<PAGE>   1
         CREATIVE BIOMOLECULES, INC. HAS OMITTED FROM THIS EXHIBIT 10.10 
PORTIONS OF THE AGREEMENT FOR WHICH CREATIVE BIOMOLECULES, INC. HAS REQUESTED 
CONFIDENTIAL TREATMENT FROM THE SECURITIES AND EXCHANGE COMMISSION. THE 
PORTIONS OF THE AGREEMENT FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED 
ARE MARKED WITH X'S IN BRACKETS AND SUCH CONFIDENTIAL PORTIONS HAVE BEEN FILED 
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 

                                                                  EXHIBIT 10.10


         MASTER RESTRUCTURING AGREEMENT, dated as of October 15, 1998, between
CREATIVE BIOMOLECULES, INC., a Delaware corporation ("CREATIVE"), and STRYKER
CORPORATION, a Michigan corporation ("STRYKER"),

                              W I T N E S S E T H :


         WHEREAS, Creative and Stryker are parties to a Second Amended and
Restated Research, Development and Supply Agreement, dated as of May 17, 1991,
as further amended to the date hereof (the "SECOND AMENDED AGREEMENT");

         WHEREAS, Creative and Stryker have been engaged in a dispute concerning
the ownership of certain patents and patent applications, which dispute is
currently the subject of an arbitration proceeding before the Commercial
Arbitration Tribunal of the American Arbitration Association (Case No.
13-133-00980-97, the "ARBITRATION");

         WHEREAS, Creative and Stryker have agreed to restructure certain terms
of their collaboration under the Second Amended Agreement and, in connection
therewith, have agreed to settle the disputed matters subject to the Arbitration
and have agreed that Creative will transfer Manufacturing Rights and certain
related assets and technology to Stryker, all on the terms and subject to the
conditions set forth herein and in the Related Agreements (as defined herein);
and

         WHEREAS, Creative and Stryker have agreed that this Agreement, together
with the Related Agreements, shall supersede and replace the Second Amended
Agreement in its entirety;

         NOW, THEREFORE in consideration of the foregoing and the mutual
covenants and agreements set forth herein and in the Related Agreements, the
parties hereto hereby agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

         Section 1.1 DEFINITION OF CERTAIN TERMS. The terms defined in this
SECTION 1.1, whenever used in this Agreement, shall have the respective meanings
indicated below for all purposes of this Agreement. All references herein to a
Section, Article, Exhibit or Schedule are to a Section, Article, Exhibit or
Schedule of or to this Agreement, unless otherwise indicated.

<PAGE>   2

         "AFFILIATE": of a specified Person means a Person that directly or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, such specified Person or a member of such specified
Person's immediate family. "CONTROL" (including the terms "CONTROLLED BY" and
"UNDER COMMON CONTROL WITH") means the ownership of fifty-one percent (51%) or
more of the voting common stock, partnership interests, joint venture interests
or other equity, as the case may be, of a Person.

         "AGREEMENT": means this Master Restructuring Agreement (including the
Exhibits and the Schedules), as the same from time to time may be amended or
supplemented.

         "APPLICABLE LAW": means any and all applicable provisions of any and
all (i) constitutions, treaties, statutes, laws (including the common law),
rules, regulations, ordinances, codes or orders of any Governmental Authority,
(ii) Governmental Approvals, and (iii) orders, decisions, injunctions,
judgments, awards and decrees of or agreements with any Governmental Authority.

         "ASSET PURCHASE AGREEMENT": means the agreement, dated as of the date
hereof, between Creative and Stryker Sales Corporation relating to the transfer
and sale of the Assets to Stryker Sales Corporation and the assumption of the
Assumed Liabilities by Stryker Sales Corporation.

         "ASSETS": has the meaning set forth in the Asset Purchase Agreement.

         "ASSIGNED AGREEMENTS": has the meaning set forth in the Asset Purchase
Agreement.

         "ASSIGNED PATENT RIGHTS": means the patents and patent applications
listed on Schedule 1 to the Creative License Agreement, and all worldwide
counterparts and registrations, continuations, divisions, reissues, extensions
or supplementary protection certificates, continuations-in-part or additions
(but only to the extent such continuations-in-part or additions claim inventions
disclosed as required by 35 U.S.C. ss.112 (CIPs) or the applicable laws
(additions) in the parent application thereof as listed in said Schedule 1) with
respect thereto, and all patents issuing therefrom.

         "ASSUMED LIABILITIES": has the meaning set forth in the Asset Purchase
Agreement.

         "BIOLOGICAL MATERIALS": means any biological materials, assays,
substances or reagents, including without limitation transformed or transfected
cells (including any

                                       2
<PAGE>   3

cell expressing an OP Product or an analog, mutation or heterodimer thereof
conceived, made, developed or reduced to practice as part of the Research
Project), cell lines, DNA sequences, vectors, host cells, proteins, antibodies
and any fragments or subcellular components thereof.

         "BONE DISEASE FIELD": means the prevention or treatment of
Osteoporosis, Osteomalacia and Paget's Disease other than (i) by the local
application of OP Products and OP Devices in an insoluble formulation directly
on bone or joint tissue for local, as opposed to general or systemic, effect and
(ii) the treatment of fractures regardless of whether they result from
Osteoporosis, Osteomalacia and Paget's Disease.

         "BOOKS AND RECORDS": has the meaning set forth in the Asset Purchase
Agreement.

         "CLOSING": has the meaning set forth in SECTION 5.1.

         "CLOSING DATE": has the meaning set forth in SECTION 5.1.

         "CONSENT": means any consent, approval, authorization, waiver, permit,
grant, franchise, concession, agreement, license, exemption or order of,
registration, certificate, declaration or filing with, or report or notice to,
any Person, including any Governmental Authority.

         "CREATIVE FIELD": means all uses and applications other than the
Stryker Field. The Creative Field includes, without limitation, the Bone Disease
Field.

         "CREATIVE INDEMNITEES": has the meaning set forth in SECTION 8.2.

         "CREATIVE LICENSE AGREEMENT": means the agreement, to be dated as of
the Closing Date, in the form attached hereto as Exhibit 4.7.

         "CREATIVE MANUFACTURING KNOW-HOW": means all inventions, know-how,
Biological Materials, designs, trade secrets, copyrights, processes, formulas,
techniques, discoveries, ideas and the like that, as of the Closing Date, are
owned by Creative or as to which Creative has acquired rights which it has the
right to license hereunder, that are necessary or useful in the manufacture of
OP Products or OP Devices.

         "CREATIVE ROYALTY BEARING OP PRODUCTS": means OP Products or devices
formulated from OP Products that are within issued or pending claims of the
Assigned Patent Rights as those claims exist on the Closing Date.

                                       3
<PAGE>   4

         "CREATIVE THRESHOLD AMOUNT": has the meaning set forth in SECTION 8.1.

         "EXCLUDED ASSETS": has the meaning set forth in the Asset Purchase
Agreement.

         "EXCLUDED LIABILITIES": has the meaning set forth in the Asset Purchase
Agreement.

         "FDA": means the United States Food and Drug Administration or any
successor thereto.

         "GOVERNMENTAL APPROVAL": means any Consent of any Governmental
Authority.

         "GOVERNMENTAL AUTHORITY": means any nation or government, any state or
other political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government (including any government authority, agency, department, board,
commission or instrumentality of the United States, any State of the United
States or any political subdivision thereof), or any tribunal or arbitrator(s)
of competent jurisdiction, or any self-regulatory organization.

         "HOPKINTON FACILITY": has the meaning provided in SECTION 6.2(c).

         "HSR ACT": means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.

         "HUMAN RESOURCES AGREEMENT": means the agreement, to be dated as of the
Closing Date, between Stryker Sales Corporation and Creative, in the form set
forth in Exhibit 4.16 hereof.

         "INCLUDE", "INCLUDES", "INCLUDED" and "INCLUDING": shall be construed
as if followed by the phrase "without being limited to".

         "INDEMNIFIED PARTY": has the meaning set forth in SECTION 8.3.

         "INDEMNIFYING PARTY": has the meaning set forth in SECTION 8.3.

         "KNOWLEDGE": an individual will be deemed to have "Knowledge" of a
particular fact or other matter if such individual is actually aware of such
fact or other matter. A Person (other than an individual) will be deemed to have
"Knowledge" of a particular fact or other matter if any individual who is
serving, or who has at any time served, as


                                       4
<PAGE>   5

a director or officer (or in any similar capacity) of such Person or as a senior
manager of such Person, and the plant manager and the individuals having primary
responsibility for environmental and health and safety and employee relations
matters at each facility, has, or at any time had, Knowledge of such fact or
other matter; provided, however, that in the case of an individual who is not an
officer or director, such individual's knowledge will only be attributed in his
or her area of responsibility.

         "LEASED REAL PROPERTY": has the meaning set forth in the Asset Purchase
Agreement.

         "LIENS" AND "PERMITTED LIENS": have the meanings set forth in the Asset
Purchase Agreement.

         "LOSSES": has the meaning set forth in SECTION 8.1.

         "MANUFACTURING OPERATIONS": has the meaning set forth in the Asset
Purchase Agreement.

         "NOTICE": has the meaning set forth in SECTION 9.3.

         "OP": means proteins (or the active sites thereof) or polypeptides or
combinations of proteins and polypeptides which produce an osteogenic effect.

         "OP DEVICES": means the combination of OP Products with suitably
biocompatible and biodegradable carriers.

         "OP PRODUCTS": means OP and polyclonal or monoclonal antibodies of OP
and specific inhibitors or inhibitory activities of the osteogenic effect of OP,
which inhibitors or inhibitory activities were found and identified as such in
the course of the Research Project.

         "PATENT ASSIGNMENT AGREEMENT": means the agreement, to be dated as of
the Closing Date, in the form attached hereto as Exhibit 4.5, pursuant to which
Creative assigns certain patent rights to Stryker.

         "PATENT RIGHTS LICENSED TO STRYKER": has the meaning set forth in
SECTION 4.6.

         "PERSON": means any natural person, firm, partnership, association,
corporation, company, limited liability company, trust, business trust,
Governmental Authority or other entity.

         "RELATED AGREEMENTS": means the Asset Purchase Agreement, the Creative
License Agreement, the Patent

                                       5

<PAGE>   6

Assignment Agreement, the Stryker License Agreement, the Human Resources
Agreement, the Releases and the Assumption Agreement.

         "RELEASES": has the meaning set forth in SECTION 4.4.

         "RESEARCH PROJECT": means the Research Project as defined in the Second
Amended Agreement.

         "ROYALTY PERIOD": means the period commencing with the Closing Date and
ending on the date on which there are no longer any issued or pending claims in
the Assigned Patent Rights; PROVIDED, HOWEVER, that the voluntary abandonment of
issued claims or pending claims (other than following rejection thereof by the
applicable patent office and the failure of reasonable efforts to overcome such
rejection) by either party without the prior written consent of the other shall
be disregarded for purposes of determining whether issued or pending claims
remain in the Assigned Patent Rights.

         "STRYKER FIELD": means the field of (i) treatment, repair or
replacement of bone and joint tissue, including, without limitation, meniscus
and articular cartilage and ligaments and tendons, but excluding the Bone
Disease Field, and (ii) treatment, repair or replacement of the tooth, dentin,
alveolar bone, cementum, enamel, gingiva (to the extent, but only to the extent,
the gingiva functions as part of the apparatus holding the tooth to the jaw)
and/or periodontal ligament, but excluding the treatment of Oral Ulcerations (as
defined below) or any other disease or disorder of the tissues of the mouth not
involving the tooth, dentin, bone (including alveolar bone), cementum, enamel,
gingiva (to the extent, but only to the extent, the gingiva functions as part of
the apparatus holding the tooth to the jaw), ligament (including the periodontal
ligament), tendon and/or cartilage.

     As used herein, "ORAL ULCERATIONS" means the formation of lesions on the
surface of skin lining the oral cavity caused by loss of tissue but does not
include Periodontal Disease (as defined below) or any other disease or disorder
involving the tooth, dentin, bone (including alveolar bone), cementum, enamel,
gingiva (to the extent, but only to the extent, the gingiva functions as part of
the apparatus holding the tooth to the jaw), ligament (including the periodontal
ligament), tendon and/or cartilage.

