from
defective Coatings applied properly by Licensee or a third party pursuant to
directions then in effect as supplied by Licensor and/or Escrow Agent, or unless
a court of competent jurisdiction finds that the Licensor has been grossly
negligent and such negligence is proven to be casually connected to the claimed
damages by clear and convincing evidence.

     (c) Licensor shall indemnify and hold harmless Licensee from and against
all claims of third parties relating to any claim of infringement of the
intellectual property rights of such third parties in connection with the
manufacture, use or sale of the Coating relative to the Licensed Products.

     (d) These indemnification obligations shall survive the expiration or
termination of this Agreement.

8.   MISAPPROPRIATION OF KNOW-HOW

     (a) Each Party shall use reasonable efforts to cooperate in the protection
of the Know-How and shall promptly notify the other of any unauthorized use or
misappropriation of any Know-How by a third party after such unauthorized use or
misappropriation comes to that Party's attention.

     (b) In the event that any such third party unauthorized use or
misappropriation of the Know-How relates to the Licensed Products and Licensee
reasonably deems such unauthorized use or misappropriation to be harmful to its
rights granted hereunder, provided that any unauthorized use or misappropriation
shall not be caused by fault, action, or inaction of Licensee, then Licensor,
upon notification by Licensee that Licensee is deemed harmed, shall at its sole
expense bring or cause to be brought against such third party, a lawsuit, action
or proceeding for the unauthorized use or misappropriation of the Know-How.
Licensee agrees to use reasonable efforts to assist in any such lawsuit, action
or proceeding brought by Licensor. Licensor agrees to join Licensee as a party
in any such lawsuit, action or proceeding upon the request of Licensee. Licensor
shall not enter into any settlements that would effect any of Licensee's
licensed rights or royalty obligations without the prior written consent of
Licensee.

     (c) Licensee may, in its sole discretion and at its sole expense, bring or
cause to be brought against such third party, a lawsuit, action, or proceeding
for unauthorized use or

                                       6
<PAGE>

misappropriation of any Know-How in connection with the Licensed Products.
Licensee shall have the right to effect settlements in any such lawsuit, action
or proceeding. Although this Agreement contemplates that Licensee shall have the
right to bring such a lawsuit, action or proceeding in Licensee's own name,
provided that any unauthorized use or misappropriation shall not be caused by
fault, action, or inaction of Licensee, Licensor agrees to to take all steps
necessary including joining any such lawsuit, action or proceeding as a party or
executing a limited field assignment of the Know-How if necessary for standing.
Licensor agrees to use reasonable efforts to assist in any such lawsuit, action
or proceeding brought by Licensee. Licensor agrees not to take any action or
position, in relation to any such lawsuit, action or proceeding, which is
adverse to Licensee's interests under this Agreement.

     (d) In the event Licensor brings a lawsuit, action or proceeding pursuant
to Section 8(b) and Licensee is not joined as a party, then any monetary damages
recovered by Licensor shall belong to Licensor; provided, however, that to the
extent Licensor receives such monetary damages Licensor shall reimburse Licensee
for any reasonable out-of-pocket expenses (not in excess of the amount of such
damages recovered) incurred by Licensee in assisting Licensor in accordance with
Section 8(b). Any monetary damages recovered by Licensee in accordance with
Section 8(c) shall belong to Licensee, provided, however, that to the extent
Licensee receives such monetary damages Licensee shall reimburse Licensor for
any reasonable out-of-pocket expenses (not in excess of the amount of such
damages recovered) incurred by Licensor in assisting Licensee in accordance with
Section 8(c). In the event both Licensor and Licensee are parties to any
lawsuit, action or proceeding for unauthorized use or misappropriation of the
Know-How, any monetary damages recovered shall be distributed as follows: costs
and expenses of each party, with the party instituting the lawsuit, action or
proceeding being reimbursed first; royalties owed to Licensor by Licensee in
order to bring Licensor to the level otherwise paid by Licensee as an exclusive
licensee; royalties owed to Licensor from the infringing sales, which shall be
paid at the rate set forth in Section 4(c), (d) and/or (e); and any remainder to
Licensee.

