Document:

<PAGE>

                                                                    Exhibit 10.2

                                                                   50,000 SHARES
                               PACE MEDICAL, INC.

                      NON-QUALIFIED STOCK OPTION AGREEMENT

       NON-QUALIFIED STOCK OPTION AGREEMENT dated as of January 3, 2001 by and
between PACE MEDICAL, INC., a Massachusetts corporation (hereinafter called the
"Corporation"), and DERRICK EBDEN (hereinafter called the "Optionee").

       WHEREAS, the Corporation desires to afford the Optionee the opportunity
to purchase shares of its Common Stock;

       NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, the parties hereby mutually
covenant and agree as follows:

       1. GRANT OF OPTION. Subject to the terms and conditions set forth herein,
the Corporation grants to the Optionee the right and option to purchase from the
Corporation at a price of $0.32 per share up to but not exceeding in the
aggregate Fifty Thousand (50,000) shares of the Corporation's Common Stock, par
value $.01 per share (the "Common Stock").

       2. TERM. This Agreement and the option granted hereby shall terminate
five (5) years from the date hereof but shall be subject to earlier termination
as herein provided. Upon termination, the option granted hereby shall thereupon
expire and thereafter shall not be exercisable.

       3. EXERCISE OF OPTION. (a) The option hereby granted may be exercised at
any time or from time to time in whole or in part during the term hereof.

<PAGE>

            (b) Upon any one exercise of the option granted hereby, the Optionee
or his legal representative may purchase all or any part of the shares of Common
Stock as to which such option is then exercisable, provided however, that no
less than one hundred (100) shares may be purchased upon any one exercise of
such option unless the number of shares purchased at such time is the total
number of shares in respect of which such option is then exercisable.

            (c) The option hereby granted shall be exercised by the Optionee
delivering to the Clerk of the Corporation, from time to time, on any business
day, written notice specifying the number of shares the Optionee then desires to
purchase, together with cash or a certified or bank cashier's check to the order
of the Corporation for an amount in United States dollars equal to the option
price of such shares.

            (d) Upon each such exercise, a certificate representing the number
of shares purchased shall be issued in the name of the person or persons
exercising the option granted hereby and delivered to the Optionee.

       4. RESTRICTIONS ON ISSUANCE OF SHARES. (a) Notwithstanding the provisions
of Section 2 hereof, the Corporation may delay the issuance of shares covered by
the exercise of the option granted hereby and the delivery of a certificate for
such shares until

            (i) one of the following conditions shall be satisfied:

                 (A)  the shares with respect to which the option granted hereby
                      has been exercised are at the time of the issuance of such
                      shares effectively registered under the Securities Act of
                      1933 as now in force or hereafter amended; or

                                       2

<PAGE>

                 (B)  a no-action letter in respect to the issuance of such
                      shares shall have been obtained by the Corporation from
                      the Securities and Exchange Commission; or

                 (C)  counsel for the Corporation shall have given an opinion,
                      which opinion shall not be unreasonably conditioned or
                      withheld, that such shares are exempt from registration
                      under the Securities Act of 1933 as now in force or
                      hereafter amended; and

            (ii) one of the following conditions shall be satisfied:

                 (A)  approval shall have been obtained from such federal and
                      state governmental agencies, other than the Securities and
                      Exchange Commission, as may be required under any
                      applicable law, rule or regulation; or

                 (B)  counsel for the Corporation shall have given an opinion,
                      which opinion shall not be unreasonably conditioned or
                      withheld, that no such approval is required.

            (b) It is intended that all exercises of the option granted hereby
shall be effective, and the Corporation shall use its best efforts to bring
about compliance with the above conditions within a reasonable time, except that
the Corporation shall be under no obligation to cause a registration statement
or a post-effective amendment to any registration statement to be prepared at
its expense or to comply with Regulation A or any other exemption under the
Securities Act of 1933 as now in force or hereafter amended, solely for the
purpose of covering the issuance of shares in respect of which the option
granted hereby may be exercised. Therefore, the Optionee shall not be entitled
to any rights in any shares of Common Stock to be issued under the option
granted hereby until delivery of a certificate therefor by the Corporation.