     As used herein, "PERIODONTAL DISEASE" means degeneration of the apparatus
holding the tooth to the jaw involving damage to any or all of the gingiva (to
the extent, but only to the extent, the gingiva functions as

                                       6


<PAGE>   7

part of the apparatus holding the tooth to the jaw), alveolar bone, cementum,
enamel and periodontal ligament.

         "STRYKER INDEMNITEES": has the meaning set forth in SECTION 8.1.

         "STRYKER LICENSE AGREEMENT": means the agreement, to be dated as of the
Closing Date, in the form attached hereto as Exhibit 4.6.

         "STRYKER MANUFACTURING KNOW-HOW": means all inventions, know-how,
Biological Materials, designs, trade secrets, copyrights, processes, formulas,
techniques, discoveries, ideas and the like that, as of the Closing Date, are
owned by Stryker or as to which Stryker has acquired rights which it has the
right to license hereunder, that are necessary or useful in the manufacture of
OP Products or OP Devices.

         "STRYKER ROYALTY BEARING OP PRODUCTS": means OP Products or OP Devices
that are within issued or pending claims of the Assigned Patent Rights or the
Patent Rights Licensed to Stryker as those claims exist on the Closing Date,
after amendment of certain claims in the Patent Rights Licensed to Stryker
pursuant to SECTION 4.9 hereof.

         "STRYKER THRESHOLD AMOUNT": has the meaning set forth in SECTION 8.2.


                                   ARTICLE II
                   REPRESENTATIONS AND WARRANTIES OF CREATIVE

                  Creative represents and warrants to Stryker as follows:

         Section 2.1 CORPORATE STATUS. (a) Creative is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Creative has full corporate power and authority to carry on the
Manufacturing Operations and to own or lease and to operate the properties and
assets of the Manufacturing Operations as and in the places where the
Manufacturing Operations are conducted and such properties and assets are owned,
leased or operated.

         (b) Creative is duly qualified or licensed to do business and is in
good standing in the Commonwealth of Massachusetts and the State of New
Hampshire.

         Section 2.2 AUTHORIZATION, ETC. Creative has the full legal right,
power and authority (i) to execute and deliver this Agreement and the Related
Agreements, and (ii) subject to obtaining the required Consents identified in

                                       7
<PAGE>   8
SCHEDULE 2.5 to this Agreement and in the Related Agreements, to perform fully
its obligations hereunder and thereunder, and to consummate the transactions
contemplated hereby and thereby. This Agreement and the Related Agreements, and
the consummation of the transactions contemplated hereby and thereby, have been
duly authorized by all requisite corporate (including board of directors and
shareholder) action of Creative. Creative has duly executed and delivered this
Agreement and the Related Agreements. Each of this Agreement and the Related
Agreements has been duly executed and delivered by Creative and is a legal,
valid and binding obligation of Creative, enforceable against it in accordance
with its terms, except as such enforceability may be limited by bankruptcy and
other similar laws and general principles of equity.

         Section 2.3 NO CONFLICTS, ETC. The execution, delivery and performance
by Creative of this Agreement and the Related Agreements, and the consummation
of the transactions contemplated hereby and thereby, upon the obtaining of the
required Consents do not and will not conflict with or result in a violation of
or a default under (with or without the giving of notice or the lapse of time or
both), or result in the acceleration of or give rise to any right of any other
party to terminate, modify or cancel, or result in the loss of any rights,
privileges, options or alternatives of Creative under, or result in the creation
of any Lien on any of the properties or assets of Creative (including the
Assets) under (i) the Restated Certificate of Incorporation, as amended, or
Restated By-Laws of Creative, (ii) any Applicable Law applicable to Creative or
any of its properties or assets (including the Assets), or (iii) any Contract or
other agreement or instrument applicable to Creative or any of its properties or
assets (including the Assets).

         Section 2.4 LITIGATION. There is no action, claim, suit or proceeding
pending, or to Creative's Knowledge threatened, by or against or affecting
Creative in connection with or relating to the transactions contemplated by this
Agreement and the Related Agreements or any action taken or to be taken in
connection herewith or the consummation of the transactions contemplated hereby
and thereby or that, if decided adversely, would impair Stryker's ability to use
the Assets.

         Section 2.5 CONSENTS. Except as referred to on SCHEDULE 2.5, no Consent
of any Governmental Authority having jurisdiction over Creative is required to
be obtained by Creative in order to authorize the execution and delivery by
Creative of this Agreement or any Related Agreement or the performance by
Creative of the terms hereof or thereof and the consummation of the transactions
contemplated hereby

                                       8
<PAGE>   9
or thereby except for filings and consents required pursuant to the HSR Act.

         Section 2.6 DISCLOSURE. No representation or warranty of Creative in
this Agreement or in any Related Agreement or in any certificate or instrument
delivered by Creative in accordance with the terms hereof or thereof contains
any untrue statement of a material fact or omits any statement of a material
fact necessary in order to make the statements contained herein or therein, in
light of the circumstances in which they were made, not misleading.


                                   ARTICLE III
                    REPRESENTATIONS AND WARRANTIES OF STRYKER

         Stryker represents and warrants to Creative as follows:

         Section 3.1 CORPORATE STATUS. Stryker is a corporation duly organized,
validly existing and in good standing under the laws of the State of Michigan.
Stryker has full corporate power and authority to carry on the Manufacturing
Operations and to own or lease and to operate the properties and assets of the
Manufacturing Operations as and in the places where the Manufacturing Operations
are conducted and such properties and assets are owned, leased or operated.

         (b) Stryker Sales Corporation is duly qualified or licensed to do
business and is in good standing in the Commonwealth of Massachusetts and the
State of New Hampshire.

         Section 3.2 AUTHORIZATION, ETC. Stryker has the corporate power and
authority to execute and deliver this Agreement and the Related Agreements, to
perform fully its obligations hereunder and thereunder, and to consummate the
transactions contemplated hereby and thereby. The execution and delivery by
Stryker of this Agreement and the Related Agreements, and the consummation of
the transactions contemplated hereby and thereby, have been duly authorized by
all requisite corporate action of Stryker. Stryker has duly executed and
delivered this Agreement and the Related Agreements. This Agreement and the
Related Agreements are legal, valid and binding obligations of Stryker,
enforceable against it in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy and other similar laws and general
principles of equity.

         Section 3.3 NO CONFLICTS, ETC. The execution, delivery and performance
by Stryker of this Agreement and the Related Agreements, and the consummation of
the transactions contemplated hereby and thereby, do not and

                                       9
<PAGE>   10

will not conflict with or result in a violation of or a default under (with or
without the giving of notice or the lapse of time or both), or result in the
acceleration of or give rise to any right of any other party to terminate,
modify or cancel, or result in the loss of any rights, privileges, options or
alternatives of Stryker under, or result in the creation of any Lien on any of
the properties or assets of Stryker under (i) the Restated Certificate of
Incorporation or By-Laws of Stryker, (ii) any Applicable Law applicable to
Stryker or any of its properties or assets, or (iii) any contract, agreement or
other instrument applicable to Stryker or any of its properties or assets.

         Section 3.4 LITIGATION. There is no action, claim, suit or proceeding
pending, or to Stryker's Knowledge threatened, by or against or affecting
Stryker in connection with or relating to the transactions contemplated by this
Agreement and the Related Agreements or any action taken or to be taken in
connection herewith or therewith or the consummation of the transactions
contemplated hereby and thereby.

         Section 3.5 CONSENTS. No Consent of any Governmental Authority having
jurisdiction over Stryker is required to be obtained by Stryker in order to
authorize the execution and delivery by Stryker of this Agreement or any Related
Agreement or the performance by Stryker of the terms hereof and thereof and the
consummation of the transactions contemplated hereby or thereby except for
filings and consents required pursuant to the HSR Act.

         Section 3.6 DISCLOSURE. No representation or warranty of Stryker in
this Agreement or in any Related Agreement or in any certificate or instrument
delivered by Stryker in accordance with the terms hereof or thereof contains any
untrue statement of a material fact or omits any statement of a material fact
necessary in order to make the statements contained herein or therein, in light
of the circumstances in which they were made, not misleading.


                                   ARTICLE IV
                                      TERMS

         Section 4.1 TERMINATION OF SECOND AMENDED AGREEMENT. Creative and
Stryker agree that the Second Amended Agreement shall be terminated effective as
of the Closing Date and that the provisions thereof shall cease to have any
effect as of the Closing Date, except that the assignment by Creative to Stryker
of the Present Patents and Applications and certain patents and applications
listed in Schedule I to the Amendment Agreement dated October 31, 1996 between
Creative and Stryker, which were prosecuted in Stryker's name during the period
from May 17, 1991 to

                                       10
<PAGE>   11
October 31, 1996 as described in Section 1.4 B of the Second Amended Agreement, 
and the license by Stryker to Creative of the inventions claimed in all of such 
patents and applications, pursuant to the Irrevocable License Agreement, dated 
May 17, 1991, as superseded by the Creative License Agreement executed pursuant 
to this Agreement, are hereby confirmed in all respects.

         Section 4.2 COMPLETION OF CURRENT SCOPE OF WORK AND WIND-DOWN OF
RESEARCH PROJECT. Creative and Stryker agree that the Current Scope[s] of Work
(as defined in the Second Amended Agreement), as most recently extended by an
amendment agreement dated April 30, 1998, shall be extended through, and
terminate as of, the close of business on the day immediately preceding the date
hereof, and Stryker shall continue to pay Creative for Creative's continued
performance of those certain Current Scope[s] of Work and certain other services
through the Closing Date, pursuant to the payment terms set forth in the
extended Current Scope[s] of Work approved by the parties by letter agreement
dated as of the date hereof. Creative shall deliver to Stryker within 30 days
after the Closing Date a final written report describing in reasonable detail
the results of the Research Project subsequent to the results reported under
date of September 25, 1998. Any inventions and improvements conceived, made,
developed or reduced to practice as part of the Current Scope[s] of Work will be
governed by the provisions of the Second Amended Agreement and any patent
applications and patents issuing therefrom disclosing such inventions and
improvements and all worldwide counterparts and registrations, continuations,
divisions, reissues, extensions or supplementary protection certificates,
continuations-in-part or additions (but only to the extent such
continuations-in-part or additions claim inventions disclosed as required by 35
U.S.C. ss.112 (CIPs) or the applicable laws (additions) in the parent
application thereof shall be deemed to be Assigned Patent Rights.

         Section 4.3 ADDITIONAL CREATIVE SERVICES. Creative and Stryker
acknowledge that they may enter into future agreements with respect to
additional services to be provided by Creative to Stryker after the Closing
Date. With respect to Stryker's PMA filing, Creative agrees that it shall
provide additional consulting services to Stryker, as may reasonably be
requested from time to time, at a rate of compensation consistent with industry
standards to be determined at the time such services are rendered; provided,
however, that Creative shall only be required to provide such services to the
extent that the same can be provided by persons employed by Creative at the time
such services are to be rendered. In addition, for the period from the Closing
Date until thirty (30) days after the Closing Date Creative shall reasonably
make available to Stryker employees remaining in Creative's process development
group


                                       11

<PAGE>   12
to discuss with Stryker the Creative Manufacturing Know-How, on reasonable
notice and at times that do not materially interfere with the performance of
their normal duties.

         Section 4.4 TERMINATION OF ARBITRATION. Creative and Stryker agree that
the Arbitration shall be terminated as of the Closing Date, each party to bear
its own costs and expenses, and that immediately following the Closing Date they
shall jointly notify the American Arbitration Association and the arbitrator,
the Hon. James F. Davis, of such fact. In connection therewith, Creative and
Stryker each agree to execute a release in favor of the other in the form of
Exhibits 4.4A and 4.4B attached hereto, respectively (the "RELEASES").

