SALE OF 35 INDUSTRIAL PARKWAY, SOMERVILLE, NJ


     This  Agreement of Sale made this 30th day of March,  1998,  by and between
Biosearch Medical Products,  Inc. a New Jersey  Corporation,  with its principle
place of business at 35 Industrial  Parkway,  Somerville,  N.J. 08876 ("Seller")
and  Hydromer,  Inc.  a New  Jersey  Corporation,  with its  principle  place of
business at 35 Columbia Road, North Branch, N.J. 08876 ("Purchaser")


                                   WITNESSETH:

     WHEREAS,  The Seller is the owner of certain real property premises located
in the municipality of Branchburg,  County of Somerset, and State of New Jersey;
and

     WHEREAS, Purchaser desires to purchase said premises from Seller; and

     WHEREAS, the parties hereto desire to set forth their mutual understandings
and agreements with respect to the sale and purchase of said premises.

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

     1.  AGREEMENT TO SELL:  Seller hereby  agrees to sell and Purchaser  hereby
agrees to purchase those real property premises  consisting of approximately 6.2
acres  situated in the Township of  Branchburg,  County of Somerset and State of
New  Jersey.  The  premises  are  commonly  known  as  35  Industrial   Parkway,
Somerville,  New Jersey and are also known as Lot 3D,  Block 13, as shown on the
current  tax  map  of  the  Township  of  Branchburg.   The  premises  are  more
specifically described on Schedule A attached hereto and made a part hereof. All
machinery and trade fixtures are not included in the sale.

     2.  PURCHASE  PRICE:  The purchase  price for the  premises  shall be Eight
Hundred  Fifty  Thousand  Dollars  ($850,000)  and a 3 year lease back of approx
16,500 sq. ft. from  Purchaser  to Seller  beginning on the date of closing said
terms  of lease  are set  forth on  Schedule  B1  attached  hereto,  subject  to
adjustments as hereinafter provided in Paragraph 8, payable as follows:

     (a) Upon  execution  hereof,  the  receipt  of which is
hereby  acknowledged,  to be held in escrow by escrow  agent
pending  closing and pursuant to the provisions of Paragraph
4                                                                       $ 85,000

     (b)   Balance  to  be  paid  at  closing  of  title  by
certified, bank, cashier's, or attorneys' trust 


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SALE OF 35 INDUSTRIAL PARKWAY                                             Page-2
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account check or pursuant to Seller's wire instructions               $  765,000

     (c) A three year  fully  paid  lease of approx.  16,500
square feet, which the parties value at $ 346,500.                    $  346,500

                                             Total Purchase Price     $1,196,500

     3. TITLE:

     (a) Title to the premises  shall be good,  marketable,  with title valid of
record,  and  insurable  by a title  insurance  company  of  Purchaser's  choice
authorized  to do business in the State of New Jersey,  subject to the following
exceptions which shall be deemed "Permitted Exceptions":

Subject to a mortgage  given by seller to the New  Jersey  Economic  Development
Authority which seller will satisfy with part of the Purchase Price.

Subject to all other  exceptions  of record  which would not render title to the
premises  unmarketable,  nor would  materially  interfere  with the  Purchaser's
Intended Use of the premises, or:

          (i) Laws, regulations or ordinances of federal, state, county or local
     entities or agencies having  jurisdiction over the premises,  provided same
     do not  prohibit the use and  enjoyment  of the  premises  for  Purchaser's
     Intended Use, as described in Paragraph 6(a)(i) below.

          (ii) Easements,  covenants,  and restrictions of record,  provided the
     same  have  not been  violated,  would  not  render  title to the  premises
     unmarketable,  nor would materially interfere with the Purchaser's Intended
     Use of the premises.

          (iii) Such state of facts as would be shown on an  accurate  survey of
     the  premises,  provided  such  facts do not render  title to the  premises
     unmarketable,  would not materially interfere with Purchaser's Intended Use
     of the  premises,  nor would reveal  encroachments  onto the premises  from
     adjoining properties or from the premises onto adjoining properties.

     The  existence  of  mortgages  on  the  premises  shall  not  constitute  a
non-Permitted Exception,  provided the outstanding principal balance and accrued
interest due and owing  thereon is less than the balance of the  purchase  price
described in Paragraph  2(b). In the event the amounts due under such  mortgages
are



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SALE OF 35 INDUSTRIAL PARKWAY                                             Page-3
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less than the balance of the purchase price  described in Paragraph  2(c),  then
the  Purchaser  shall be permitted  to use a portion of the closing  proceeds to
satisfy such amounts.

     (b) Within thirty (30) days from the date hereof, Purchaser shall procure a
preliminary  certificate of title from a title insurance  company of Purchaser's
choice  licensed  to do business  in the State of New  Jersey.  Purchaser  shall
promptly notify Seller,  in writing,  of any title  exceptions set forth in such
preliminary  certificate  or in any  amendments  thereto which are not Permitted
Exceptions. Seller shall then have a thirty (30) day period after such notice to
clear or remove the  non-Permitted  Exceptions to the  satisfaction of Purchaser
and Purchaser's title company.

     (c) In the event  Seller is  unable,  after due  diligence,  to remove  the
non-Permitted  Exceptions and deliver title as required in Paragraph 3(a) above,
Purchaser  shall have the right either to accept such title as Seller is able to
convey, without abatement of the purchase price, or to terminate this Agreement.

     4. ESCROW AGENT AND DEPOSIT:

     (a) The escrow  agent  referred  to in  Paragraph  2 above  shall be Smith,
Stratton,  Wise,  Herher & Brennan,  attorneys at Law,  (600 College  Road-East,
Princeton,  N.J. 08540) (hereinafter  referred to as "Escrow Agent"). The Escrow
Agent shall hold the deposit and interest accrued thereon  (hereinafter  "escrow
funds")  pursuant  to an  ESCROW  AGREEMENT,  the form  being  attached  to this
AGREEMENT as Schedule C.

     (b) Upon closing of title,  the Escrow Agent shall deliver the escrow funds
to Seller.  Purchaser  shall be entitled to a credit  against the purchase price
for the deposit but not the interest.

     (c) In the event that  pursuant to this  Agreement or by mutual  consent of
Seller and  Purchaser  this  Agreement  is  terminated,  the Escrow  Agent shall
deliver the deposit and all interest  earned thereon to the  Purchaser.  In that
event, the Purchaser herein agrees to execute any and all documents necessary to
confirm that  Purchaser  shall be liable to any taxing  authority for taxes with
respect to such interest.  The Purchaser's  obligation  herein shall survive the
termination of this Agreement.

     (d) In the  event  that  there is no  closing,  nor a  termination  of this
Agreement  in  accordance  with its terms or by  mutual  consent  of Seller  and
Purchaser, and/or one party shall allege default or breach by the other party as
the cause,  the Escrow Agent shall continue to hold said escrow funds pending an
order from a court of  competent  jurisdiction  or mutual  consent of Seller and
Purchaser.



