BIOSEARCH MEDICAL PRODUCTS, INC.

                                       TO

                                 Hydromer, Inc.

           CONTRACT FOR THE SALE OF THE PREMISES COMMONLY KNOWN AS 35
                   INDUSTRIAL PARKWAY, SOMERVILLE, N.J. 08876
                                 March 15, 1998
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Table of Contents:

                                                                            Page

SALE OF 35 INDUSTRIAL PARKWAY, SOMERVILLE, NJ................................  1
      1. AGREEMENT TO SELL:..................................................  1
      2. PURCHASE PRICE:.....................................................  1
      3. TITLE:..............................................................  2
      4. ESCROW AGENT AND DEPOSIT:...........................................  3
      5. TERMINATION OF AGREEMENT:...........................................  4
      6. PURCHASER'S INTENDED USE:...........................................  4
      7. PURCHASER'S CONTINGENCIES:..........................................  4
      8. CLOSING AND DELIVERY OF DOCUMENTS:..................................  6
      9. ADJUSTMENTS AT CLOSING:.............................................  7
      10. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER................  7
      10A. PRE-CLOSING COVENANTS OF SELLER.  ................................  9
      11. POSSESSION AND PRECLOSING ENTRY:................................... 10
      12. ASSESSMENTS:....................................................... 10
      13. REAL ESTATE BROKERAGE COMMISSION:.................................. 10
      14. RISK OF LOSS:...................................................... 10
      15. CONDEMNATION:...................................................... 11
      16. FLOOD HAZARD AREA:................................................. 11
      17. BOUNDARY LINES:.................................................... 11
      18. NOTICES:........................................................... 11
      19. ENTIRE AGREEMENT:.................................................. 11
      20. BINDING EFFECT:.................................................... 11
      21. GOVERNING LAW:..................................................... 11
      22. HEADINGS:.......................................................... 11
      23. SURVIVAL:.......................................................... 11
      24. RECORDING OF AGREEMENT:............................................ 12
      25. LIENS AGAINST THE PREMISES:........................................ 12
      26. LOAN OF DOCUMENTS:................................................. 12
      27. CALCULATION OF TIME PERIODS:....................................... 12
      28. DEFAULT BY PURCHASER/LIQUIDATED DAMAGES:........................... 12
      29. COUNTERPARTS:...................................................... 12
      LEGAL DESCRIPTION:..................................................... 14
                                                                            
Lease........................................................................ 15
                                                                            
Escrow Agreement............................................................. 22
<PAGE>

                  SALE OF 35 INDUSTRIAL PARKWAY, SOMERVILLE, NJ

      This Agreement of Sale made this 15th 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 Thousand Dollars ($800,000) and a 3 year lease back of approx 17,000 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                $   50,000

            (b) Balance to be paid at
closing of title by certified, bank,
cashier's, or attorneys' trust account
check or pursuant to Seller's wire
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SALE OF 35 INDUSTRIAL PARKWAY                                             Page-2
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instructions                                             $  750,000

            (c) A three year fully paid
lease of approx. 17,000 square feet,
which the parties value at $357,000.

                                                         $  357,000

                                Total Purchase Price     $1,157,000

      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 purchaser to the New Jersey Economic Development
Authority which purchaser will satisfy with part of the Purchase Price.

Subject to all other exceptions of record.

                  (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 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
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SALE OF 35 INDUSTRIAL PARKWAY                                             Page-3
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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.

            (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
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SALE OF 35 INDUSTRIAL PARKWAY                                             Page-4
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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 is
one of the attorneys for the Buyer but such fact shall not disqualify Escrow
Agent from representing the Seller in any dispute between the parties hereto.

            (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 the mixing
of chemicals used for, and the coating of medical/industrial devices 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.

      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:
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SALE OF 35 INDUSTRIAL PARKWAY                                             Page-5
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      (a) Purchaser obtaining a commitment (the "Commitment") from any bank
("the Lender") for a mortgage loan (the "Loan") in the amount of $600,000 with
interest at the prevailing rates for a prevailing year term. 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 the 33rd day or
this contingency is waived.

      (b) Environmental. Seller has delivered 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.). Seller has reviewed and
accepted this document, subject to a representation by Seller at closing that
there are no material changes.

      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 premisis, 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 suitable for Purchaser's use as the warehousing of fabric.

            (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 the
warehousing of fabric, 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. If such notice is not delivered
on the 30th day this condition is waived.