       5. PURCHASE FOR INVESTMENT. (a) Unless the shares to be issued upon
exercise of the option granted hereby have been effectively registered under the
Securities Act of

                                       3

<PAGE>

1933 as now in force or hereafter amended, the Corporation shall be under no
obligation to issue any shares covered by such option unless the person who
exercises such option, in whole or in part, shall give a written representation
to the Corporation satisfactory in form and scope to the Corporation's counsel
and upon which, in the opinion of such counsel the Corporation may reasonably
rely, that he/she is acquiring the shares issued to him pursuant to such
exercise of such option as an investment and not with a view to, or for sale in
connection with, the distribution of any such shares.

            (b) The certificate for each share of Common Stock issued pursuant
to such exercise of the option granted hereby may bear a reference to the
investment representation made in accordance with this Section 5 and to the fact
that no registration statement has been filed with the Securities and Exchange
Commission in respect to such shares.

            (c) In the event that the Corporation shall nevertheless, deem it
necessary or desirable to register under the Securities Act of 1933 or other
applicable statutes any shares with respect to which the option granted hereby
shall have been exercised, or to qualify any such shares for exemption from the
Securities Act of 1933 or other applicable statutes, then the Corporation shall
take such action at its own expense and may require from the Optionee such
information in writing for use in any registration statement, prospectus,
preliminary prospectus or offering circular as is reasonably necessary for such
purpose and may require reasonable indemnity to the Corporation and its officers
and directors from such holder against all losses, claims, damages, and
liabilities arising from such use of the information so furnished and caused by
any untrue statement of any material fact therein or caused by the omission

                                       4

<PAGE>

to state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under which
they were made.

       6. TERMINATION OF BUSINESS RELATIONSHIP. (a) The option hereby granted
shall terminate and be of no force or effect in the event the Optionee ceases to
serve as an employee, consultant, officer or director of the Corporation or any
subsidiary of the Corporation (such service is described herein as maintaining
or being involved in a "Business Relationship with the Corporation") for any
reason, provided however, that in the event of the termination of the Optionee's
employment such option may be exercised (to the extent exercisable by the
Optionee at the date of such termination) at any time within three (3) months
after the date of such termination, but in any event not later than five (5)
years from the date hereof and provided further, however, that if the
termination of the Optionee's Business Relationship with the Corporation shall
result from the Optionee's death, such option may be exercised (to the extent
exercisable by the Optionee at the date of his death) by the Optionee's personal
representative or by the person or persons to whom such option shall have been
transferred by will or by the laws of descent and distribution, at any time
within three (3) months after the date of the Optionee's death but in any event
not later than five (5) years from the date hereof.

            (b) As used herein, the term "subsidiary" shall mean any present or
future corporation which would be a "subsidiary corporation" of the Corporation,
as the term is defined in Section 424 of the Internal Revenue Code of 1986.

            (c) Whenever the word "Optionee" is used in any provision of this
Agreement under circumstances where the provision should logically be construed
to

                                       5

<PAGE>

apply to the estate, personal representative, or beneficiary to whom this option
may be transferred by will or by the laws of descent and distribution, it shall
be deemed to include such person.

       7. ASSIGNABILITY. The option granted hereby is not assignable or
transferable by the Optionee otherwise than by will or the laws of descent and
distribution and is exercisable during the Optionee's lifetime only by him. No
assignment or transfer of such option, or of the right represented thereby,
whether voluntary or involuntary, by operation of law or otherwise, except by
will or the laws of descent and distribution, shall vest in the assignee or
transferee any interest or right herein whatsoever, and immediately upon any
attempt to assign or transfer such option the same shall terminate and be of no
force or effect.

       8. LIMITATION ON RIGHTS. (a) The Optionee shall not be deemed for any
purpose to be a shareholder of the Corporation with respect to any shares as to
which the option granted hereby shall not have been exercised and payment and
issuance made as herein provided. Nothing herein shall confer on the Optionee
any right to continue in the employ of the Corporation or its subsidiaries, nor
affect the right of the Corporation or its subsidiaries to terminate the
Optionee's employment at any time without liability to the Corporation.

            (b) The existence of the option granted hereby shall not affect in
any way the right or power of the Corporation or its shareholders to make or
authorize any or all adjustments, recapitalizations, reorganizations or other
changes in the Corporation's capital structure or its business, or any merger or
consolidation of the Corporation, or any issue of bonds, debentures, preferred
or prior preference stocks ahead of or

                                       6

<PAGE>

convertible into, or otherwise affecting the Common Stock or the rights thereof,
or the dissolution or liquidation of the Corporation, or any sale or transfer of
all or any part of its assets or business, or any other corporate act or
proceeding, whether of a similar character or otherwise.