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SALE OF 35 INDUSTRIAL PARKWAY                                             Page-4
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     (e)  Notwithstanding  the terms of  subparagraphs  (c) and (d)  above,  the
parties hereto agree that the question of which party is entitled to the deposit
and when shall be governed by other paragraphs of this Agreement other than this
Paragraph 4, and that this  Paragraph 4 shall  determine the procedures by which
the Escrow Agent shall make disbursements.  If Seller claims at any time that it
is entitled to the escrow funds on account of any default by  Purchaser,  Seller
shall notify Escrow Agent, in writing,  requesting  payment to Seller. If within
ten (10)  days of  Escrow  Agent's  receipt  of such  notice  Purchaser  has not
objected  to the  payment  thereof to  Seller,  Escrow  Agent  shall pay same to
Seller. If Purchaser objects, then subparagraph (d) above shall apply. If on the
date set for closing  Purchaser does not object,  in writing,  to the payment of
the escrow funds to Seller in accordance  with Paragraph 4(b), then Escrow Agent
shall pay to Seller  such  sums.  If  Purchaser  objects,  in  writing,  to such
payment,  then  subparagraph  4(d) above shall apply. If Purchaser claims at any
time that it is entitled to the return of the escrow  funds in  accordance  with
this  Agreement,  Purchaser  shall notify the Escrow Agent,  in writing,  of its
claim for same. If within ten (10) days of Escrow Agent's receipt of such notice
Seller has not objected to the payment thereof to Purchaser,  Escrow Agent shall
pay same to Purchaser.  If Seller  objects,  then the provisions of subparagraph
4(d) shall apply.  Both Seller and Purchaser  agree that in connection  with any
written  notification  to be given to the Escrow  Agent,  a copy of such written
notification  shall be served  upon the other  party and the party  giving  such
notice  shall have the  unconditional  obligation  to provide  Escrow Agent with
evidence satisfactory to Escrow Agent that a copy of the written demand has been
delivered to the other party.  Each party  undertakes  the obligation to provide
such notice and provide  evidence  of such  notice to Escrow  Agent.  Until such
obligation has been satisfied,  any time period  described in this  subparagraph
(e) shall not commence to run.

     (f) The  Seller  and  Purchaser  acknowledge  that  the  Escrow  Agent  has
represented  both Purchaser and Seller in different  matters but such fact shall
not disqualify Escrow Agent from representing the Purchaser in this transaction.

     (g) Seller and Purchaser agree that upon Escrow Agent's disbursement of the
escrow funds to Seller or to Purchaser,  in accordance  with the terms set forth
hereinabove or upon deposit thereof with a court of competent jurisdiction,  the
Escrow  Agent  shall have no further  obligation  under this  Agreement  or with
respect of the escrow funds.

     5.  TERMINATION OF AGREEMENT:  If, pursuant to the terms of this Agreement,
this  Agreement  shall be  terminated  or canceled  then  subject to Paragraph 4
hereof,  Escrow Agent shall  return the escrow  funds to  Purchaser  and neither
Seller nor Purchaser shall have any further liability to the other.

     6.  PURCHASER'S  INTENDED USE: Seller and Purchaser agree that Purchaser is
purchasing  the premises for the purpose of utilizing  the premises for research
and


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SALE OF 35 INDUSTRIAL PARKWAY                                             Page-5
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development of polymers and polymer based product, including but not limited the
storage and mixing of chemicals used for, and the coating of  medical/industrial
devices subject to all federal state and municipal laws and regulations.  Seller
represents  that to Seller's  best  knowledge,  the premises can be so used in a
lawful manner provided Buyer meets all legal requirements at its own expense.

     7.  PURCHASER'S  CONTINGENCIES:  It  is  understood  and  agreed  that  the
obligation  of Purchaser to purchase the premises is expressly  contingent  upon
the achievement or satisfaction of all of the following  conditions,  any or all
of which the Purchaser  shall have the right to waive,  in whole or in part. The
Purchaser shall not have the right to extend any time periods referred to herein
unless  such  extension  is  agreed to in  writing  signed  by both  Seller  and
Purchaser. Said conditions are as follows:

     (a) Purchaser obtaining a commitment (the "Commitment") from any bank ("the
Lender")  for a  mortgage  loan  (the  "Loan")  in the  amount  of not less then
$722,500  with  interest  at  the  prevailing  rates  and  terms  reasonable  to
Purchaser.  Purchaser  agrees to make  immediate  application  for such Loan and
promptly comply with all of such Lender's reasonable  requirements in connection
with such Loan.  Purchaser  shall  proceed  with due  diligence  to obtain  such
commitment.  In the event  Purchaser  has not obtained the  Commitment  from the
Lender within  thirty (30) days of the date on which Seller and  Purchaser  have
both  duly  executed  this  Agreement  and each has  received  a fully  executed
counterpart  thereof (the  "Execution  Date"),  either party may terminate  this
Agreement by written  notice sent before close of business,  May 4, 1998 or this
contingency is waived.

     (b)   Environmental.   Seller  will  deliver  an  approval  of  a  negative
declaration  issued  by  the NJ DEP  dated  January  12,  1998  pursuant  to the
Industrial Site Recovery Act (N.J.S.A.  13:1K-6 et seq.).  Purchaser will review
and accept this document,  subject to a representation by Seller at closing that
there are no material  changes and further  subject to: 1.  acceptance by lender
and 2. no requirement by the NJ DEP for a subsequent filing.

     If at any  time any  seepage,  presence  of or  exposure  to any  hazardous
substance  or   chemical,   toxic  or  other  waste   (collectively   "Hazardous
Substances") occurs or exists on the premises, then Purchaser may terminate this
Agreement.

     (c) Feasibility Study

     (i) The  Purchaser  shall  have a  period  of  thirty  (30)  days  from the
Execution  Date  ("Feasibility  Period")  in which to make such  zoning,  legal,
title, engineering, soil, environmental, geological and other technical studies,
tests, investigations and inquiries as shall deem necessary and appropriate, all
at the  Purchaser's  sole cost and expense,  in order to  determine  whether the
premises is


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SALE OF 35 INDUSTRIAL PARKWAY                                             Page-6
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suitable for Purchaser's use.

     (ii) In the event that the  Purchaser  determines,  that as a result of the
tests,  studies and  investigations,  that it is  unwilling  to proceed with the
acquisition of the premises because the premises is not suitable for Purchaser's
purposes,  the Purchaser shall have the right, upon written notice to the Seller
delivered on or before the 30th day of the  Feasibility  Period,  to cancel this
Agreement in which event the Deposit  heretofore  paid by the Purchaser shall be
returned and there shall be no further  liability or  obligation  on the part of
either party hereto.