            (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. This indemnification
and hold harmless agreement extends to any loss occasioned to the premises. This
indemnification and hold harmless agreement extends to any loss
<PAGE>

SALE OF 35 INDUSTRIAL PARKWAY                                             Page-6
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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 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 May 15, 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. Seller acknowledges
agrees that since the Purchaser may be obtaining mortgage financing, the closing
will take place at the offices of Purchasers'
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SALE OF 35 INDUSTRIAL PARKWAY                                             Page-7
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attorneys, or such other location as is designated by Purchaser's lender. At the
closing, 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.

      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.
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SALE OF 35 INDUSTRIAL PARKWAY                                             Page-8
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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 forclosure. (Summit Bank v Biosearch Medical
Products, Inc. docket BER-L-10086-97 Bergan County, suit on contract; Summit
Bank v Biosearch Medical Products, Inc. docket F-18439-97 suit on Forclosue)

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, or other agreements affecting the operation of the premises except
as set forth in this Agreement with the exception of a Use and Occupancy Permit
that Seller has with its affiliate, Hydromer, Inc., which is terminable on
thirty (30) days notice. At the option of the Purchaser, Seller will assign such
Permit to Purchaser.

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
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SALE OF 35 INDUSTRIAL PARKWAY                                             Page-9
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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. 13:1K-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.

            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. 58:10-23.11b(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
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SALE OF 35 INDUSTRIAL PARKWAY                                            Page-10
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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.

      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.
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SALE OF 35 INDUSTRIAL PARKWAY                                            Page-11
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      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, 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.
<PAGE>

SALE OF 35 INDUSTRIAL PARKWAY                                            Page-12
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      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.

      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 has received 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/LIQUIDATED 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 $50,000. Accordingly, in the event of any default by Purchaser, Seller shall
be entitled to
<PAGE>

SALE OF 35 INDUSTRIAL PARKWAY                                            Page-13
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liquidated damages in the sum of $50,000. 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
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      IN WITNESS WHEREOF, the undersigned have set their hands and seals the day
and year first above written.


Biosearch Medical Products, Inc.

_________________________ Seller

Robert Keller, Vice President


Hydromer, Inc.

______________________ Purchaser

Ken Brice, Vice President

Date:___________________________
<PAGE>

SALE OF 35 INDUSTRIAL PARKWAY                                            Page-15
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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>

SALE OF 35 INDUSTRIAL PARKWAY                                            Page-16
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Schedule B1

LEASE

      THIS LEASE is made as of the _____ day of _____, 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. 17,000 sq. ft. in the east side of the building, commonly known as 35
Industrial Parkway, Somerville, NJ, the east side being identified as Schedule
B2 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 fifty seven thousand dollars ($357,000) 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 (herein the "Basic Rent").

                                    SECTION 2
                    ADDITIONAL RENT, TAXES, ASSESSMENTS, ETC.

      In addition to the Basic Rent provided in Section I hereof, Tenant will
pay 68% of any increase in real estate taxes over the year 1998 ("Additional
Rent"). Tenant will pay all utility bills that are metered and enter the
Premises. 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
paid by Landlord.

                                    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 as aforesaid;
<PAGE>

SALE OF 35 INDUSTRIAL PARKWAY                                            Page-17
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                  (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 short 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 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 of a Medical
Device manufacturing; or

            (C) assign, mortgage or pledge this Lease, in whole or in part, or
permit the assignment by operation of law or otherwise, or sublet the Premises
or any portion thereof, without the consent in writing of Landlord.

                                    SECTION 5
                                 QUIET ENJOYMENT
<PAGE>

SALE OF 35 INDUSTRIAL PARKWAY                                            Page-18
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      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
                                   TERMINATION

      After a period of 10 months, Tenant may terminate this lease with a two
month notice to Landlord. Landlord shall refund any unused rent at the rate of:

      1.    if termination is effective in months 13-24, $6,000 per month times
            the remaining months payable within 9 months.

      2.    if termination is effective in months 25-36, $8,000 per month times
            the remaining months payable within 3 months.

      Tenant's responsibility to vacate the premises at the termination of the
Lease subject to a two month extension, shall be deemed to be "of the essence"
of this Lease. Tenant shall have one option to extend the lease for two one
month periods at a rate of $8,750 per month. In the event that tenant does not
vacate the premises at the time of termination of this lease extension, landlord
shall be entitled to make an immediate application to a court of appropriate
jurisdiction and ask that the tenant be removed from the premises. The losing
party shall be responsible for payment of all attorneys' fees and cost of suit.

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

                                    SECTION 8
                              EFFECT OF DESTRUCTION

      If the Premises shall be destroyed or rendered untenantable by fire or
<PAGE>

SALE OF 35 INDUSTRIAL PARKWAY                                            Page-19
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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 Landlord shall refund the unused
portion of the Rent at:

      1.    if termination is effective in months 13-24, $6,000 per month times
            the remaining months payable within 9 months.

