NON-DISCLOSURE AND CONFIDENTIALITY AGREEMENT


This  agreement  is  entered  into  as of  February  23,  1999,  between  Sulzer
Orthopedics Biologics Inc. ("SOBI") and BIOSYNTECH LTD. ("BIOSYNTECH"). Mutually
SOBI and BIOSYNTECH are referred to as "The Parties".

Whereas,  The Parties are willing to disclose  information and provide access to
material they regard as  confidential  business  information  (hereafter  called
"Company Information") to each other, and

Whereas,  The Parties will receive  Company  Information in their  evaluation of
possible future business relations and ongoing business, and

Now therefore, The Parties,  acknowledging mutual consideration and intending to
be legally bound, agree as follows:

1.   COMPANY INFORMATION

As used in this  agreement,  the  term  "Company  Information"  shall  mean  all
confidential or proprietary  information and proprietary  materials,  including,
but not limited to: trade secrets,  know-how, client lists, proposed trademarks,
patent applications,  formulations,  techniques,  processes,  inventions, ideas,
designs, formulae,  methodology, data, reports, proteins, biological substances,
chemical  substances  and  chemical  compounds,   including  the  compounds  and
substances  resulting  from a variation  of the  proportion  of their  component
parts, computer software, computer software source codes, machinery,  equipment,
all prior and future  developments,  enhancements and improvements to any of the
foregoing and information  regarding sources of supply,  business plans,  patent
positioning  and the  existence,  scope and  activities  regarding any research,
development, manufacturing, marketing or other projects of The Parties.

"Company  Information" shall include,  without limiting the preceding,  a sample
(Arthroscopic  Probe identified as ARTHRO-BST  /Mechanical  Tester identified as
MACH-1/ of  polymeric  compounds  resulting  from the  incorporation  of varying
proportions   of   component   parts,   each  such   compound   having   various
physico-chemical   properties,   identified  as  BST-GEL,  BST-CARGEL  or  other
trademarks of BIOSYNTECH and  bone-derived  growth factor  mixtures from Sulzer)
and related  proprietary  information  provided by  BIOSYNTECH  or Sulzer to the
other Party.

2.   DISCLOSURE OF COMPANY INFORMATION

The Parties shall not, except with the prior written consent of the other Party,
disclose to a third party, wholly or partly, Company Information disclosed by or
in any other  manner  obtained  from the other Party or from the material of the
other  Party to which  access is  granted,  on or after  they date  first  above
written .


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3.   USE OR SALE

The Parties shall use the Company  Information solely for the purpose of testing
and examining the Company  Information to evaluate the  possibility of executing
an agreement for the marketing,  sale and distribution of Company Information or
products  incorporating  Company  Information or other future business relations
between them.  The Parties shall not use the other Party's  Company  Information
for any other purpose. In particular,  but without limitation, The Parties shall
not use the other Party's Company Information for the direct or indirect benefit
of third parties or for consulting  purposes,  nor sell, lend,  exchange or draw
profits from the Company Information of the other Party, in whole or in part.

4.   REVERSE ENGINEERING

The  Parties  shall  not  make  use  of any  reverse  engineering  processes  or
techniques,  or other similar means, to obtain  additional  information from the
Company Information disclosed or otherwise obtained from the other Party or from
the material of the other Party to which access is granted, on or after the date
first above written.

5.   COPIES

The Parties  shall not make any  copies,  images or other  reproductions  of the
Company Information disclosed by or otherwise obtained from the other Party.

6.   PRECAUTIONS REGARDING THIRD PARTIES

The Parties shall hold the Company  Information  in strict  confidence and shall
take all  possible  precautions  to prevent the Company  Information  from being
disclosed or made available to third parties.

7.   PRECAUTIONS REGARDING EMPLOYEES

The  Parties  shall take every  possible  precaution  to ensure  that only their
employees,  contractors,  directors  and  officers who have a strict and genuine
need to know have access to the Company Information.

8.    LIMIT

The Parties' obligations under this agreement shall not apply to any information
required  by law,  regulation  or court  order  to be  disclosed  to  regulatory
authorities and other governmental bodies, or which The Parties can document was
available  to the public or known to The  Parties  prior to the date first above
written.  These  obligations  shall  cease  as  to  any  information  which  the
disclosing  Party can  document  thereafter  became or becomes  available to the
public otherwise than as a result of a disclosure by the disclosing Party or was
or is disclosed to the disclosing

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Party  by a party  unrelated  to the  disclosing  Party  that  does  not  have a
non-disclosure obligation with respect to it.

If Company Information  of the other Party is required to be  disclosed by law,
regulation  or  court  order to  regulatory  authorities  or other  governmental
bodies,  The Party must promptly  inform the other Party before  disclosing such
Company Information so that the other Party may have a reasonable opportunity to
contest such requirement.

9.    RETURN OF COMPANY INFORMATION

At any time, upon one Party's request,  the other Party shall promptly redeliver
to the first  Party the Company  Information  and all  materials  relating to or
involving Company  Information of the first Party (whether prepared by the party
or otherwise),  and will not retain any copies,  extracts or other reproductions
in whole or in part  regarding the Company  Information.  The redelivery of such
material  shall  not  relieve  The  Parties  of their  confidentiality  or other
obligations hereunder.

10.  TERMINATION

The present  agreement  may be  unilaterally  terminated  by either Party in the
event that the other Party  becomes  bankrupt or is judged to be  insolvent by a
court of law or if either  company makes any  assignment  for the benefit of its
creditors  generally.  It may  also be  terminated  by  written  consent  of The
Parties.

11.  SURVIVAl

Termination of the present agreement,  at any time and for any reason whatsoever
shall  not  extinguish  its  terms.  The  terms  of  this   Non-Disclosure   and
Confidentiality  Agreement  will  survive  for 5 years,  for the  benefit of The
Parties and their respective successors.

12.  ENTIRE AGREEMENT

This agreement,  including its Schedule, constitutes the entire agreement of The
Parties  relating to the subject  matter,  supersedes  all prior oral or written
understandings  or  agreements  regarding  that  subject  matter  and may not be
amended,  modified or cancelled except by a written  instrument  executed by The
Parties.

13.  APPLICABLE LAW AND VENUE

This  agreement  shall be governed by and construed in accordance  with the laws
applicable in the province of Quebec and the venue for any dispute  arising from
this agreement shall be the courts of competent  jurisdiction in the district of
Montreal, Quebec, Canada.

IN WITNESS  THEREFORE,  THE PARTIES have caused this agreement to be executed in
duplicate by their respective duly authorised representatives.

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Sulzer Orthopedics Biologics Inc.            BIOSYNTECH LTD.


by /s/ illegible                             by  /s/ illegible
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[name of representative and title]           [name of representative and title]


PROJECT DEVELOPMENT SUKMIST                  VICE PRESIDENT R&D


date            3/2/99                       date      3/1/99
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