Document:

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                                                                    EXHIBIT 10.6

                                  AVIGEN, INC.

                 1996 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN

                             ADOPTED MARCH 29, 1996

                     APPROVED BY STOCKHOLDERS APRIL 30, 1996
             AMENDED BY THE BOARD OF DIRECTORS ON SEPTEMBER 24, 1999
                   APPROVED BY STOCKHOLDERS NOVEMBER 12, 1999

1. PURPOSE.

         (a) The purpose of the Avigen, Inc. 1996 Non-Employee Directors' Stock
Option Plan (the "Plan") is to provide a means by which each director of Avigen,
Inc. a Delaware corporation (the "Company") who is not otherwise an employee of
the Company or of any Affiliate of the Company (each such person being hereafter
referred to as a "Non-Employee Director") will be given an opportunity to
purchase stock of the Company.

         (b) The word "Affiliate" as used in the Plan means any parent
corporation or subsidiary corporation of the Company as those terms are defined
in Sections 424(e) and (f), respectively, of the Internal Revenue Code of 1986,
as amended from time to time (the "Code").

         (c) The Company, by means of the Plan, seeks to retain the services of
persons now serving as Non-Employee Directors of the Company, to secure and
retain the services of persons capable of serving in such capacity, and to
provide incentives for such persons to exert maximum efforts for the success of
the Company.

2. ADMINISTRATION.

         (a) The Plan shall be administered by the Board of Directors of the
Company (the "Board") unless and until the Board delegates administration to a
committee, as provided in subparagraph 2(b).

         (b) The Board may delegate administration of the Plan to a committee
composed of not fewer than two (2) members of the Board (the "Committee"). If
administration is delegated

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to a Committee, the Committee shall have, in connection with the administration
of the Plan, the powers theretofore possessed by the Board, subject, however, to
such resolutions, not inconsistent with the provisions of the Plan, as may be
adopted from time to time by the Board. The Board may abolish the Committee at
any time and revest in the Board the administration of the Plan.

3. SHARES SUBJECT TO THE PLAN.

         (a) Subject to the provisions of paragraph 10 relating to adjustments
upon changes in stock, the stock that may be sold pursuant to options granted
under the Plan shall not exceed in the aggregate two hundred thousand (200,000)
(after giving effect to the 4.43-for-1 reverse split of the Company's Common
Stock) shares of the Company's Common Stock. If any option granted under the
Plan shall for any reason expire or otherwise terminate without having been
exercised in full, the stock not purchased under such option shall again become
available for the Plan.

         (b) The stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.

4. ELIGIBILITY.

         Options shall be granted only to Non-Employee Directors of the Company.

5. NON-DISCRETIONARY GRANTS.

         (a) Each person who is, after the Effective Date, elected for the first
time to be a Non-Employee Director automatically shall, upon the date of initial
election to be a Non-Employee Director by the Board or stockholders of the
Company, be granted an option to purchase fifteen thousand (15,000) (after
giving effect to the 4.43-for-1 reverse split of the Company's Common Stock)
shares of Common Stock of the Company on the terms and conditions set forth
herein.

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         (b) At each annual meeting of the Company's stockholders after the
Effective Date (i) each person who is then a Non-Employee Director and
continuously has been a Non-Employee Director since the preceding annual meeting
of the Company's stockholders automatically shall be granted an option to
purchase seven thousand five hundred (7,500) (after giving effect to the
4.43-for-1 reverse split of the Company's Common Stock) shares of Common Stock
of the Company on the terms and conditions set forth herein, and (ii) each other
person who is then a Non-Employee Director automatically shall be granted an
option to purchase, on the terms and conditions set forth herein, the number of
shares of Common Stock of the Company (rounded up to the nearest whole share)
determined by multiplying the seven thousand five hundred (7,500) shares by a
fraction, the numerator of which is the number of days the person continuously
has been a Non-Employee Director as of the date of such grant and the
denominator of which is 365.

6. OPTION PROVISIONS.

         Each option shall be subject to the following terms and conditions:

         (a) The term of each option commences on the date it is granted and,
unless sooner terminated as set forth herein, expires on the date ("Expiration
Date") ten (10) years from the date of grant. If the optionee's service as a
Non-Employee Director or employee of or consultant to the Company or any
Affiliate terminates for any reason or for no reason, the option shall terminate
on the earlier of the Expiration Date or the date twelve (12) months following
the date of termination of all such service; provided, however, that if such
termination of service is due to the optionee's death, the option shall
terminate on the earlier of the Expiration Date or eighteen (18) months
following the date of the optionee's death. In any and all circumstances, an
option may be exercised following termination of the optionee's service as a
Non-Employee Director or employee of or consultant to the Company or any
Affiliate only as to that number of shares as to

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which it was exercisable on the date of termination of such service under the
provisions of subparagraph 6(e).

         (b) The exercise price of each option shall be one hundred percent
(100%) of the fair market value of the stock subject to such option on the date
such option is granted.

         (c) Payment of the exercise price of each option is due in full in cash
upon any exercise when the number of shares being purchased upon such exercise
is fewer than 1,000 shares. However, when the number of shares being purchased
upon an exercise is 1,000 or more shares, the optionee may elect to make payment
of the exercise price under one of the following alternatives:

                        (i) Payment of the exercise price per share in cash or
by check at the time of exercise; or

                        (ii) Provided that at the time of the exercise the
Company's Common Stock is publicly traded and quoted regularly in the Wall
Street Journal, payment by delivery of shares of Common Stock of the Company
already owned by the optionee, held for the period required to avoid a charge to
the Company's reported earnings, and owned free and clear of any liens, claims,
encumbrances or security interest, which Common Stock shall be valued at its
fair market value on the date preceding the date of exercise; or

                        (iii) Payment by a combination of the methods of payment
specified in subparagraph 6(c)(i) and 6(c)(ii) above.

         Notwithstanding the foregoing, this option may be exercised pursuant to
a program developed under Regulation T as promulgated by the Federal Reserve
Board which results in the receipt of cash (or check) by the Company prior to
the issuance of shares of the Company's Common Stock.

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         (d) An option shall not be transferable except by will or by the laws
of descent and distribution, or pursuant to a qualified domestic relations order
satisfying the requirements of Rule 16b-3 under the Securities Exchange Act of
1934 ("Rule 16b-3") and shall be exercisable during the lifetime of the person
to whom the option is granted only by such person (or by his guardian or legal
representative) or transferee pursuant to such an order. Notwithstanding the
foregoing, the optionee may, by delivering written notice to the Company in a
form satisfactory to the Company, designate a third party who, in the event of
the death of the optionee, shall thereafter be entitled to exercise the option.

         (e) The option shall become exercisable in installments over a period
of three (3) years from the date of grant commencing on the date one (1) year
after the date of grant of the option, with thirty-three percent (33%) becoming
exercisable one (1) year after the date of the grant, thirty-four percent (34%)
becoming exercisable two (2) years after the date of grant and the remaining
thirty-three percent (33%) becoming exercisable three (3) years after the date
of grant; provided that the optionee has, during the entire period prior to such
vesting date, continuously served as a Non-Employee Director or employee of or
consultant to the Company or any Affiliate of the Company, whereupon such option
shall become fully exercisable in accordance with its terms with respect to that
portion of the shares represented by that installment.

         (f) The Company may require any optionee, or any person to whom an
option is transferred under subparagraph 6(d), as a condition of exercising any
such option: (i) to give written assurances satisfactory to the Company as to
the optionee's knowledge and experience in financial and business matters; and
(ii) to give written assurances satisfactory to the Company stating that such
person is acquiring the stock subject to the option for such person's own

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account and not with any present intention of selling or otherwise distributing
the stock. These requirements, and any assurances given pursuant to such
requirements, shall be inoperative if (i) the issuance of the shares upon the
exercise of the option has been registered under a then-currently-effective
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), or (ii), as to any particular requirement, a determination is
made by counsel for the Company that such requirement need not be met in the
circumstances under the then-applicable securities laws.

         (g) Notwithstanding anything to the contrary contained herein, an
option may not be exercised unless the shares issuable upon exercise of such
option are then registered under the Securities Act or, if such shares are not
then so registered, the Company has determined that such exercise and issuance
would be exempt from the registration requirements of the Securities Act.

         (h) The Company (or a representative of the underwriters) may, in
connection with the first underwritten registration of the offering of any
securities of the Company under the Securities Act, require that any optionee
not sell or otherwise transfer or dispose of any shares of Common Stock or other
securities of the Company during such period (not to exceed one hundred eighty
(180) days) following the effective date of the registration statement of the
Company filed under the Securities Act as may be requested by the Company or the
representative of the underwriters.

7. COVENANTS OF THE COMPANY.

         (a) During the terms of the options granted under the Plan, the Company
shall keep available at all times the number of shares of stock required to
satisfy such options.

         (b) The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of

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stock upon exercise of the options granted under the Plan; provided, however,
that this undertaking shall not require the Company to register under the
Securities Act either the Plan, any option granted under the Plan, or any stock
issued or issuable pursuant to any such option. If, after reasonable efforts,
the Company is unable to obtain from any such regulatory commission or agency
the authority which counsel for the Company deems necessary for the lawful
issuance and sale of stock under the Plan, the Company shall be relieved from
any liability for failure to issue and sell stock upon exercise of such options.

8. USE OF PROCEEDS FROM STOCK.

         Proceeds from the sale of stock pursuant to options granted under the
Plan shall constitute general funds of the Company.

9. MISCELLANEOUS.

         (a) Neither an optionee nor any person to whom an option is transferred
under subparagraph 6(d) shall be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares subject to such option unless
and until such person has satisfied all requirements for exercise of the option
pursuant to its terms.

         (b) Throughout the term of any option granted pursuant to the Plan, the
Company shall make available to the holder of such option, not later than one
hundred twenty (120) days after the close of each of the Company's fiscal years
during the option term, upon request, such financial and other information
regarding the Company as comprises the annual report to the stockholders of the
Company provided for in the Bylaws of the Company and such other information
regarding the Company as the holder of such option may reasonably request.