     (iii) From and after the date hereof, the Purchaser shall have the right to
enter upon the premises for the purpose of making, at its sole cost and expense,
the various tests, studies and investigations,  authorized herein. Additionally,
the Purchaser  agrees to  indemnify,  defend and hold harmless the Seller herein
from and against any claims,  damage or losses caused by the  Purchaser's  entry
upon the premises.  This  indemnification and hold harmless agreement extends to
any loss occasioned to the premises or the Seller  resulting from the conduct or
access  of  the  Purchaser's  representative  as  well  as by  its  contractors,
subcontractors, business invitees and/or licensees.

     (iv) The Purchaser  agrees to restore the premises  promptly  following the
completion  of the tests  herein  permitted to the  condition  of said  premises
immediately prior to the Purchaser's entry thereon.

     If the contingencies set forth in this Paragraph 7 are not satisfied within
the applicable  contingency period and the Agreement is terminated in accordance
with the terms  hereof,  the Escrow  Agent shall refund the Deposit to Purchaser
and neither party shall have any further liability to the other hereunder."

     Purchaser  agrees  to use  reasonable  diligence  and act in good  faith in
pursuit of the satisfaction of all contingencies.

     In connection  with the  satisfaction  of  contingencies,  Seller,  without
charge to Purchaser  but without  assuming any financial  obligation,  agrees to
fully cooperate with Purchaser and execute all  applications,  confirmations and
other  documents  necessary  to permit  Purchaser to satisfy  contingencies.  In
connection with any contingency,  Purchaser shall advise Seller, in writing,  by
the date when  Purchaser  shall have the right to terminate  this  Agreement for
non-satisfaction  of the  contingency  or shall have  satisfied the  contingency
whether  or  not  Purchaser  (a)  has  satisfied  the  contingency,  or  (b)  is
terminating this Agreement for  non-satisfaction.  If by such date Purchaser has
not so advised  Seller,  then at any time commencing on the next day thereafter,
Seller shall have the right to  terminate  this  Agreement by written  notice to
Purchaser thereof. If neither Seller nor Purchaser has terminated this


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SALE OF 35 INDUSTRIAL PARKWAY                                             Page-7
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Agreement by reason of  non-satisfaction  of a  contingency,  nor  Purchaser has
advised Seller that such  contingency has been  satisfied,  then the time period
within which such  contingency can be satisfied shall continue until the earlier
of (i) Seller's  written  notification to Purchaser that this Agreement has been
terminated  for  non-satisfaction  of  contingency,   (ii)  Purchaser's  written
notification   to  Seller  that  this   Agreement   has  been   terminated   for
non-satisfaction  of contingency,  or (iii)  Purchaser's  notification to Seller
that the contingency  has been satisfied or waived.  It is the intention of this
paragraph to provide that this Agreement shall not  automatically  terminate nor
will any contingency be deemed automatically satisfied on any contingency period
termination date unless and until Seller and/or Purchaser, as applicable,  shall
have affirmatively advised the other party as to the status of the matter.

     8. CLOSING AND DELIVERY OF DOCUMENTS:  Closing of title shall take place on
or about June 1, 1998 or within  thirty (30) days of the waiver or  satisfaction
of all of Purchaser's  Contingencies,  whichever date shall first occur, at such
time as is  convenient  for and agreed to by the parties.  At the closing  which
will take place at the premises, Seller shall deliver a Deed of Bargain and Sale
with  Covenant  against  Grantors  Acts,  an  affidavit  of title,  a  corporate
resolution  authorizing  the sale, an affidavit that the Seller is not a foreign
person  as  defined  in  Section  1445 of the  Internal  Revenue  Code  ("FIRPTA
Affidavit") and shall deliver and/or execute such other documents as Purchaser's
title  insurance  company  and/or  mortgage  lender  may  reasonably  request or
require.  Seller  agrees that it shall not convey  title  pursuant to a power of
attorney.  In the  event  Purchaser  obtains  a survey  of the  premises  from a
surveyor  licensed  in the  State of New  Jersey,  Seller  agrees to use a legal
description in accordance with such survey, provided such survey is certified to
Seller,  a copy of which shall be provided to Seller by  Purchaser in advance of
closing.  Seller and Purchaser agree to exchange copies of the closing documents
not less than five (5) days prior to closing.

     9.  ADJUSTMENTS  AT CLOSING:  At the time of closing and  delivery of deed,
taxes, water and sewer charges, if applicable,  shall be adjusted between Seller
and  Purchaser  as of the  closing  date  with  charges  for the day of  closing
attributable  to the  Seller.  Seller  shall bear the  expense of payment of the
realty  transfer fee. Real estate taxes shall be apportioned on the basis of the
calendar  year for which  assessed,  except that if the closing date shall occur
before  the  final  tax rate is  fixed,  the  apportionment  of  taxes  shall be
tentative,  based  upon  the  parties'  best  knowledge  of the  current  year's
assessments.  At such time as the full year's taxes are known, the parties shall
thereafter  adjust as of the date of closing  based upon the full year's  taxes.
Seller shall pay all roll-back  taxes relating to farmland  assessment  whenever
such assessment may be imposed by the taxing authority.  The obligations of this
paragraph with regard to any  adjustments or payments  subsequent to closing for
real property taxes shall survive closing.

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SALE OF 35 INDUSTRIAL PARKWAY                                             Page-8
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     10. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER

Seller is the owner of the  premises  and has the  authority  to enter into this
transaction.

Seller is a corporation,  duly organized,  validly existing and in good standing
in the State of New Jersey.  Seller has full power and  authority to  consummate
the sale of the premises as set forth herein, and all requisite actions required
by law to authorize the  execution,  delivery and  performance of this Agreement
have been taken.

Seller has not  received any notice of any  violation  of any federal,  state or
municipal laws, ordinances, orders, rules, regulations or requirements affecting
any portion of the premises.  In the event of the issuance of any written notice
of violations after the date hereof, but prior to the Closing,  Seller agrees to
correct such  violations or to allow  Purchaser a credit at Closing to make such
corrections.

Seller has received no notice and has no knowledge of any pending  improvements,
liens or special assessments to be made against the premises by any governmental
authority.

No portion of the  premises  is, and the Seller has not  received any notice and
has no  knowledge  that any  portion  of the  premises  will be,  subject  to or
affected by any condemnation of similar proceeding.

The Seller has no knowledge of any existing action, suit or proceeding affecting
the  premises  or any  portion  thereof or  relating  to, or arising  out of the
ownership, management or operation of the premises, in any court or before or by
any federal, state, county or municipal department, commission, board, bureau or
agency or other  governmental  instrumentality  other then a suit by the present
Mortgagee,  Summit Bank,  NA in  foreclosure.  (Summit Bank v Biosearch  Medical
Products,  Inc. docket  BER-L-10086-97  Bergen County, suit on contract;  Summit
Bank v Biosearch Medical Products,  Inc. docket F-18439-97 suit on Foreclosure),
it being the  intention of  Purchaser  and Seller to satisfy and  discharge  the
Mortgage held by Summit Bank at the closing.