         Section 4.5 ASSIGNMENT OF PATENT RIGHTS TO STRYKER. Creative agrees to
execute and deliver to Stryker on the Closing Date the Patent Assignment
Agreement in the form of Exhibit 4.5 attached hereto in order to effectuate the
assignment to Stryker of Creative's entire right, title and interest in and to
the inventions and improvements claimed in the U.S., foreign and PCT
applications and patents issuing therefrom that are listed in Schedule A to the
Patent Assignment Agreement and all worldwide counterparts and registrations,
continuations, divisions, reissues, extensions or supplementary protection
certificates, continuations-in-part or additions (but only to the extent such
continuations-in-part or additions claim inventions disclosed as required by 35
U.S.C. ss.112 (CIPs) or the applicable laws (additions) in the parent
application thereof as listed in said Schedule A with respect thereto). On the
Closing Date Stryker will pay to Creative a sum equal to the total expense
incurred by Creative relating to the prosecution, but not to the preparation or
filing of the patent applications, or the applications for the patents listed on
Schedule A of the Patent Assignment Agreement.

         Section 4.6 LICENSE OF PATENT RIGHTS AND CREATIVE MANUFACTURING
KNOW-HOW TO STRYKER. Creative agrees to execute and deliver to Stryker on the
Closing Date the Stryker License Agreement which shall grant to Stryker (i) an
irrevocable, exclusive, worldwide license, with the unrestricted right to grant
sublicenses, to all of the U.S., foreign and PCT applications and patents
issuing therefrom that are listed in Schedule 1 to the Stryker License Agreement
and all worldwide counterparts and registrations, continuations, divisions,
reissues, extensions or supplementary protection certificates,
continuations-in-part or additions (but only to the extent such
continuations-in-part or additions claim inventions disclosed as required by 35
U.S.C. ss.112 (CIPs) or the applicable laws (additions) in the parent
application thereof as listed in said Schedule 1 with respect thereto) and all
patents issuing therefrom (the "PATENT RIGHTS LICENSED TO STRYKER"), solely for
the


                                       12
<PAGE>   13

manufacture, use, importation and sale of OP Products and OP Devices in the
Stryker Field, which grant shall be exclusive, even as to Creative, with respect
to the Stryker Field, and (ii) an irrevocable, non-exclusive, worldwide license,
with the unrestricted right to grant sublicenses, under all Creative
Manufacturing Know-How, solely for use (A) in the manufacture of OP Products and
OP Devices for use in the Stryker Field, (B) in the manufacture of OP Products
and OP Devices for Creative, and (C) in the manufacture of proteins or
polypeptides (or combinations of proteins or polypeptides) other than OP.
Notwithstanding the foregoing, Creative hereby retains for itself the right to
use OP Products and OP Devices as research and development tools for the
development of other products and devices for use in the Creative Field. Nothing
in this Agreement or in the Stryker License Agreement shall preclude Creative
from engaging in the development, production and sale of products and devices in
the Creative Field. If during the period commencing on the date hereof and
continuing for a period of three months thereafter Creative files any patent
applications with claims that cover any OP Product or OP Device with application
or use in the Stryker Field or any application with claims that cover any use,
formulation or method with application or use in the Stryker Field, or if
Creative subsequently amends any patent applications filed during such three
month period or filed at any time prior to the date hereof to include claims
that cover any OP Product or OP Device with application or use in the Stryker
Field or any claims that cover any use, formulation or method with application
or use in the Stryker Field, such patent applications and any resulting patents
shall be deemed to be Patent Rights Licensed to Stryker for the purposes of this
Agreement, and the parties shall execute any assignments, amendments to this
Agreement or the Related Agreements or other documents necessary to reflect such
fact.

         Section 4.7 LICENSE OF PATENT RIGHTS AND STRYKER MANUFACTURING KNOW-HOW
TO CREATIVE. Stryker agrees to execute and deliver to Creative on the Closing
Date the Creative License Agreement which shall grant to Creative (i) an
irrevocable, exclusive, worldwide license, with the unrestricted right to grant
sublicenses, to all of the Assigned Patent Rights for all uses and applications
of all inventions claimed therein, except for the manufacture, use, importation
and sale of OP Products and OP Devices for use in the Stryker Field, which grant
shall be exclusive, even as to Stryker, with respect to the Creative Field, and
(ii) an irrevocable, non-exclusive, worldwide license, with the unrestricted
right to grant sublicenses, under all Stryker Manufacturing Know-How, solely for
use (A) in the manufacture of OP, OP Products or products or devices formulated
with OP for use in the Creative Field, and (B) in the manufacture of proteins or
polypeptides (or combination of proteins or polypeptides) other than OP.
Notwithstanding

                                       13
<PAGE>   14
the foregoing, Stryker hereby retains for itself the right to use OP Products
and OP Devices as research and development tools for the development of other
products and devices for use in the Stryker Field. Nothing in this Agreement or
in the Creative License Agreement shall preclude Stryker from engaging in the
development, production and sale of products and devices in the Stryker Field.

         Section 4.8 FUTURE PATENTS. (a) Exclusive of any future patent rights
covered by SECTIONS 4.2 and 4.6, in the event a patent is issued to Creative in
the future, which patent is based upon an application not presently included in
the Assigned Patent Rights and the Patent Rights Licensed to Stryker, with
claims that cover any product or device with application or use in the Stryker
Field or any application with claims that cover any use, formulation or method
with application or use in the Stryker Field, at Stryker's request Creative will
discuss with Stryker the grant of a license to Stryker under such claims in the
Stryker Field. Any such license will be separate from the present licenses and
ownership rights, with separate terms and conditions. Creative has no obligation
to grant such a license and is free to decline to do so in its sole discretion.

         (b) In the event a patent is issued to Stryker in the future, which
patent is based upon an application not presently included in the Assigned
Patent Rights, with claims that cover any product or device with application or
use in the Creative Field or any application with claims that cover any use,
formulation or method with application or use in the Creative Field, at
Creative's request Stryker will discuss with Creative the grant of a license to
Creative under such claims in the Creative Field. Any such license will be
separate from the present licenses and ownership rights, with separate terms and
conditions. Stryker has no obligation to grant such a license and is free to
decline to do so in its sole discretion.

         Section 4.9 AMENDMENT OF CERTAIN PATENT APPLICATIONS. Creative shall,
within a reasonable time after the Closing Date, (i) file a divisional
application separating out claims that both parties agree pertain to the Stryker
Field contained in [XXXXX] (ii) file an amendment to claims [XXXXX] to clarify
that [XXXXX] and (iii) file an amendment to the claims in [XXXXX] such that they
do not cover the Stryker Field. In the event any patent issues from [XXXXX],
U.S. Serial Number 08/396,684 (Filed March 1, 1995), [XXXXX], U.S. Serial Number
08/271,556 (Filed July 7, 1994), or [XXXXX], U.S. Serial Number 08/643,763
(Filed May 6, 1996), that does not have a terminal disclaimer with respect to a
patent owned by Creative, then Creative will assign such patent to Stryker and
the parties

                                       14
<PAGE>   15

shall execute any assignments, amendments to this Agreement or the Related
Agreements or other documents necessary to reflect such fact. In the event that
any patent application owned by Creative is required to be terminally disclaimed
with respect to any patent assigned to Stryker pursuant to this SECTION 4.9,
then Stryker will reassign such patent to Creative and it will be treated as a
part of the Patent Rights Licensed to Stryker. In such a case the parties shall
execute any assignments, amendments to this Agreement or the Related Agreements
or other documents necessary to reflect such fact.

         Section 4.10 ENFORCEMENT OF PATENTS BY STRYKER. If any claims issue
from the patent applications identified as being part of cases [XXXXX] on
Schedule 1 to the Stryker License Agreement and all worldwide counterparts and
registrations, continuations, divisions, reissues, extensions or supplementary
protection certificates, continuations-in-part or additions (but only to the
extent such continuations-in-part or additions claim inventions disclosed as
required by 35 U.S.C. ss.112 (CIPs) or the applicable laws (additions) in the
parent application thereof) with respect thereto, and all patents issuing
therefrom which would be infringed by the manufacture, use, sale or import of
any product or device specifically for use or application in the Stryker Field,
to the fullest extent permitted by law Creative hereby grants to Stryker the
right to bring an infringement action, the right to obtain an injunction and the
right to collect damages under such claim(s) against any third party that is
manufacturing, using, selling or importing an infringing product specifically
for use or application in the Stryker Field. Creative shall not oppose joinder
as a party in such infringement action, provided that Stryker has taken all
reasonable practicable steps to pursue the infringement action without joining
Creative, and the Court or tribunal before which the infringement action is
pending has ruled that Creative is a necessary and indispensable party to such
action. Creative shall be entitled to representation by counsel of its choice in
any such action in which it has been joined as a party. Stryker agrees that it
will pay Creative for all reasonable costs, including without limitation
attorney's fees, incurred by Creative related to the infringement action.
Stryker agrees that it will not enter into any settlement agreement or consent
judgment or other like agreement relating to disposition of any infringement
action in which Creative has been joined as a party, in whole or in part,
without Creative's express prior written consent, which consent shall not be
unreasonably withheld. Nothing in this SECTION 4.10 shall constitute a waiver of
any of Creative's rights in such infringement action, including waiver of any
objections in discovery or at trial. Further, nothing in this SECTION 4.10

                                       15
<PAGE>   16

shall preclude Creative from asserting any claim or defense on its own behalf.

         Section 4.11 DEVELOPMENT AND COMMERCIALIZATION OF OP PRODUCTS AND OP
DEVICES. (a) Stryker shall continue to have sole responsibility for testing and
commercialization of OP Products and OP Devices in the Stryker Field. Stryker
agrees that it will employ such reasonable efforts as are necessary to
diligently pursue clinical testing of OP Products and OP Devices in the Stryker
Field and the filing of an application with the FDA and the regulatory
authorities in other major markets, to market the OP Products and OP Devices in
the Stryker Field in the United States and other major markets and to diligently
pursue commercial introduction upon approval to market from the FDA and the
regulatory authorities in other major markets.

         (b) In the event Stryker determines not to develop or market any OP
Product or OP Device in the Stryker Field in any market otherwise than based on
its assessment of the impact of sales in such market on sales in other markets,
Stryker shall notify Creative of such determination and shall negotiate in good
faith the grant of rights to Creative to sell such OP Product or OP Device in
such market.

         (c) If either party learns or otherwise becomes aware of the existence
of a "serious adverse event" (as defined in applicable FDA regulations) in
clinical trials or in the marketplace with respect to OP, any OP Product, any OP
Device or any device or product formulated with OP, such party shall notify the
other of the occurrence of such event within 24 hours after such party learns or
becomes aware of such event.

         Section 4.12 PATENT PROSECUTION. (a) Creative and Stryker agree that
the prosecution of all Assigned Patent Rights will be in Stryker's name and at
Stryker's expense.

         (b) Issues that arise in the course of the prosecution of any patent
applications described in subsection (a) above will be jointly decided by
Stryker and Creative.

         (c) Creative will maintain research records for all research pertaining
to the Assigned Patent Rights and reasonably related to regulatory filings of
Stryker and all Biological Materials transferred to Stryker, including the
design history file and the PMA, as are reasonable and customary for companies
in Creative's industry, and Creative will grant to Stryker and Stryker's
representatives such access to such research records as is reasonably necessary

                                       16
<PAGE>   17

for Stryker to protect its rights and prosecute patent rights, make submissions
to regulatory agencies and continue research commenced by Creative under the
Second Amended Agreement as set forth above, provided that any person given such
access shall execute an appropriate confidentiality agreement if requested to do
so by Creative.

         (d) Creative hereby agrees that Stryker will have the right to consult
with Creative on the prosecution of [XXXXX] and that Creative will give
substantial consideration to all input received from Stryker and will use all
reasonable efforts to obtain the broadest coverage practicable in the Stryker
Field under any patent issued on such applications.