         (c) Nothing in the Plan or in any instrument executed pursuant thereto
shall confer upon any Non-Employee Director any right to continue in the service
of the Company or any

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Affiliate or shall affect any right of the Company, its Board or stockholders or
any Affiliate to terminate the service of any Non-Employee Director.

         (d) No Non-Employee Director, individually or as a member of a group,
and no beneficiary or other person claiming under or through him, shall have any
right, title or interest in or to any option reserved for the purposes of the
Plan except as to such shares of Common Stock, if any, as shall have been
reserved for him pursuant to an option granted to him.

         (e) In connection with each option made pursuant to the Plan, it shall
be a condition precedent to the Company's obligation to issue or transfer shares
to a Non-Employee Director, or to evidence the removal of any restrictions on
transfer, that such Non-Employee Director make arrangements satisfactory to the
Company to insure that the amount of any federal or other withholding tax
required to be withheld with respect to such sale or transfer, or such removal
or lapse, is made available to the Company for timely payment of such tax.

         (f) As used in this Plan, "fair market value" means, as of any date,
the value of the Common Stock of the Company determined as follows:

                  (i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the National
Market of The Nasdaq Stock Market , the Fair Market Value of a share of Common
Stock shall be the closing sales price for such stock (or the closing bid, if no
sales were reported) as quoted on such system or exchange (or the exchange with
the greatest volume of trading in Common Stock) on the last market trading day
prior to the day of determination, as reported in the Wall Street Journal or
such other source as the Board deems reliable;

                  (ii) If the Common Stock is quoted on The Nasdaq Stock Market
(but not on the National Market thereof) or is regularly quoted by a recognized
securities dealer but selling

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prices are not reported, the Fair Market Value of a share of Common Stock shall
be the mean between the bid and asked prices for the Common Stock on the last
market trading day prior to the day of determination, as reported in the Wall
Street Journal or such other source as the Board deems reliable;

                  (iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the Board.

         Notwithstanding the foregoing, the Fair Market Value of the Common
Stock for an option granted on the Effective Date shall be the price per share
at which shares of Common Stock are first sold to the public in the Company's
initial public offering.

10. ADJUSTMENTS UPON CHANGES IN STOCK.

         (a) If any change is made in the stock subject to the Plan, or subject
to any option granted under the Plan (through merger, consolidation,
reorganization, recapitalization, reincorporation, stock dividend, dividend in
property other than cash, stock split, liquidating dividend, combination of
shares, exchange of shares, change in corporate structure or otherwise), the
Plan and outstanding options will be appropriately adjusted in the class(es) and
maximum number of shares subject to the Plan and the class(es) and number of
shares and price per share of stock subject to outstanding options.

         (b) In the event of: (1) a dissolution, liquidation or sale of
substantially all of the assets of the Company; (2) a merger or consolidation in
which the Company is not the surviving corporation; (3) a reverse merger in
which the Company is the surviving corporation but the shares of the Company's
Common Stock outstanding immediately preceding the merger are converted by
virtue of the merger into other property, whether in the form of securities,
cash or otherwise; or (4) any other capital reorganization (including a sale of
stock of the Company to a

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single purchaser or single group of affiliated purchasers) after which less than
fifty percent (50%) of the outstanding voting shares of the new or continuing
corporation are owned by stockholders of the Company immediately before such
transaction, the time during which options outstanding under the Plan may be
exercised shall be accelerated to permit the optionee to exercise all such
options in full prior to such event, and the options shall terminate if not
exercised prior to such event.

11. AMENDMENT OF THE PLAN.

         (a) The Board at any time, and from time to time, may amend the Plan,
provided, however, that the Board shall not amend the Plan more than once every
six (6) months, with respect to the provisions of the Plan which relate to the
amount, price and timing of grants, other than to comport with changes in the
Code, or applicable regulations or rulings thereunder. Except as provided in
paragraph 10 relating to adjustments upon changes in stock, no amendment shall
be effective unless approved by the stockholders of the Company within twelve
(12) months before or after the adoption of the amendment, where the amendment
will modify the Plan in any way if such modification requires stockholder
approval in order for the Plan to comply with the requirements of Rule 16b-3.

         (b) Rights and obligations under any option granted before any
amendment of the Plan shall not be impaired by such amendment unless (i) the
Company requests the consent of the person to whom the option was granted and
(ii) such person consents in writing.

12. TERMINATION OR SUSPENSION OF THE PLAN.

         (a) The Board may suspend or terminate the Plan at any time. No options
may be granted under the Plan while the Plan is suspended or after it is
terminated.

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         (b) Rights and obligations under any option granted while the Plan is
in effect shall not be impaired by suspension or termination of the Plan, except
with the consent of the person to whom the option was granted.

         (c) The Plan shall terminate upon the occurrence of any of the events
described in Section 10(b) above.

13. EFFECTIVE DATE OF PLAN; CONDITIONS OF EXERCISE.

         (a) The Plan shall become effective on the same day that the Company's
initial public offering of shares of Common Stock becomes effective (the
"Effective Date"), subject to the condition that the Plan is approved by the
stockholders of the Company.

         (b) No option granted under the Plan shall be exercised or exercisable
unless and until the condition of subparagraph 13(a) above has been met.

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                                                                    EXHIBIT 10.1

                      LICENSE AND DISTRIBUTORSHIP AGREEMENT

This Agreement (the "Agreement"), dated and effective as of November 22, 1999 by
and between Cohesion Technologies, Inc. ("Cohesion"), a corporation duly
organized and existing under the laws of the State of Delaware and having its
principal place of business at 2500 Faber Place, Palo Alto, CA 94303, United
States Surgical, a division of Tyco Healthcare Group LP ("USS"), a limited
partnership duly organized and existing under the laws of the State of Delaware
and having its principal place of business at 150 Glover Avenue, Norwalk,
Connecticut 06856, and Tyco Healthcare Group AG, a corporation organized and
existing under the laws of Switzerland and having its principal place of
business at Bahnhofstrasse 8, CH-8200 Schaffhausen, Switzerland (THG) (Cohesion,
USS/THG, each a "Party" and collectively, the "Parties").

In consideration of the mutual promises and, covenants contained herein, the
parties hereto agree as follows:

                             ARTICLE 1 - DEFINITIONS

1.l For purposes of this Agreement, the definitions set forth below shall be
applicable.

"Act" shall mean the United States Food, Drug and Cosmetic Act of 1938, as
amended to date and during the term of this Agreement, including, without
limitation the Medical Device Amendments of 1976.

"Action" shall mean a legal claim, action, suit, proceeding or arbitration.

"Affiliate" shall mean with respect to any specified Person, any other Person,
as of the date of the execution of this Agreement, that directly or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, the Person specified. For purposes of this definition,
"control" including, with correlative meanings, the terms "controlled by" and
"under common control with" means ownership directly or indirectly of more than
fifty percent (50%) of the equity capital having the right to vote for election
of directors in the case of a corporation and more than fifty percent (50%) of
the beneficial interest in the business entity other than a corporation.

"Confidential Information" shall mean, unless specified in writing to the
contrary, all non-public information disclosed by one of the Parties to the
other Party, including the terms of this Agreement; provided, however, that
"Confidential Information" shall not include information that (i) can be
demonstrated to have been in the public domain or publicly known prior to the
date of disclosure by the disclosing Party; or (ii) that can be demonstrated
from written records, to have been in the receiving Party's possession from
another source not under an obligation of secrecy to the disclosing Party prior
to disclosure by the disclosing Party; or (iii) that becomes part of the public
domain or publicly known by publication or otherwise, not due to any

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unauthorized act by the receiving Party; or (iv) that can be demonstrated by
written records to have been independently developed by the receiving Party
without the use of the disclosing Party's Confidential Information.

"FDA" shall mean the United States Department of Health and Human Services, Food
and Drug Administration, or any successor governmental organization.

"Regulatory Approvals" shall mean FDA's and International Regulatory Agencies'
(defined below) clearance of the CoStasis Products for use in the Field.

"Rights Technology" shall mean any and all secret or confidential information,
trade secrets, specifications, tests results, analyses, data, inventions,
modifications and improvements, methods, processes, formulae, compositions,
designs, techniques, applications, ideas or concepts, whether or not reduced to
practice, including, without limitation, technology that is or could be the
subject matter of a foreign or domestic patent or patent application, whether or
not reduced to writing in a patent application, relating to the CoStasis
technology and as to which (i) Cohesion either conceives or develops during the
term of this Agreement relating to the CoStasis technology, or (ii) Cohesion
has, or during the term of this Agreement obtains, any rights, title or
interest, in either case, that relates to the CoStasis technology and which is
not otherwise subject to USS/THG's rights under this Agreement. Rights
Technology shall not include Cohesion's "CoSeal" product line or future product
lines involving PEG or recombinant technology.

"Field" shall mean all medical applications relating to hemostasis in surgical
applications including, without limitation, the use of the CoStasis Products and
the CoStasis Product improvements mutually agreed upon by the parties. The Field
does not include femoral access closure, sealing, gluing, adhesion prevention or
drug delivery.

"International Regulatory Agency" shall mean any national, provincial, state or
local governmental agency or other organization outside of the United States
which performs functions similar to the FDA.

"Laws" shall mean any statute, regulation, rule, ordinance, guideline, order,
judgment, decision or interpretation of the FDA, any International Regulatory
Agency, the Securities Exchange Commission or any applicable governmental
organization.

The "CoStasis Product" or" the "CoStasis Products" shall mean those specific
products listed in Exhibit A-3 attached hereto, as Exhibit A-3 may be amended
from time to time on the mutual agreement of the parties to include upgrades or
other specific improvements to the CoStasis Products. The "CoStasis Products"
shall not include Cohesion's "CoSeal" product line or future product lines
involving PEG or recombinant technology.

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"CellPaker" shall mean a needle-less syringe device for drawing blood from a
human for direct placement into a centrifuge and centrifuging to separate plasma
from red and white blood cells. The CellPaker is a proprietary accessory device
of Cohesion.

