<PAGE>   1
                                                                   EXHIBIT 10.97
                                               Application for an order granting
                                              confidential treatment pursuant to
                                           Rule 24b-2 of the Securities Exchange
                                         Act of 1934 has been made. Confidential
                                             portions of this document have been
                                        redacted and marked with an [*] and have
                                     been filed with the Securities and Exchange
                                    Commission separately with such application.


                            COLLAGEN SUPPLY AGREEMENT


        This COLLAGEN SUPPLY AGREEMENT (the "Agreement"), effective as of
January 1, 1998 (the "Effective Date"), is made by and between COLLAGEN
CORPORATION, a Delaware corporation ("Collagen"), and COHESION TECHNOLOGIES,
INC., a Delaware corporation formerly known as Collagen Technologies, Inc.
("Technologies").

                                    RECITALS

        1. Technologies and Collagen have entered into a relationship whereby
certain assets and liabilities are being transferred from Collagen to
Technologies as further described in the Separation and Distribution Agreement
effective as of January 1, 1998 between Collagen and Technologies (the
"Separation Agreement") and in the Ancillary Agreements.

        2. Collagen is in the business of developing, manufacturing and selling
human aesthetic and reconstructive medical technology products and processes.

        3. Technologies is in the business of developing, manufacturing and
selling products and processes utilizing innovative collagen-based technology
and novel biomaterials.

        4. Technologies wishes to purchase from Collagen its requirements for
certain collagen based materials and products, and Collagen wishes to supply
such requirements to Technologies.

        NOW, THEREFORE, the parties agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

        Except as otherwise defined herein, capitalized terms used herein shall
have the meanings given to them in the Separation Agreement. In addition, for
the purposes of this Agreement, the capitalized terms set forth below shall have
the meanings set forth in this Article I.

        1.1 "Collagen Material" shall mean any collagen based product,
intermediate or finished material other than a Product, Specified Material or
products and materials provided by Collagen to Technologies pursuant to the
Collagraft Supply Agreement dated as of the Effective Date.


<PAGE>   2
        1.2 "CoStasis" shall mean the bovine collagen based finished product
currently known as CoStasisTM.

        1.3 "Direct Costs" shall mean the direct cost to Collagen related to
manufacturing the Product, Collagen Material or Specified Material as set forth
in Exhibit A attached hereto.

        1.4 "FDA" shall mean the United States Food and Drug Administration or
any successor agency thereof.

        1.5 "Intellectual Property Rights" shall mean trade secrets, patents,
copyrights, trademarks, know-how, moral rights and similar rights of any type
under the laws of any governmental authority, domestic or foreign, including all
applications and registrations relating to any of the foregoing.

        1.6 "Product" shall mean a finished product or intermediate
incorporating human placental collagen or Persistent Technology.

        1.7 "Specifications" shall mean the technical specifications for a
product or material that Collagen is obliged to supply to Technologies under
this Agreement.

        1.8 "Specified Material" shall mean (A) any Third Party Product and (B)
any collagen based product, intermediate, or finished material (including
collagen components of the products of Cohesion Corporation) other than
recombinant human collagen based products and materials (i) manufactured
(commercially or by the Investigational Formulation Department) by Collagen
prior to January 1, 1999 or (ii) for which Technologies initially submits a
purchase order based upon Specifications mutually agreed to by the parties prior
to January 1, 1999.

        1.9 "Third Party Product" shall mean any collagen-based product,
intermediate or finished material other than recombinant human collagen based
products and materials that Technologies is obligated to supply to a third party
prior to March 15, 2004 pursuant to a written agreement first entered into: (i)
by Collagen prior to the Effective Date (the "Existing Third Party Products"), a
list of such agreements is set forth on the Schedule of Material Supply
Agreements delivered and executed by the parties at the time of execution of
this Agreement; or (ii) by Technologies on or after the Effective Date and prior
to January 1, 1999 (the "Additional Third Party Products").