      2.    if termination is effective in months 25-36, $8,000 per month times
            the remaining months payable within 3 months.

                                    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.

                                   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. Tenant will keep the sidewalks
forming part of the Premises clean and free of obstructions, snow and ice.

                                   SECTION 11
                                  CONDEMNATION

      If the whole or any part of the Premises shall be acquired or condemned by
eminent domain for any public or quasi-public purpose or use, then this Lease
and the term and estate hereby granted shall forthwith cease and terminate as of
the date of
<PAGE>

SALE OF 35 INDUSTRIAL PARKWAY                                            Page-20
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vesting of title and Landlord shall refund any and all unused Rent at the rate:

      1.    if termination is effective in months 13-24, $6,000 per month times
            the remaining months payable within 9 months.

      2.    if termination is effective in months 25-36, $8,000 per month times
            the remaining months payable within 3 months.

                                   SECTION 12
                                  SUBORDINATION

      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 13
                                 INDEMNIFICATION

      Tenant agrees to indemnity 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.

                                   SECTION 14
                                   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
<PAGE>

SALE OF 35 INDUSTRIAL PARKWAY                                            Page-21
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the terms, covenants and conditions of this Lease to be performed by Landlord.

                                   SECTION 15
                                 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,
subject to the limitations set forth in Section 15 hereof.

                                   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.

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

ATTEST/WITNESS:                         LANDLORD

___________________________________     BY: _____________________________ (Seal)

ATTEST/WITNESS:                         TENANT

___________________________________     BY: _____________________________ (Seal)
<PAGE>

SALE OF 35 INDUSTRIAL PARKWAY                                            Page-22
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Schedule B2

Partition of premises into 17,000 sq ft leasehold.

******INSERT DRAWING HERE*****
<PAGE>

SALE OF 35 INDUSTRIAL PARKWAY                                            Page-23
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Schedule C

Escrow Agreement Between

                                    Smith, Stratton, Wise, Herher & Brennan

                                    Biosearch Medical Products

                                    Hydromer, Inc.
<PAGE>

SALE OF 35 INDUSTRIAL PARKWAY                                            Page-24
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                                ESCROW AGREEMENT

      In connection with a contract for the sale of real estate dated
___________, 1997 ("Agreement") entered into by and between BioSearch Medical
Products, Inc. of 35 Industrial Parkway, Somerville, New Jersey 08876, ("BMP")
and Hydromer, Inc., of 40 Industrial Parkway, Somerville, New Jersey
08876("Buyer"); BMP, Buyer (hereafter also referred to as the "Parties") and
Smith Stratton, Wise, Herher & Brennan, 600 College Road East, Princeton, New
Jersey 08540 (the "Escrow Agent") agree as follows:

1.    DEPOSIT

      Simultaneously with the execution of the Escrow Agreement, Buyer has
deposited fifty thousand dollars ($50,000) with the Escrow Agent Escrow Fund
pursuant to Section 2a of the Agreement.

2.    TERM

      This Escrow Agreement shall take effect on the date hereof, and remain in
effect until the closing or cancellation of the Agreement, and for such
additional time as may be required to resolve any dispute between Buyer and BMP
with the purpose of this Escrow Agreement. This Escrow Agreement shall terminate
upon the earlier or i) termination or cancellation of the Agreement without
dispute contemplated by this Escrow Agreement, or ii) delivery of the escrow
fund pursuant to the Agreement, the written direction of Buyer and BMP or a
court order, and the Escrow Agent shall thereupon be released from any further
obligation hereunder.

3.    PURPOSE OF ESCROW

      The Escrow Agent holds the Escrow Fund solely for the purpose described in
Section 4 of the Agreement.

4.    MISCELLANEOUS

      (a) Escrow Agent shall not be under any duty to give the escrowed Escrow
Fund any greater degree of care than it gives other similar property held in a
fiduciary capacity, and shall not be required to invest the funds in an interest
bearing account or in any other manner.

      (b) Escrow Agent may act in reliance upon any instrument or signature
believed to be genuine and may assume that any person purporting to give any
writing, notice, advice or instruction in connection with the provisions hereof
or of the Agreement has been duly authorized to do so.
<PAGE>

SALE OF 35 INDUSTRIAL PARKWAY                                            Page-25
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      (c) Escrow Agent may act relative hereto upon advice of counsel in
reference to any matter connected herewith, and shall be indemnified and held
harmless by the Parties and for any mistake of fact or error of judgment, or for
any acts or omissions, unless caused by its wilful misconduct or gross
negligence.