"Net Sales" shall mean gross sales of the CoStasis Products billed and shipped
by or on behalf of USS or its Subsidiaries, Affiliates, Sublicensees, or
permitted assignees, less normal or customary allowances and discounts actually
allowed, returns, invoices written off as uncollectable (but only to the extent
of the Variable Transfer Prices attributable thereto), billed taxes and customs
duties paid by USS, costs of insurance and transportation, freight and transit
insurance, and shall not include samples or demonstration materials or any sale
to USS employees for any reason other than resale. The term "Net Sales" shall
not include sales between the Parties, sales by independent distributors (but
shall include such sales to independent distributors), or sales between USS and
its Affiliates, Subsidiaries, Sublicensees or permitted assignees.

For the purposes of the "Net Sales" definition, where CoStasis Products are sold
in packages, trays, or other groups of items consisting of one or more CoStasis
Products and one or more non-Products (the "Package"), Net Sales shall be
calculated for each CoStasis Product within a Package as though it were sold
separately.

                                 [Text Deleted]

"Patents" or "Patent Rights" shall mean any and all patents and patent
applications relating to the CoStasis Products in the Field on file within the
Territory and presently or hereafter owned by Cohesion or a Cohesion Affiliate
and/or in which Cohesion or a Cohesion Affiliate has or obtains any right, title
or interest including, without limitation the patents and patent applications
set forth on Exhibit A-1 attached hereto, and all continuations,
continuations-in-part, divisions, reissues, reexaminations, additions, and
renewals thereof.

"Person" or "Persons" shall mean any individual, corporation, partnership,
association, trust or other entity or organization including a governmental or
political sub division or any agency or instrumentality thereof.

"Regulatory Authorities " shall mean collectively, the FDA and the International
Regulatory Agencies.

"Sublicensee" shall mean any third Person to whom USS grants a sublicense to
sell the CoStasis Product.

"Domestic Territory" shall mean those geographical areas included in Exhibit
A-4. Said Exhibit shall be amended to include Canada if Cohesion determines that
it will use a distributor for sales therein rather than making direct sales.

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"International Territory" shall mean those geographical areas included in
Exhibit A-5.

"Territory" or "Territories" shall mean the Domestic Territory and the
International Territory.

"Trademarks" or "Trademark Rights" shall mean only those trademarks and
trademark applications and copyrights included in Exhibit A-2, used by Cohesion
in connection with the CoStasis Products in the Territory in the Field presently
or hereafter owned by Cohesion or a Cohesion Affiliate and/or in which Cohesion
or a Cohesion Affiliate has or obtains any right, title or interest.

1.2 In addition to the foregoing defined terms, the following terms shall have
the meanings set forth in the referenced Sections of this Agreement:

<TABLE>
<CAPTION>
               Term                                                     Section
               ----                                                     -------
<S>                                                                     <C>
               Force Majeure Event                                      18.1
               Marketing Rights                                          3.1
               Cohesion Indemnitees                                     12.1
               Cohesion Inventions                                      11.1
               Promotional Materials                                     3.2
               Term                                                     15.1
               USS Indemnitees                                          12.1
               USS Inventions                                           11.1
</TABLE>

                             ARTICLE 2 - APPOINTMENT

2.1 (a) For the term of this Agreement, USS hereby accepts appointment as
Cohesion's sole and exclusive distributor, with the right to sell and distribute
the CoStasis Products throughout the Domestic Territory in the Field, in all
surgical specialties in the Field not contraindicated for the CoStasis Products,
subject to Section 3.1, Article 5 and other terms and conditions set forth in
this Agreement.

(b) For the term of this Agreement, THG hereby accepts appointment as Cohesion's
sole and exclusive distributor, with the right to sell and distribute the
CoStasis Products throughout the International Territory in the Field, in all
surgical specialties in the Field not contraindicated for the CoStasis Products,
subject to Section 3.1, Article 5 and other terms and conditions set forth in
this Agreement.

(c) In connection with such appointments, Cohesion hereby grants to USS and THG
(hereinafter collectively referred to as USS/THG, with references to the
"Territory" to be construed as references to their respective portions of the
Territory, i.e., Domestic Territory and International Territory), in their
respective Territories, the following:

(i) Marketing Rights (as set forth in Article 3 below) during the term of this
Agreement; and

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(ii) an exclusive, royalty-free, paid-up license, with right to sublicense,
under the Patents in the Territory solely for the purpose of selling and
distributing the CoStasis Products in the Field, such license to continue during
the term of this Agreement; and

(iii) a license under the Trademarks in the Territory as set forth in Exhibit
2.1 (the "Trademark License") solely for the purpose of advertising and
marketing the CoStasis Products, such license to continue during the term of
this Agreement. The form of Trademark License set forth in Exhibit 2.1 shall be
executed by the parties simultaneously with the execution of this Agreement.

(d) All references in the Agreement to rights and obligations of USS/THG with
respect to the CoStasis Products shall also be deemed to include Affiliates and
Sublicensees appointed by USS/THG, subject to written agreements no less
restrictive than this Agreement. USS/THG shall from time to time provide
Cohesion with a list of such Affiliates and Sublicensees of USS/THG.
Notwithstanding such appointment of Sublicensees, USS/THG shall remain fully
responsible for the performance of all its covenants and obligations under this
Agreement.

(e) Cohesion shall promptly forward to USS/THG all leads for sales of CoStasis
Products in the Field in the appropriate Territory. USS/THG shall promptly
forward to Cohesion all leads for sales of CoStasis Products either (i) outside
the Field or (ii) in the Field and outside the Territory.

(f) During the term of USS/THG's distribution rights pursuant to this Article 2,
USS/THG shall not market or sell in the Territory any new products not already
sold which are competitive with the CoStasis Products.

2.2 Cohesion shall (i) not exercise any Marketing Rights in the Territory for
any of the CoStasis Products in the Field, other than as described in Section
8.5, nor permit any other third Person to exercise any Marketing Rights in the
Territory for any of the CoStasis Products in the Field, and (ii) subject to
Section 8.4, enforce its rights to prevent any other third Person, directly or
indirectly, from exercising any Marketing Rights in the Territory for any of the
CoStasis Products in the Field.

2.3 This Agreement shall not be construed to provide USS or THG with any right
to manufacture CoStasis Products.

             ARTICLE 3 - MARKETING AND SALES RIGHTS AND OBLIGATIONS

3.1 Cohesion hereby grants to USS/THG the exclusive right to promote, market,
sell and distribute the CoStasis Products for use in the Field in their
respective portions of the Territory, subject to Article 5 and other terms and
conditions of this Agreement. . Notwithstanding the foregoing, it is agreed that
Cohesion may take up to [Text Deleted] following the execution of this Agreement
in which to terminate certain international distributor agreements, and that
THG's exclusive rights in the countries affected by those agreements shall
become effective on the earlier to occur of i) the termination of such
agreement(s) or ii) the end of said [Text

                                       5
<PAGE>   6

Deleted]. Subject to Section 3.2, USS/THG's Marketing Rights in their respective
portions of the Territory for the CoStasis Products in the Field shall include
the following: (a) the exclusive right to market and solicit orders including,
without limitation, advertise, promote sales and contact potential customers,
prepare and distribute the most recently approved marketing and sales brochures
and materials, pursue sales leads, answer customer inquiries, make quotations
and take orders, and (b) exclusively train customers of the CoStasis Products
with such assistance by Cohesion as provided in this Article 3. All
communications or inquiries received by Cohesion from potential customers for
CoStasis Products shall be promptly forwarded by Cohesion to USS/THG. All
decisions regarding USS/THG marketing, solicitation, handling of customer
inquiries and training shall be in USS/THG's sole discretion.

3.2 Cohesion is legally responsible for the accuracy of all product information
regarding the CoStasis Products provided by Cohesion to USS/THG and included by
USS/THG in CoStasis Products advertising, promotional material, sales aids,
sales brochures and product labeling and packaging under the Act (collectively,
"Promotional Materials"), provided USS/THG distributes only the most recently
revised and approved, as set forth in this Section 3.2, version of such
Promotional Materials. USS/THG shall submit all Promotional Materials prepared
for use with marketing of the CoStasis Products for prior review and approval by
Cohesion, which approval shall not be unreasonably withheld or delayed. If any
Promotional Materials have been previously approved by Cohesion, USS/THG shall
not be required to resubmit such Promotional Materials for Cohesion's review and
approval.

3.3 USS/THG shall promote a CoStasis Product within the Field only for
indications covered by the labeling or literature which accompany the CoStasis
Product and which have been approved, cleared or otherwise allowed by the
applicable Regulatory Authorities in the country in which such promotion occurs.

3.4 Cohesion shall provide assistance in training with respect to the CoStasis
Products for USS/THG's marketing and sales personnel and, in accordance with
USS/THG's reasonable requests, to customers procured by USS/THG. Such training
shall be conducted by competent, technically qualified employees or
representatives of Cohesion. Cohesion shall bear the expense associated with
such training as they relate to Cohesion's employees or representatives; USS/THG
shall bear the expenses associated with such training as they relate to the
training facility and supplies. Cohesion training of USS/THG's marketing and
sales personnel shall occur at such times and locations as are mutually agreed
consistent with the mutually beneficial objective of the parties to effect rapid
and thorough training of USS/THG's marketing and sales personnel to maximize
sales of the CoStasis Products. Within the limitations set forth in this Section
3.4, Cohesion shall also provide support for USS/THG's marketing efforts,
including regulatory review of marketing materials, as set forth in Section 3.2,
conducted pursuant hereto as USS/THG's shall reasonably request. Cohesion shall
bear the costs of providing all of the support and assistance described in this
Section 3.4 up to a maximum of [Text Deleted] per calendar year. Any costs
incurred by Cohesion above [Text Deleted] in any calendar year for such support,
if approved in writing in advance by USS/THG, shall be reimbursed to Cohesion by
USS/THG within 30 days after receipt of an invoice therefor at the end of the
appropriate calendar year.

                                       6
<PAGE>   7

3.5 Cohesion shall make available to USS/THG , at the "No P.O. Prices" as set
forth in Tables 6 and 7, demonstration CoStasis Products ("Demonstration
Products"), to be used only for demonstration purposes and not for subsequent
resale by USS/THG. USS/THG shall not purchase Demonstration Products in an
amount exceeding [Text Deleted] of its first six month sales forecast prepared
pursuant to Section 4.2 hereof for each calendar year of this Agreement.
Demonstration Products purchased pursuant to this Section shall not be counted
toward the minimum purchase requirements set forth in Article 5 hereof. USS/THG
may request that such Demonstration Products be shipped directly to a hospital/
account, or shipped directly to a U.S. Surgical facility, the shipping costs for
which USS/THG shall reimburse Cohesion within thirty (30) days of the end of
each calendar quarter.