                                   ARTICLE II
                                     SUPPLY

        2.1 SPECIFIED MATERIALS. Subject to the terms and conditions hereto,
Collagen shall manufacture for and supply to Technologies all Technologies'
requirements for any Specified Material commencing upon the Effective Date until
the later of: (i) March 15, 2004; (ii) after eighteen (18) months written notice
of termination of the Agreement (as a whole or on a product-by-product basis) by
either party to the other; or (iii) solely with respect to Existing Third Party
Products, the date of termination of Technologies' obligation to supply such
Existing Third Party Products. Notwithstanding the foregoing and solely with
respect to CoStasis, subject 


                                      -2-


<PAGE>   3
to the terms and conditions herein, Collagen shall manufacture and supply
CoStasis to Technologies until January 1, 2000, provided that Technologies'
requirements for CoStasis are no more than [*] syringes ([*] ccs per syringe)
per batch. Collagen shall have no obligation to supply CoStasis to Technologies
hereunder when Technologies' requirements for CoStasis exceed [*] syringes ([*]
ccs per syringe) per batch.

        2.2 PRODUCTS. Subject to terms and conditions herein, Collagen shall
manufacture for and supply to Technologies all Technologies' requirements for
any Product; provided, however, that Technologies has received regulatory
approval anywhere in the world for such Product based on manufacturing by
Collagen prior to January 1, 2002. Collagen's obligations under this Section 2.2
to supply Products to Technologies shall terminate the later of: (i) March 15,
2004; or (ii) after eighteen (18) months written notice of termination of the
Agreement by either party to the other (as a whole or on a product-by-product
basis).

        2.3 COLLAGEN MATERIALS. Subject to terms and conditions herein, upon
Technologies' request, Collagen shall manufacture for and supply to Technologies
any Collagen Material upon such terms as shall be mutually agreed to by the
parties in good faith commencing from the Effective Date until the later of: (i)
March 15, 2004; or (ii) after eighteen (18) months written notice of termination
of this Agreement by either party to the other (as a whole or on a
product-by-product basis).

        2.4 CONDITIONS TO SUPPLY. Notwithstanding anything herein to the
contrary, Collagen shall not be obligated to supply to Technologies bovine
collagen based Products, Specified Materials or Collagen Materials once Collagen
has discontinued making bovine collagen based products or materials for its own
requirements or for supply to third parties. In addition, the quantity, in the
aggregate, of Specified Materials and Products that Collagen is obligated to
supply to Technologies annually pursuant to Sections 2.1 and 2.2 shall not
exceed the greater of: (i) [*] percent ([*]%) of Collagen's total annual (actual
and not theoretical) cc manufacturing facility capacity; or (ii) [*] cc of
Zyderm ITM equivalent ("Supply Obligation"). Collagen shall have sole discretion
whether to supply any Specified Materials and/or Products in excess of the
Supply Obligation.

        2.5 TECHNOLOGIES PURCHASE OBLIGATION. Subject to the terms and
conditions herein, Technologies shall purchase from Collagen all its
requirements for any Specified Material or Product that Collagen is obligated to
supply to Technologies pursuant to Sections 2.1 and 2.2 hereof until the
termination of this Agreement or the termination of Collagen's supply obligation
for such Specified Material or Product; provided that Technologies shall be
released from any further obligation to purchase its requirements for CoStasis
from Collagen once its requirements for CoStasis exceeds [*] syringes ([*] ccs
per syringe) per batch, in which event Technologies may terminate the supply of
CoStasis by Collagen hereunder upon ninety (90) days prior written notice to
Collagen.

        [*] Application for an order granting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934 has been made. Confidential
portions of this document have been redacted and marked with an [*] and have
been filed with the Securities and Exchange Commission separately with such
application.