       9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. (a) The shares with
respect to which the option granted hereby is granted are shares of the Common
Stock as constituted on the date of this Agreement, but if and whenever, prior
to the delivery by the Corporation of all of the shares of Common Stock with
respect to which this option is granted, the Corporation shall effect a
subdivision or consolidation of shares, or other capital readjustment, or the
payment of a stock dividend, or other increase or decrease of the number of
shares of Common Stock outstanding, without receiving compensation therefor in
money, services or property, then

            (i)  in the event of any increase in the number of such shares
                 outstanding, the number of shares of Common Stock then
                 remaining subject to option hereunder shall be proportionately
                 increased (except that any fraction of a share resulting from
                 any such adjustment shall be excluded from the operation of
                 this Agreement), and the cash consideration payable per share
                 shall be proportionately reduced, and

            (ii) in the event of a reduction in the number of such shares
                 outstanding, the number of shares of Common Stock then
                 remaining subject to option hereunder shall be proportionately
                 reduced (except that any fractional shares resulting from any
                 such adjustment shall be excluded from the operation of this
                 Agreement), and the cash consideration payable per share shall
                 be proportionately increased.

            (b) In the event of (i) any merger of one or more other corporations
with the Corporation or any consolidation of the Corporation and one or more
other corporations in which the Corporation is not the surviving or resulting
corporation or (ii)

                                       7

<PAGE>

any merger of one or more other corporations with the Corporation or any
consolidation of the Corporation and one or more other corporations in which the
Corporation shall be the surviving or resulting corporation and the then issued
and outstanding shares of Common Stock shall be converted into and/or exchanged
for cash and/or any securities of any other corporation, then, in any such case
and without the need for any further action by the Corporation or its
stockholders, this Agreement and the option granted hereby shall terminate as of
the effective time of the merger or consolidation and thereupon be of no force
or effect, and the holder hereof shall, at no additional cost, be entitled
solely to receive (at such effective time and otherwise in the form and manner
provided by the terms of the agreement of merger or consolidation) an amount of
the consideration payable under the terms of such agreement equal to the excess
of (i) the aggregate consideration (valued in accordance with the terms thereof)
to which the holder hereof would have been entitled pursuant to the terms of
such agreement if, immediately prior to such effective time, the holder hereof
had been the holder of record of a number of shares of Common Stock equal to the
aggregate number of shares of Common Stock as to which this Agreement was
exercisable immediately prior to such effective time over (ii) the aggregate
exercise price payable hereunder with respect to such number of shares. In the
event of any other merger or consolidation in which the Corporation is the
surviving or resulting corporation, this Agreement and the option granted hereby
shall remain in full force and effect in accordance with its terms. In the event
of any dissolution or liquidation of the Corporation, this Agreement and the
option granted hereby shall terminate and thereupon be of no force or effect.

                                       8

<PAGE>

       10. MISCELLANEOUS. (a) This Agreement is the sole and only agreement
between the parties hereto with respect to the subject matter hereof and may not
be modified or amended except by a subsequent written agreement duly executed by
the parties hereto.

            (b) The Corporation shall at all times during the term of the option
granted hereby reserve and keep available such number of shares of Common Stock
as will be sufficient to satisfy the requirements of such option.

            (c) Any notice which either party hereto may be required or
permitted to give to the other shall be in writing, and may be delivered
personally or by mail, postage prepaid, addressed as follows: To the Corporation
(Attention to the Clerk), at its principal office at 391 Totten Pond Road,
Waltham, Massachusetts 02451, or at such other address as the Corporation, by
notice to the Optionee, may designate in writing from time to time; and to the
Optionee at his address as the Optionee, by notice to the Clerk of the
Corporation, may designate in writing from time to time.

            (d) This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts.

                                       9

<PAGE>

       IN WITNESS WHEREOF, the Corporation has caused this Non-Qualified Stock
Option Agreement to be executed by its duly-authorized officer, and the Optionee
has hereunto set his hand and seal, all on the day and year first above written.

                                       PACE MEDICAL, INC.

                                       By
                                          --------------------------------------
                                          Ralph E. Hanson, President

                                          --------------------------------------
                                          Derrick Ebden--Optionee

                                       10<PAGE>

                                                                    Exhibit 10.3

                                                                   50,000 SHARES
                               PACE MEDICAL, INC.