         Section 4.13 ROYALTIES PAYABLE BY CREATIVE. For any and all of the
rights granted to it hereunder: (a) Creative hereby agrees to pay to Stryker, in
U.S. dollars, quarterly royalties (the "CREATIVE ROYALTY PAYMENTS") equal to (i)
[XXXXX] of Creative's Net Sales during the Royalty Period of Creative Royalty
Bearing OP Products or (ii) [XXXXX] of any royalties received by Creative from
any third party (a "CREATIVE THIRD PARTY SELLER") with respect to such third
party's Net Sales during the Royalty Period of Creative Royalty Bearing OP
Products; PROVIDED, HOWEVER, that the amount required to be paid by Creative to
Stryker shall in no event exceed [XXXXX] of such Creative Third Party Seller's
Net Sales of such products, and PROVIDED FURTHER, HOWEVER, that, in the event
that Creative grants rights to a Creative Third Party Seller as sublicensee or
otherwise under the Creative License Agreement, Stryker shall be entitled to
receive from Creative an amount not less than [XXXXX] of such Creative Third
Party Seller's Net Sales of such products, regardless of the amount of payments
that Creative is entitled to receive from such Creative Third Party Seller or
the characterization thereof. "NET SALES" for purposes of this SECTION 4.13
shall mean revenue derived by Creative or any sublicensee from the sale of
Creative Royalty Bearing OP Products (including, without limitation, sales by
Creative to any Creative Third Party Seller), less discounts allowed,
transportation charges, insurance, credits for claims or allowances, returns,
and taxes or other governmental charges levied on or measured by such sales and
included in the billing price, whether absorbed by Creative, third parties or
their customers. For Creative Royalty Bearing OP Products (collectively, the "OP
COMPONENT") that are sold in combination with another product, if both the OP
Component and such other product have established market prices, Net Sales shall
be calculated by multiplying Net Sales of the combination product by the
fraction A/(A+B) where A is the sales price of the OP Component in the
combination when sold separately and B is the sales price of the other product
in the combination when sold separately. If one or both of the OP


                                       17

<PAGE>   18
Component and the other product do not have an established market price, Net
Sales shall include only that portion of the sales price of the combination
product that is determined by good faith negotiation between Stryker and
Creative to represent the value of the OP Component. In such negotiation, the
parties shall take into account the list price of either the OP Component or the
other product, if there be one, or of similar products, and the market share of
the combination product. The allocation of the sales price of the combination
product shall be subject to renegotiation upon the request of either party at
two year intervals. The method of allocation of the sales price of a combination
product set forth in the four preceding sentences is referred to herein as the
"ALLOCATION METHOD." Notwithstanding anything in the foregoing to the contrary,
no payments shall be required to be made by Creative to Stryker in respect of
the[XXXXX]of Creative Royalty Payments, calculated in the manner provided
herein, that would otherwise be required to be paid hereunder.

         (b) Creative agrees that it will furnish to Stryker a copy of the
relevant provisions of any agreement with any Creative Third Party Seller
pursuant to which royalties or other payments may be received by Creative in
respect of any Creative Third Party Seller's sales of Creative Royalty Bearing
OP Products or in respect of rights granted to any Creative Third Party Seller
as sublicensee or otherwise under the Creative License Agreement. Creative
further agrees that Creative Royalty Payments shall be paid to Stryker quarterly
within thirty (30) days after the end of each calendar quarter and that Creative
will, within such 30-day period, furnish to Stryker a quarterly royalty report,
setting forth, on a country-by-country basis, Net Sales of each Creative Royalty
Bearing OP Product and the calculation of the Creative Royalty Payments due with
respect thereto. Creative further agrees, at Stryker's request and expense, to
cause its independent certified public accounting firm to deliver a certificate
to Stryker within ninety (90) days after the end of each annual audit period
setting forth the amount of Creative Royalty Payments that should have been paid
to Stryker for such year pursuant to this SECTION 4.13.

         (c) Creative shall keep complete and accurate records in sufficient
detail to enable the royalties payable hereunder to be determined. Upon the
written request of Stryker and not more than once in each calendar year,
Creative shall permit an independent certified public accounting firm of
nationally recognized standing selected by Stryker and reasonably acceptable to
Creative, at Stryker's expense, to have access during normal business hours to
such of the records of Creative as may be reasonably necessary to verify the
accuracy of the royalty reports hereunder for any year ending not more than
twenty-

                                       18
<PAGE>   19
four (24) months prior to the date of such request and no later than forty-five
(45) days after written request is made. The accounting firm shall disclose to
Stryker only whether the royalty reports are correct or incorrect and the
specific details concerning any discrepancies. No other information shall be
provided to Stryker.

         (d) If such accounting firm correctly concludes that additional
royalties were owed during such period, Creative shall pay the additional
royalties, together with interest accrued from the date such royalty was due at
an annual rate (based on a 360-day year) equal to the lesser of [XXXXX] or the
highest rate permitted by applicable law within thirty (30) days after the date
Stryker delivers to Creative such accounting firm's written report so
concluding. Creative shall receive a credit for any overpayment of royalties.
The fees charged by such accounting firm shall be paid by Stryker, except
Creative shall pay such fees in the event that the additional royalties owed by
Creative for the period in question vary from royalties paid by five percent
(5%) or greater.

         (e) Creative shall include in each agreement to sell Creative Royalty
Bearing OP Products and in each sublicense granted by it pursuant to the
Creative License Agreement a provision requiring the sublicensee to make reports
to Creative, to keep and maintain records of sales made pursuant to such
agreement or sublicense and to grant access to such records by Stryker's
independent accountant to the same extent required of Creative under this
Agreement. Upon the expiration of twenty-four (24) months following the end of
any year, the calculation of royalties payable with respect to such year shall
be binding and conclusive upon Stryker, and Creative and its sublicensees shall
be released from any liability or accountability with respect to royalties for
such year.

         (f) Stryker shall treat all financial information subject to review
under this SECTION 4.13 or under any sublicense or other agreement in accordance
with the confidentiality provisions of this Agreement, and shall, at Creative's
request, cause its accounting firm to enter into an acceptable confidentiality
agreement with Creative obligating it to retain all such financial information
in confidence pursuant to such confidentiality agreement.

         (g) If at any time, any jurisdiction in which Creative or any
sublicensee has Net Sales requires the withholding of income taxes or other
taxes imposed upon payments set forth in this SECTION 4.13, Creative shall make
such withholding payments as required and subtract such withholding payments
from the payments set forth in this SECTION 4.13, or if applicable, Stryker will
promptly reimburse Creative or its designee(s) for the amount of such


                                       19
<PAGE>   20
payments. Creative shall provide Stryker with documentation of such withholding
and payment in a manner that is satisfactory for purposes of such taxing
authority. Any withholdings paid when due hereunder shall be for the account of
Stryker and shall not be included in the calculation of Net Sales. Stryker shall
be liable for any deficiency, and any fine, assessment or penalty imposed by any
taxing authority for any deficiency in the amount of any such withholding or the
failure to make such withholding payment, which obligation shall survive the
termination of the Agreement for a time period no less than the applicable
statute of limitations. If Creative is required to pay any such deficiency, or
any fine, assessment or penalty for any such deficiency, Stryker shall promptly
reimburse Creative for such payments, which shall not be included in the
calculation of Net Sales.

         (h) For the purpose of computing Net Sales of Creative or any
sublicensees sold in a currency other than United States Dollars, such currency
shall be converted into United States Dollars in accordance with the commercial
rate of exchange for purchasing U.S. Dollars with such currency as reported by
Citibank, N.A. for the last business day of the calendar quarter for which the
relevant royalty payment is to be made.

         Section 4.14 ROYALTIES PAYABLE BY STRYKER. For any and all of the
rights granted to it hereunder: (a) Stryker shall pay to Creative, in U.S.
dollars, quarterly royalties ("STRYKER ROYALTY PAYMENTS") equal to (i) [XXXXX]
of Stryker's Net Sales during the Royalty Period of Stryker Royalty Bearing OP
Products, and (ii) [XXXXX]of any royalties and other licensing or sublicensing
payments received by Stryker from any third party (a "STRYKER THIRD PARTY
SELLER") with respect to the grant of a license or sublicense to such party or
with respect to such Stryker Third Party Seller's Net Sales during the Royalty
Period of Stryker Royalty Bearing OP Products. If Market Sales for any calendar
year exceed [XXXXX] the rate of the Stryker Royalty Payment for the entire year
shall be [XXXXX] and, if Stryker's Market Sales for any calendar year exceed
[XXXXX], the rate for the entire year shall be [XXXXX]. For each quarter in
which Stryker Royalty Payments are due, the royalty rate shall be calculated by
annualizing Stryker's Market Sales for such quarter based on a 365-day year, and
any royalty payment shortfall or royalty overpayment as a result of a higher or
lower rate, as the case may be, being applicable for the entire year shall be
paid with or deducted from the royalty payment for the fourth quarter of the
year, with any remaining amount of royalty overpayment being credited against
royalties due for the following quarter. If a Stryker Royalty Payment is due for
less than a full calendar year, either with respect to the beginning or end of
the Royalty Period, the royalty rate shall be


                                       20
<PAGE>   21
determined by annualizing Stryker's Market Sales for such period based on a
365-day year. "NET SALES" for purposes of this SECTION 4.14 shall mean revenue
derived by Stryker or any licensee or sublicensee from the sale of Stryker
Royalty Bearing OP Products (including, without limitation, sales by Stryker to
any Stryker Third Party Seller), less discounts allowed, transportation charges,
insurance, credits for claims or allowances, returns, and taxes or other
governmental charges levied on or measured by sales and included in the billing
price, whether absorbed by Stryker or the customer; PROVIDED, HOWEVER, that if
the Stryker Royalty Bearing OP Product is sold in combination with another
product, Net Sales shall be determined under the same methodology as the
Allocation Method. "MARKET Sales" for purposes of this SECTION 4.14 shall mean
(i) Stryker's Net Sales of Stryker Royalty Bearing OP Products to Persons other
than Stryker Third Party Sellers, plus (ii) the Net Sales of all Stryker Third
Party Sellers of Stryker Royalty Bearing OP Products.

         (b) Stryker agrees that it will furnish to Creative a copy of the
relevant provisions of any agreement with any Stryker Third Party Seller
pursuant to which royalties or other payments may be received by Stryker in
respect of sales of OP Products and OP Devices by a Stryker Third Party Seller
as licensee, sublicensee or otherwise. Stryker further agrees that Stryker
Royalty Payments shall be made to Creative quarterly within thirty (30) days
after the end of each calendar quarter and that Stryker will, within such 30-day
period, furnish to Creative a quarterly royalty report, setting forth, on a
country-by-country basis, Net Sales of each Stryker Royalty Bearing OP Product
and the calculation of the Stryker Royalty Payments due with respect thereto.
Stryker further agrees, at Creative's request and expense, to cause its
independent certified public accounting firm to deliver a certificate to
Creative within ninety (90) days after the end of each annual audit period
setting forth the amount of Stryker Royalty Payments that should have been made
to Creative for such year pursuant to this SECTION 4.14.

         (c) Stryker shall keep complete and accurate records in sufficient
detail to enable the royalties payable hereunder to be determined. Upon the
written request of Creative and not more than once in each calendar year,
Stryker shall permit an independent certified public accounting firm of
nationally recognized standing selected by Creative and reasonably acceptable to
Stryker, at Creative's expense, to have access during normal business hours to
such of the records of Stryker as may be reasonably necessary to verify the
accuracy of the royalty reports hereunder for any year ending not more than
twenty-four (24) months prior to the date of such request and no later than
forty-five (45) days after written request is made. The

                                       21
<PAGE>   22
accounting firm shall disclose to Creative only whether the royalty reports are
correct or incorrect and the specific details concerning any discrepancies. No
other information shall be provided to Creative.

         (d) If such accounting firm correctly concludes that additional
royalties were owed during such period, Stryker shall pay the additional
royalties, together with interest accrued from the date such royalty was due at
an annual rate (based on a 360-day year) equal to the lesser of [XXXXX] or the
highest rate permitted by applicable law within thirty (30) days after the date
Creative delivers to Stryker such accounting firm's written report so
concluding. Stryker shall receive a credit for any overpayment of royalties. The
fees charged by such accounting firm shall be paid by Creative, except Stryker
shall pay such fees in the event that the additional royalties owed by Stryker
for the period in question vary from royalties paid by five percent (5%) or
greater.

         (e) Stryker shall include in each agreement to sell Stryker Royalty
Bearing OP Products and in each license or sublicense granted by it relating to
OP Products and OP Devices a provision requiring the licensee or sublicensee to
make reports to Stryker, to keep and maintain records of sales made pursuant to
such agreement, license or sublicense and to grant access to such records by
Creative's independent accountant to the same extent required of Stryker under
this Agreement. Upon the expiration of twenty-four (24) months following the end
of any year, the calculation of royalties payable with respect to such year
shall be binding and conclusive upon Creative, and Stryker and its licensees and
sublicensees shall be released from any liability or accountability with respect
to royalties for such year.