3.6 Cohesion shall accept and fill CoStasis Products purchase orders forwarded
to it by USS/THG. In addition, Cohesion shall accept and fill purchase orders
for Centrifuges forwarded to it by USS/THG, and shall accept and fill purchase
orders for CellPaker Units forwarded to it by USS/THG.

3.7 The Parties shall continuously communicate and update each other concerning
customer purchase orders, customer pricing and purchase terms, shipping and
delivery of CoStasis Products, and customer invoicing, payment and complaints.
Notwithstanding the foregoing, CoStasis Products shall be invoiced by USS/THG,
but shipped C.I.F. destination and delivered to customers (or as otherwise
directed by USS/THG) directly by Cohesion or its representatives, employing
two-day Federal Express shipping or the equivalent carrier selected by Cohesion
(subject to the approval of USS/THG), the aggregate cost of which insurance and
freight (including supply of appropriate Cohesion shipping containers and
packing materials) shall be reimbursed quarterly by USS/THG, within thirty (30
days) of receipt of an invoice therefor at the end of the appropriate calendar
quarter, except where such costs have been charged directly to USS/THG's
accounts with the applicable carriers. USS/THG shall have sole responsibility
for customer payments and collections, and Cohesion shall be solely responsible
for warranty repairs for CoStasis Products. Cohesion shall have no right,
responsibility or liability for order processing, invoicing, billing or
collection with respect to the CoStasis Products nor any responsibility for any
delays or damages in shipment, except to ensure that reasonable insurance for
shipment delays or damages is maintained.

3.8 Cohesion agrees, at USS/THG's option, to accept orders by electronic data
interchange with USS, and in connection therewith to allow USS/THG to install
and maintain, at USS/THG's expense, a connection between Cohesion's QAD computer
system and USS/THG's SAP computer system.

3.9 USS/THG agree to provide Cohesion on a timely basis with certain sales,
customer, and marketing data relating to the CoStasis Products. Such data may
include customer feedback on the basic CoStasis Products and ideas for
improvements thereto, individual case reports of CoStasis Product uses, data
relating to account usage, ordering, re-ordering, non-ordering of CoStasis
Products, conversion from and data regarding competitive products, and such
other information as USS/THG and Cohesion deem to be reasonably useful to the
implementation of this Agreement.

                                       7
<PAGE>   8

                         ARTICLE 4 - SUPPLY OBLIGATIONS

4.1 Cohesion shall fill USS/THG's purchase orders and arrange shipment to
USS/THG's customers USS/THG within the Territory of the entirety of their
requirements for the CoStasis Products, at the Transfer Prices defined in
Article 7 of this Agreement. In the event that USS/THG orders in any month more
than 125% of the amount of CoStasis Products estimated to be ordered in such
month pursuant to Section 4.2 hereof, Cohesion shall ship the CoStasis Products
that exceed said 125% as soon as reasonably possible, but in no event more than
sixty (60) calendar days after receipt of USS/THG's purchase orders therefor.

4.2 Forty-five (45) calendar days before the start of each calendar year during
the term of this Agreement, USS/THG will provide Cohesion with a twelve (12)
month forecast of its anticipated monthly purchase requirements for CoStasis
Products (the "Forecast"). The Forecast shall be updated by USS/THG on a
quarterly basis, with the updates to be provided to Cohesion forty-five (45)
calendar days before the start of each calendar quarter, for rolling successive
twelve-month periods.

            ARTICLE 5 - MAINTENANCE OF EXCLUSIVE DISTRIBUTION RIGHTS

5.1 During the term of this Agreement, USS/THG shall attain the minimum
aggregate annual purchases of Units ("Minimum Aggregate Annual Purchase
Amounts") set forth in this Article 5.

5.2 By the conclusion of the calendar years set forth below in Table 1, 2 and 3,
USS/THG shall have purchased from Cohesion a Minimum Aggregate Annual Purchase
Amount of CoStasis Products in the Territory as a whole, and as to the Domestic
Territory identified in Exhibit A-4, and as to the International Territory
identified in Exhibit A-5, as follows:

            Table 1 - USS/THG Purchases in Units for Total Territory

<TABLE>
<CAPTION>
                   Year 2000   Year 2001  Year 2002  Year 2003  Year 2004
<S>                <C>         <C>        <C>        <C>        <C
     4.5ml             ***        ***        ***        ***        ***
     2.0ml             ***        ***        ***        ***        ***
     1.0ml             ***        ***        ***        ***        ***
</TABLE>

             Table 2 - USS Purchases in Units for Domestic Territory

<TABLE>
<CAPTION>
                 Year 2000      Year 2001  Year 2002  Year 2003  Year 2004
<S>              <C>            <C>        <C>        <C>        <C
4.5ml                  ***         ***        ***        ***        ***
2.0ml                  ***         ***        ***        ***        ***
1.0ml                  ***         ***        ***        ***        ***
</TABLE>

                                       8
<PAGE>   9

          Table 3 - THG Purchases in Units for International Territory

<TABLE>
<CAPTION>
                 Year 2000      Year 2001  Year 2002  Year 2003  Year 2004
<S>              <C>            <C>        <C>        <C>        <C
4.5ml                  ***         ***        ***        ***        ***
2.0ml                  ***         ***        ***        ***        ***
1.0ml                  ***         ***        ***        ***        ***
</TABLE>

***Deleted

5.3 The minimum purchase quantities set forth in Tables 1, 2 and 3 shall be
adjusted to reflect delays in FDA clearance (as regards Tables 1 and 2) or
delays in termination of foreign distribution agreements (as regards Tables 1
and 3). If FDA clearance of the CoStasis Product has not been received by
January 1, 2000, the minimum purchase amount for calendar year 2000 in Table 2
shall be reduced by 1/12 for each month, or portion thereof, that said FDA
clearance is delayed, with a corresponding reduction in the minimum amount in
Table 1. If FDA clearance of the CoStasis Product has not been received by March
31, 2000, the minimum purchase amount for calendar year 2001 in Table 2 shall be
reduced by 1/12 for each month, or portion thereof, that said FDA clearance is
delayed beyond March 31, 2000, with a corresponding reduction in the minimum
amount in Table 1. . If Cohesion has been unable to terminate an existing
exclusive distribution agreement with a third party distributor in any part of
the International Territory [Text Deleted] from the date of execution of this
Agreement, the minimum purchase amount for calendar year 2000 in Table 3 shall
be reduced [Text Deleted], with a corresponding reduction in the minimum amount
in Table 1.

5.4 In the event that USS/THG, for whatever reason, fails to purchase sufficient
CoStasis Products to meet the Minimum Aggregate Annual Purchase Amount (as
adjusted pursuant to Section 5.3) to be purchased in any calendar year, then
USS/THG at its sole option may render payment within 30 days of the close of
that calendar year to Cohesion in a sum sufficient at the Transfer Price to
remedy the deficiency in the Minimum Aggregate Annual Purchase Amount in that
calendar year. Such payment by USS/THG to Cohesion will secure the exclusive
rights granted herein.

5.5 In the event that USS/THG fails to purchase sufficient CoStasis Products to
meet the Minimum Aggregate Annual Purchase Amount in any given calendar year for
reasons other than a Force Majeure as defined by this Agreement (or fails to
make the payment(s) permitted under Section 5.4, if applicable), USS/THG's
exclusive rights under this Agreement shall terminate (subject to Sections 5.6
and 5.7) and USS/THG shall no longer be obligated to purchase the Minimum
Aggregate Annual Purchase Amount of CoStasis Products.

5.6 Notwithstanding Section 5.5, if USS/THG fails to purchase sufficient
CoStasis Products to meet the Minimum Aggregate Annual Purchase Amount for total
Territory sales set forth in Table 1 in Section 5.2 in any calendar year, but
USS or THG has purchased sufficient CoStasis Products to meet the Minimum
Aggregate Annual Purchase Amount for either Domestic Territory sales set forth
in Table 2 in Section 5.2 or International Territory sales set forth in

                                       9
<PAGE>   10

Table 3 in Section 5.2, then the conversion of USS/THG's exclusive rights to
non-exclusive rights under this Agreement for the subsequent calendar year shall
not apply to the Domestic Territory or International Territory as to which USS
or THG has purchased sufficient CoStasis Products to meet the Minimum Aggregate
Annual Purchase Amount relevant thereto.

5.7 Notwithstanding any other provision of this Article 5, if in any calendar
year USS/THG fails to purchase sufficient CoStasis Products to meet the Minimum
Aggregate Annual Purchase Amounts (calculated in units) set forth in Tables 2 or
3 above, but USS/THG purchases CoStasis Products in dollar amounts, based on the
Fixed Transfer Prices and Variable Transfer Prices set forth in Table 6, equal
to or greater than the dollar amounts set forth in Tables 4 and 5 below, as
applicable, then the conversion of USS/THG's exclusive rights to non-exclusive
rights under this Agreement for the subsequent calendar year shall not apply to
the Region as to which USS/THG has purchased sufficient Products to meet the
minimum dollar purchase amounts relevant thereto and set forth in said Tables 4
and 5.

         Table 4 - USS Purchases in U.S. Dollars for Domestic Territory

<TABLE>
<CAPTION>
Year 2000      Year 2001      Year 2002      Year 2003      Year 2004
<S>            <C>            <C>            <C>            <C>
      ***            ***            ***            ***            ***
</TABLE>

       Table 5 - THG Purchases in U.S. Dollars for International Territory
<TABLE>
<CAPTION>
Year 2000      Year 2001      Year 2002      Year 2003      Year 2004
<S>            <C>            <C>            <C>            <C>
            ***            ***            ***            ***           ***
</TABLE>

*** Deleted

5.8 If USS/THG's exclusive rights under this Agreement are converted to
non-exclusive rights pursuant to Section 5.5, 5.6 or 5.7, Cohesion shall have
the right to promote, sell and distribute CoStasis Products in the Field within
the Territory to the same extent as is provided to USS/THG by Articles 2 and 3
of this Agreement, and shall have the right to grant to third parties, including
Cohesion Affiliates, the non-exclusive right to promote, sell and distribute
CoStasis Products in the Field within the Territory.

