Document:

NON-DISCLOSURE AND CONFIDENTIALITY AGREEMENT

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

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

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

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

1.   COMPANY INFORMATION

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

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

2.   DISCLOSURE OF COMPANY INFORMATION

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

<PAGE>

3.   USE OR SALE

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

4.   REVERSE ENGINEERING

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

5.   COPIES

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

6.   PRECAUTIONS REGARDING THIRD PARTIES

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

7.   PRECAUTIONS REGARDING EMPLOYEES

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

8.    LIMIT

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

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

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

9.    RETURN OF COMPANY INFORMATION

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

10.  TERMINATION

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

11.  SURVIVAl

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

12.  ENTIRE AGREEMENT

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

13.  APPLICABLE LAW AND VENUE

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

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

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Sulzer Orthopedics Biologics Inc.            BIOSYNTECH LTD.

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

PROJECT DEVELOPMENT SUKMIST                  VICE PRESIDENT R&D

date            3/2/99                       date      3/1/99
    ------------------------------           -----------------------------------MATERIAL TRANSFER AGREEMENT

This Material Transfer Agreement  (together with its Exhibits referred to herein
as the "Agreement") governs the transfer of certain substances from time to time
from   Biosyntech   Limited   having  its  place  of  business  at  475,   boul.
Armand-Frappier,  Laval, QC Canada, H7V 4B3 to Sulzer Orthopedics ltd ("SULZER")
Ko. St 113980/Geb 540, CH-8404 Winterthur.

1.  Background.  SULZER  desires to obtain samples of  Biosyntech's  proprietary
delivery vehicle described in Exhibits A (such delivery  vehicle,  excluding the
materials, together with its progeny, derivatives or improvements is referred to
herein as the "Vehicle") to evaluate the Vehicle's suitability in its models set
forth in  Exhibit  A.  Biosyntech  desires  to obtain  samples  of the  material
described in Exhibit B from SULZER for use in the research described in Exhibits
B under the terms and conditions of this Agreement. Such material, together with
its progeny, derivatives or improvements is referred to herein as "Material". As
part of the  research  described  in Exhibits A,  SULZER  will  incorporate  the
Material into Biosyntech's Vehicle. The Vehicle containing the Material shall be
referred to herein as the  Vehicle/Material  Product.  Additionally,  SULZER may
desire to evaluate  Vehicle/Material  Product in accordance with Exhibits A. The
research set forth in Exhibits A and B shall be considered "Research" under this
Agreement. Biosyntech shall own all title and interest in and to the Vehicle.

2. The  Vehicle  and the  research.  Biosyntech  will  supply  SULZER  with such
quantities of the Vehicle as SULZER may reasonably request and as Biosyntech may
make available, in its sole discretion,  from time to time. However,  Biosyntech
shall be under no  obligation  to supply any  Vehicle at any time and may cancel
the  supply  of  Vehicle  at any  time  without  advance  notice.  Additionally,
Biosyntech  will supply  SULZER  with such  quantities  of the  Vehicle/Material
Product or other  related  materials as needed by SULZER in order to conduct the
Research  set forth in Exhibits A hereto.  SULZER will use the  Vehicle/Material
Product  and any product or process  derived  from the use of the Vehicle or the
Vehicle/Material Product, solely in its Research set forth in Exhibits A and for
no other  purpose.  The  Research  will be  conducted  solely  by  SULZER at its
research facilities or by a third party contractor at their facilities.  None of
the Vehicle or  Vehicle/Material  Product will be  transferred  or sold to third
parties other than the aforesaid  third party  contractors.  SULZER WILL NOT USE
THE VEHICLE OR  VEHICLE/MATERIAL  PRODUCT FOR TESTING IN OR  TREATMENT  OF HUMAN
SUBJECTS.  SULZER acknowledges that the Vehicle and Vehicle/Material  Product is
experimental  and will comply with all laws and  regulations  applicable  to its
handling and use. Any Vehicle  remaining upon completion of the Research will be
returned to Biosyntech.  Any Vehicle/Material  Product remaining upon completion
of the Research will be destroyed by SULZER