                                      -3-


<PAGE>   4
        2.6 RELEASE FROM REQUIREMENTS OBLIGATION. Technologies shall have no
obligation pursuant to Section 2.5 to purchase its requirements for Specified
Materials and Products from Collagen in the event that: (i) Collagen shall fail
to deliver any such Specified Materials or Products within ninety (90) days of
Collagen's receipt of a firm purchase order issued by Technologies and
acknowledged by Collagen (unless the scheduled delivery date set forth in such
purchase order is more than ninety (90) days from Collagen's receipt thereof) or
shall fail on two (2) consecutive occasions or three (3) occasions in any one
hundred eighty (180) day period to deliver such Specified Materials or Products
within fifteen (15) days of the scheduled delivery date therefor as set forth in
a firm purchase order issued by Technologies and acknowledged by Collagen; (ii)
Collagen shall have manufactured any Specified Materials and/or Products not in
conformance with Section 4.3, except as otherwise requested by Technologies; or
(iii) the quantity in the aggregate, of Specified Materials and Products shall
exceed the Supply Obligation, and Collagen shall not agree to supply any such
excess Specified Materials or Products.

        2.7 SERVICES. Collagen shall, at Technologies' reasonable request,
provide to Technologies support to manufacture clinical materials including
without limitation proposed Products for regulatory approval ("Investigational
Formulation Services") until the earlier of: (i) January 1, 2002 or (ii) the
termination of the Agreement by either party. For providing Investigational
Formulation Services, Technologies shall pay Collagen $[*] per person hour,
which shall cover routine testing, but shall not cover costs incurred by
Collagen in procuring raw materials from third parties or non-standard
production materials to perform such Investigational Formulation Services for
Technologies, the latter costs which shall be reimbursed by Technologies to
Collagen.

        2.8 CLOSED HERDS. During the Term and after the termination or
expiration of this Agreement, Collagen shall allow Technologies access to any
closed herd animals that are not being used by Collagen; provided, however,
Collagen shall have sole control and discretion over all practices and
procedures relating to the health, husbandry, maintenance and slaughter of the
closed herd animals and access thereto.

                                   ARTICLE III
                                TERMS OF PURCHASE

        3.1 ORDER AND ACCEPTANCE. Technologies shall from time to time submit to
Collagen firm purchase orders for Specified Materials and Products. All orders
shall be by means of signed written purchase orders by Technologies to Collagen,
sent to Collagen at Collagen's address for notice hereunder specifying the
Product, Specified Material or Collagen Material and required quantity. Orders
may initially be placed by telephone or telecopy; provided, however, that a
signed confirming purchase order is received in writing (which may


        [*] Application for an order granting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934 has been made. Confidential
portions of this document have been redacted and marked with an [*] and have
been filed with the Securities and Exchange Commission separately with such
application.


                                      -4-


<PAGE>   5
include telecopy transmission) by Collagen. Upon receipt, Collagen shall
promptly accept such purchase order (except to the extent that Collagen is not
required to supply Products or Specified Materials pursuant to Section 2.4) and
return a signed acceptance thereof to Technologies. Notwithstanding anything
herein to the contrary, no order shall be binding upon Collagen until accepted
by Collagen in writing. Each party may cancel or reschedule purchase orders for
Product only with prior written approval of the other party.

        3.2 FORECASTING. Technologies shall provide Collagen with a non-binding
six (6) month rolling forecast prepared in good faith setting forth its
projected requirements for Products and Specified Materials.

        3.3 PURCHASE PRICE. The purchase price to Technologies for Products,
Specified Materials and Collagen Materials shall be equal to [*]. The list price
shall equal: (i) Collagen's [*] for manufacturing such products or materials
plus [*] percent ([*]%) during the period commencing on the Effective Date and
terminating on June 30, 1999, and (ii) Collagen's [*] for manufacturing such
products or materials plus [*] percent ([*]%) during the period from July 1,
1999 until the termination or expiration of the Agreement. The list price for
VitrogenTM and Cell PrimeTM shall be equal to the greater of: (i) [*] percent
([*]%) of the end market selling price of Technologies to third parties for such
products; or (ii) Collagen's [*] for manufacturing such products, plus [*]
percent ([*]%). The parties agree that to the extent that the purchase prices
hereunder are based on Collagen's [*], Collagen may not increase its [*] by more
than [*] percent ([*]%) from one fiscal year to the next. Collagen shall provide
Technologies with an updated price list upon execution of this Agreement for the
fiscal year ending June 30, 1998 and at the beginning of each fiscal year, i.e.,
July 1, which shall be effective for such fiscal year. Collagen will review such
updated price list with Technologies and shall provide supporting documentation
therefor similar to those provided for the fiscal year 1998 price list. Payment
by Technologies to Collagen of the purchase prices pursuant to this Section 3.3
shall constitute payment in full for the Products, Specified Materials and
Collagen Materials, including without limitation, payment for manufacturing,
distribution, order entry and accounts receivables services performed in
connection therewith. Collagen shall use reasonable commercial efforts to
efficiently manufacture the Products, Specified Materials and Collagen Materials
and pursue manufacturing cost reductions without compromising the quality or
function of the Products, Specified Materials and Collagen Materials.