No person,  firm or other entity has any right of first  refusal,  option or any
other right of any nature to acquire the premises or any portion  thereof or any
interest therein.

Neither the execution and delivery of this Agreement nor the consummation of the
sale provided for herein will  constitute a violation or breach by Seller of any
provision of any agreement or other  instrument to which Seller is a party or to
which  Seller  may be  subject  although  not a  party,  or  will  result  in or
constitute a violation or breach of any judgement,  order,  writ,  injunction or
decree issued against Seller.

There  are no  tenants  or  occupants,  leases,  mortgages  or  other  liens  or
encumbrances,


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SALE OF 35 INDUSTRIAL PARKWAY                                             Page-9
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or other agreements affecting the operation of the premises.

Seller  represents  that  there  are  no  existing  contracts  for  advertising,
janitorial services,  maintenance contracts,  or purchase contracts or for other
services  which would be binding on the  Purchaser  after  Closing or affect the
premises  being  conveyed.  All valid bills and claims for labor  performed  and
materials  furnished to or for the benefit of the premises for all periods prior
to the Closing Date will be paid in full by Seller.

All public utilities required for the operation of the premises either enter the
premises  through  adjoining public streets,  or if they pass through  adjoining
private land, do so in accordance with valid irrevocable  easements which run to
the benefit of the owner of the premises.

Seller has maintained and will maintain  through the Closing Date such insurance
coverage as is adequate to insure the premises at full replacement cost.

To the best of Seller's knowledge,  the premises are in full compliance with all
New Jersey and Federal environmental laws, including,  without limitation, ISRA,
the New Jersey Spill Compensation and Control Act, N.J.S.A.  58:10-23,  et seq.,
and the regulations promulgated thereunder,  and all other rules and regulations
of the New Jersey Department of Environmental Protection and Energy ("DEPE") and
its  various  divisions.  Seller  has not dumped or  disposed  of,  suffered  or
permitted dumping and disposal or, nor cleaned up any "Hazardous Substances", as
such term is  defined  in  N.J.S.A.  13:1  K-8(d) on or upon any  portion of the
premises. To the best of Seller's knowledge,  the premises has not been used for
any of the aforementioned purposes, or subjected to any such occurrences.  Prior
to the  Closing  Date,  Seller  shall  prevent  the  dumping or  disposal of any
Hazardous  Substances  on or upon any  portion of the  premises.  Seller  hereby
agrees to defend,  indemnify,  and hold Buyer  harmless from and against any and
all claims, losses, judgments, liabilities, damages and expenses (including with
limitation  cleanup  costs and  attorneys'  fees arising by reason of any of the
aforesaid or an action against the Seller under this indemnity) arising directly
or  indirectly  from,  out of, or by reason of any breach of this Section or the
release of any Hazardous  Substances  prior to Closing.  If any of the aforesaid
representations  are not true at the time of  Closing,  the  Purchaser  shall be
permitted  to  terminate  the  Agreement  and  receive the return of the Deposit
together with all accumulated interest.

Survival.  The  representation,  warranties  and  covenants of the Seller listed
above are true and complete as of the  Execution  Date and Seller will  reaffirm
their truth and  completeness as of the Closing Date. All such  representations,
warranties and covenants shall survive the Closing.

     10A. PRE-CLOSING COVENANTS OF SELLER.


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SALE OF 35 INDUSTRIAL PARKWAY                                            Page-10
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     Seller covenants and agrees that subsequent to the Execution Date and until
the Closing:

     Seller shall deliver the premises at the Closing Date in the same condition
as it is on the Execution Date subject to ordinary wear and tear.

     Without the prior written consent of Purchaser in each instance, the Seller
shall not enter  into,  renew,  amend or extend  any lease or enter into any new
tenancy of any nature.

     Seller shall not suffer, cause or permit any change in the condition of the
premises  including,  without limitation,  the duping of any garbage,  Hazardous
Substances  (as  defined in  N.J.S.A.  58:10-23.1lb(k),  or of any fill or other
materials,  or the removal of any fill,  soil or  vegetation  from the premises.
Seller  shall  not  suffer,  cause or  permit  any use or the  occupancy  of the
premises pending the Closing.

     In the event the  Seller  receives  written  notice  from any  governmental
agency  of any  violation  of  any  governmental  rule,  statute,  ordinance  or
regulation  affecting  any portion of the premises,  Seller shall  promptly cure
such violation, at its sole cost and expense, prior to the Closing. Seller shall
provide Purchaser with copies of all such notices and any responses thereto.

     The risk of loss or damage to the  premises  by or as a result of any cause
until the Closing Date is assumed by and shall be the responsibility of Seller.

     Certificate of Occupancy or other Governmental  Approval. In the event that
the Township of Branchburg  requires the obtaining of  Certificate of Occupancy,
Certificate of Continuing  Occupancy or any other type of governmental  approval
as a  prerequisite  for  Closing,  it shall be the  obligation  of the Seller to
obtain same at its sole cost and expense. Seller shall make any repairs required
to the premises for the issuance of said  certificates  or  approvals,  provided
however,  Seller has no duty to repair or modify the  premises if said repair or
modification is related to the activity or proposed activity of Purchaser.

     11. POSSESSION AND PRECLOSING ENTRY:  Purchaser may enter into and upon the
said lands and  premises  upon  delivery of deed and from thence take the rents,
issues and profits for its own use; provided, however, that Purchaser shall have
the right,  from time to time,  to enter upon the premises  prior to the date of
closing hereunder for the purpose of conducting  inspections,  surveys and tests
related  to  Purchaser's  Intended  Use and for  satisfying  of the  Purchaser's
Contingencies.  Purchaser  shall indemnity and hold Seller harmless from any and
all liability for damage to persons or property arising from such entry prior to
the closing date.



<PAGE>


SALE OF 35 INDUSTRIAL PARKWAY                                            Page-11
--------------------------------------------------------------------------------

     12. ASSESSMENTS:  If at the time for the delivery of the deed the premises,
or any  part  thereof,  shall  be or  shall  have  been  affected  by a  special
governmental assessment or assessments which are or may become payable in annual
installments  of which the first  installment is then due or has been paid, then
for the purpose of this  Agreement,  all of the unpaid  installments of any such
assessment,  including  those  which are to  become  due and  payable  after the
delivery of the deed, shall be deemed to be due and payable and to be liens upon
the premises  affected  thereby and shall be paid and  discharged by Seller upon
delivery of the deed. Unconfirmed improvements or assessments,  if any, shall be
paid and allowed by Seller on account of the purchase  price if the  improvement
or work has been  commenced on or before the date hereof.  Seller  represents to
the  best  of its  knowledge  that  there  are no  unconfirmed  improvements  or
assessments for improvements contemplated for the premises.