5.9 In the event that Cohesion grants to third parties, including Cohesion
Affiliates, the non-exclusive right to promote, sell and distribute CoStasis
Products within the Territory pursuant to Section 5.8, the terms of such
non-exclusive grants shall not be more favorable than those terms under which
USS/THG promotes, sells and distributes CoStasis Products within the Territory
on a non-exclusive basis.

                            ARTICLE 6 - CONSIDERATION

                                       10
<PAGE>   11

        6.1 As consideration for the rights granted hereunder, in addition to
its payments under Article 7, USS/THG shall pay to Cohesion the following:

               (a) Upfront License Fee: A payment of Five Hundred Thousand
Dollars ($500,000) payable to Cohesion within five (5) business days of
execution of this Agreement, 75% of which shall be payable by USS and 25% of
which shall be payable by THG.

               (b)  Additional License Fees:

                      (i) U.S. Approval: Five Hundred Thousand Dollars
($500,000) payable to Cohesion upon issuance to Cohesion of all required
Regulatory Approvals by the FDA for the commercial marketing of the CoStasis
Products; 75% of which shall be payable by USS and 25% of which shall be payable
by THG.

                      (ii) April Payment: Two Hundred Fifty Thousand Dollars
($250,000) payable to Cohesion on April 1, 2000, 75% of which shall be payable
by USS and 25% of which shall be payable by THG.

                      (iii) [Text Deleted]

                      (iv) [Text Deleted]

                      (v) Cumulative Sales: [Text Deleted] upon cumulative Net
Sales from the inception of this Agreement reaching or exceeding [Text Deleted]
, 75% of which shall be payable by USS and 25% of which shall be payable by THG;
provided, that such payment shall not be due unless and until [Text Deleted]

                 ARTICLE 7 - TRANSFER PRICES AND OTHER PAYMENTS

7.1 USS/THG and any USS/THG Affiliate shall purchase CoStasis Products from
Cohesion pursuant to Sections 3.6 and 4.1, respectively, at the Transfer Prices
for those products as defined by this Article 7.

7.2 The Transfer Price for a specific CoStasis Product to be sold to any person
or entity other than an USS/THG Affiliate shall be the sum of: (1) a fixed
amount (the "Fixed Transfer Price") and (2) a percentage of Net Sales (the
"Variable Transfer Price"), each as set forth in Tables 5 and 6.

                                       11
<PAGE>   12

             Table 6 - CoStasis Product Transfer Prices and Payments

<TABLE>
<CAPTION>
Unit Size        Fixed             Variable Transfer             Variable Transfer        "No P.O.
                 Transfer Price    Price, Years 2000 & 2001      Price, Years 2002+       Price"
<S>              <C>               <C>                           <C>                      <C>
9.0 cc (4.5 ml)  ***               *** of Net Sales              *** of Net Sales         ***
4.0 cc (2 ml)    ***               *** of Net Sales              *** of Net Sales         ***
2.0 cc (1 ml)    ***               *** of Net Sales              *** of Net Sales         ***
</TABLE>

         Table 7 - Centrifuge and CellPaker Transfer Prices and Payments

<TABLE>
<CAPTION>
Product                           Fixed Transfer Price      "No P.O. Price"
<S>                               <C>                       <C>
Centrifuge                        ***(1)                          ***(1)
CellPaker (1x Unit)               ***                             ***
CellPaker (10xUnit)               ***                             ***
</TABLE>

--------
(1)  The parties agree that Centrifuges provided to USS/THG hereunder shall be
     priced at [Text Deleted]. The price set forth in this table is an estimate
     for planning purposes only.

                                       12
<PAGE>   13

7.3 Fixed Transfer Prices for all Products shipped by Cohesion during any month
shall be payable by USS/THG by the 15th day of the following month, following
receipt of verification of shipment thereof from Cohesion.

7.4 Variable Transfer Prices shall be payable by USS within 30 days following
the end of each calendar quarter.

                      ARTICLE 8 - RESEARCH AND DEVELOPMENT

8.1 The Parties agree that one of the aims of their relationship is the further
commercialization of the CoStasis Products and the development of improvements
to the CoStasis Products which are compatible and complementary with USS/THG
products and function in a manner designed to protect, to the maximum extent
reasonably possible, the intellectual property rights of the parties and the
distinctiveness of the CoStasis Products with USS/THG products in the
marketplace, and shall design or redesign their respective products for use in
the Field consistent with the foregoing objectives.

8.2 The planning, direction and activities of the research and development
program shall be under the coordination of a "Development Committee", which
shall consist of four members, one of which shall serve as Chairman.
Responsibilities of the Development Committee shall include, but shall not be
limited to, discussion and communications concerning strategies for further
research and development of the CoStasis Products and CoStasis Product
Improvements, and development of product designs. Cohesion and USS/THG shall
each have two (2) representatives on the Development Committee. The chairmanship
shall rotate each twelve (12) month period and shall first be a representative
of Cohesion and then a representative of USS/THG, and so forth. The Development
Committee shall be established within thirty (30) days after the effective date
of this Agreement. Each party shall name, and may remove and replace at any time
without the consent of the other party, its members. The affirmative vote of a
majority of the members present at a meeting shall be necessary for the passage
of any resolution or for any other action by the Development Committee (except
adjournment of a meeting where less than a quorum is present). The Development
Committee may meet by telephone conference or other similar means.
Notwithstanding the foregoing, the Development Committee shall not have any
authority to alter in any way the substantive rights of the parties hereto set
forth in this Agreement.

8.3 Development of the CoStasis Products and Improvements during the term of
this Agreement including, without limitation, the conduct of all clinical trials
shall be the responsibility of Cohesion, unless otherwise decided by the
Development Committee. [Text Deleted] Both parties will communicate with each
other and provide copies of all test data and other results relating to agreed
upon development of CoStasis Products and Improvements. [Text Deleted] For
purposes of this Section, "Manufacturing Cost" means the direct labor and
material, but not overhead, costs incurred in, or attributable to, the
manufacture, packaging and labeling of that CoStasis Product. Manufacturing
Costs shall be Cohesion's costs as determined by Cohesion's cost accounting
procedures, which shall be in

                                       13
<PAGE>   14

accordance with generally accepted accounting principles. Cohesion agrees to
allow USS/THG to examine and copy Cohesion's books and records as and when
reasonably requested, during Cohesion's normal business hours, for verification
of the direct labor and material costs incurred in, or attributable to, the
manufacture, packaging and labeling of that CoStasis Products.

8.4 [Text Deleted]

8.5 USS/THG agrees to allow Cohesion to use samples of CoStasis Products during
general CoStasis Product demonstrations. USS/THG further agrees to allow
Cohesion to distribute samples of CoStasis Products to physicians, not to exceed
[Text Deleted] units per year during the term of this Agreement, provided that
Cohesion notifies USS/THG in writing of the names and addresses of all parties
receiving such samples.

                       ARTICLE 9 - MANUFACTURE AND SUPPLY

9.1 Cohesion shall have sole right and shall have sole responsibility and
liability for the manufacture, assembly, production, quality control,
sterilizing, packaging, and multilingual labeling of the CoStasis Products.

9.2 Cohesion shall comply, and shall cause each of its third party vendors,
suppliers, distributors or other Persons involved in the manufacture, assembly,
production, packaging, labeling, shipping or delivery of the CoStasis Products
to comply, with all present and future Laws relating to the manufacture,
assembly, production, packaging, sterilizing, labeling, shipping and delivery of
the CoStasis Products, including, without limitation, those enforced or
promulgated by Regulatory Authorities (e.g., FDA Good Manufacturing Practices/
Quality Systems Regulations, defect notifications and any other registration
requirements which may be imposed on the manufacture, assembly or supply of
drugs or medical devices).

9.3 USS/THG shall have the right, upon reasonable advance notice (no less than
15 days) specifying USS/THG's purpose and during regular business hours, to
inspect the manufacture, assembly, production, packaging, labeling, shipping,
quality control and sterilizing facilities of Cohesion and its third party
vendors, suppliers and distributors, as well as all records relating to the
CoStasis Products to allow USS/THG to verify Cohesion's compliance with its
obligations under this Agreement. Cohesion shall provide USS/THG with reasonable
advance notice (no less than 45 days) prior to making, or any third party
making, any change which would require notification of any International
Regulatory Agency of the design of a CoStasis Product, the materials used to
manufacture a CoStasis Product, or the manufacturing process thereof.

9.4 USS/THG shall maintain, at Cohesion's expense, contingent business
interruption insurance under which USS/THG is the sole covered party. The amount
of such coverage shall be based upon the reasonable estimate of the parties in
their business judgment exercised in a reasonable and prudent manner as to the
expected sales of the CoStasis Products during the first twelve (12) months
following United States Regulatory Approval, but the premium payable by Cohesion
therefor shall not exceed [Text Deleted] . Thereafter, the dollar amount of such
coverage shall be adjusted on the annual anniversary date of such Regulatory
Approval during the Term to reflect the reasonable estimate of the parties in
their business judgment exercised in

                                       14
<PAGE>   15

a reasonable and prudent manner as to the expected sales of the CoStasis
Products during the immediately following twelve (12) months, but the premium
payable by Cohesion therefor shall not exceed [Text Deleted] . Nothing set forth
in this section 9.4 is intended to substitute for the indemnity rights set forth
in this Agreement.

9.5 (a) In the event of any shortage, damage or discrepancy in or to a shipment
of CoStasis Products or in the event any of the CoStasis Products fail to comply
with the then current Specifications for the CoStasis Products, USS/THG shall
report the same to Cohesion and furnish such written evidence or other
documentation as Cohesion reasonably may deem appropriate. If the substantiating
evidence delivered by USS/THG demonstrates that such shortage, damage or
discrepancy or non-conformity with Specifications existed at the time of
delivery of the CoStasis Product at the C.I.F. point, USS/THG may return the
CoStasis Product to Cohesion at Cohesion's expense, and at USS/THG's request
Cohesion shall use all reasonable efforts to deliver promptly replacement
CoStasis Products to USS/THG in accordance with the delivery procedures set
forth herein.