     (e) In the event any such lawsuit, action or proceeding is brought or
caused to be brought against a third party for unauthorized use or
misappropriation of the Know-How, whether such lawsuit, action or proceeding is
brought pursuant to Section 8(b) or 8(c), the royalties due to Licensor by
Licensee under Section 4(c), (d) and/or (e) shall be reduced by one-half, until
the lawsuit, action or proceeding is concluded or otherwise terminated. Such a
reduction shall be deemed superior expenses to be repaid through any damages
awarded.

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<PAGE>

9.   ASSIGNABILITY

     (a) Except as provided in Section 2(b), neither Party shall assign,
transfer or otherwise dispose of this Agreement in whole or in part, or any of
its obligations hereunder, to a third party without the prior written consent of
the other Party.

     (b) Notwithstanding the above, Licensee may, without the consent of
Licensor, (i) assign or transfer all or part of its rights under this Agreement
to an Affiliate, or (ii) in the event of a sale by Licensee of all or
substantially all of the assets of the business related to Licensee's
manufacture and sale of any Licensed Product, assign or transfer to the
purchaser of such assets rights under this Agreement to use the Know-How in
connection with the manufacture, use distribution and sale of such Licensed
Product; provided that in each such case the assignee or transferee agrees in
writing to be bound by all the terms of this Agreement. Where any assignment is
made without the consent of the other Party or is made without assigning all or
substantially all of the assets of the business related to Licensee's
manufacture and sale of any Licensed Product, such assignment shall not relieve
the assignor of any of its obligations under this Agreement.

10.  BREACH AND TERMINATION

     The following termination rights are in addition to termination rights
provided elsewhere in this Agreement:

     (a) If either Party hereto is in material breach of any of the material
terms and conditions of this Agreement and fails to cure the breach within sixty
(60) days after the date of receipt of written notice from the other Party
advising it of the nature of such breach, or in the case of a breach that cannot
reasonably be expected to be cured within sixty (60) days fails within such time
to use its best efforts and proceed with due diligence to cure such breach, the
Party not in material breach shall have the right to terminate this Agreement
forthwith by written notice to the Party in material breach, provided however if
the breach is caused by the non- payment of royalties then the notice and cure
periods shall be reduced to fifteen (15) days.

     (b) Either Party hereto shall have the right to terminate this Agreement
forthwith by written notice to the other Party in the event that such other
Party shall be adjudicated bankrupt, become insolvent, make any assignment for
the benefit of its creditors, have its assets placed in the hands of a receiver,
file or have filed against it a petition in bankruptcy, or be dissolved or
liquidated.


                                       8
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     (c) Licensee may terminate this Agreement by one hundred eighty (180) days
prior written notice to Licensor.

     (d) Anything herein to the contrary notwithstanding, in the event of
termination of this Agreement, excepting termination by Licensor pursuant to
Section 10(a) or (b) hereof, Licensee may continue to sell any Licensed Products
previously manufactured and on hand at the time of receipt of notice of
termination for a period of twelve (12) months or until the inventory of such
Licensed Products is depleted provided a full accounting of sales and royalties
are made and paid.

     (e) In the event that this Agreement is in full force and effect in twenty
(20) years from the Effective Date, the Agreement shall terminate and the
Know-How licensed herein shall become fully paid-up and perpetual with no
further payment obligations of Licensee.

     (f) Termination of this Agreement pursuant to any of the provisions hereof
shall be without prejudice to any rights which either Party may have against the
other Party hereto.

     (g) In the event that this Agreement or the exclusive license granted
herein terminates for whatever reason, except for termination pursuant to
Section 2(c) or Section 10(e), Licensee shall immediately cease using any and
all Know-How acquired from Licensor, subject to Section 14.