                      NON-QUALIFIED STOCK OPTION AGREEMENT

       NON-QUALIFIED STOCK OPTION AGREEMENT dated as of January 3, 2001 by and
between PACE MEDICAL, INC., a Massachusetts corporation (hereinafter called the
"Corporation"), and GEORGE F. HARRINGTON (hereinafter called the "Optionee").

       WHEREAS, the Corporation desires to afford the Optionee the opportunity
to purchase shares of its Common Stock;

       NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, the parties hereby mutually
covenant and agree as follows:

       1. GRANT OF OPTION. Subject to the terms and conditions set forth herein,
the Corporation grants to the Optionee the right and option to purchase from the
Corporation at a price of $0.32 per share up to but not exceeding in the
aggregate Fifty Thousand (50,000) shares of the Corporation's Common Stock, par
value $.01 per share (the "Common Stock").

       2. TERM. This Agreement and the option granted hereby shall terminate
five (5) years from the date hereof but shall be subject to earlier termination
as herein provided. Upon termination, the option granted hereby shall thereupon
expire and thereafter shall not be exercisable.

       3. EXERCISE OF OPTION. (a) The option hereby granted may be exercised at
any time or from time to time in whole or in part during the term hereof.

<PAGE>

            (b) Upon any one exercise of the option granted hereby, the Optionee
or his legal representative may purchase all or any part of the shares of Common
Stock as to which such option is then exercisable, provided however, that no
less than one hundred (100) shares may be purchased upon any one exercise of
such option unless the number of shares purchased at such time is the total
number of shares in respect of which such option is then exercisable.

            (c) The option hereby granted shall be exercised by the Optionee
delivering to the Clerk of the Corporation, from time to time, on any business
day, written notice specifying the number of shares the Optionee then desires to
purchase, together with cash or a certified or bank cashier's check to the order
of the Corporation for an amount in United States dollars equal to the option
price of such shares.

            (d) Upon each such exercise, a certificate representing the number
of shares purchased shall be issued in the name of the person or persons
exercising the option granted hereby and delivered to the Optionee.

       4. RESTRICTIONS ON ISSUANCE OF SHARES. (a) Notwithstanding the provisions
of Section 2 hereof, the Corporation may delay the issuance of shares covered by
the exercise of the option granted hereby and the delivery of a certificate for
such shares until

            (i) one of the following conditions shall be satisfied:

                 (A)  the shares with respect to which the option granted hereby
                      has been exercised are at the time of the issuance of such
                      shares effectively registered under the Securities Act of
                      1933 as now in force or hereafter amended; or

                                       2

<PAGE>

                 (B)  a no-action letter in respect to the issuance of such
                      shares shall have been obtained by the Corporation from
                      the Securities and Exchange Commission; or

                 (C)  counsel for the Corporation shall have given an opinion,
                      which opinion shall not be unreasonably conditioned or
                      withheld, that such shares are exempt from registration
                      under the Securities Act of 1933 as now in force or
                      hereafter amended; and

            (ii) one of the following conditions shall be satisfied:

                 (A)  approval shall have been obtained from such federal and
                      state governmental agencies, other than the Securities and
                      Exchange Commission, as may be required under any
                      applicable law, rule or regulation; or

                 (B)  counsel for the Corporation shall have given an opinion,
                      which opinion shall not be unreasonably conditioned or
                      withheld, that no such approval is required.

            (b) It is intended that all exercises of the option granted hereby
shall be effective, and the Corporation shall use its best efforts to bring
about compliance with the above conditions within a reasonable time, except that
the Corporation shall be under no obligation to cause a registration statement
or a post-effective amendment to any registration statement to be prepared at
its expense or to comply with Regulation A or any other exemption under the
Securities Act of 1933 as now in force or hereafter amended, solely for the
purpose of covering the issuance of shares in respect of which the option
granted hereby may be exercised. Therefore, the Optionee shall not be entitled
to any rights in any shares of Common Stock to be issued under the option
granted hereby until delivery of a certificate therefor by the Corporation.