3. The Material and the Research. Biosyntech acknowledges that SULZER has rights
to the  Material.  SULZER will supply with such  quantities  of the  Material as
Biosyntech may reasonably request and as SULZER may make available,  in its sole
discretion,  from time to time. However,  SULZER shall be under no obligation to
supply any  Material  at any time and may cancel the supply of  Material  at any
time  without   advance   notice.   Biosyntech   will  use  the  Material,   the
Vehicle/Material  Product and any product or process derived from the use of the
Material or the  Vehicle/Material  Product,  solely in its Research set forth in
exhibits  B and for no other  purpose.  The  Material  and the  Vehicle/Material
Product will not be used by Biosyntech in research that is subject to consulting
or licensing  obligations to other party, unless SULZER gives its prior, express
written  permission.  The Research will be conducted solely by Biosyntech at its
research  facilities.  None of the Material or Vehicle/Material  Product will be
transferred  or sold to third parties.  Biosyntech  WILL NOT USE THE MATERIAL OR
VEHICLE/MATERIAL  PRODUCT  FOR  TESTING  IN  OR  TREATMENT  OF  HUMAN  SUBJECTS.
Biosyntech  acknowledges  that the  Material  and  Vehicle/Material  Product  is
experimental  and will comply with all laws and  regulations  applicable  to

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its handling and use. Any Material remaining upon completion of the Research
will return to SULZER. Any Vehicle/Material Product remaining upon completion of
the Research will be destroyed by Biosyntech.

4. In Vivo  Studies.  If  Biosyntech  or SULZER  is using  the  Vehicle/Material
Product for  non-human  in vivo  studies,  it will  comply  with all  applicable
federal, state and local laws and regulations.

5.  Inventions

5.1  Disclosures.  Biosyntech  will  promptly  and fully  disclose in writing to
SULZER any and all inventions,  (whether or not protectable under state, federal
or local laws) related to the Material,  the  Vehicle/Material  Product or their
use, or developed  using  Material,  or the  Vehicle/Material  Product which are
conceived  and/or  reduced  to  practice  by  Biosyntech,  in the  course of its
Research and SULZER will  promptly and fully  disclose in writing to  Biosyntech
any and all  inventions,  (whether or not  protectable  under state,  federal or
local laws) related to the Vehicle, the  Vehicle/Material  Product or their use,
or  developed  using the  Vehicle,  or the  Vehicle/Material  Product  which are
conceived  and/or  reduced to practice by SULZER,  in the course of its Research
(collectively, the "Invention(s)").

5.2 Rights.  Except as provided  herein,  ownership  of any  Invention  shall be
determined in accordance with the applicable  intellectual  property laws of the
CANADA.  Notwithstanding  any other  provision  contained in this  Agreement (a)
Biosyntech shall solely own those Inventions that are directed to the Vehicle or
related  to the use  thereof,  except  in the  combination  with  the use of the
Material and (b) SULZER shall solely own those  Inventions  that are directed to
Material or related to the use thereof,  except in  combination  with the use of
the  vehicle.  Biosyntech  and  SULZER  hereby  agree  that a party  may not use
information  from the  Research to file a patent  application  without the prior
written  consent of the other party on any Inventions that cover (i) the Vehicle
and  the  Material,  (ii)  the  combination  of the  Vehicle  and the use of the
Material,  (iii) the combination of the Material and the use of the Vehicle,  or
(iv)  the  combination  of the  use of the  Vehicle  and  the  Material  ("Joint
Inventions").  Biosyntech  represents  and warrants that no other person has any
prior  right to  ownership  of Joint  Inventions  or a prior  right to acquire a
licence  under such Joint  Inventions  by reason of any action or  agreement  by
Biosyntech.

5.3 Patent Applications.  Subject to Section 5.2 any and all patent applications
necessary  to protect the  proprietary  position of solely owned  Inventions  by
Biosyntech  will be prepared,  filled and maintained by Biosyntech with expenses
paid by Biosyntech.  Subject to Section 5.2 any patent application  necessary to
protect the  proprietary  position of solely owned  Inventions by SULZER will be
prepared,  filled and maintained by SULZER with expenses paid by SULZER. For any
and all patent  applications  on Joint  Inventions,  both  Biosyntech and SULZER
agree to cooperate  jointly at each such party's own expense in the preparation,
prosecution and/or maintenance of any patents or patent applications for a Joint
Invention.

5.4 Reports. At Biosyntech's  request,  SULZER will advise and update Biosyntech
on the progress  and results of the  Research  subject to Section 7. At SULZER's
request, Biosyntech will advise and update SULZER on the progress and results of
the Research subject to Section 7.