         (f) Creative shall treat all financial information subject to review
under this SECTION 4.14 or under any license or sublicense agreement in
accordance with the confidentiality provisions of this Agreement, and shall, at
Stryker's request, cause its accounting firm to enter into an acceptable
confidentiality agreement with Stryker obligating it to retain all such
financial information in confidence pursuant to such confidentiality agreement.

         (g) If at any time, any jurisdiction in which Stryker or any licensee
or sublicensee has Net Sales requires the withholding of income taxes or other
taxes imposed upon payments set forth in this SECTION 4.14, Stryker shall make
such withholding payments as required and subtract such withholding payments
from the payments set forth in this SECTION 4.14, or if applicable, Creative
will promptly reimburse Stryker or its designee(s) for the amount of such
payments. Stryker shall provide Creative with


                                       22
<PAGE>   23

documentation of such withholding and payment in a manner that is satisfactory
for purposes of such taxing authority. Any withholdings paid when due hereunder
shall be for the account of Creative and shall not be included in the
calculation of Net Sales. Creative shall be liable for any deficiency, and any
fine, assessment or penalty imposed by any taxing authority for any deficiency
in the amount of any such withholding or the failure to make such withholding
payment, which obligation shall survive the termination of the Agreement for a
time period no less than the applicable statute of limitations. If Stryker is
required to pay any such deficiency, or any fine, assessment or penalty for any
such deficiency, Creative shall promptly reimburse Stryker for such payments,
which shall not be included in the calculation of Net Sales.

         (h) For the purpose of computing Stryker's Net Sales sold in a currency
other than United States Dollars, such currency shall be converted into United
States Dollars in accordance with the commercial rate of exchange for purchasing
U.S. Dollars with such currency as reported by Citibank, N.A. for the last
business day of the calendar quarter for which the relevant royalty payment is
to be made.

         Section 4.15 ASSET TRANSFER. Creative agrees to sell, assign and
transfer to Stryker, and Stryker agrees to purchase or acquire from Creative, on
the Closing Date Creative's leasehold interests in the Leased Real Property and
all of its right, title and interest in and to the Assets, in each case on the
terms and subject to the conditions set forth in the Asset Purchase Agreement.

         Section 4.16 HUMAN RESOURCES AGREEMENT. Creative and Stryker agree to
execute and deliver, the Human Resources Agreement.

         Section 4.17 FUTURE SUPPLY. Stryker agrees that, prior to June 30,
1999, Stryker shall manufacture for Creative 15 grams of OP-1, which OP-1 shall
be manufactured in accordance with specifications identical to those applied to
the OP-1 delivered to Stryker hereunder. Creative may decrease the amount of
OP-1 to be supplied hereunder on or before March 31, 1999. Such OP-1 shall be
delivered to Creative at a time or times selected by Creative during the period
from June 30, 1999 through and including December 31, 1999, and shall be sold to
Creative at a price of [XXXXX] per milligram.

         Section 4.18 FURTHER ASSURANCES. Each of Creative and Stryker agrees
that, following the Closing, it shall, from time to time, execute and deliver
such additional instruments, documents, conveyances, assignments, assumptions or
assurances and take such other actions as

                                       23
<PAGE>   24

shall be necessary, or otherwise reasonably requested by the other party, to
confirm and assure the rights and obligations provided for in this Agreement and
the Related Agreements and render effective the consummation of the transactions
contemplated hereby and thereby.

         Section 4.19 ADDITIONAL AGREEMENTS. (a) In order to assure the value to
Stryker of the assets purchased by Stryker pursuant to the Asset Purchase
Agreement and the patents assigned to Stryker and the licenses granted to
Stryker pursuant to this Agreement, Creative agrees that it will not, and will
cause its Affiliates not to, directly or indirectly (i) develop any product or
device specifically for use or application in the Stryker Field or manufacture,
import, market or sell any product or device for use or application in the
Stryker Field anywhere in the world during the Royalty Period, (ii) conduct
research for or with a third party with respect to any product or device
specifically for use or application in the Stryker Field anywhere in the world
during the Royalty Period, or (iii) grant a license or transfer any right, title
or interest of Creative to any third party under any patent or patent
application or under any know-how, including all inventions, know-how, designs,
trade secrets, copyrights, processes, formulas, techniques, discoveries, ideas
and the like, or with respect to any Biological Material owned or co-owned by
Creative or under which Creative has any right, title or interest giving such
third party licensee or transferee the right to make, import, use or sell any
product or device for use or application in the Stryker Field anywhere in the
world during the Royalty Period.

         (b) In order to assure the value to Creative of the licenses granted to
Creative pursuant to this Agreement, Stryker agrees that it will not, and will
cause its Affiliates not to, directly or indirectly (i) develop any product or
device specifically for use or application in the Creative Field or manufacture,
import, market or sell any product or device for use or application in the
Creative Field anywhere in the world during the Royalty Period, (ii) conduct
research for or with a third party with respect to any product or device
specifically for use or application in the Creative Field anywhere in the world
during the Royalty Period, or (iii) grant a license or transfer any right, title
or interest of Stryker to any third party under any patent or patent application
or under any know-how, including all inventions, know-how, designs, trade
secrets, copyrights, processes, formulas, techniques, discoveries, ideas and the
like, or with respect to any Biological Material owned or co-owned by Stryker or
under which Stryker has any right, title or interest giving such third party
licensee or transferee the right to make, import, use or sell any product or
device for use or application in the

                                       24
<PAGE>   25
Creative Field anywhere in the world during the Royalty Period.

         (c) In the event of an acquisition (as defined in subparagraph (d)
below) of either Creative or Stryker by another Person, the prohibitions of
subparagraphs (a) and (b), respectively, shall not apply to any activities of
such Person except to prohibit the use by such Person, directly or indirectly,
of any right, title or interest transferred or licensed pursuant to this
Agreement or the Related Agreements to the party being acquired or any other
intellectual property or know-how of the party being acquired or to utilize the
persons who were scientific employees of the party being acquired at or at any
time within the six months preceding the time of the acquisition to pursue the
activities prohibited by subparagraphs (a) or (b) hereof.

         (d) As used in subparagraph (c) above, an "acquisition" shall mean a
transaction or series of transactions, pursuant to which Creative or Stryker, as
the case may be, shall consolidate or merge with another entity, or convey or
sell to another entity all or substantially all of its stock, assets or
business, unless the stockholders of Creative or Stryker, as the case may be,
immediately prior to such transaction or series of transactions own a majority
of the equity securities of the merged, consolidated or acquiring entity after
the transaction or series of transactions.

         (e) In the event that either party hereto alleges that the other party
has violated the provisions of subsection (a)or (b) (as the case may be), such
party shall notify the alleged violator (the "ALLEGED VIOLATOR"). The Alleged
Violator may elect to cure the alleged violation. In addition, either party may
commence arbitration to determine whether there is a violation. Royalties
payable hereunder to the Alleged Violator will continue to accrue and be payable
during the first 90 days following notice of the alleged violation. After the
90th day, such royalties will cease to be payable (although royalties accruing
during the 90 days will be paid when due, even if the due date is after the 90
days) irrespective of whether arbitration has been commenced or its status until
resolution of the arbitration or cure. Any arbitration commenced pursuant to
this subsection (e) will be conducted in accordance with the provisions of
subsection (f) below. If the arbitrators finds no violation, back royalties will
be payable from the 90th day after the notice (when such royalties were
suspended) forward and shall be payable at such time as the arbitrator may
determine and the arbitrator may award such other remedy or remedies as
appropriate. If the arbitrator finds there was a violation, the arbitrator shall
determine damages resulting from the violation and an appropriate

                                       25

<PAGE>   26
remedy, commensurate with the nature and severity of the violation and the
damage to the other party, which may include injunctive relief, monetary damages
(against which any royalties withheld during the arbitration shall be applied),
or a reduction of royalties payable to the party which has been found to have
violated subsection (a) or (b) (as the case may be). Notwithstanding the
foregoing, in the event an alleged violation of a non-material nature results
from actions or activities of third parties which are beyond the reasonable
control of the Alleged Violator and once notified, the Alleged Violator uses its
reasonable efforts to cause the alleged violation to cease, then royalties shall
continue to be payable until resolution of the arbitration or cure. For purposes
of this SECTION 4.19, a violation will be deemed cured if the activities
constituting the violation cease on an ongoing basis, whether or not prior
violating activities are remedied. (For example, if sale of a particular product
is determined to be a violation, the violation will be deemed cured if the
violating party ceases to sell the product. Products previously sold to end
users do not have to be recovered, but products sold to distributors must be
recovered.)

         (f) Any arbitration commenced pursuant to subsection (e) above will be
conducted in accordance with the following rules:

                  (1) In the event that either party ( the "COMPLAINING PARTY")
         notifies the other (the "DEFENDING PARTY") in writing that it believes
         that the Defending Party is in violation of subsection (a) or (b) (as
         the case may be), and in that notification states with reasonable
         particularity the nature of such alleged violation, the parties will
         then cooperate in an expedited arbitration proceeding in which the
         merits of such allegation are determined.

                  (2) Immediately upon receipt of the above-mentioned
         notification, the parties will confer and seek to agree upon a single
         arbitrator who is available to hear and decide the merits of the
         alleged violation within the time frame set forth herein. If such
         agreement is not reached within five (5) days of said notification, the
         parties will, on the first business day following the expiration of
         such five (5) days, jointly request in writing, sent immediately by
         facsimile, that the New York office of the American Arbitration
         Association ("AAA") select an arbitrator within five (5) days who the
         AAA believes, in its sole discretion, is qualified and sufficiently
         available to decide the matters in issue and to do so within the time
         frame set forth herein. If either party fails to join in such joint
         request the other party shall have the

                                       26


<PAGE>   27
         right to make such request on behalf of both parties.

                  (3) Within ten (10) days following the designation of the
         arbitrator, the Complaining Party shall serve, by immediate facsimile,
         upon the Defending Party and the arbitrator, its factual and legal
         submission, together with all documents it wishes to be considered by
         the arbitrator, in support of its claim that the Defending Party is in
         violation of subsection (a) or (b).

                  (4) Within twenty (20) days following the service of the
         submission referred to in sub-subsection (3) above, the Defending Party
         shall serve, by immediate facsimile, upon the Complaining Party, its
         factual and legal submission together with all documents it wishes to
         be considered by the arbitrator, in opposition to the Complaining
         Party's allegations.

                  (5) Within five (5) days after service of the Defending
         Party's submission, either party may request from the other party any
         specifically identified document in the other party's possession which
         the requesting party believes is relevant and important for the
         arbitrator to consider in deciding the case. Within five (5) days of
         receiving such request, the other party shall either provide the
         requested documents or notify the requesting party and arbitrator that
         it opposes the request or some part thereof, in which case the
         arbitrator shall hold a conference call with the parties within five
         (5) days, hear the parties' arguments, and decide, under the general
         principles followed in AAA proceedings, within two (2) days, what
         documents must be provided. Within two (2) days after such decision by
         the arbitrator, all documents required to be produced shall be
         delivered to the requesting party. In the event of a party's failure to
         make timely production of documents pursuant to the arbitrator's
         ruling, the arbitrator shall have discretion to disallow the claim or
         defense of that party or to extend for an appropriate time the period
         in which that party shall be precluded from withholding royalties or
         other payments.

                  (6) Within ten (10) days after production of all documents by
         the parties as provided for herein, the arbitrator shall request, by
         facsimile to the parties, any further factual or legal information from
         the parties he/she believes to be necessary to decide the matters in
         issue. The parties shall provide such information to the arbitrator and
         to each other within

                                       27
<PAGE>   28
         ten (10) days of said request.

                  (7) Within thirty (30) days of the completion of document
         production, the arbitrator shall hold a hearing at a location of the
         arbitrator's choosing in New York City. The length of such hearing, the
         number of witnesses, the number of documents to be considered, and all
         other aspects of such hearing shall be determined by the arbitrator
         such that such hearing does not last for more than ten (10) days,
         including weekends.

                  (8) Within three (3) days after the close of the hearing,
         either party may submit to the arbitrator, with service upon the other,
         further written arguments based upon evidence heard at the hearing.