       5. PURCHASE FOR INVESTMENT. (a) Unless the shares to be issued upon
exercise of the option granted hereby have been effectively registered under the
Securities Act of

                                        3

<PAGE>

1933 as now in force or hereafter amended, the Corporation shall be under no
obligation to issue any shares covered by such option unless the person who
exercises such option, in whole or in part, shall give a written representation
to the Corporation satisfactory in form and scope to the Corporation's counsel
and upon which, in the opinion of such counsel the Corporation may reasonably
rely, that he/she is acquiring the shares issued to him pursuant to such
exercise of such option as an investment and not with a view to, or for sale in
connection with, the distribution of any such shares.

            (b) The certificate for each share of Common Stock issued pursuant
to such exercise of the option granted hereby may bear a reference to the
investment representation made in accordance with this Section 5 and to the fact
that no registration statement has been filed with the Securities and Exchange
Commission in respect to such shares.

            (c) In the event that the Corporation shall nevertheless, deem it
necessary or desirable to register under the Securities Act of 1933 or other
applicable statutes any shares with respect to which the option granted hereby
shall have been exercised, or to qualify any such shares for exemption from the
Securities Act of 1933 or other applicable statutes, then the Corporation shall
take such action at its own expense and may require from the Optionee such
information in writing for use in any registration statement, prospectus,
preliminary prospectus or offering circular as is reasonably necessary for such
purpose and may require reasonable indemnity to the Corporation and its officers
and directors from such holder against all losses, claims, damages, and
liabilities arising from such use of the information so furnished and caused by
any untrue statement of any material fact therein or caused by the omission

                                       4

<PAGE>

to state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under which
they were made.

       6. TERMINATION OF BUSINESS RELATIONSHIP. (a) The option hereby granted
shall terminate and be of no force or effect in the event the Optionee ceases to
serve as an employee, consultant, officer or director of the Corporation or any
subsidiary of the Corporation (such service is described herein as maintaining
or being involved in a "Business Relationship with the Corporation") for any
reason, provided however, that in the event of the termination of the Optionee's
employment such option may be exercised (to the extent exercisable by the
Optionee at the date of such termination) at any time within three (3) months
after the date of such termination, but in any event not later than five (5)
years from the date hereof and provided further, however, that if the
termination of the Optionee's Business Relationship with the Corporation shall
result from the Optionee's death, such option may be exercised (to the extent
exercisable by the Optionee at the date of his death) by the Optionee's personal
representative or by the person or persons to whom such option shall have been
transferred by will or by the laws of descent and distribution, at any time
within three (3) months after the date of the Optionee's death but in any event
not later than five (5) years from the date hereof.

            (b) As used herein, the term "subsidiary" shall mean any present or
future corporation which would be a "subsidiary corporation" of the Corporation,
as the term is defined in Section 424 of the Internal Revenue Code of 1986.

            (c) Whenever the word "Optionee" is used in any provision of this
Agreement under circumstances where the provision should logically be construed
to

                                       5

<PAGE>

apply to the estate, personal representative, or beneficiary to whom this option
may be transferred by will or by the laws of descent and distribution, it shall
be deemed to include such person.

       7. ASSIGNABILITY. The option granted hereby is not assignable or
transferable by the Optionee otherwise than by will or the laws of descent and
distribution and is exercisable during the Optionee's lifetime only by him. No
assignment or transfer of such option, or of the right represented thereby,
whether voluntary or involuntary, by operation of law or otherwise, except by
will or the laws of descent and distribution, shall vest in the assignee or
transferee any interest or right herein whatsoever, and immediately upon any
attempt to assign or transfer such option the same shall terminate and be of no
force or effect.

       8. LIMITATION ON RIGHTS. (a) The Optionee shall not be deemed for any
purpose to be a shareholder of the Corporation with respect to any shares as to
which the option granted hereby shall not have been exercised and payment and
issuance made as herein provided. Nothing herein shall confer on the Optionee
any right to continue in the employ of the Corporation or its subsidiaries, nor
affect the right of the Corporation or its subsidiaries to terminate the
Optionee's employment at any time without liability to the Corporation.

            (b) The existence of the option granted hereby shall not affect in
any way the right or power of the Corporation or its shareholders to make or
authorize any or all adjustments, recapitalizations, reorganizations or other
changes in the Corporation's capital structure or its business, or any merger or
consolidation of the Corporation, or any issue of bonds, debentures, preferred
or prior preference stocks ahead of

                                       6

<PAGE>

or convertible into, or otherwise affecting the Common Stock or the rights
thereof, or the dissolution or liquidation of the Corporation, or any sale or
transfer of all or any part of its assets or business, or any other corporate
act or proceeding, whether of a similar character or otherwise.