6. No Licence. Biosyntech retains all rights and title in and to the Vehicle and
all  related  Biosyntech   intellectual   property  rights,   including  without
limitation,   any  patents,   patent  applications,   copyrights  and  copyright
applications,  subject to the limited  right of use granted to SULZER  herein to
carry out the  Research,  and  retains  the  right to have any  Vehicle/Material
Products  destroyed  and any Vehicle  returned to Biosyntech or disposed of upon
request.  SULZER understands that no other right or license to the Vehicle,  the
Vehicle/Material  Products  or to their use is granted or implied as a result of

<PAGE>

Biosyntech's sending the Vehicle or the Vehicle/Material Products to it. Nothing
contained in this Agreement shall restrict Biosyntech's right to disclose,  use,
sell  assign,  transfer  or  distribute  the  Vehicle  to any other  entity  for
commercial or non-commercial purposes. SULZER retains all right and title in and
to the Material and all related SULZER intellectual  property rights,  including
without limitation,  any patents, patent applications,  copyrights and copyright
applications,  subject to the limited right of use granted to Biosyntech  herein
to carry  out  Research,  and  retains  the  right to have any  Vehicle/Material
Products  destroyed  and any  Material  returned  to SULZER or  disposed of upon
request.  Biosyntech understands that no other right or license to the Material,
the Vehicle/Material  Products or to their use is granted or implied as a result
of SULZER's  sending the Material to it.  Nothing  contained  in this  Agreement
shall  restrict  SULZER's  right to  disclose,  use,  sell  assign,  transfer or
distribute  the Material to any other entity for  commercial  or non  commercial
purposes.

7. Confidentiality.  Subject to Section 5.3 hereof, for a period of 5 years from
the date of this  Agreement,  neither party will disclose or publish the results
of the Research to third  parties  other than in  confidence  to its  directors,
officers,  employees,  consultants,  corporate  partners or potential  corporate
partners. With the exception of the results of the Research, any confidential or
proprietary  information  provided by  Biosyntech  to SULZER shall be considered
Biosyntech's  Proprietary  Information  and for a period of five  years from the
date of disclosure of any Biosyntech Proprietary  Information hereunder,  SULZER
agrees that it will hold in confidence and not disclose or make available to any
third party,  any Biosyntech  Proprietary  Information  disclosed to it by or on
behalf of Biosyntech,  will not use such Biosyntech Proprietary  Information for
any purpose other than as advised or directed by Biosyntech and will not exploit
such  Biosyntech  Proprietary  Information for its own benefit or the benefit of
another without the prior written  consent of Biosyntech.  With the exception of
the  results  of the  Research,  any  confidential  or  proprietary  information
provided  by  SULZER  to  Biosyntech  shall  be  considered  SULZER  Proprietary
Information and for a period of five years from the latest date of disclosure of
any SULZER  Proprietary  Information  hereunder,  Biosyntech agrees that it will
hold in confidence  and not disclose or make  available to any third party,  any
SULZER Proprietary  Information  disclosed to it by or on behalf of SULZER, will
not use such  SULZER  Proprietary  Information  for any  purpose  other  than as
advised or directed  by SULZER,  and will not  exploit  such SULZER  Proprietary
Information  for its own  benefit or the  benefit of another  without  the prior
written  consent  of  SULZER.  Biosyntech  Proprietary  Information  and  SULZER
Proprietary Information shall not include information which:

a) is known to the public at the time of disclosure by the  disclosing  party or
become so known through no wrongful act on the part of the receiving  party, but
only after it becomes so publicly known;

b) is in the  receiving  party's  possession  at the time of  disclosure  by the
disclosing party, as evidenced by written records;

c) becomes known to the receiving party through  disclosure by sources not under
an obligation to the disclosing party to maintain such information in confidence
as evidenced by written records;

d) is  independently  developed by or on behalf of the  receiving  party without
reference to or reliance on the Proprietary Information of the disclosing party,
as evidenced by written records.

8. NO WARRANTY.  THE MATERIAL IS PROVIDED TO SULZER AS-IS AND WITHOUT  WARRANTY,
EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY , TITLE OR FITNESS
FOR A PARTICULAR PURPOSE AND WITHOUT ANY REPRESENTATION OR WARRANTY THAT THE USE
OF THE VEHICLE WILL NOT INFRINGE ANY PATENT,  OR OTHER  RIGHTS.  THE MATERIAL IS
PROVIDED TO BIOSYNTECH AS-IS AND WITHOUT WARRANTY, EXPRESS OR IMPLIED, INCLUDING
ANY WARRANTY OF  MERCHANTABILITY,  TITLE OR FITNESS FOR A PARTICULAR

<PAGE>

PURPOSE AND WITHOUT ANY REPRESENTATION OR WARRANTY THAT THE USE OF THE MATERIAL
WILL NOT INFRINGE ANY PATENT, OR OTHER RIGHTS.