  (b) Cohesion represents and warrants to USS/THG that (i) all CoStasis Products
sold and delivered to any account under this Agreement will have been
manufactured, if required by law, in accordance with FDA Good Manufacturing
Practices / Quality Systems Regulations, European Medical Device Directive
requirements, ISO 9001 certification or successor requirements, and all other
applicable manufacturing requirements, (ii) all CoStasis Products sold and
delivered to any account under this Agreement shall have received all Regulatory
Approvals required for the CoStasis Products in any countries in the Territory
(subject to the material accuracy of all information provided by USS to Cohesion
in relation to such Regulatory Approvals), and (iii) continually during the term
of this Agreement no CoStasis Products delivered by Cohesion to USS/THG or to
any USS/THG account shall be adulterated or misbranded at the time of delivery
within the meaning of the U.S. Food, Drug and Cosmetic Act and regulations
thereunder. Cohesion shall cause USS/THG's regulatory personnel to be provided
with reasonable access from time to time to the facilities and records of
Cohesion for the purpose of confirming Cohesion's compliance with all applicable
requirements noted in this Section.

  (c) Cohesion warrants to USS/THG and to USS/THG's customers that CoStasis
Products sold by Cohesion will not infringe any currently issued patents, trade
secrets, trademarks, or other intellectual property rights of any third party,
and that such products shall, when delivered at the C.I.F. point, meet the
Specifications and shall be free from defects in materials and workmanship.
USS/THG shall invoice Cohesion for, and Cohesion shall promptly pay, USS/THG's
reasonable labor charges and USS/THG's out-of-pocket materials, handling,
shipping, transportation, insurance and other expenses actually incurred in
replacing defective CoStasis Products which were under warranty.

  (d) THE WARRANTIES SET FORTH ABOVE ARE IN LIEU OF ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED, WHICH ARE HEREBY DISCLAIMED AND EXCLUDED BY COHESION,
INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR USE, EXCEPT THAT COHESION SHALL ALSO PROVIDE WITH RESPECT
TO COSTASIS

                                       15
<PAGE>   16

PRODUCTS SOLD TO DISTRIBUTORS OR TO DISTRIBUTORS' CUSTOMERS SUCH OTHER
WARRANTIES AS COHESION CUSTOMARILY PROVIDES TO ITS CUSTOMERS OR END-USERS OF THE
COSTASIS PRODUCTS IN THE FIELD OF USE.

                             ARTICLE 10 - REGULATORY

10.1 (a) Cohesion shall permit USS/THG to inspect and copy at USS/THG expense
Cohesion's Regulatory Approvals for CoStasis Products in the Field in the
Territory at Cohesion's principal offices on prior notice during regular
business hours. Such Regulatory Approvals shall be retained by USS/THG in
confidence as Cohesion's Confidential Information. Promptly following the
execution of this Agreement, Cohesion shall provide to USS/THG a schedule to the
best of Cohesion's knowledge containing a description of the timing, clinical
endpoints, indications approvals, and clinical protocols for all clinical trials
conducted, sponsored or funded, in whole or in part, by Cohesion or any Cohesion
Affiliate, or currently expected or anticipated to be conducted, sponsored or
funded, in whole or in part, by Cohesion or any Cohesion Affiliate relating to
CoStasis Products in the Field in the Territory.

(b) During the term of the Agreement, interaction with the FDA, any
International Regulatory Agency and any other similar authority within or
outside the United States concerning CoStasis Products shall be conducted
exclusively by Cohesion. For purposes of any regulatory filings concerning the
CoStasis Products, Cohesion shall be the official company sponsor in the United
States. Cohesion agrees to appoint the appropriate USS/THG Affiliate or
distributor as the official company sponsor in countries in the Territory
outside the United States. Cohesion shall make reasonable commercial efforts and
provide its own resources as reasonably required to receive the Regulatory
Approvals for all countries in the Territory as to which USS requests that
applications for Regulatory Approvals be filed. Cohesion shall advise USS/THG of
regulatory communications with Regulatory Agencies concerning the CoStasis
Products in the Field in the Territory and provide USS/THG with a copy of all
proposed filings with Regulatory Agencies concerning the CoStasis Products in
the Field in the Territory as far in advance as is reasonably possible to permit
USS/THG to comment upon the proposed filings, such comment to be made within
seven (7) business days after receipt of the proposed regulatory filing. No such
filing shall be submitted to a Regulatory Agency unless USS and Cohesion have
each approved such filing in writing. USS/THG will assume and be solely
responsible for all costs associated with regulatory interaction concerning the
CoStasis Products in the International Territory, and shall reimburse Cohesion
for its costs associated therewith, provided that USS/THG's obligations in
relation to such costs will apply only to costs incurred after the date of
execution hereof which have been approved in advance by USS/THG. Cohesion shall
provide USS/THG with written updates, no less often that each calendar quarter,
on the status of any pending filings with such Regulatory Agencies for CoStasis
Products in the Field in the Territory.

10.2 Either party shall notify the other Party as soon as practicable after
receiving notice of any Action involving or relating to CoStasis Products which
includes allegations of violation of any applicable Laws. In addition, Cohesion
shall promptly notify USS/THG of any adverse reaction or other similar claims
with respect to CoStasis Products of which it becomes aware. USS/THG shall
promptly notify Cohesion of any adverse reaction or other similar claims with
respect to the CoStasis Products, for purposes of notifying the appropriate
regulatory agency or

                                       16
<PAGE>   17

agencies of which it becomes aware. Any death, serious injury, potential for
occurrence of the same, or change in the frequency or occurrence in field
experiences required to be reported to the FDA shall be reported by a Party to
the other Party in a manner and time which will enable the Party receiving the
information to comply with applicable Laws in a timely manner.

10.3 Cohesion shall be solely responsible to institute and fund any recall,
field corrective action, or the like in circumstances relating to a CoStasis
Product defect or failure which requires such action as determined by the FDA,
any International Regulatory Agency or any other similar authority within or
outside the United States, or by Cohesion or as otherwise may be required
pursuant to applicable Laws, except to the extent such action is the result of a
failure by USS/THG to limit its promotion of the CoStasis Products to
indications approved, cleared or otherwise allowed by applicable Regulatory
Agencies. In such circumstances, the actual retrieval of the CoStasis Products
will be the responsibility of Cohesion and handled by Cohesion or third Persons
authorized by Cohesion. USS/THG shall assist Cohesion in any such recall, field
corrective action, or the like and, subject to the exception set forth in the
first sentence of this Section 10.3, shall be reimbursed by Cohesion for
USS/THG's out of pocket costs, other than attorney's fees and expenses, involved
in such requested assistance.

10.4 Cohesion represents, warrants and covenants that (i) in connection with any
CoStasis Product sold to customers, it will have and will continue to have and
maintain, effective Regulatory Approvals to manufacture and sell CoStasis
Products in the Territory, to the extent required by Law, and shall provide a
copy of such Regulatory Approvals to USS/THG, and (ii) that the submissions made
by Cohesion to obtain or maintain such Regulatory Approval shall be made in good
faith and contain accurate and complete data and information regarding the
CoStasis Products as required by applicable Laws. Cohesion warrants and
covenants that no CoStasis Products delivered by it, or on its behalf, to
customers will be adulterated or misbranded at the time of delivery within the
meaning of the Act.

10.5 USS/THG represents and warrants that (i) it shall comply with all
applicable Laws in its advertising, promotion and sale of CoStasis Products,
(ii) it shall promote CoStasis Products only within the approved indications;
and (iii) all advertising, detail aids, promotional materials and sales
brochures used by it to market CoStasis Products shall be approved by Cohesion,
such approval not to be unreasonably withheld. Cohesion represents and warrants
that (i) it shall comply with all applicable Laws in its advertising, promotion
and sale of CoStasis Products, (ii) it shall advise USS/THG of the approved
indication, and (iii) Cohesion's approval of USS/THG advertising, detail aids,
promotional materials and sales brochure for CoStasis Products, and all
advertising, detail aids, promotional materials and sales brochures prepared by
Cohesion for CoStasis Products, shall be consistent with all applicable
Regulatory Approvals.

                       ARTICLE 11 - INVENTIONS AND PATENTS

11.1 The Parties each acknowledge that the other Party has developed or acquired
methods, processes and apparatus relating to their respective fields of
endeavor. Notwithstanding anything in this Agreement to the contrary, each Party
shall retain all right and title in and to such methods, processes and apparatus
developed or owned on their respective parts prior to the

                                       17
<PAGE>   18

Effective Date. During the term of this Agreement, inventions by Cohesion or
USS/THG shall be treated as follows:

(i) Inventions, whether or not patentable, which are conceived and/or reduced to
practice (i) solely by or on behalf of USS/THG based solely on Cohesion
Confidential Information, or (ii) solely by or on behalf of Cohesion based
solely on Cohesion Confidential Information, or (iii) jointly by or on behalf of
USS/THG and Cohesion based solely on Cohesion Confidential Information, shall be
owned by Cohesion (collectively, "Cohesion Inventions"); and

(ii) Inventions, whether or not patentable, which are conceived and/or reduced
to practice (i) solely by or on behalf of USS/THG based solely on USS/THG
Confidential Information, (ii) solely by or on behalf of Cohesion based solely
on USS/THG Confidential Information, or (iii) jointly by or on behalf of USS/THG
and Cohesion based solely on USS/THG Confidential Information, shall be owned by
USS/THG (collectively, "USS/THG Inventions").

(iii) Inventions, whether or not patentable, which are conceived and /or reduced
to practice by either Party based on both USS/THG Confidential Information and
Cohesion Confidential Information shall be owned jointly by both Parties.
USS/THG and Cohesion shall execute any assignments necessary to effect the
distribution of ownership of joint inventions specified in this section 11.1.