                  (9) Within thirty three (33) days after the close of the
         hearing, the arbitrator shall render her/his written decision, sent by
         facsimile to the parties, on all issues submitted for decision. The
         arbitrator shall state briefly the facts and reasons for such decision.

                  (10) Within ten (10) days after receiving the decision, either
         party may submit a request to the arbitrator, with service by facsimile
         on the other party, for reconsideration of the decision, setting forth
         all factual and legal arguments in support of such request. Within five
         (5) days thereafter, the other party may submit to the arbitrator, with
         service by facsimile on the other party, an opposition or other
         response to the request.

                  (11) Within fifteen (15) days after receipt of any such
         requests for reconsideration and responses thereto, the arbitrator
         shall render her/his decision as to such request and a final ruling on
         the merits of all claims heard in the arbitration. This decision will
         be final and binding upon the parties as to all issues decided in the
         arbitration, subject only to judicial review under the Federal
         Arbitration Act.

                  (12) The parties shall pay promptly and in equal shares all
         expenses of the arbitration as assessed by the arbitrator and/or the
         AAA.

                  (13) In addition to the specific powers and responsibilities
         set forth herein, the arbitrator shall have all powers and discretion
         customarily exercised in arbitrations under the Commercial Rules of the
         AAA.

                                       28
<PAGE>   29
         (g) If either party hereto wishes to have an interpretation as to
whether a particular action or proposed action would violate subsection (a) or
(b), such party may commence an arbitration to determine whether such action
would constitute a violation. Any arbitration commenced pursuant to this
subsection (g) will be conducted in accordance with the following rules:

                  (1) In the event a Complaining Party wishes to obtain a
         declaratory ruling in arbitration as to whether a particular action or
         proposed action would violate subsection (a) or (b), the Complaining
         Party shall notify the Defending Party and in that notification state
         with reasonable particularity the nature of the issue raised and the
         declaratory ruling sought, and the parties will then cooperate in an
         expedited arbitration proceeding in which the merits of such
         declaratory relief are determined.

                  (2) Immediately upon receipt of the above-mentioned
         notification, the parties will confer and seek to agree upon a single
         arbitrator who is available to hear and decide the merits of the
         declaratory relief requested within the time frame set forth herein. If
         such agreement is not reached within five (5) days of said
         notification, the parties will, on the first business day following the
         expiration of such five (5) days, jointly request in writing, sent
         immediately by facsimile, that the New York office of the AAA select an
         arbitrator within five (5) days who the AAA believes, in its sole
         discretion, is qualified and sufficiently available to decide the
         matters in issue and to do so within the time frame set forth herein.
         If either party fails to join in such joint request the other party
         shall have the right to make such request on behalf of both parties.

                  (3) Within ten (10) days following the designation of the
         arbitrator, the Complaining Party shall serve, by immediate facsimile,
         upon the Defending Party and the arbitrator, its factual and legal
         submission, together with all documents it wishes to be considered by
         the arbitrator, in support of the declaratory relief requested.

                  (4) Within fifteen (15) days following the service of the
         submission referred to in sub-subsection (3) above, the Defending Party
         shall serve, by immediate facsimile, upon the Complaining Party, its
         factual and legal submission together with all documents it wishes to
         be considered by the arbitrator, in opposition to the Complaining
         Party's allegations.

                                       29

<PAGE>   30
                  (5) Within ten (10) days of the service of the Defending
         Party's submission, the arbitrator shall hold a hearing at a location
         of the arbitrator's choosing in New York City. The length of such
         hearing, the number of witnesses, the number of documents to be
         considered, and all other aspects of such hearing shall be determined
         by the arbitrator such that such hearing does not last for more than
         ten (10) days, including weekends.

                  (6) Within three (3) days after the close of the hearing,
         either party may submit to the arbitrator, with service upon the other,
         further written arguments based upon evidence heard at the hearing.

                  (7) Within sixteen (16) days after the close of the hearing,
         the arbitrator shall render her/his written decision, sent by facsimile
         to the parties, on all issues submitted for decision. The arbitrator
         shall state briefly the facts and reasons for such decision.


                  (8) Within three (3) days after receiving the decision, either
         party may submit a request to the arbitrator, with service by facsimile
         on the other party, for reconsideration of the decision, setting forth
         all factual and legal arguments in support of such request. Within
         three (3) days thereafter, the other party may submit to the
         arbitrator, with service by facsimile on the other party, an opposition
         or other response to the request.

                  (9) Within ten (10) days after receipt of any such requests
         for reconsideration and responses thereto, the arbitrator shall render
         her/his decision as to such request and a final ruling on the merits of
         all claims heard in the arbitration. This decision will be final and
         binding upon the parties as to all issues decided in the arbitration,
         subject only to judicial review under the Federal Arbitration Act.

                  (10) The parties shall pay promptly and in equal shares all
         expenses of the arbitration as assessed by the arbitrator and/or the
         AAA.

                  (11) In addition to the specific powers and responsibilities
         set forth herein, the arbitrator shall have all powers and discretion
         customarily exercised in arbitrations under the Commercial Rules of the
         AAA.
                                       30
<PAGE>   31

         Section 4.20 CONFIDENTIALITY. As a result of entering into the Second
Amended Agreement, this Agreement and the Related Agreements and the performance
of the obligations hereunder and thereunder, each party has had, and will have
access to information of the other party which the other party considers to be
proprietary and confidential. Each party agrees that any and all such
information which it has obtained or will in the future obtain will be held
confidential and shall not be disclosed to any third party nor used by a party
at any time for its own individual advantage, without the prior written consent
of the other. Each party agrees that it shall take all reasonable steps
necessary to ensure the confidential treatment herein agreed to. Notwithstanding
the above, however, these obligations of confidential treatment shall not apply
to information which:

                  (i) is known to the receiving party at the time of disclosure
         and can be documented as such by contemporaneous written documents;

                  (ii) is in the public domain at the time of disclosure;

                  (iii) is required by statute, regulation, rule of any stock
         exchange or Governmental Authority or a court of law to be disclosed
         (except that, if a party is so required to disclose any confidential
         information, the other party hereto shall, prior to disclosure thereof,
         be given notice of such requirement and an opportunity to contest such
         disclosure);

                  (iv) after disclosure enters the public domain through no
         positive action or omission on the part of the receiving party; or

                  (v) lawfully comes into the possession of the receiving party
         from a source independent of the disclosing party.

                  Section 4.21 DRUG MASTER FILE. Stryker agrees to file a Drug
Master File with the FDA following the Closing, which Drug Master File shall
cover OP-1 as manufactured by Stryker. Stryker acknowledges that Creative shall
have access to review and inspect such Drug Master File as filed with the FDA,
and Creative agrees to provide notice to Stryker on each occasion that Creative
accesses the Drug Master File.

                  Section 4.22 REPRESENTATION. Except as set forth in SCHEDULE
4.22, Creative represents to Stryker that the Assigned Patent Rights and Patent
Rights Licensed to Stryker constitute all U.S., foreign and PCT applications and
patents in which Creative ever had any right, title and

                                       31
<PAGE>   32
interest that disclose inventions and improvements related to products or
devices that have use or application in the Stryker Field or related to any use,
formulation or method with application or use in the Stryker Field that have
been filed or issued as of the date hereof.

         Section 4.23 BEST EFFORTS. Each of Creative and Stryker shall use its
best efforts to cause all of the conditions to the obligations of the other to
consummate the transactions contemplated hereby and by the Related Agreements to
be met as soon as practicable after the date of this Agreement.


                                    ARTICLE V
                                   THE CLOSING

         Section 5.1 PLACE AND DATE. The closing of the transactions
contemplated by this Agreement and the Related Agreements (the "CLOSING") shall
take place on November 20, 1998, provided that all of the Government Approvals
and Consents referred to in subsections (c) and (g) of SECTION 6.2 have been
obtained or the requirement therefor has been waived and that all other closing
conditions set forth in Article VI have been satisfied or waived, at the offices
of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., located at One Financial
Center, Boston, Massachusetts, or such other time and place upon which the
parties may agree; provided, however, that the Closing may be postponed by
either Stryker or Creative in order to obtain any Consents required to be
obtained prior to the Closing. If the Closing is postponed, Stryker and Creative
will agree on the Purchase Price (as defined in SECTION 3.2 of the Asset
Purchase Agreement) and the Purchase Price will not be subject to change except
for adjustment as a result of the post closing audit pursuant to SECTION 3.5 of
the Asset Purchase Agreement. The day on which the Closing actually occurs is
herein sometimes referred to as the "CLOSING DATE".


                                   ARTICLE VI
                              CONDITIONS PRECEDENT

         Section 6.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The obligations of
the parties to consummate the transactions contemplated hereby and by the
Related Agreements shall be subject to the fulfillment on or prior to the
Closing Date of the following conditions:

         (a) NO INJUNCTION, ETC. Consummation of the transactions contemplated
hereby shall not have been restrained, enjoined or otherwise prohibited by any
Applicable Law, including any order, injunction, decree or

                                       32
<PAGE>   33

judgment of any court or other Governmental Authority. No court or other
Governmental Authority shall have determined that any Applicable Law makes
illegal the consummation of the transactions contemplated hereby, and no
proceeding with respect to the application of any such Applicable Law to such
effect shall be pending.

         (b) HSR ACT. The statutory waiting period during which consummation of
the transactions contemplated by this Agreement is prohibited by the HSR Act
shall have expired or been terminated.

         Section 6.2 CONDITIONS TO OBLIGATIONS OF STRYKER. The obligations of
Stryker to consummate the transactions contemplated hereby and by the Related
Agreements shall be subject to the fulfillment (or waiver by Stryker) on or
prior to the Closing Date of the following additional conditions:

         (a) REPRESENTATIONS; PERFORMANCE. Each of the representations and
warranties of Creative contained in this Agreement and any Related Agreement
that is qualified as to materiality shall be true and correct and each such
representation and warranty that is not so qualified shall be true and correct
in all material respects in each case on the date hereof and at and as of the
Closing Date as though made on and as of the Closing Date. Creative shall have
duly performed and complied in all material respects with all agreements and
conditions required by this Agreement and the Related Agreements to be performed
or complied with by it prior to or on the Closing Date. Creative shall have
delivered to Stryker a certificate, dated the Closing Date and signed by its
duly authorized officer, to the foregoing effect.

         (b) NO MATERIAL ADVERSE CHANGE. There shall not have occurred any
physical loss or damage to any material amount of the Assets (whether or not
covered by insurance).

         (c) CONSENTS. (i) Creative shall have obtained and shall have delivered
to Stryker copies of (A) all Governmental Approvals required to be obtained by
Creative in connection with the execution and delivery of this Agreement and the
Related Agreements and the consummation of the transactions contemplated hereby
and thereby, (B) all Consents necessary to be obtained in order to consummate
the sale and transfer of the Assets pursuant to the Asset Purchase Agreement and
the consummation of the other transactions contemplated hereby and listed on
SCHEDULE 2.5, and (C) the Consent of each landlord under each Lease (other than
the lease for Creative's facility in Hopkinton, Massachusetts), substantially in
the form of SCHEDULE 6.2 (c-1), and of the lessor under each Equipment Lease,
substantially in the form of SCHEDULE 6.2 (c-2),to the


                                       33
<PAGE>   34
assignment thereof to Stryker, and a statement from such landlord or lessor to
the effect that all rents and other charges under such landlord's or lessor's
Lease or Equipment Lease have been paid to the Closing Date and that Creative,
as tenant under such Lease or Equipment Lease, is not in default under any of
the provisions thereof, each such Governmental Approval and Consent to be
reasonably satisfactory to Stryker, and (ii) (A) Stryker shall have entered into
a lease with the landlord of Creative's facility at 35 South Street in
Hopkinton, Massachusetts (the "HOPKINTON FACILITY"), (B) such landlord shall
have released Creative for all future liability under the premises subject to
Stryker's lease at 35 South Street, Hopkinton, Massachusetts, (C) Creative's
lease for a portion of the premises at 35 South Street, Hopkinton, Massachusetts
(the "RETAINED FACILITY") shall continue in effect, and (D) Stryker and Creative
shall have entered into a mutually satisfactory Facility Sharing Agreement for
35 South Street, Hopkinton, Massachusetts providing for the sharing of
utilities, waste disposal and other common items and providing for Creative to
vacate a portion of the Retained Facility by April 30, 1999.