9. Indemnification. To the extend permitted under governing law, Biosyntech will
indemnify and hold SULZER  harmless from any claims or liability  resulting from
Biosyntech's  use,  handling  or storage  of the  Material  or  Vehicle/Material
Product,  except  insofar  as such  claims or  liability  result  from  SULZER's
negligence or wrongdoing  subject to SULZER  providing  prompt written notice of
any such claim or  liability  and  Biosyntech  having  the right to control  the
defence  and/or  settlement  of such  claim;  and to the extent  SULZER has been
negligent or engaged in  wrongdoing,  SULZER shall  indemnify  Biosyntech to the
extent  permitted  under  governing law subject to Biosyntech  providing  prompt
written  notice of any such claim or  liability  and having the right to control
the defence  and/or  settlement  of such claim.  To the extent  permitted  under
governing  law,  SULZER will  indemnify  and hold  Biosyntech  harmless from any
claims or liability  resulting  from  SULZER's  use,  handling or storage of the
Vehicle or  Vehicle/Material  Product except insofar as such claims or liability
result  from  Biosyntech's  negligence  or  wrongdoing,  subject  to  Biosyntech
providing prompt written notice of any such claim or liability and SULZER having
the right to control the defence  and/or  settlement  of such claim;  and to the
extent Biosyntech has been negligent or engaged in wrongdoing,  Biosyntech shall
indemnify  SULZER to the extent  permitted under governing law subject to SULZER
providing  prompt  written  notice of any such claim or liability and Biosyntech
having the right to control the defence and/or settlement of such claim.

10.  Termination.  Either party may terminate this Agreement on thirty (30) days
prior written notice to the other party. Upon termination,  SULZER shall destroy
any  Vehicle/Material  Product,  shall  immediately  return  to  Biosyntech  all
Biosyntech Proprietary  Information provided by Biosyntech,  and all Vehicle and
all of SULZER's right to use the Vehicle and the Vehicle/Material Products shall
end. Upon termination,  Biosyntech shall destroy any Vehicle/Material  Products,
shall immediately return to SULZER all SULZER Proprietary  Information  provided
by SULZER,  and all Material and all of  Biosyntech's  right to use the Material
and the  Vehicle/Material  Products shall end.  Following  termination,  neither
party  shall have any  further  obligation  under this  Agreement,  except  that
Section 5 through 10 shall survive termination.

11.  Modifications.  This Agreement supersedes all prior agreements,  written or
oral,  including the Confidential  Disclosure Agreement dated __________ between
Biosyntech and SULZER  related to the subject matter of this Agreement  provided
that the obligations of confidentiality and non-use attaching to the Proprietary
Information disclosed under such Confidential Disclosure Agreement shall survive
its termination.  This Agreement may not be modified,  changed or discharged, in
whole or in part, except by an agreement in writing signed by the Biosyntech and
SULZER.

12. Third Partied. Biosyntech and SULZER hereby represent that the acceptance of
the Material and Vehicle in  accordance  with,  and the  performance  of all the
terms of this  Agreement  do not and will not breach or conflict  with any other
agreement or arrangement to which Biosyntech or SULZER is a party.

13.  Bailment.  It is the intent of the parties that the transfer of Material to
Biosyntech  or the transfer of Vehicle to SULZER be  considered a bailment,  and
shall be considered neither a conditional nor an unconditional  sale. Any monies
transferred  in  conjunction   with  the  transfer  of  Material,   Vehicle  and
information  shall be only to cover the costs associated with the transfer,  and
shall not represent consideration for an exchange of title thereto.

14. Miscellaneous.  This Agreement (a) may not be assigned or transferred by any
party  without  the prior  written  consent  of the  other  party,  except  that
Biosyntech  or SULZER may assign this  Agreement to an  affiliated  SULZER or in
connection with the merger, consolidation or sale of all or

<PAGE>

substantially all of its assets and (b) shall be governed by and construed in
accordance with the laws of the Province of Quebec, Canada.

<PAGE>

IN WITNESS  WHEREOF,  Biosyntech  and SULZER have caused  this  Agreement  to be
executed in their properly and duly authorized afficers or representatives.

Biosyntech Limited

Name: /s/ Francois Binette, Ph.D.
      ---------------------------------

Title: Vice President, Research & Development

Date:  January 10, 2000

Biosyntech Limited
475, boul. Armand-Frappier
Laval (QC) H7V 4B3
Canada

Phone: (450) 686-2437
Facsimile: (450) 686-8952

SULZER Orthopedics*

Name:  /s/ Werner Miller Ph.D.
       -------------------------------

Title: Director Biotech Dept.

Date:  January 7, 2000

Sulzer Orthopedics Ltd

Ko. St 113980/Geb 540,

CH-8404 Winterthur

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