        3.4 INVOICING. Collagen shall submit an invoice, packing list and airway
bill to Technologies upon each shipment of Product, Specified Material or
Collagen Material ordered by Technologies. All invoices and other shipping
documents shall be sent via first class mail or by fax, followed by business
mail to Technologies' address for notices hereunder, without regard to the
actual shipping address. Each such invoice shall state the aggregate and unit
invoice price for Product, Specified Material or Collagen Material in a given
shipment. Solely with respect to VitrogenTM and Cell PrimeTM, Collagen shall
invoice Technologies for such products based on the


        [*] Application for an order granting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934 has been made. Confidential
portions of this document have been redacted and marked with an [*] and have
been filed with the Securities and Exchange Commission separately with such
application.


                                      -5-


<PAGE>   6
end market selling price of Technologies to third parties in effect at the end
of the previous fiscal year. Within sixty (60) days of the close of the fiscal
year, Collagen will submit to Technologies an accounting of any discrepancy
between the invoiced prices and the prices pursuant to Section 3.3, and
Technologies agrees to promptly, upon Collagen's request, provide Collagen with
any information, including but not limited to end user pricing information, of
which Technologies has knowledge or control for Collagen to prepare such
accounting. Within thirty (30) days after such accounting is delivered by
Collagen to Technologies: (i) Technologies shall pay any balance owed to
Collagen; or (ii) Collagen shall pay to Technologies any overpayment based on
such accounting.

        3.5 DELIVERY. Collagen shall ship Products, Specified Materials and
Collagen Materials to the address set forth in the applicable purchase order for
delivery on the scheduled delivery date specified in the applicable purchase
order; provided, however, that such scheduled delivery date shall not be less
than sixty (60) days from the date of receipt by Collagen of such purchase order
with respect to any Product, Specified Material or Collagen Material. All
Products, Specified Materials and Collagen Materials supplied to Technologies by
Collagen shall be delivered to Technologies within thirty (30) days from the
date their manufacture is completed. All shipments shall be F.O.B. Collagen's
manufacturing facilities in Fremont, and Technologies shall bear the risk of
loss and cost of transportation of the products and materials upon delivery by
Collagen to the carrier identified by Technologies. Collagen shall suitably pack
the products and materials for delivery by surface or air, at Technologies'
discretion, in Collagen's standard shipping cartons. Collagen shall ship the
products and materials using the carrier specified in Technologies' purchase
order; provided, however, that if Technologies does not provide instructions
with respect to the carrier to be used, Collagen shall select the carrier. All
freight and insurance shall be paid by Technologies. Product, Specified
Materials or Collagen Materials shall be deemed delivered by Collagen and
accepted by Technologies upon: (i) the receipt by Technologies of a Certificate
of Analysis based on the Specifications; and (ii) the review and approval by
Technologies of the information contained in the alert notices and deviation
reports.

        3.6 PAYMENT AND AUDIT. Technologies shall make payment within thirty
(30) days of receipt of Collagen's invoice. Upon reasonable notice to Collagen,
Technologies shall have the right to have an independent certified public
accountant, selected by Technologies and reasonably acceptable to Collagen,
audit Collagen's records during normal business hours to verify the amount
payable by Technologies for Products, Specified Materials and Collagen
Materials, and charges for providing Investigational Formulation Services;
provided, however, that such audit shall not take place more frequently than
once a year and shall not cover such records for more than the preceding two (2)
years. The accountant shall only report to Technologies as to the accuracy of
the amounts charged by Collagen to Technologies for Products, Specified
Materials and Collagen Materials and the charges for Investigational Formulation
Services, and in the event of any inaccuracy, the correct amounts thereof.
Collagen shall promptly refund to Technologies the amount of any overpayment
determined in such audit, and Technologies shall promptly pay to Collagen the
amount of any underpayment. Such audit shall be at Technologies' expense unless
such audit indicates greater than five percent (5%) overpayment or underpayment
by Technologies based on invoices submitted by Collagen, in 