         (d) CORPORATE PROCEEDINGS. All corporate and other proceedings of
Creative in connection with this Agreement and the Related Agreements and the
transactions contemplated hereby and thereby, and all documents and instruments
incident thereto, shall be reasonably satisfactory in form and substance to
Stryker and its counsel, and Stryker and its counsel shall have received all
such documents and instruments, or copies thereof, certified if requested, as
may be reasonably requested.

         (e) TRANSFER DOCUMENTS. Creative shall have delivered to Stryker at the
Closing all documents, certificates and agreements necessary to transfer to
Stryker title to the Assets, free and clear of any and all Liens thereon, other
than Permitted Liens, which documents, certificates and agreements shall each be
in form and substance reasonably satisfactory to Stryker, including:

                  (i) a bill of sale, assignment and general conveyance, dated
         the Closing Date, with respect to the Assets;

                  (ii) assignments of all Assigned Agreements and any other
         agreements and instruments constituting Assets, dated the Closing Date,
         assigning to Stryker all of Creative's right, title and interest
         therein and thereto;

                  (iii) an assignment of lease other than the lease for
         Creative's facility in Hopkinton,

                                       34
<PAGE>   35
         Massachusetts, dated the Closing Date, with respect to each Lease; and

                  (iv) a non-disturbance agreement from each mortgagee of each
         parcel of Leased Real Property, other than the lease for Creative's
         facility in Hopkinton, Massachusetts, encumbered by one or more
         existing mortgages.

         (f) UCC RELEASES. Creative shall have obtained, releases of all
financing statements filed against Creative as a debtor under the Uniform
Commercial Code of any jurisdiction (other than any such financing statements
filed in respect of Permitted Liens) in respect of the Assets.

         (g) ENVIRONMENTAL MATTERS. Creative shall have: (i) complied with all
requirements of Creative under Environmental Laws to provide notice, obtain
Governmental Approval and take any other action necessary to lawfully consummate
the transactions contemplated by this Agreement and the Related Agreements, (ii)
obtained and provided Stryker with executed copies of all Consents which, by
law, Creative can obtain, and as are currently required under Environmental Laws
in connection with the transfer of the Manufacturing Operations and the Assets,
(iii) cooperated fully with Stryker and taken all actions necessary to
transfer/assign all transferable/assignable environmental Consents relating to
the Manufacturing Operations and the Assets to Stryker in its own name, and (iv)
cooperated fully with Stryker in Stryker's efforts to obtain all
non-transferable/non-assignable environmental Consents necessary to conduct the
Manufacturing Operations as currently conducted by Creative in compliance with
Environmental Laws in Stryker's own name ab initio. Stryker shall have received
Phase I environmental assessments of the Assets and the Hopkinton Facility and,
if commenced within two (2) weeks after the date of this Agreement or such later
date that Stryker's environmental consultant is provided access to the Assets
and the Hopkinton Facility for such purpose, Phase II reports prepared by
Stryker's environmental consultant, which reports shall be reasonably
satisfactory to Stryker. Stryker shall have obtained in Stryker's own name ab
initio all non-transferable/non-assignable environmental Consents necessary to
conduct the Manufacturing Operations as currently conducted by Creative.

         (h) OPINION OF COUNSEL TO CREATIVE. Stryker shall have received an
opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., counsel to
Creative, dated as of the Closing Date, in form and substance reasonably
satisfactory to Stryker and its counsel.

         Section 6.3 CONDITIONS TO OBLIGATIONS OF CREATIVE. The obligation of
Creative to consummate the

                                       35
<PAGE>   36
transactions contemplated hereby and by the Related Agreements shall be subject
to the fulfillment (or waiver by Creative), on or prior to the Closing Date, of
the following additional conditions:

         (a) REPRESENTATIONS; PERFORMANCE. Each of the representations and
warranties of Stryker contained in this Agreement and any Related Agreement that
is qualified as to materiality shall be true and correct and each such
representation and warranty that is not so qualified shall be true and correct
in all material respects in each case on the date hereof and at and as of the
Closing Date as though made on and as of the Closing Date. Stryker shall have
duly performed and complied in all material respects with all agreements and
conditions required by this Agreement and the Related Agreements to be performed
or complied with by it prior to or on the Closing Date. Stryker shall have
delivered to Creative a certificate, dated the Closing Date and signed by its
duly authorized officer, to the foregoing effect.

         (b) ASSUMPTION AGREEMENT. Creative shall have received from Stryker an
Assumption Agreement, in form and substance reasonably satisfactory to Creative,
under which Stryker shall have assumed the Assumed Liabilities.

         (c) CORPORATE PROCEEDINGS. All corporate proceedings of Stryker in
connection with this Agreement and the Related Agreements and the transactions
contemplated hereby and thereby, and all documents and instruments incident
thereto, shall be reasonably satisfactory in form and substance to Creative, and
its counsel, and Creative and its counsel shall have received all such documents
and instruments, or copies thereof, certified if requested, as may be reasonably
requested.

         (d) OPINION OF COUNSEL TO STRYKER. Creative shall have received an
opinion of Whitman Breed Abbott & Morgan LLP, counsel to Stryker, dated as of
the Closing Date, in form and substance reasonably satisfactory to Creative and
its counsel.

         (e) CONSENTS. Stryker shall have obtained and shall have delivered to
Creative copies of (i) all Governmental Approvals required to be obtained by
Stryker in connection with the execution and delivery of this Agreement and the
Related Agreements and the consummation of the transactions contemplated hereby
and thereby, (ii) all Consents necessary to be obtained by it in order to
consummate the sale and transfer of the Assets and the assumption of the Assumed
Liabilities pursuant to the Asset Purchase Agreement and the consummation of the
other transactions contemplated hereby and thereby.

                                       36
<PAGE>   37

                                   ARTICLE VII
                                   TERMINATION

         Section 7.1 TERMINATION. This Agreement may be terminated at any time
prior to the Closing Date:

         (a) by the written agreement of Stryker and Creative; or

         (b) by either Creative or Stryker by written notice to the other party
if the transactions contemplated hereby shall not have been consummated pursuant
hereto by 5:00 p.m. Eastern time on December 15, 1998, unless such failure has
been caused by the breach of this Agreement by the party seeking such
termination or such date shall be extended by the mutual written consent of
Creative and Stryker.

                  Section 7.2 EFFECT OF TERMINATION. If this Agreement is
terminated pursuant to the provisions of SECTION 7.1, then this Agreement shall
become void and have no effect, without any liability to any Person in respect
hereof or of the transactions contemplated hereby on the part of any party
hereto, or any of its directors, officers, employees, agents, consultants,
representatives, advisers, stockholders or Affiliates.


                                  ARTICLE VIII
                                 INDEMNIFICATION

         Section 8.1 BY CREATIVE. Subject to the terms and conditions of this
ARTICLE VIII, Creative covenants and agrees to defend, indemnify and hold
harmless Stryker and its officers, directors, employees, agents, advisers,
representatives and Affiliates (collectively, the "STRYKER INDEMNITEES"), from
and against, and pay or reimburse the Stryker Indemnitees for, any and all
claims, liabilities, obligations, losses, fines, expenses, costs, proceedings,
deficiencies or damages (whether absolute, accrued, conditional or otherwise and
whether or not resulting from third party claims), including reasonable
out-of-pocket expenses, court costs, expert witness fees and reasonable
attorneys' fees and expenses incurred in the investigation or defense of any of
the same or in asserting any of their respective rights hereunder (collectively,
"LOSSES"), resulting from or arising out of:

         (a) any misrepresentation or breach of any warranty of Creative made or
contained in this Agreement or any Related Agreement; PROVIDED, HOWEVER, that no
claim for indemnification under this clause (a) may be made after the first
anniversary of the Closing Date, except that any claim for misrepresentation or
breach of warranty under SECTIONS

                                       37
<PAGE>   38
4.4 and 4.7 of the Asset Purchase Agreement and SECTION 2.1(c) of the Human
Resources Agreement may be made no later than a date 30 days from and after the
expiration of the period of the applicable statute of limitations;

         (b) any failure of Creative to perform any covenant or agreement made
or contained in this Agreement or any Related Agreement or fulfill any
obligation in respect thereof;

         (c) any and all of the Excluded Liabilities;

         (d) directly or indirectly from the use by any Person of any OP Product
or OP Device manufactured by Creative and furnished to Stryker, which OP Product
or OP Device failed to meet specification at the time of delivery to Stryker; or

         (e) directly or indirectly from the use by any Person of an OP Product
manufactured by Stryker and furnished to Creative which OP Product met
specification at the time of delivery to Creative.

         Notwithstanding the foregoing, Creative shall not be liable for any
Losses resulting from or arising out of any misrepresentation or breach of any
warranty relating to Environmental Laws (or compliance therewith), including
without limitation, the provisions of SECTION 4.7 of the Asset Purchase
Agreement, or any Environmental Liabilities and Costs which, in either case,
relate to conditions or events not caused by Creative unless such Losses arise
from the assertion of a claim by a third party or governmental agency or from
remediation or corrective action otherwise required by law.

         Creative shall not be required to indemnify the Stryker Indemnitees
with respect to any claim or claims for indemnification resulting from or
arising out of matters described in this SECTION 8.1 unless and until the
aggregate amount of all claims against Creative exceeds [XXXXX] ("CREATIVE'S
THRESHOLD AMOUNT"), in which case Creative shall only be required to indemnify
the Stryker Indemnitees for the amount by which such claims exceed Creative's
Threshold Amount. Claims thereafter may be asserted regardless of amount.
Creative's maximum liability to the Stryker Indemnitees under this SECTION 8.1
shall not exceed [XXXXX]

         Section 8.2 BY STRYKER. Subject to the terms and conditions of this
ARTICLE VIII, Stryker covenants and agrees to defend, indemnify and hold
harmless Creative and its officers, directors, employees, agents, advisers,
representatives and Affiliates (collectively, the "CREATIVE INDEMNITEES"), from
and against, and pay or reimburse the

                                       38
<PAGE>   39

Creative Indemnitees for, any and all Losses resulting from or arising out of:

         (a) any misrepresentation or breach of warranty of Stryker made or
contained in this Agreement; PROVIDED, however, that no claim for
indemnification under this clause (a) may be made after the first anniversary of
the Closing Date;

         (b) any failure of Stryker to perform any covenant or agreement made or
contained in this Agreement or fulfill any other obligation in respect thereof;

         (c) the Assumed Liabilities (it being understood and agreed by the
parties hereto that the definition of Assumed Liabilities shall not, for all
purposes of this Agreement (including this SECTION 8.2), be in any way affected
or expanded by virtue of or by reason of any assignment agreement, assumption
agreement or consent agreement entered into on or after the Closing Date with
respect to any particular Assigned Agreement);

         (d) directly or indirectly from the use by any Person of any OP Product
manufactured by Stryker and furnished to Creative, which OP Product failed to
meet specification at the time of delivery to Creative; or

         (e) directly or indirectly from the use by any Person of any OP Product
or OP Device manufactured by Creative and furnished to Stryker which OP Product
or OP Device met specification at the time of delivery to Stryker.