11.  RIGHT OF FIRST REFUSAL

     (a) In the event Licensor files an application for a patent in the United
States or in any foreign patent office covering the Know-How disclosed (if
applicable per Section 14) and licensed to Licensee, and, if any such
application matures into a patent ("Patents"), Licensee shall automatically have
the option to obtain a worldwide, royalty-bearing, exclusive right and license
in and to the Patents in the manufacture, use, distribution and sale of the
Licensed Products in the Territory on the same terms and conditions (where
applicable), including royalty rates, as negotiated in this Agreement. The
Parties recognize that a separate written agreement covering such an exclusive
license will be required, with any applicable terms and conditions, including
royalty rates, being the same as in this Agreement. The Parties acknowledge that
in any such license or agreement with respect to the Patents, no license fees
shall be due to Licensor from Licensee.

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<PAGE>

     (b) In the event that Licensee chooses not to exercise its option to obtain
a worldwide, royalty-bearing, exclusive right and license in and to the Patents
in the manufacture, use, distribution and sale of the Licensed Products,
Licensee and Licensor shall negotiate in good faith a worldwide, non-exclusive
right and license in and to the Patents in the manufacture, use, distribution
and sale of the Licensed Products in the Territory for the duration of the Term
of this Agreement.

12.  FUTURE DEVELOPMENTS

     (a) Licensor shall disclose to Licensee (or Escrow Agent as the case may
be) and provide Licensee with access to all improvements of the Know-How
("Improvements") relating to the Coating as applicable to the Licensed Products
which are invented, developed, or otherwise acquired by Licensor during the Term
of this Agreement. Licensee shall automatically have, subject to all the terms
and conditions of this Agreement but without additional royalty, the right to an
exclusive license to use such Improvements in the Territory, including the right
to grant sublicenses.

     (b) In the event Licensor files an application for a patent in the United
States or in any foreign patent office covering the Improvements, and, if any
such application matures into a patent ("Improvement Patents"), Licensee shall
have the option to obtain a worldwide, royalty-bearing, exclusive right and
license in and to the Improvement Patents in the manufacture, use, distribution
and sale of the Licensed Products in the Territory on the same terms and
conditions (where applicable), including royalty rates, as negotiated in this
Agreement. The Parties recognize that a separate written agreement covering such
an exclusive license will be required, with any applicable terms and conditions,
including royalty rates, being the same as in this Agreement. The Parties
acknowledge that in any such license or agreement with respect to the
Improvement Patents, no license fees shall be due to Licensor from Licensee.

     (c) In the event that Licensee chooses not to exercise its option to obtain
a worldwide, royalty-bearing, exclusive right and license in and to the
Improvement Patents in the manufacture, use, distribution and sale of the
Licensed Products, Licensee and Licensor shall negotiate in good faith a
worldwide, non-exclusive right and license in and to the Improvement Patents in
the manufacture, use, distribution and sale of the Licensed Products in the
Territory. The Parties recognize that a separate written agreement covering such
a non-exclusive license will be required.

13.  PRODUCT TESTING AND COMPLIANCE

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     At Licensee's request and cost, Licensor shall aid and assist Licensee in
the following:

     (a) Conducting laboratory and clinical evaluations of the Licensed Products
coated with the Coating;

     (b) Preparing accurate labeling and advertising for the Licensed Products
as those terms are defined in the Federal Food, Drug and Cosmetic Act;

     (c) Securing the approval of any state or federal regulatory agency from
which approval may be necessary to commence or continue sales of the Licensed
Products, it being understood and agreed to that any such approval obtained with
respect to the Licensed Products utilizing the Coating shall be the property of
Licensee, it being further understood and agreed to that in the course of
assisting Licensee with obtaining such approval, Licensor may be called upon to,
and shall, disclose in confidence to such regulatory agency the Know-How; and

     (d) Defending the Licensed Products before any state or federal regulatory
agency, which may seek to seize, ban or prevent the introduction of the Licensed
Products into commerce.