                                      -6-


<PAGE>   7
which case such audit shall be at Collagen's expense. Collagen shall preserve
and maintain all such records and accounts required for audit for a period of
two (2) years after the calendar quarter for which the record applies.

        3.7 PRODUCT PACKAGING AND LABELING. Collagen shall package and label
Products, Specified Materials and Collagen Materials as directed by
Technologies. Technologies shall be responsible for designing and determining
the form and format of packaging labels.

                                   ARTICLE IV
                         REPRESENTATIONS AND WARRANTIES

        4.1 BY BOTH PARTIES. Technologies (on behalf of itself and each member
of the Technologies Group) and Collagen (on behalf of itself and each member of
the Collagen Group), represents and warrants to the other that: (i) it has full
power and authority to execute, deliver and perform this Agreement; and (ii) the
execution, delivery and performance by such party of this Agreement does not
contravene any law, regulation, rules or order binding on such party and do not
contravene the provisions of or constitute a default under any contract or other
agreement binding on such party.

        4.2 REGULATORY APPROVALS. Technologies warrants to Collagen that any and
all required government approvals, including any approvals under applicable
health and safety laws and regulations, to import, register, market, distribute
and sell the Products, Specified Materials and Collagen Materials pursuant to a
purchase order issued by Technologies shall have been secured for every
jurisdiction into which such products and materials shall be shipped or sold in
accordance with such purchase order. The parties agree to cooperate with each
other and perform all necessary actions to obtain and maintain CE marks and ISO
certification for Products, Specified Materials and Collagen Material, as
applicable.

        4.3 GMP. Except as otherwise requested by Technologies in writing,
Collagen shall manufacture the Products, Specified Materials and Collagen
Materials in accordance with: (i) then current GMP, as required by the United
States Food and Drug and Cosmetic Act (the "Act"); (ii) all pertinent rules and
regulations of the FDA; (iii) the laws of the United States of America and all
local laws; and (iv) all other laws, regulations and guidelines, including
without limitation regulations of the European Union and any jurisdiction
therein, to the extent the same are applicable; provided, however, that nothing
contained in this Agreement is intended to render applicable any laws other than
the Act, FDA regulations and United States law. Collagen represents and warrants
that no products and materials delivered by Collagen under this Agreement will
be adulterated or misbranded by Collagen within the meaning of the Act, or
within the meaning of any other applicable law in which the definitions of
adulteration or misbranding are substantially the same as those contained in the
Act, as such laws are constituted and effective at the time of such shipment or
delivery, or as an article which may not, under the provisions of Section 404 or
505 of the Act, be introduced into interstate commerce.

        4.4 LIMITED WARRANTY. Collagen represents and warrants that the products
and materials supplied by it to Technologies under this Agreement shall conform
to their Specifications, if any, and shall be free from defects in material and
workmanship for the shelf 


                                      -7-


<PAGE>   8
life of the products and materials as set forth in the applicable
Specifications. Technologies' exclusive remedy and sole liability for breach of
the foregoing warranty shall be the remedy as set forth in this Section 4.4.

               4.4.1 RETURN OF DEFECTIVE PRODUCT. In the event that any Product,
Specified Material or Collagen Material purchased by Technologies from Collagen
fails to conform to the warranty set forth in this Article 4.4, Collagen's sole
and exclusive liability and Technologies' exclusive remedy shall be to replace
the product or material, or if, at Collagen's sole determination, replacement is
not practicable, refund Technologies for the amount actually paid by
Technologies for any such product or material; provided, however, that: (i)
Technologies promptly notifies Collagen in writing that such product or material
failed to conform, furnishes a detailed explanation of any alleged
nonconformity, and requests a return material authorization number; and (ii)
such product or material is returned to Collagen by Technologies F.O.B.
Collagen's shipping location in Fremont, California, during the warranty period,
with the return material authorization number affixed prominently to the outside
packaging. If such product or material fails to so conform, Collagen will
reimburse Technologies for shipment charges for return of the nonconforming
product or material.