      (d) This Agreement sets forth exclusively Escrow Agent's duties with
respect to the Escrow Fund and no implied duties or obligations shall be read
into this Agreement against it.

      (e) Escrow Agent makes no representation as to the validity, value, or
genuineness, sufficiency, completeness or collectibility of the Escrow Fund
delivered to it.

      (f) Escrow Agent does not have and will not have any interest in the
Escrow Fund but is serving only as Escrow Agent and will have only possession
thereof. The Parties agree to indemnify it and hold it harmless from and against
all damages, losses, costs and expenses in connection with or arising out of its
duties as Escrow Agent hereunder.

      (g) In the event of any disagreement between any of the Parties resulting
in adverse claims or demands being made in connection with the subject matter of
this Agreement, or in the event that Escrow Agent should, in good faith, be in
doubt as to what action it should take hereunder, it may, at its option, refuse
to comply with any claims or demands on it, or refuse to take any other action
hereunder, so long as such disagreement continues or such doubt exists, and in
any such event, it shall not be or become liable in any way or to any person for
its failure or refusal to act, and it shall be entitled to continue so to
refrain from acting until the rights of the Parties shall have been fully and
finally adjudicated by a court of competent jurisdiction or all differences
shall have been fully and finally adjudicated by a court of competent
jurisdiction or all differences shall have been adjusted and all doubt resolved
by agreement among all of the interested persons.

      (h) This Escrow Agreement shall survive the release of the Escrow Fund
from escrow contemplated hereby.

      (i) This Agreement and the rights and obligations herein contained shall
be binding upon and inure to the benefit of the Parties, the Escrow Agent, and
their respective successors and assigns.

5.    LIABILITY
<PAGE>

SALE OF 35 INDUSTRIAL PARKWAY                                            Page-26
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      The Escrow Agent shall not, by reason of its execution of this Escrow
Agreement, assume any responsibility or liability for any transaction between
Buyer and BMP with respect to the Escrow Fund held by it in accordance with this
Escrow Agreement. The Escrow Agent shall not be responsible for any claims,
liabilities, losses, or damages of any party which may result from the Escrow
Agent's good faith performance hereunder, unless the Escrow Agent's performance
has been found to constitute gross negligence or willful misconduct.

6.    CONSENT TO REPRESENTATION

      Buyer understands and acknowledges the Escrow Agent provides and has
provided legal representation and counsel to BMP, Manfred F. Dyck, President and
Chairman of BMP, Ursula M. Dyck, Director of BMP, and Hydromer, Inc. and
affiliate of BMP, and that service as Escrow Agent hereunder does not constitute
legal representation of, or counsel to Buyer. Service as Escrow Agent hereunder
will not bar Escrow Agent from continuing its representation of such persons and
entities, including but not limited to representation in connection with the
Agreement, or otherwise in connection with this Escrow Agreement. Buyer hereby
consents to such representation.

7.    SUBSTITUTION OF ESCROW AGENT

      Any Escrow Agent serving hereunder may resign at any time upon 30 days'
prior notice to the Parties, whereupon the Parties shall appoint a successor. If
the Parties fail to appoint a successor Escrow Agent within thirty (30) days of
the date of resignation of the resigning Escrow Agent, the resigning Escrow
Agent shall appoint a new Escrow Agent. Upon delivery of the Escrow Fund in its
possession to the new Escrow Agent the former Escrow Agent shall have no further
obligation hereunder.

8.    AMENDMENTS

      This Escrow Agreement may be amended by written agreement of the Parties
and the Escrow Agent.

9.    ADDRESS

      All notices or other communications required or contemplated herein shall
be in writing, sent by certified or express mail, addressed as indicated in this
Escrow Agreement or as the same may be changed from time to time by notice
similarly given.

10.   ASSIGNMENT

      Except as provided in Section 7 above, neither this Escrow Agreement, nor
any
<PAGE>

SALE OF 35 INDUSTRIAL PARKWAY                                            Page-27
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rights, liabilities, or obligations hereunder may be assigned by the Escrow
Agent without the prior written consent of the Parties.

11.   CHOICE OF LAW.

      This Escrow Agreement shall be governed by and constructed in accordance
with the laws of the State of New Jersey.
<PAGE>

SALE OF 35 INDUSTRIAL PARKWAY                                            Page-28
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AGREED:

BIOSEARCH MEDICAL                               Hydromer, Inc.
PRODUCTS, INC.

By:_______________________                      By:________________________
      Robert Keller, V.P.                             Ken Brice, V.P.


SMITH, STRATTON,
WISE, HERHER & BRENNAN

By:_______________________
      Robert D. Frawley

                                     **END**