     13.  REAL  ESTATE  BROKERAGE  COMMISSION:  Seller  and  Purchaser  mutually
represent  and warrant to each other that there are no real estate  brokers that
either have dealt in connection with the negotiation of this Agreement.

     The parties  hereto agree to save each other  harmless and  indemnify  each
other from any losses, damages, judgments and costs, including legal fees, which
a party may suffer if the other party breaches its  obligations  hereunder or if
the  representation  of the other party contained herein proves untrue or if the
claim is made against the indemnifying party.

     14. RISK OF LOSS: Risk of loss, by reason of fire or other casualty,  shall
remain  with  Seller  until the time of  closing.  In the event of fire or other
casualty to the  premises,  Seller shall advise  Purchaser  within ten (10) days
thereof If all or a material  part of the premises is destroyed by fire or other
casualty,  Purchaser  shall  have the right to  terminate  this  Agreement.  For
purposes  hereof,  a material damage shall be damage,  the restoration or repair
cost of  which  shall,  as  estimated  by  Seller's  insurance  company,  exceed
$200,000. In connection with any non-material  casualty,  Seller shall cause all
repairs  to be made on or  before  closing.  In  connection  with  any  material
casualty  which does not result in Purchaser's  termination  of this  Agreement,
Purchaser  shall have the right to require  Seller to repair  the  premises,  in
which case the time for closing  shall be extended as required to allow for such
repair, or to purchase the premises in accordance herewith, without abatement of
purchase price, and receive an assignment of proceeds of such insurance.

     15.  CONDEMNATION:  In the event condemnation or eminent domain proceedings
shall be commenced by any  governmental or  quasi-governmental  authority having
jurisdiction  therefor  against all or any part of the  premises,  Seller  shall
promptly notify Purchaser and provide Purchaser with all information  concerning
such  proceedings.  Purchaser  may, at its option,  by giving  written notice to
Seller  within  forty-five  (45) days  after its  receipt  of the notice of such
proceedings,


<PAGE>


SALE OF 35 INDUSTRIAL PARKWAY                                            Page-12
--------------------------------------------------------------------------------

terminate this Agreement.

     In the event Purchaser does not elect to terminate this Agreement, then any
award in  condemnation  and/or unpaid claims and rights in connection  with such
condemnation  shall be assigned to  Purchaser  at closing,  or if paid to Seller
prior  thereof,  shall be credited  against the unpaid  balance of the  purchase
price due at closing.  If Purchaser  determines not to terminate this Agreement,
Seller  shall not adjust or settle any  condemnation  awards  without  the prior
written  approval of Purchaser and shall allow  Purchaser to  participate in all
proceedings.

     16.  FLOOD  HAZARD  AREA:  If the  premises are within a flood hazard area,
Purchaser shall have the right to terminate this Agreement.  Purchaser agrees to
obtain a flood hazard certification within 30 days from the date hereof.

     17.  BOUNDARY LINES: Seller represents that there are no encroachments from
the premises onto  adjoining  properties or from adjoining  properties  onto the
premises.

     18. NOTICES: All notices, demands or communications hereunder shall be sent
by registered or certified mail, postage prepaid,  return receipt requested,  to
the following addresses first appearing.

     19. ENTIRE  AGREEMENT:  This  Agreement  constitutes  the entire  agreement
between the parties hereto.  No amendment or modification  hereof shall have any
force or effect unless in writing and executed by all parties.

     20. BINDING  EFFECT:  This Agreement shall be binding upon and inure to the
benefit of the parties hereto,  their  respective legal  representatives,  their
heirs, executors, administrators, successors and assigns.

     21. GOVERNING LAW: This Agreement shall be construed in accordance with the
laws of the State of New Jersey.

     22.  HEADINGS:  The article  headings  contained in this  Agreement are for
reference only for the  convenience of the parties.  They shall not be deemed to
constitute  a part of this  Agreement  nor shall  they  alter or  supersede  the
contents of the paragraphs themselves.

     23.  SURVIVAL:  Whenever the context of this  Agreement  allows,  expressly
provides,  or  reasonably  implies  a  continuing  obligation,  such  continuing
obligation shall survive the closing of title and delivery of the deed and shall
not merge therein.

     24. RECORDING OF AGREEMENT:  Seller and Purchaser agree that this Agreement
will not be recorded.

<PAGE>


SALE OF 35 INDUSTRIAL PARKWAY                                            Page-13
--------------------------------------------------------------------------------

     25. LIENS AGAINST THE PREMISES:  All sums paid by Purchaser pursuant to the
terms  of this  Agreement  shall  be  returned  to  Purchaser  upon  Purchaser's
termination  of this Agreement and the same shall  constitute  liens against the
premises.

     26. LOAN OF DOCUMENTS:  Purchaser agrees that it will make available copies
of its title insurance policy, present deed, proposed deed, 1994 ISRA submission
and Resolution by the Board of Directors of Seller, authorizing the sale. Seller
shall also make  available to  Purchaser  plans and  specifications  utilized by
Seller in connection with any  applications  made by Seller for any governmental
approvals or in connection  with the  construction  of any  improvements  on the
premises.

     27. CALCULATION OF TIME PERIODS: With respect to any time periods set forth
herein which are calculated  from the date of this  Agreement,  it is understood
and agreed that such time period  commences from the date of final  execution of
this  Agreement  by all parties  hereto,  including  execution  of any riders or
amendments  hereto.  The  date of this  Agreement  shall  be the  date  the last
signatory executes this Agreement and any such riders or amendments.

     28. DEFAULT BY PURCHASER/LIOUIDATED  DAMAGES: The parties hereto agree that
in the event Purchaser  shall default under this  Agreement,  the actual damages
which Seller would suffer would be  mathematically  difficult to calculate.  The
parties  hereto agree in good faith to estimate the amount of such damages which
would reasonably  compensate the Seller for such a default. Such amount is equal
to $85,000.  Accordingly, in the event of any default by Purchaser, Seller shall
be entitled  to  liquidated  damages in the sum of  $85,000.  The balance of the
deposit, if any, together with interest, shall be returned to Purchaser.

     29.  COUNTERPARTS:   This  Agreement  will  be  signed  in  any  number  of
counterparts  with the same effect as if the signatures  thereto and hereto were
upon the same instrument.




<PAGE>


SALE OF 35 INDUSTRIAL PARKWAY                                            Page-14
--------------------------------------------------------------------------------

     IN WITNESS WHEREOF,  the undersigned have set their hands and seals the day
and year first above written. 