               4.4.2 RECALL; MDR; FIELD CORRECTION. Should any defect in the
Product, Specified Material, or Collagen Material, or any governmental action
require: (i) the recall, destruction or withholding from market ("Recall"); (ii)
issuance of a Medical Device Report within the meaning of the Act ("MDR"); or
(iii) institution of a field correction ("Field Correction") for the Product,
Specified Material or Collagen Material, Collagen shall bear the costs and
expenses of such Recall, MDR or Field Correction to the extent such Recall, MDR
or Field Correction is the result of any non-conformance to Specifications due
to a fault or omission attributable to Collagen, and Technologies shall bear the
costs and expenses of such Recall, MDR or Field Correction to the extent such
Recall, MDR or Field Correction is the result of any fault or omission
attributable to Technologies. Should such Recall, MDR or Field Correction result
from the fault of both parties, the parties shall share such costs and expenses
in accordance with their proportionate fault.

                                    ARTICLE V
                              TERM AND TERMINATION

        5.1 TERM. The term of this Agreement shall commence on the Effective
Date and continue in full force and effect until the expiration of Collagen's
supply obligations set forth in Sections 2.1, 2.2 and 2.3 or expiration or
termination of the Agreement ("Term").

        5.2 TERMINATION FOR CAUSE. Either party shall have the right to
terminate this Agreement following any material breach or default in performance
under this Agreement by the other party upon sixty (60) days prior written
notice to the breaching party specifying the nature of the breach or default.
Unless the breaching party has cured the breach or default prior to the
expiration of the sixty (60) day period, the non-breaching party, at its sole
option, may terminate this Agreement upon written notice to the breaching party.
Termination of this Agreement shall become effective upon receipt of such second
notice by the breaching party.


                                      -8-


<PAGE>   9
        5.3 EFFECT OF TERMINATION. Upon expiration under Section 5.1 or
termination under Section 5.2, Collagen: (i) hereby grants to Technologies a
non-exclusive, non-transferable, royalty-free, perpetual, irrevocable,
world-wide, right and license (with the right to sublicense) to any
Manufacturing Improvements; and (ii) shall deliver to Technologies a copy of any
written materials embodying such Manufacturing Improvements as reasonably
necessary for Technologies to manufacture or have manufactured such Specified
Material or Product. For purposes of this Agreement, the term "Manufacturing
Improvements" shall mean any modifications, improvements, enhancements, and
other revisions to the manufacturing materials or processes, solely as related
to the Specified Material or Product that is the subject of this Section 5.3,
made by Collagen during the Term of this Agreement. Expiration or termination of
this Agreement pursuant to the terms and conditions set forth in this Agreement
shall not relieve Technologies of any payment obligations to Collagen, accruing
prior to or upon such expiration or termination.