(iv) Each Party shall have sole responsibility for filing, prosecuting and
maintaining applications or patents and local counterparts in its territory.
Each Party shall bear the expenses of filing, prosecution and maintenance of
joint Inventions in its territory. If either Party declines to file, prosecute
or maintain a joint Invention patent in a territory, it shall notify the other
party in writing before any applicable due date no later than thirty (30) days
prior to such due date. The notified Party shall have the option to file,
prosecute or maintain at its expense each such joint Invention patent.

11.2 Cohesion shall have sole right and shall have sole responsibility at its
sole cost to obtain and maintain all Patents involving or related to CoStasis
Products. Cohesion shall provide USS/THG with a copy of all Patents related to
CoStasis Products in the Field in the Territory upon the issuance thereof.

11.3 If USS/THG or Cohesion receives notice of an Action by a third Person
alleging infringement of such third Person's patent rights by the manufacture,
use or sale of a CoStasis Product in the Field in the Territory, the Party
receiving such notice shall promptly notify the other Party. Cohesion shall
conduct the legal defense of such Action and may enter into any disposition with
respect thereof, including any out of court settlement or agreement with the
third party, as Cohesion in its discretion deems desirable. All costs of
Cohesion's defense, including its attorneys' fees and court costs, and any
damages awarded or amounts paid in settlement in any such Action, shall be the
sole responsibility of Cohesion. Cohesion shall keep USS/THG advised of the
status of such Action and shall provide USS/THG with a copy of all litigation
papers filed relating thereto. USS/THG shall fully cooperate with Cohesion in
its defense of such infringement Action and Cohesion shall pay USS/THG's out of
pocket expenses, including its attorneys fees and expenses, in providing such
cooperation to Cohesion.

                                       18
<PAGE>   19

11.4 The Parties shall each give prompt written notice to the other of any
apparent infringement discovered by it with respect to any Patent or trademark
related to CoStasis in the Field in the Territory. Such notice shall set forth
the facts of the apparent infringement in reasonable detail to the extent then
known to the notifying Party. Should either Cohesion or USS/THG desire that an
Action be brought against third party infringers to enforce a Patent, the Party
shall notify the other Party. USS/THG shall have the exclusive right to bring or
settle, in its discretion and within the terms of this Agreement, such Action if
it is within the Field and in the Territory at its own expense and shall be
entitled to all amounts recovered from opposing parties, if any. Cohesion shall
have the exclusive right to bring or settle, in its discretion, such Action if
it is outside the Field or outside the Territory at its own expense and shall be
entitled to all amounts recovered from opposing parties, if any. USS/THG shall
keep Cohesion advised of the status of such Action within the Field within the
Territory and shall provide a copy of all litigation papers received or prepared
involving or relating thereto. Cohesion shall cooperate with USS/THG in
connection with any such Action within the Field within the Territory and
USS/THG shall pay Cohesion's out of pocket expenses, other than attorneys fees
and expenses, in providing such cooperation. Cohesion shall have the right in
its discretion to join in any such Action within the Field provided that it pays
the costs and expenses of its counsel.

11.5 The provisions of this Article 11 shall survive termination of this
Agreement.

                    ARTICLE 12 - INDEMNIFICATIONS; INSURANCE

12.1 (a) Cohesion shall be liable for and shall defend, indemnify and hold
USS/THG, its Affiliates and permitted assignees, and each of their respective
directors, officers, employees, agents and representatives (collectively,
"USS/THG Indemnitees") harmless from and against any liability, damage or loss
and from any judgments, awards, claims, Action, demands, recoveries or expenses,
including USS/THG's attorneys fees and costs, to the extent that they (i) arise
out of Cohesion's breach of this Agreement or of any representation or warranty
made to USS/THG under this Agreement, or (ii) ) [Text Deleted], or (iii) result
from the negligent acts or willful malfeasance on the part of Cohesion or
Cohesion's employees or agents, or (iv) arising out of any tort claim, worker's
compensation claims or other employment related claims of any agents or
employees of Cohesion; or (v) to the extent caused by use of a defective
CoStasis Product in the Territory, except (aa) to the extent caused by an act or
omission of USS/THG or its agents, or (bb) arising out of or incident to any
misrepresentation or any breach of any warranty or covenant of USS/THG hereunder
or any default in the observance or performance of any term or provision to be
observed or performed by USS/THG hereunder, or (cc) resulting from a defect in a
USS/THG product sold in a kit form with a CoStasis Product. Cohesion shall
reimburse USS for any attorneys fees and costs incurred by USS under this
Section 12.1(a) on a monthly basis during any Action covered hereby.

(b) USS/THG shall be liable for and shall defend, indemnify and hold Cohesion,
its Affiliates and permitted assignees, and each of their respective directors,
officers, employees, agent and

                                       19
<PAGE>   20

representatives (collectively, "Cohesion Indemnitees") harmless from and against
any liability, damage or loss and from any judgment, awards, claims, Action,
demands, recoveries or expenses, including Cohesion's attorneys fees and costs,
to the extent that they (i) arise out of USS/THG's breach of this Agreement or
of any representation or warranty made to Cohesion under this Agreement, or (ii)
result from the negligent acts or willful malfeasance on the part of USS/THG or
USS/THG's employees or agents including, without limitation, selling CoStasis
Products outside the Field or outside the Territory, or in promoting a CoStasis
Product in a manner inconsistent with the CoStasis Product's labeling (except as
to Promotional Materials approved by Cohesion), or (iii) arising out of any
tort claim, worker's compensation claims or other employment related claims of
any agents or employees of USS/THG, or (iv) arising out of or incident to any
misrepresentation or any breach of any warranty or covenant of USS/THG hereunder
or any default in the observance or performance of any term or provision to be
observed or performed by USS/THG hereunder. USS shall reimburse Cohesion for any
attorneys fees and costs incurred by Cohesion under this Section 12.1(b) on a
monthly basis during any Action covered hereby.

 (c) If any lawsuit concerning CoStasis Products in the Territory or the
transactions contemplated by this Agreement is brought by or on behalf of a
third party against Cohesion and/or USS/THG, in such event Cohesion and USS/THG
shall reasonably consult concerning the handling of such matter. However, this
obligation to consult shall not affect the liabilities and obligations imposed
by this Section 12.1.

 (d) On execution of this Agreement, each party shall maintain comprehensive
general liability insurance, including product liability insurance with broad
form vendors coverage, with insurance carriers reasonably acceptable to the
other party on a claims made basis in an amount [Text Deleted] . Cohesion shall
consider increases in the amount of such insurance beyond [Text Deleted] based
on its business judgment exercised in a reasonable and prudent manner. Such
insurance shall have a combined single limit for bodily injury and property
damage per occurrence and in the aggregate in the aforementioned amounts. Such
insurance shall include the other party as an additional named insured as its
interest may appear. Commencing with Regulatory Approval to sell a CoStasis
Product in the Territory, each party shall furnish to the other party a
certificate of insurance evidencing such coverage with thirty days' written
notice to the other party of cancellation or material change. Nothing set forth
herein in this Section 12.1(d) is intended to substitute for the indemnity
rights of the parties set forth in this Agreement.

12.2 Promptly after receipt by a Party indemnified pursuant to this Agreement of
the commencement of any Action against such indemnified Party in respect of
which indemnity or reimbursement may be sought against the indemnifying Party
hereunder, such indemnified Party shall promptly notify the indemnifying Party
in writing of the commencement of the Action, but the failure to so notify the
indemnifying Party shall not relieve it of any liability which it may have to
any such indemnified Party unless such a failure substantially prejudices the
rights of the indemnifying Party hereunder. The indemnifying Party shall
thereupon undertake the defense of such Action. If any such action shall be
brought against any indemnified Party and it shall notify the indemnifying Party
of the commencement thereof, the indemnified Party shall be entitled to
participate therein, and to the extent it so desires, to control the defense
thereof, with counsel

                                       20
<PAGE>   21

reasonably satisfactory to such indemnified Party. After notice is given by the
indemnified Party to the indemnifying Party of its election to participate in
the defense thereof, the indemnified Party may participate in such defense, but
the indemnifying Party shall not be liable to such indemnified party under this
Section 12.2 for any legal or other expenses subsequently incurred by such
indemnified Party in connection with its participation in the defense thereof
other than out of pocket costs and expenses of the indemnified party (excluding
legal costs and expenses) in connection with assistance rendered to the
indemnifying party at the specific request of the indemnifying Party.

12.3 The provisions of this Article 12 shall survive termination of this
Agreement.

                       ARTICLE 13 NON-COMPETE; EXCLUSIVITY

13.l During the term of this Agreement, Cohesion shall not except as provided in
Article 5, directly or indirectly, without USS/THG's prior written consent, in
its sole discretion, market or solicit, or permit, encourage or assist third
parties to market or solicit, the sale or lease of CoStasis Products in the
Field in the Territory, other than through USS/THG.

13.2 During the term of this Agreement, USS/THG shall not, directly or
indirectly, without Cohesion's prior written consent, in its reasonable
discretion, market or solicit, or permit, encourage or assist third parties to
market or solicit, the sale or lease of the CoStasis Products outside of the
Field in the Territory, other than through Cohesion.

          ARTICLE 14 - RIGHT OF FIRST REFUSAL AND RIGHT OF FIRST OFFER

        14.1 Cohesion hereby grants to USS/THG the below rights of first refusal
and first offer for Rights Technologies in the Field in the Territory set forth
in this Article 14. In accordance with such rights of first refusal and first
offer, Cohesion agrees not to transfer, by sale, license or otherwise, any
interest in any of the Rights Technology in the Field in the Territory to any
third Person, except pursuant to this Article 14.

        14.2 If Cohesion decides to offer for transfer such ownership interest
in its Rights Technologies in the Field in the Territory to outside entities, it
shall first deliver to USS/THG an offer, irrevocable for forty-five (45) days
from its receipt, to sell to USS/THG the interest which is the subject of the
outside offer. If USS/THG notifies Cohesion that it desires to negotiate for the
acquisition of such Rights Technologies within ten (10) days of its receipt of
such offer, the parties shall promptly negotiate in good faith an agreement to
sell or otherwise transfer to USS/THGC such Rights Technologies. If the parties
fail to enter into an agreement regarding such Technology within said forty-five
(45) day period, Cohesion shall be free to offer such Rights Technologies to
third parties, provided the terms of any such offer(s) may not be more favorable
to such third parties than were last offered to USS/THG if such agreement is
entered into within six (6) months following the termination of said forty-five
(45) day period.