         Stryker shall not be required to indemnify the Creative Indemnitees
with respect to any claim for indemnification resulting from or arising out of
matters described in this SECTION 8.2 unless and until the aggregate amount of
all claims against Stryker exceeds [XXXXX] ("STRYKER'S THRESHOLD AMOUNT"), in
which case Stryker shall only be required to indemnify the Creative Indemnitees
for the amount by which such claims exceed the Stryker's Threshold Amount.
Stryker's maximum liability to the Creative Indemnitees under this SECTION 8.2
shall not exceed [XXXXX]

         Section 8.3 INDEMNIFICATION PROCEDURES. In the case of any claim
asserted by a third party against a party entitled to indemnification under this
Agreement (the "INDEMNIFIED PARTY"), notice shall be given by the Indemnified
Party to the party required to provide indemnification (the "INDEMNIFYING
PARTY") as soon as practicable after such Indemnified Party has actual Knowledge
of any claim as to which indemnity may be sought, and the Indemnified Party
shall permit the Indemnifying Party (at the expense of such Indemnifying Party)
to assume
                                       39
<PAGE>   40
the defense of any third party claim or any litigation with a third party
resulting therefrom; PROVIDED, HOWEVER, that (a) the counsel for the
Indemnifying Party who shall conduct the defense of such claim or litigation
shall be subject to the approval of the Indemnified Party (which approval shall
not be unreasonably withheld or delayed), (b) the Indemnified Party may
participate in such defense at such Indemnified Party's expense (which shall not
be subject to reimbursement hereunder except as provided below), and (c) the
omission by any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its indemnification obligation under this
Agreement except and only to the extent that such Indemnifying Party is actually
and materially damaged as a result of such failure to give notice. Except with
the prior written consent of the Indemnified Party, no Indemnifying Party, in
the defense of any such claim or litigation, shall consent to entry of any
judgment or enter into any settlement that provides for injunctive or other
nonmonetary relief affecting the Indemnified Party or that does not include as
an unconditional term thereof the giving by each claimant or plaintiff to such
Indemnified Party of a general release from any and all liability with respect
to such claim or litigation. If the Indemnified Party shall in good faith
determine that the conduct of the defense of any claim subject to
indemnification hereunder or any proposed settlement of any such claim by the
Indemnifying Party might be expected to affect adversely the Indemnified Party's
tax liability or the ability of the Indemnified Party to conduct its business,
or that the Indemnified Party may have available to it one or more defenses or
counterclaims that are inconsistent with one or more of those that may be
available to the Indemnifying Party in respect of such claim or any litigation
relating thereto, the Indemnified Party shall have the right at all times to
take over and assume control over the defense, settlement, negotiations or
litigation relating to any such claim at the sole cost of the Indemnifying
Party; PROVIDED, HOWEVER, that if the Indemnified Party does so take over and
assume control, the Indemnified Party shall not settle such claim or litigation
without the prior written consent of the Indemnifying Party, such consent not to
be unreasonably withheld or delayed. If the Indemnifying Party does not accept
the defense of any matter as above provided, the Indemnified Party shall have
the full right to defend against any such claim or demand at the sole cost of
the Indemnifying Party and shall be entitled to settle or agree to pay in full
such claim or demand. In any event, the Indemnifying Party and the Indemnified
Party shall reasonably cooperate in the defense of any claim or litigation
subject to this ARTICLE VIII and the records of each shall be reasonably
available to the other with respect to such defense.

                                       40
<PAGE>   41

         Section 8.4 EXPIRATION OF REPRESENTATIONS AND WARRANTIES, ETC. All
representations and warranties contained in this Agreement and any Related
Agreement shall survive the Closing for a period of one (1) year; PROVIDED,
HOWEVER, that the representations and warranties stated in SECTIONS 4.4 and 4.7
of the Asset Purchase Agreement and SECTION 2.1(c) of the Human Resources
Agreement shall survive the Closing until 30 days after expiration of the
applicable statute of limitations. The right to indemnification or other remedy
based on such representations and warranties will not be affected by any
investigation conducted with respect to, or any knowledge acquired (or capable
of being acquired) at any time whether before or after the execution and
delivery of this Agreement or the Closing Date, with respect to, the accuracy or
inaccuracy of or compliance with any such representation or warranty. The waiver
of any condition based on the accuracy of any representation or warranty will
not affect the right to indemnification or other remedy based on such
representation or warranty.

         Section 8.5 EXCLUSIVE REMEDY. Absent fraud or criminal activity, the
indemnifications provided for in this ARTICLE VIII shall be the sole and
exclusive post-Closing remedies available to either party against the other
party for any claims under or based upon this Agreement.


                                   ARTICLE IX
                                  MISCELLANEOUS

         Section 9.1 EXPENSES. Except to the extent otherwise provided hereby,
Creative, on the one hand, and Stryker, on the other hand, shall bear their
respective expenses, costs and fees (including fees of any counsel, accountants
and other advisors) in connection with the transactions contemplated hereby,
including the preparation, execution and delivery of this Agreement and the
Related Agreements and compliance herewith and therewith, whether or not the
transactions contemplated hereby and thereby shall be consummated.

         Section 9.2 SEVERABILITY. If any provision of this Agreement or any
Related Agreement, including any phrase, sentence, clause, Section or subsection
is inoperative or unenforceable for any reason, such circumstances shall not
have the effect of rendering the provision in question inoperative or
unenforceable in any other case or circumstance, or of rendering any other
provision or provisions herein or therein contained invalid, inoperative, or
unenforceable to any extent whatsoever.

         Section 9.3 NOTICES. All notices, requests, demands, approvals,
consents, waivers and other
                                       41

<PAGE>   42
communications required or permitted to be given under this Agreement or any
Related Agreement (each, a "NOTICE") shall be in writing and shall be (a)
delivered personally, (b) mailed by first-class, registered or certified mail,
return receipt requested, postage prepaid, (c) sent by next-day or overnight
mail or delivery, or (d) sent by facsimile transmission, provided that the
original copy thereof also is sent by pre-paid, first class certified or
registered mail.

                           (i)      if to Stryker, to:

                                    Stryker Corporation
                                    2725 Fairfield Road
                                    Kalamazoo, MI  49003
                                    Attention:  John W. Brown
                                    Facsimile:  (616) 385-0030

                                    with a copy to:

                                    Whitman Breed Abbott & Morgan LLP
                                    200 Park Avenue
                                    New York, NY  10166
                                    Attention:  John H. Denne, Esq.
                                    Facsimile:  (212) 351-3131

                           (ii)     if to Creative, to:

                                    Creative Biomolecules, Inc.
                                    101 Huntington Avenue
                                    Suite 2400
                                    Boston, Massachusetts  02199
                                    Attention:  Michael M. Tarnow
                                    Facsimile:  (617) 912-2900

                                    with a copy to:

                                    Mintz, Levin, Cohn, Ferris,
                                      Glovsky and Popeo, P.C.
                                    One Financial Center
                                    Boston, Massachusetts  02210
                                    Attention:  Jeffrey M. Wiesen, Esq.
                                    Facsimile:  (617) 542-2241

or, in each case, at such other address as may be specified in a Notice to the
other party hereto. All Notices shall be deemed effective and given upon receipt
or refusal of receipt.

         Section 9.4 BOOKS AND RECORDS. From and after the Closing and until the
sixth anniversary thereof, (a) Creative agrees to grant to Stryker, upon
reasonable notice and during normal business hours, reasonable access to (and
the right to copy) any tax, accounting and other records

                                       42


<PAGE>   43
pertaining to the Manufacturing Operations and existing on the Closing Date that
are included in the Excluded Assets, for any reasonable purpose of Stryker, and
(b) Stryker agrees to grant to Creative, upon reasonable notice and during
normal business hours, reasonable access to (and the right to copy) any Books
and Records included in the Assets that pertain to the operation of the
Manufacturing Operations on or prior to the Closing Date for any Tax or
accounting matters involving Creative.

         Section 9.5 LIABILITY FOR TRANSFER TAXES. Creative and Stryker shall
each be responsible for and pay in a timely manner fifty percent (50%) of all
sales, use, value added, documentary, stamp, gross receipts, registration,
transfer, conveyance, excise, recording, license and other similar Taxes and
fees ("TRANSFER TAXES"), arising out of or in connection with or attributable to
the transactions effected pursuant to this Agreement. Each party hereto shall
prepare and timely file all Tax Returns required to be filed in respect of
Transfer Taxes that are the primary responsibility of such party under
applicable law; PROVIDED, HOWEVER, that such party's preparation of any such Tax
Returns shall be subject to the other party's approval, which approval shall not
be withheld or delayed unreasonably.

         Section 9.6 HEADINGS. The headings contained in this Agreement and the
Related Agreements are for purposes of convenience only and shall not affect the
meaning or interpretation hereof or thereof.

         Section 9.7 ENTIRE AGREEMENT. This Agreement and the Related Agreements
(including the Schedules and Exhibits hereto and thereto) constitute the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, between the parties with respect to the subject matter hereof and
thereof.

         Section 9.8 COUNTERPARTS. This Agreement and the Related Agreements may
be executed (including by facsimile transmission) with counterpart signature
pages or in several counterparts, each of which shall be deemed an original and
all of which shall together constitute one and the same instrument.

         Section 9.9 GOVERNING LAW; ARBITRATION. This Agreement and the Related
Agreements shall be governed in all respects, including as to validity,
interpretation and effect, by the internal laws of the State of Delaware without
giving effect to the conflict of laws rules thereof. At the request of either
party, any controversy or claim arising out of or relating to this Agreement
shall be settled by arbitration in New York, New York in accordance with the
then current Arbitration Rules of the American

                                       43
<PAGE>   44
Arbitration Association, and judgment upon the award rendered by the
Arbitrator(s) shall be binding on the parties and may be entered by either party
in the court or forum, state or federal, having jurisdiction.

         Section 9.10 BULK SALES. Stryker hereby waives compliance by Creative
with the provisions of the bulk sales laws of any jurisdiction. Creative shall
indemnify and hold harmless Stryker and the other Stryker Indemnitees from and
against any and all Losses resulting from or arising out of any noncompliance or
alleged noncompliance by Stryker or Creative with such bulk sales laws.

         Section 9.11 BINDING EFFECT. This Agreement and the Related Agreements
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.

         Section 9.12 ASSIGNMENT. This Agreement and the Related Agreements
shall not be assignable or otherwise transferable by either party hereto without
the prior written consent of the other party hereto; PROVIDED, HOWEVER, that
Creative may assign this Agreement to any Subsidiary or Affiliate, to any
successor by merger or consolidation or sale of all or substantially all of
Creative's assets, or to any Person to which Creative assigns the Creative
License Agreement, and Stryker may assign this Agreement to any Subsidiary or
Affiliate, to any successor by merger or consolidation or sale of all or
substantially all of Stryker's assets, or to any Person to which Stryker assigns
the Stryker License Agreement (it being understood and agreed that no such
assignment pursuant to this proviso shall relieve such party of any of its
obligations hereunder or under any Related Agreement). This Agreement shall be
binding upon and shall inure to the benefit of Creative and Stryker and their
respective successors and assigns.

         Section 9.13 NO THIRD PARTY BENEFICIARIES. Except as provided in
ARTICLE VIII with respect to indemnification of the Indemnified Parties
hereunder, nothing in this Agreement or any Related Agreement shall confer any
rights upon any Person other than the parties hereto and their respective
successors and permitted assigns.

         Section 9.14 AMENDMENT; WAIVERS, ETC. No discharge of this Agreement or
any Related Agreement, and no waiver hereunder or thereunder, shall be valid or
binding unless set forth in writing and duly executed by the party against whom
enforcement of the discharge or waiver is sought. Any such waiver shall
constitute a waiver only with respect to the specific matter described in such
writing and shall in no way impair the rights of the party granting such

                                       44
<PAGE>   45
waiver in any other respect or at any other time. Neither the waiver by any of
the parties hereto or thereto of a breach of or a default under any of the
provisions of this Agreement or any Related Agreement, nor the failure by any of
the parties, on one or more occasions, to enforce any of the provisions of this
Agreement or any Related Agreement or to exercise any right or privilege
hereunder or thereunder, shall be construed as a waiver of any other breach or
default of a similar nature, or as a waiver of any of such provisions, rights or
privileges hereunder or thereunder. No amendment or modification of this
Agreement or any Related Agreement shall be effective unless in a writing signed
by Stryker and Creative.


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


                                       45
<PAGE>   46



         IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.

                                               STRYKER CORPORATION



                                               By: /s/ JOHN W. Brown 
                                                   -----------------------------
                                                   Name: John W. Brown
                                                   Title: Chairman,
                                                          President and
                                                          Chief Executive
                                                          Officer


                                               By: /s/ James E. Kemler
                                                   ----------------------------
                                                   Name: James E. Kemler
                                                   Title: President,
                                                          Stryker Biotech


                                               CREATIVE BIOMOLECULES, INC.



                                               By: /s/ Michael M. Tarnow
                                                   -----------------------------
                                                   Name: Michael M. Tarnow
                                                   Title: President and
                                                          Chief Executive
                                                          Officer


                                               By: /s/ Brian H. Dovey
                                                   -----------------------------
                                                   Name: Brian H. Dovey
                                                   Title: Chairman of the
                                                          Board of Directors



                                       46