       9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. (a) The shares with
respect to which the option granted hereby is granted are shares of the Common
Stock as constituted on the date of this Agreement, but if and whenever, prior
to the delivery by the Corporation of all of the shares of Common Stock with
respect to which this option is granted, the Corporation shall effect a
subdivision or consolidation of shares, or other capital readjustment, or the
payment of a stock dividend, or other increase or decrease of the number of
shares of Common Stock outstanding, without receiving compensation therefor in
money, services or property, then

            (i)  in the event of any increase in the number of such shares
                 outstanding, the number of shares of Common Stock then
                 remaining subject to option hereunder shall be proportionately
                 increased (except that any fraction of a share resulting from
                 any such adjustment shall be excluded from the operation of
                 this Agreement), and the cash consideration payable per share
                 shall be proportionately reduced, and

            (ii) in the event of a reduction in the number of such shares
                 outstanding, the number of shares of Common Stock then
                 remaining subject to option hereunder shall be proportionately
                 reduced (except that any fractional shares resulting from any
                 such adjustment shall be excluded from the operation of this
                 Agreement), and the cash consideration payable per share shall
                 be proportionately increased.

            (b) In the event of (i) any merger of one or more other corporations
with the Corporation or any consolidation of the Corporation and one or more
other corporations in which the Corporation is not the surviving or resulting
corporation or (ii)

                                       7

<PAGE>

any merger of one or more other corporations with the Corporation or any
consolidation of the Corporation and one or more other corporations in which the
Corporation shall be the surviving or resulting corporation and the then issued
and outstanding shares of Common Stock shall be converted into and/or exchanged
for cash and/or any securities of any other corporation, then, in any such case
and without the need for any further action by the Corporation or its
stockholders, this Agreement and the option granted hereby shall terminate as of
the effective time of the merger or consolidation and thereupon be of no force
or effect, and the holder hereof shall, at no additional cost, be entitled
solely to receive (at such effective time and otherwise in the form and manner
provided by the terms of the agreement of merger or consolidation) an amount of
the consideration payable under the terms of such agreement equal to the excess
of (i) the aggregate consideration (valued in accordance with the terms thereof)
to which the holder hereof would have been entitled pursuant to the terms of
such agreement if, immediately prior to such effective time, the holder hereof
had been the holder of record of a number of shares of Common Stock equal to the
aggregate number of shares of Common Stock as to which this Agreement was
exercisable immediately prior to such effective time over (ii) the aggregate
exercise price payable hereunder with respect to such number of shares. In the
event of any other merger or consolidation in which the Corporation is the
surviving or resulting corporation, this Agreement and the option granted hereby
shall remain in full force and effect in accordance with its terms. In the event
of any dissolution or liquidation of the Corporation, this Agreement and the
option granted hereby shall terminate and thereupon be of no force or effect.

                                       8

<PAGE>

       10. MISCELLANEOUS. (a) This Agreement is the sole and only agreement
between the parties hereto with respect to the subject matter hereof and may not
be modified or amended except by a subsequent written agreement duly executed by
the parties hereto.

            (b) The Corporation shall at all times during the term of the option
granted hereby reserve and keep available such number of shares of Common Stock
as will be sufficient to satisfy the requirements of such option.

            (c) Any notice which either party hereto may be required or
permitted to give to the other shall be in writing, and may be delivered
personally or by mail, postage prepaid, addressed as follows: To the Corporation
(Attention to the Clerk), at its principal office at 391 Totten Pond Road,
Waltham, Massachusetts 02451, or at such other address as the Corporation, by
notice to the Optionee, may designate in writing from time to time; and to the
Optionee at his address as the Optionee, by notice to the Clerk of the
Corporation, may designate in writing from time to time.

            (d) This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts.

                                       9

<PAGE>

       IN WITNESS WHEREOF, the Corporation has caused this Non-Qualified Stock
Option Agreement to be executed by its duly-authorized officer, and the Optionee
has hereunto set his hand and seal, all on the day and year first above written.

                                       PACE MEDICAL, INC.

                                       By
                                          --------------------------------------
                                          Ralph E. Hanson, President

                                          --------------------------------------
                                          George F. Harrington--Optionee

                                       10

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