        5.4 LIMITATION OF LIABILITY UPON TERMINATION. A PARTY SHALL NOT BE
LIABLE TO THE OTHER PARTY, OR ANY OF ITS EMPLOYEES, AGENTS, OR CUSTOMERS, FOR
DAMAGES OF ANY KIND, INCLUDING DIRECT, INDIRECT, SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES, ON ACCOUNT OF THE TERMINATION OR EXPIRATION OF THIS
AGREEMENT IN ACCORDANCE WITH THIS ARTICLE 5. EACH PARTY HEREBY WAIVES ANY RIGHTS
IT MAY HAVE TO RECEIVE ANY COMPENSATION OR REPARATIONS ON TERMINATION OR
EXPIRATION OF THIS AGREEMENT UNDER LAW OTHER THAN AS EXPRESSLY PROVIDED HEREIN.
NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY ON ACCOUNT OF TERMINATION OR
EXPIRATION OF THIS AGREEMENT FOR REIMBURSEMENT OR DAMAGES FOR THE LOSS OF
GOODWILL, PROSPECTIVE PROFITS OR ANTICIPATED INCOME, OR ON ACCOUNT OF ANY
EXPENDITURES, INVESTMENTS, LEASES OR COMMITMENTS MADE BY THE OTHER PARTY OR FOR
ANY OTHER REASON WHATSOEVER. EACH PARTY ACKNOWLEDGES THAT IT HAS NO EXPECTATIONS
AND HAS RECEIVED NO ASSURANCES FROM THE OTHER PARTY THAT ANY INVESTMENT BY IT IN
THE DISTRIBUTION, PROMOTION, OR SALE OF THE PRODUCTS, SPECIFIED MATERIALS AND
COLLAGEN MATERIALS WILL BE RECOVERED OR RECOUPED OR THAT IT WILL OBTAIN ANY
ANTICIPATED AMOUNT OF PROFITS BY VIRTUE OF THIS AGREEMENT. THE PARTIES
ACKNOWLEDGE THAT THIS SECTION HAS BEEN INCLUDED AS A MATERIAL INDUCEMENT FOR
THEM TO ENTER INTO THIS AGREEMENT AND THAT THEY WOULD NOT HAVE ENTERED INTO THIS
AGREEMENT BUT FOR THE LIMITATIONS OF LIABILITY AS SET FORTH HEREIN.

        5.5 SURVIVAL OF CERTAIN TERMS. The provisions of Sections 2.8, 3.6, 4.4,
5.3, 5.4, and 5.5, and Articles VI and VII shall survive the expiration or
termination of this Agreement for any reason. All other rights and obligations
of the parties shall cease upon expiration or termination of this Agreement.


                                      -9-


<PAGE>   10
                                   ARTICLE VI
                                 CONFIDENTIALITY

        The parties agree that Information that is proprietary or confidential
to: (i) Collagen prior to the Effective Date or (ii) to one party and provided
to the other party pursuant to or in furtherance of this Agreement after the
Effective Date shall be subject to and treated in accordance with Article VII of
the Separation Agreement.

                                   ARTICLE VII
                                  MISCELLANEOUS

        This Agreement shall be subject to the terms and provisions of Article
XI of the Separation Agreement, which are hereby incorporated into this
Agreement to the extent applicable.


                                      -10-


<PAGE>   11
        IN WITNESS WHEREOF, the parties hereto have caused this Collagen Supply
Agreement to be executed by their duly authorized representatives.

                                      COLLAGEN CORPORATION



  Dated:  March 5, 1998               By:  /s/ Gary S. Petersmeyer
          -------------                    -----------------------

                                      Name:  Gary S. Petersmeyer

                                      Title:  President and CEO



                                      COHESION TECHNOLOGIES, INC.



  Dated:  March 5, 1998               By:  /s/ David Foster
          -------------                    ----------------

                                      Name:  David Foster

                                      Title: CEO


                                      -11-


<PAGE>   12
                                    EXHIBIT A

                                  Direct Costs

Direct Costs shall include the following expense types incurred by the cost
centers directly involved in manufacturing the products or materials.

        Type of expenses or costs:
               [*]

        Cost centers:
               [*]

        Direct Costs shall specifically exclude the following types of costs 
        and expenses:
               [*]


<PAGE>   13
                     SCHEDULE OF MATERIAL SUPPLY AGREEMENTS



        Attached hereto is a list of the supply agreements for Existing Third
Party Products, as defined in the Collagen Supply Agreement effective as of
January 1, 1998 by and between Collagen Corporation and Collagen Technologies,
Inc.



COLLAGEN CORPORATION                       COHESION TECHNOLOGIES, INC.


By:  /s/ Gary S. Petersmeyer               By:  /s/ David Foster
   ------------------------------             -------------------------------
        (Signature)                               (Signature)

Name:  Gary S. Petersmeyer                 Name:  David Foster

Title:  President and CEO                  Title:  CEO

Date:  March 5, 1998                       Date:  March 5, 1998
       -------------                              -------------

Address:                                   Address:
        1850 Embarcadero Road                     2500 Faber Place
        Palo Alto, CA  94303                      Palo Alto, CA  94303