     It is understood and agreed to by the Parties that the foregoing aid and
assistance shall not be financial but shall be given by way of review of
protocols, materials and data, personal consultations, preparation of written
statements and oral testimony, and Licensee shall have the sole and exclusive
right to use or disclose any information and data applicable to the Licensed
Products resulting from such aid and assistance. Licensee shall reimburse
Licensor for all reasonable out-of-pocket expenses, which Licensor may incur by
reason of the foregoing. Notwithstanding anything herein to the contrary,
Licensee shall have the responsibility for obtaining any required FDA approval
for the marketing of the Licensed Products. Licensor shall have exclusive rights
to any and all information and data provided and/or generated by Licensor in
rendering such aid as such information and data pertain to all other products
and processes except Licensed Products.

14.  ESCROW / COATING SUPPLY

     (a) Within thirty (30) days from the Effective Date, Licensor shall send to
a third party mutually agreed upon by the Parties ("Escrow Agent'), for
placement in escrow a written statement, together with copies of relevant lab
notebook pages, reflecting the composition of the Coating, the manufacturing
methods thereof, and the coating techniques as they relate to the Licensed
Products ("Documentation"). Every six (6) months thereafter, Licensor shall send
to

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the Escrow Agent any updates with respect to the Documentation and if none, a
statement confirming that no updates have occurred. The Escrow Agent shall
notify Licensee that such updates or statement has been received. The
Documentation shall be of sufficient detail to provide for the manufacture of a
coating comparable in quality and performance to the Coating licensed under this
Agreement and shall also provide for coating techniques comparable to those
employed by Licensor. The Escrow Agent shall hold all of the Documentation in
confidence, except that, in the event Licensor is unable to supply Licensee with
the Coating pursuant to Section 14(b) below, Licensor agrees to waive the
obligation of confidence of the Escrow Agent as to Licensee with respect to the
Documentation. In any such event of termination by Licensee, the Escrow Agent
shall, upon receipt of a written request from Licensee, deliver the originals
and all copies of the Documentation to Licensee for use by Licensee or a third
party selected by Licensee in connection with the rights and licenses granted to
Licensee hereunder.

     b) In the event this Agreement is terminated by Licensee pursuant to
Section 10(a) or (b) or is terminated by Licensee pursuant to Section 11 of the
Coating Services Agreement, Licensor shall use its best efforts to supply
Licensee with the Coating at $_____ per gallon in minimum 55 gallon quantities
ordered by Licensee on non-cancelable purchase orders and on terms that are no
more burdensome then the terms of this Agreement. Licensor may raise this price
no more than once per contract year limited to the same percentage increase as
the Cost of Living Indicator for Northern New Jersey ("COL"), provided however,
if raw material prices are increased by suppliers to Licensor greater than said
COL, Licensor may pass on the greater costs over the COL to Licensee. This
Section 14(b) is subject to the Coating meeting Licensor's manufacturing and
quality assurance specifications _________________________ Further, Section
14(b) shall not apply if Licensor is unable to supply Licensee within 60 days of
termination by Licensee.

     (c) In the event Licensor is unable to supply Licensee with the Coating
pursuant to Section 14(b) but subsequently offers to supply the Coating to
Licensee, Licensee shall then order the Coating from Licensor, provided Licensor
notifies Licensee in writing of said offer at least two (2) years in advance of
the date of supply and further provided Licensor agrees to reimburse Licensee
for any non-amortized equipment costs and expenses. . This Section 14(c) is
subject to the Coating meeting Licensor's manufacturing and quality assurance
specifications therefor, as set forth _______________________________________

     (d) Royalties for sales under Section 14(a), (b) or (c) shall be paid
pursuant to the terms set forth in Section 4(c), (d) or (e). Any costs in excess
of what would have been paid by Licensee to Licensor which are incurred by
Licensee as a result of Licensor's inability to supply

                                       12
<PAGE>

Licensee with the Coating will be deducted from future royalty payments owed to
Licensor under the terms of this Agreement.