Biosearch Medical Products. Inc., Seller


by: __________________________

Robert Keller, Vice President


Hydromer, Inc., Purchaser

by: __________________________

Ken Brice, Vice President

Date: ________________________

<PAGE>


SALE OF 35 INDUSTRIAL PARKWAY                                            Page-15
--------------------------------------------------------------------------------

Schedule A 

LEGAL DESCRIPTION:

BEGINNING  at the most  northerly  corner  of Lot 3D, as shown on "Plan of Major
Subdivision-Final Plat: Industrial Property of Herbert  Vollers-Readington Road,
situated in Branchburg  Twp.,  Somerset  County" dated September  1965,  revised
April 1967,  which map was filed in the Somerset  County  Clerks's Office as Map
No.  1139 and from  said  Beginning  point  running;  (1) South 66  degrees,  06
minutes,  44 seconds East, 531 .87 feet along the southerly property line of the
Central  Railroad Company of New Jersey to a point and corner of Lot 3A as shown
on the map herein  referred to;  thence (2) South 24 degrees,  15 minutes  West,
493.73 feet along Lot 3A to the center line of  Industrial  Parkway;  thence (3)
North 65  degrees,  45  minutes  West,  658.13  feet  along the  center  line of
Industrial  Parkway;  thence (4) North 38 degrees,  41 minutes, 12 seconds East,
506.36  feet to the point and place of  BEGINNING.  Containing  6.2 aces more or
less.

The  above  description  includes  all of Lot 3D as  shown  on  "Plan  of  Major
Subdivision-Final Plat: Industrial Property of Herbert  Vollers-Readington Road,
situated in Branchburg  Twp.,  Somerset  County" dated September  1965,  revised
April 1967, which map is filed in the Somerset County Clerk's Office as Map No.
1139.

Being the same premises conveyed to Fabri-Kal  Corporation by deed of Herbert D.
Vollers and Nancy V. Vollers, his wife, dated July 16, 1970, and recorded in the
Somerset County Clerk's Office in Deed Book 1229 at page 848.

Together with all rights of Fabri-Kal  Corporation under deed dated December 29,
1972, to the Township of Branchburg and recorded in the Somerset  County Clerk's
Office in Deed Book 1274 at page 591.

Also being the same premises  conveyed to Biosearch  Medical  Products,  Inc. by
deed of Fabri-Kal  Corporation,  dated  September  9, 1980,  and recorded in the
Somerset County Clerk's Office in Deed Book 1427 at page 620.

Further being made subject to agreements,  covenants, easements and restrictions
of record and such facts as an inspection and accurate survey would disclose.




<PAGE>


                                      Lease

               HYDROMER, Inc. to BIOSEARCH MEDICAL PRODUCTS, Inc.
                 Premises-35 Industrial Parkway, Somerville, NJ
                                    36 Months


<PAGE>


                                      Lease



               HYDROMER, Inc. to BIOSEARCH MEDICAL PRODUCTS, Inc.
                 Premises-35 Industrial Parkway, Somerville, NJ
                                   36 Months


     THIS LEASE is made as of the twelfth day of June, 1998,  between  Hydromer,
Inc.  (hereinafter  referred to as "Landlord") and Biosearch  Medical  Products,
Inc. (hereinafter referred to as "Tenant").

                                    SECTION 1
                              DEMISE AND BASIC RENT

     Landlord  hereby  rents to Tenant and Tenant  hereby  rents from  Landlord,
approx.  1 6,500 sq. ft. in the east side of the building,  commonly known as 35
Industrial Parkway, Somerville, NJ, the east side being identified as Schedule A
attached hereto,  (hereinafter  referred to as the  "Premises"),  in its "As Is"
condition,  for  the  term of  beginning  on the day of  that  the  real  estate
containing  the  premises is  conveyed  by Tenant to  Landlord  and ending on 36
months later,  at seven Dollars ($7.00) per sq ft. per year, the amount of three
hundred and forty six thousand five hundred dollars ($346,500)  ("Prepaid Rent")
being  acknowledged  as received by Landlord  from Tenant as part of the sale of
the real estate in which the Premises is part and parcel  therein to be utilized
by Tenant at the rate of $9,625 per month (herein the "Basic Rent").

                                    SECTION 2
                    ADDITIONAL RENT, TAXES, ASSESSMENTS, ETC.

     If the premises is separately  metered for utilities,  Tenant will pay such
bills else Tenant will pay 65% of all utility bills for the entire building. All
other costs of operation (such as but not limited to taxes,  building insurance,
grounds  upkeep,  snow  removal and other like  costs) are to be shared  equally
("Additional rent").

                                    SECTiON 3
                         AFFIRMATIVE COVENANTS OF TENANT

     Tenant,  jointly and  severally  if more than one,  hereby  covenants  with
Landlord as follows:

          (A) to pay any Additional Rent within Ten (10) days of date of invoice
          therefor;

          (B) to keep the Premises in good order; and

          (C) to surrender the peaceful and quiet  possession of the Premises at
          the end of the term or any shorter period,  broom clean and in as good
          condition  as when  received  (normal  wear and tear and  damage  from
          insured events excepted).

                                   SECTION 3A
                                ADDITIONAL TERMS

1. Landlord shall pay for the cost of  construction  of interior  demising walls
which  shall be  finished  on both sides  together  with the doors to be located
therein. All other interior modifications shall be


<PAGE>


LEASE - HYDROMER, Inc. to BIOSEARCH MEDICAL PRODUCTS, Inc.
35 Industrial Parkway, Somerville, N.J.                                   page-2
36 months
================================================================================

the responsibility of the Tenant.

2. Landlord  will  reimburse  Tenant for any  electricity  or utilities  used by
Landlord on Tenant's meters.

3. Landlord will grant Tenant access to the loading dock to load trucks.

4. Landlord  recognizes  there is a security system covering the entire premises
and Tenant will disconnect the sensors in the non-leasehold from the system.

5. Tenant has the right to park up to 3 trailers and 2 refuse  containers in the
rear parking lot for storage,  provided no municipal ordinances are violated. At
the end of the lease these trailers and containers shall promptly removed.

                                    SECTION 4
                          NEGATIVE COVENANTS OF TENANT

     Tenant  hereby  covenants  that Tenant will not do, suffer or permit any of
the following:

          (A) anything to be done in or about the Premises which will contravene
          any policy of insurance against loss by fire;

          (B) violate the  Certificate  of Occupancy for the Premises or use, or
          permit to be used,  the  Premises  for the  purposes  other than those
          allowed by the zoning ordinances of the Township of Branchburg;

                                    SECTION 5
                                 QUIET ENJOYMENT

     The  Landlord  covenants  that he shall do nothing  to affect the  Tenant's
right to peaceably  and quietly  have,  hold and enjoy the Premises for the term
herein mentioned, subject to the provisions of this Lease and to any mortgage or
deed of trust to which this Lease shall be subordinate.

                                    SECTION 6
                                   ALTERATIONS

     Tenant shall not make any alterations or additions to the Premises  without
the prior written consent of Landlord. Any alterations, additions or repairs the
Tenant shall be permitted to make shall be done at Tenant's own expense.

     Landlord  shall make all  alteration  to secure the Premises from the other
parts of the building,  including  installing  separate  meters to insure Tenant
does not pay for any part of the non-leasehold.

                                    SECTION 7
                               EXPIRATION OF LEASE

     Upon  expiration of this Lease Tenant shall deliver as soon afterwards as a
received  from the state of New Jersey,  an  approval of a negative  declaration
regarding the premises pursuant to the 


<PAGE>


LEASE - HYDROMER, Inc. to BIOSEARCH MEDICAL PRODUCTS, Inc.
35 Industrial Parkway, Somerville, N.J.                                   page-3
36 months
================================================================================

Industrial Site Recovery Act (N.J.S.A. 13:1 K-6 et seq.) (hereinafter, ISRA).

     In the event Tenant does not  surrender  the premises to Landlord  upon the
expiration  of this Lease,  Tenant shall pay a holdover rent of $19,250 for each
month of holdover. This is not an election of remedies and Landlord may take any
other action to remove Tenant allowed by law or equity.

                                    SECT1ON 8
                              EFFECT OF DESTRUCTION

     If the  Premises  shall be destroyed  or rendered  untenantable  by fire or
unavoidable accident, or if the building in which the Premises are located is so
damaged  that  Landlord  shall  elect to  demolish it or rebuild it, the tenancy
hereby  created  shall be thereby  terminated,  and,  provided  Tenant is not in
default  at the time of such  destruction,  Landlord  shall  refund  the  unused
portion of the  Prepaid  Rent,  payable in 4 equal  installments  over a 4 month
period.  Landlord at its own expense  shall  purchase  insurance if available to
insure   this  obligation  and add it to any  insurance  policy  as a  rider  if
available.  Such refund  obligation  may be set off against  any  obligation  of
Tenant to Landlord under section 1 2, below.

                                    SECTION 9
                                    INSURANCE

     Tenant  shall  provide  and keep in  force  during  the term of this  Lease
general  liability  insurance  for injury or damage to persons or property in or
upon the Premises  during the term of this Lease.  The said policy shall be with
limits  not less than one  million  Dollars  ($1,000,000)  in respect of any one
person,  in respect of any one  accident  and in respect of property  damage and
shall also contain an  endorsement  protecting the Landlord for water damage and
sprinkler damage liability with respect to property other than the Landlord's.

     Landlord shall insure the building including the premises as Landlord deems
fit.  Tenant shall have the right to purchase any additional  insurance to cover
losses of Tenant.

     Tenant  shall also  furnish  insurance  for such other  hazards and in such
amounts as Landlord may reasonably  require.  Landlord reserves the right at any
time and from time to time to require the limits for any of the insurance  under
this Section to be increased to limits which Landlord deems  reasonable.  Tenant
shall  provide a certificate  evidencing  such  insurance to Landlord.  Landlord
shall be a named  insured on any such  policy.  No such  policy may be  canceled
without ten days prior notice to Landlord.

                                   SECTION 10
                                     REPAIRS

     Tenant  shall  keep the  Premises  in good  condition  and repair and shall
redecorate,  paint and renovate the Premises as may be necessary to keep them in
good condition and repair and good  appearance  and in compliance  with the laws
and regulations  applicable to Tenant's  business.  

                                   SECTION 11
                                 SUBORDINATION


<PAGE>



LEASE - HYDROMER, Inc. to BIOSEARCH MEDICAL PRODUCTS, Inc.
35 Industrial Parkway, Somerville, N.J.                                   page-4
36 months
================================================================================

     This Lease is and shall be  subject  and  subordinate  to all  present  and
future  mortgages,  deeds of trust or underlying  leases affecting the Premises.
Tenant shall execute any instrument  which may be deemed  necessary or desirable
by Landlord to further effect or to evidence the  subordination of this Lease to
any such mortgage, deed of trust or underlying lease.

                                   SECTION 12
                                 INDEMNIFICATION

     Tenant agrees to indemnify and hold harmless the Landlord,  each mortgagee,
ground  or  underlying  lessor  of the  Premises  from and  against  any and all
liabilities,  damages,  claims, losses,  judgments,  causes of action, costs and
expenses  (including  reasonable  counsel fees and legal  expenses) which may be
incurred by Landlord or any such mortgagee or underlying  lessor  relating to or
arising out of any breach by Tenant of (i) its obligations to be performed under
this Lease, or (ii) the carelessness,  negligence or improper conduct of Tenant,
its agents, contractors,  employees, invitees or licensees, or (iii) arising out
of the use and occupancy of the Premises or any work or thing whatsoever done or
any condition created in or about the Premises during the term of this Lease. In
case any action or proceeding be brought against  Landlord by reason of any such
claim, Tenant, upon notice from Landlord, shall resist and defend such action or
proceeding. Tenant shall be entitled to a credit against such indemnification in
the amount of any unused, pre-paid basic rent in the event that the Premises are
destroyed or rendered untenantable by Tenant's act or omission hereunder.

                                   SECTION 13
                                   EXCULPATION

     The term  "Landlord"  as used in this Lease means only the holder,  for the
time being, of the Landlord's  interest under this Lease so that in the event of
any  transfer  of title to the  Premises,  the  Landlord  shall be and hereby is
entirely free and relieved of all  obligations  of Landlord  hereunder  accruing
after such transfer.  Tenant  acknowledges  that there is absolutely no personal
liability on the part of the Landlord,  its successor or assigns with respect to
any of the terms,  covenants and conditions of this Lease, and that Tenant shall
look solely to the equity of Landlord in the  Building for the  satisfaction  of
each and every remedy of Tenant in the event of any breach by Landlord of any of
the terms, covenants and conditions of this Lease to be performed by Landlord.

                                   SECTION 14
                                 BINDING EFFECT

     This Lease  shall be  binding  upon and shall  inure to the  benefit of the
parties hereto and their personal  representatives,  successors and assigns, and
sub-tenants.

                                   SECTION 15
                                ASSIGNMENT/SUBLET

     Provided Tenant is not in default, Tenant shall have the unrestricted right
to assign this prepaid  lease or sub-let the  premises  provided the assignee or
sub-tenant  as the case may be  agrees  to be  bound by the  provisions  of this
lease,  provided  however,  Landlord  shall have the: (i) option of exercising a
right of first refusal to prevent such sub-lease or assignment by the payment of
a monthly rate of $9,625 times the number of months left in this pre-paid lease,
provided further such right shall be exercised, within 10 days of the receipt of
a written notice by Tenant to Landlord.



<PAGE>


LEASE - HYDROMER, Inc. to BIOSEARCH MEDICAL PRODUCTS, Inc.
35 Industrial Parkway, Somerville, N.J.                                   page-5
36 months
================================================================================

This payment shall be made in 4 equal installments over a 4 month period or (ii)
in the event the Basic Rent paid by such  assignee/subtenant  exceeds  $7.00/sq.
ft. per year,  Landlord may elect not to exercise its option of first refusal in
consideration   for   payment   of  50%  of  the   monthly   amount   by   which
assignee/subtenant's  Basic  Rent  exceeds a rate of $7.00 per  square  foot per
year.