15.  CONFIDENTIAL INFORMATION

     Licensor and Licensee agree to use reasonable efforts to maintain in strict
confidence, and not to disclose to others, any technical or financial
information they obtain from each other pursuant to this Agreement relating to
the manufacture, distribution and sale of the Licensed Products (hereinafter
"Confidential Information"). Information disclosed by either Party shall not be
Confidential Information to the extent that such information (a) is available to
members of the public or becomes publicly available through no unauthorized act
of the receiving Party, (b) is subsequently given to the receiving Party by a
third party having a right to do so, or (c) is independently developed by
employees of the receiving Party, as evidenced by written documents in its
possession. Each Party's obligation not to disclose the Confidential Information
shall run for a period of three (3) years from the termination or expiration of
this Agreement. Such obligation of confidentiality shall not apply to the extent
that either Party is required to disclose such Confidential Information to the
government or makes use of such Confidential Information in any dispute with the
other Party over the terms or performance of this Agreement in any court of law
or equity and then only under a protective order of the court.

16.  NO JOINT VENTURE

     Nothing herein contained shall be construed to place the Parties in the
relationship of partners or joint venturers, and neither Licensee nor Licensor
shall become bound by any representation, act or omission of the other.

17.  WAIVERS

     None of the terms of this Agreement can be waived or modified except by an
express agreement in writing signed by all the Parties hereto. There are no
representations, promises, warranties, covenants or undertakings other than
those contained in this Agreement, which represents the entire understanding of
the Parties. The failure of any Party to enforce, or the delay by any Party in
enforcing, any of its rights under this Agreement shall not be deemed a
continuing waiver or a modification thereof and any Party may, within the time
provided by applicable law, commence appropriate legal proceedings to enforce
any and all such rights.

18.  SEVERABILITY

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     In the event that any term or provision of this Agreement shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other term or
provision and this Agreement shall be interpreted and construed as if such term
or provision, to the extent the same shall have been held to be invalid, illegal
or unenforceable, had never been contained herein.

19.  INTEGRATION

     This Agreement represents the entire understanding between the Parties
hereto with respect to the subject matter hereof and this Agreement supersedes
all previous representations, understandings or agreements, oral or written,
between the Parties with respect to the subject matter hereof and cannot be
modified except by a written instrument signed by the Parties hereto.

20.  NON ANALYSIS

     Licensee agrees it will not analyze or reverse engineer the Coating, except
in accordance with Sections 2(c), 10(g) and 14(b).

21.  PUBLICITY

     No press release, advertising, promotional statements (either oral or
written) in connection with the existence, substance or details of this
Agreement or the contractual arrangements relating to the subject matter of this
Agreement, shall be made by Licensor unless required by Law without the prior
written approval of the Licensee, which approval shall not be unreasonably
withheld.

22.  NOTICES

     Any notice or other communication required or permitted to be given by the
Parties hereto shall be mailed by registered or certified United States mail,
postage prepaid, and addressed as follows:

                  If to Licensor:
                  Hydromer, Inc.
                  35 Industrial Parkway
                  Branchburg, New Jersey
                  Attention: Vice President and General Counsel

                  If to Licensee:
                  Tyco Healthcare Group LP
                  15 Hampshire Street
                  Mansfield, Massachusetts 02048
                  Attention:  Vice President - Intellectual Property

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<PAGE>

     Notices or other communications mailed as herein provided shall be deemed
to have been given when received or when an attempt to deliver same was made as
evidenced by a duly executed return receipt.

23.  CAPTIONS

     The captions used in connection with the paragraphs and subparagraphs of
this Agreement are inserted only for purpose of reference. Such captions shall
not be deemed to govern, limit, modify or in any other manner affect the scope,
meaning or intent of the provisions of this Agreement or any part thereof, nor
shall such captions otherwise be given any legal effect.

24.  GOVERNING LAW

     This Agreement shall be governed by and construed in accordance with the
laws of New Jersey, without regard to the conflicts of law principles thereof.

     IN WITNESS WHEREOF, Licensor and Licensee have caused this instrument to be
duly executed as of the day and year first above written.


HYDROMER, INC.                                       TYCO HEALTHCARE GROUP LP

By:                                                  By:
   ------------------------                             ------------------------
Name:                                                Name:
     ----------------------                               ----------------------
Title:                                               Title:
      ---------------------                                ---------------------



Exhibit A     Exclusions of Licensed Products


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