                                   SECTION 16
                                 APPLICABLE LAW

     The Lease shall be interpreted and construed in accordance with the laws of
the State of New Jersey (excluding New Jersey conflict of laws) and by the state
courts of New Jersey.

                                   SECTION 17
                                    CAPTIONS

     The  captions  appearing  in this  Lease are  inserted  only as a matter of
convenience and do not define,  limit,  construe or describe the scope or intent
of the Sections of this Lease nor in any way affect this Lease.

                                   SECTION 18
                                TENANT'S DEFAULT

     A default  under this lease by Tenant  shall exist if any of the  following
occurs:

          (a) If Tenant fails to pay  Additional  Rent or any other sum required
          to be paid hereunder within ten (10) days of when due; or

          (b) If Tenant fails to perform any term, covenant or condition of this
          Lease except those requiring the payment of money, and Tenant fails to
          cure such breach  within  thirty (30) days after  written  notice from
          Landlord   where  such  breach  could  be   reasonably   cured  within
          such thirty  (30) day period;  provided,  however,  where such failure
          could not reasonably be cured within the thirty (30) day period,  that
          Tenant shall not be in default if it commences such performance within
          the thirty (30) day period and  diligently  thereafter  prosecutes the
          same to completion; or

          (c) If Tenant  shall have  abandoned  or vacated the Premises for more
          than ten (10)  consecutive  days  except  by  reason  of fire or other
          casualty pursuant to Section 8 of this Lease.

                                   SECTION 19
                                    REMEDIES

     Upon a default,  Landlord shall have the following remedies, in addition to
all other  rights and  remedies  provided by law or  otherwise  provided in this
Lease, to which Landlord may resort cumulatively or in the alternative:

          (a)  Landlord may  continue  this Lease in full force and effect,  and
          this Lease shall continue in full force and effect as long as Landlord
          does not terminate  this Lease,  and Landlord  shall have the right to
          collect  Additional  Rent  and  other  charges  when  due  or  at  the
          Landlord's option to set off against the Prepaid Rent.


<PAGE>


LEASE - HYDROMER, Inc. to BIOSEARCH MEDICAL PRODUCTS, Inc.
35 Industrial Parkway, Somerville, N.J.                                   page-6
36 months
================================================================================

          In addition, for the period of any default, any unpaid Additional Rent
          shall accrue  interest at the annualized  rate equal to the Prime Rate
          in the Wall Street Journal plus 2% compounded monthly.

          (b)  Landlord  may  terminate  Tenant's  right  to  possession  of the
          premises at any time by given written notice to that effect, and relet
          the  Premises  or any part  thereof.  On  giving  the  notice,  all of
          Tenant's  rights  in  the  Premises,   shall   terminate.   Upon  such
          termination,  Tenant shall surrender and vacate Premises, and Landlord
          may re-enter  and take  possession  of the Premises and all  remaining
          improvements   or  property  and  eject  Tenant  or  any  of  Tenant's
          sub-tenants,  assignees or other person or persons  claiming any right
          under or  through  Tenant.  This  Lease  may also be  terminated  by a
          judgement  specifically  providing for  termination.  Any  termination
          under this  Article  shall not release  Tenant from the payment of any
          sum then due Landlord or from any claim for damages or Additional Rent
          or other sum previously accrued or then accruing against Tenant.  Upon
          such  termination  Tenant shall be liable  immediately to Landlord for
          all  costs  Landlord  incurs in  reletting  the  Premises  or any part
          thereof,  including,  without  limitation,  legal  fees and  expenses,
          broker's commissions,  expenses of cleaning and restoration, repair or
          redecorating  the Premises  required by reletting and like costs which
          at Landlord's  option may be set off against the unused  Prepaid Rent.
          Provided, however, upon such termination,  Tenant shall be entitled to
          a credit in the amount of any unused prepaid Basic Rent,  which credit
          if any shall be paid in 4 equal monthly installments.

          Reletting  may be for a period  shorter or longer  then the  remaining
          term of this Lease. Acts of maintenance, efforts to relet the Premises
          or the  appointment of a receiver on Landlord's  initiative to protect
          Landlord's   interest   under  this  Lease  shall  not   constitute  a
          termination or interfere of or with Tenant's right to possession.

          In the event Landlord  terminates  Tenant's right to possession  under
          this section and occupies the premises,  Tenant shall  immediately  be
          entitled to a credit in the amount of any  unused Prepaid Rent,  which
          credit if any shall be paid in 4 equal monthly installments.

          (c) In the event of a breach  by  Tenant  of any of the terms  hereof,
          Landlord shall have the right of injunction to restrain the same.

          (d)  Landlord  and Tenant  hereby  mutually,  knowingly,  irrevocably,
          voluntarily  and  intentionally  waive  trial  by jury in any  action,
          proceeding or counterclaim  brought by either party hereto against the
          other  in any way  connected  with  this  Lease.  Each  party  further
          warrants and  represents  that it has reviewed  this waiver with legal
          counsel  and  that  each  waived  its  jury  trial  rights   following
          consultation  with legal  counsel.  This waiver shall apply to any and
          all  subsequent  amendments and any other  agreements  relating to the
          subject matter hereof.  In the event of litigation,  this lease may be
          filed as a written consent to a trial by court, sitting without jury.

                                   SECTION 20
                                    NO WAIVER

The  failure  of either  party to  insist,  in any one  instances,  upon  strict
performance  of any covenants of this Lease,  or to exercise any options  herein
contained,  shall not be construed as a waiver or relinquishment for the future,
of such covenant or option, but the same shall continue and remain in

<PAGE>


LEASE - HYDROMER, Inc. to BIOSEARCH MEDICAL PRODUCTS, Inc.
35 Industrial Parkway, Somerville, N.J.                                   page-7
36 months
================================================================================

full force and effect. Even though Landlord has consented that this Lease may be
assigned or the premises  sublet,  any  assignee  may not further  assign or any
sub-tenant may not sublet without express consent in writing by Landlord.

     WITNESS  the hands and seals of the  parties  hereto as of the day and year
first above written.


ATTEST/WITNESS:                       LANDLORD-Hydromer, Inc.

__________________________            BY: _______________________(SEAL)



ATTEST/WITNESS:                       TENANT-Biosearch Medical Products, Inc.

__________________________            BY: _______________________(SEAL)




<PAGE>

LEASE - HYDROMER, Inc. to BIOSEARCH MEDICAL PRODUCTS, Inc.
35 Industrial Parkway, Somerville, N.J.                                   page-8
36 months
================================================================================


Schedule A

Partition of premises into 16,500 sq ft leasehold.



******INSERT DRAWING HERE*****


<PAGE>

                                   Schedule A

                               [GRAPHIC OMITTED]

                Graphical Presentation of 35 Industrial Parkway


<PAGE>

                               [GRAPHIC OMITTED]

         Graphical Presentation of Parking Plan for Hydromer & Biosearch