        14.3 [Text Deleted]

                                       21
<PAGE>   22

                        ARTICLE 15 - TERM AND TERMINATION

15.l This Agreement shall remain in full force and effect from the date hereof
until the date which is five (5) years from the date hereof, unless earlier
terminated pursuant to this Article 15 (the "Term").

15.2 Both Parties agree to discuss, starting no later than January 1, 2004,
renewal of this Agreement.

15.3 This Agreement may be terminated prior to the end of the term of this
Agreement as follows:

(a) by either Party, in the event the other Party files any petition in a
bankruptcy or similar proceeding or, if the other Party has a petition in a
bankruptcy or similar proceeding filed against it and such proceeding continues
unstayed after forty five (45) days after the filing thereof, on thirty (30)
days written notice to the other Party;

(b) by either Party, in the event the other Party becomes insolvent or makes an
assignment for the benefit of its creditors, on thirty (30) days written notice
to the other Party;

(c) by either Party, in the event a Force Majeure Event (defined below) prevents
the other Party from performing for more than sixty (60) days, on thirty (30)
days written notice to the other Party;

(d) by either Party, in the event the other Party refuses to perform or shall
materially breach or materially fail in the observance or performance of any
representation, warranty, covenant or obligation under this Agreement following
notice of such refusal, breach or failure; provided however, that non-payment of
any amount due hereunder shall not constitute a material breach of this
Agreement unless payment is not made within fifteen (15) days after the date
such payment is due hereunder, and provided that the Party receiving such notice
shall have thirty (30) days after receiving notice to cure the refusal, breach
or failure. In the event such breach or failure is cured, the notice shall be of
no effect. In the event such refusal, breach or failure is not cured, this
Agreement shall then terminate at the end of such thirty (30) day period;

(e) [Text Deleted]

15.4 In the event of termination of this Agreement, each Party shall fulfill all
obligations existing as of the effective date of termination and shall supply
all open customer orders and payment for the CoStasis Products that may be due
under this Agreement. Notwithstanding the foregoing, USS/THG shall not be
obligated to pay Cohesion the Additional Fees set forth in

                                       22
<PAGE>   23

Section 6.1(b) in the event that Cohesion achieves either or both of such
regulatory approvals subsequent to the date that USS/THG gives notice to
Cohesion of termination of this Agreement, unless USS/THG shall in its
discretion solicit orders for the CoStasis Products in such portion of the
Territory covered by such regulatory approval during the period between the date
notice of termination is given to Cohesion and the effective termination date of
this Agreement.

                          ARTICLE 16 - CONFIDENTIALITY

16.1 Each Party represents, warrants and covenants that it has not, directly or
indirectly, disclosed and agrees that it shall not, directly or indirectly,
disclose to any third person or entity either during the term of this Agreement
or for a period of five (5) years subsequent to the termination of this
Agreement, (a) any Confidential Information concerning the other Party disclosed
in accordance with this Agreement; or (b) the terms or substance of this
Agreement except as required by law or legal process; provided that prior to any
such disclosure the disclosing Party shall notify the other Party of such
proposed disclosure with as much prior notice as is reasonably possible and
shall not take any action to prevent the other Party from taking any legal
action as it deems necessary or desirable to prevent or limit any such
disclosure.

16.2 Notwithstanding Section 16.1, each Party may disclose Confidential
Information received pursuant to this Agreement as required to fulfill the terms
and obligations of this Agreement to its directors, officers, employees,
consultants, attorneys and accountants provided that such persons and entities
are obligated to hold the Confidential Information in confidence. Each Party
covenants that it shall exercise the same degree of care with respect to the
other Party's Confidential Information as it would its own Confidential
Information.

16.3 Upon termination of this Agreement, each Party shall, upon the request of
the other Party, return all documents received by it from the other Party which
contain the other Party's Confidential Information or destroy all of such
documents and confirm in writing the destruction thereof to the other Party,
except that one copy thereof may be retained solely for archival purposes in the
files of the counsel for the Party.

16.4 The provisions of this Article 16 shall survive termination of this
Agreement.

             ARTICLE 17 - REPRESENTATIONS, WARRANTIES AND COVENANTS

17.1 Each Party represents, warrants and covenants to the other Party that (i)
the performance by such Party of its obligations under this Agreement will not
result in a violation or breach of, and not conflict with or constitute a
default under, its Certificate of Incorporation or other incorporation
documents, corporate bylaws or any contract, commitment, agreement or other
obligation to which such Party or any of its Affiliates is a party or by which
any of them is bound; and (ii) there is no Action pending or currently
threatened against it or any of its Affiliates which, if adversely determined,
would restrict or limit such Party's right to enter into this Agreement,
transfer the rights or carry out its obligations under this Agreement.

                                       23
<PAGE>   24

                           ARTICLE 18 - FORCE MAJEURE

18.1 If either Party is prevented from performing any of its obligations
hereunder due to any cause which is beyond the non-performing Party's reasonable
control, including fire, explosion, flood, or other acts of God; acts,
regulations, or laws of any government; war or civil commotion; strike, lock-out
or labor disturbances; or failure of public utilities or common carrier(a "Force
Majeure Event"), such non-performing Party shall promptly give notice thereof to
the other party and shall use its best efforts to cure or correct any such Force
Majeure Event and to resume performance of its affected obligations as soon as
possible.

                           ARTICLE 19 - MISCELLANEOUS

19.1 This Agreement shall be binding upon and shall inure to the benefit of each
of the Parties hereto, and their respective successors and permitted assigns as
hereinafter set forth in this Section 19.1. Neither Party shall transfer or
assign this Agreement, in whole or in part, nor any of their respective rights
and obligations under this Agreement without the prior written consent of the
other Party; except that either Party may, without such consent, assign this
Agreement to a Affiliate of such Party provided the Party remains liable for the
performance thereof.

19.2 All notices, and other communications required or called for under this
Agreement shall be in writing, shall be transmitted by overnight U.S. mail,
postage prepaid, or by certified or registered U.S. Mail, return receipt
requested, postage prepaid or by overnight Federal Express or another nationally
recognized courier serviced (billed to sender) and shall be deemed delivered
when received by the Party to whom it is addressed at:

If to Cohesion:                             If to USS/THG:

Cohesion Corporation                        United States Surgical Corporation
2500 Faber Place,                           150 Glover Avenue
Palo Alto, CA  94303                        Norwalk, CT  06856
Attn.:  CEO                                 Attn.: Legal Department

19.3 This Agreement supersedes all prior discussions, negotiations, and
agreements between the Parties including, without limitation, any
confidentiality agreement heretofore entered into between the parties, but only
as to matters occurring after the date of the execution of this Agreement by
both Parties. This Agreement cannot be altered or amended except by an agreement
in writing signed by the Parties.

19.4 No previous course of dealing or performance or usage of trade not
specifically set forth in this Agreement shall be admissible to explain, modify
or contradict this Agreement. Either Party's failure to require performance by
the other of any provisions hereof shall, in no way, be deemed a waiver or
affect the right of either Party to require such performance at any time
thereafter.

                                       24
<PAGE>   25

19.5 This Agreement shall not constitute either Party as an employee, agent,
partner or legal representative of the other Party for any purpose, or give
either Party any right to supervise or direct the functions of the other Party.
Neither Party shall have authority to act for or obligate the other Party in any
way or to extend any representation or warranty on behalf of the other Party.
Each Party agrees to perform under this Agreement solely as an independent
contractor and shall not hold itself out as an employee or agent of the other
Party in any sense. Each Party agrees not to permit its employees or agents to
do anything which might be construed or interpreted as acts of the other Party.
Each Party agrees that the other Party shall not be responsible for any acts or
omissions by it or its directors, officers, employees and agents and shall
indemnify and hold harmless the other Party from and against all losses,
damages, claims, judgments, and costs (excluding attorneys' fees and expenses)
claimed or rendered against such other Party on account of acts or omissions by
such Party, its directors, officers, employees and agents.

19.6 Neither Party shall originate any publicity, news release or other
announcement, written or oral, relating to the terms and conditions of this
Agreement without the prior written consent of the other Party, such consent not
to be unreasonably withheld, except as may be necessary to comply with
applicable Laws or legal process.

19.7 If any provisions of this Agreement should be or become fully or partly
invalid or unenforceable for any reason whatsoever or violate any applicable
law, this Agreement is to be considered divisible as to such provision and such
provision is to be deleted from this Agreement, and the remainder of this
Agreement shall be deemed valid and binding as if such provision were not
included herein. There shall be substituted for any such provision deemed to be
deleted a suitable provision which, as far as legally possible, comes nearest to
what the Parties desired according to the sense and purpose of this Agreement
had this point been considered when concluding this Agreement.

19.8 This Agreement shall be governed by and construed in accordance with the
internal laws of the State of Delaware applicable to contracts entered into and
to be performed entirely within the State of Delaware without reference to its
conflict of laws provisions.

19.9 The Article headings included in this Agreement are for reference purposes
only and shall not affect the meaning or interpretation of this Agreement.

19.10 This Agreement may be executed in two counterparts, each of which shall be
deemed to be an original instrument, but both such counterparts together shall
constitute but one agreement.

                                       25
<PAGE>   26

IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their
respective corporate officers as of the date first above written.

COHESION TECHNOLOGIES, INC.

By: /s/ DAVID FOSTER
    -------------------------------

Name: David Foster
Title: CEO

UNITED STATES SURGICAL

By: /s/ STEVEN AMELIO
    -------------------------------

Name: Steven Amelio
Title: VP & Controller USS

TYCO HEALTHCARE GROUP AG

By: /s/ FELIX HEUSLER
    -------------------------------
Name: Felix Heusler
Title: Director

EXHIBITS

A-1     Patents
A-2     Trademarks
A-3     CoStasis Products
A-4     Domestic Territory
A-5     International Territory
2.1     Trademark License
2.2     Current CoStasis Applicator Device

                                       26
<PAGE>   27

                                   EXHIBIT A-1
                                     PATENTS

<TABLE>
<CAPTION>
      PATENT TITLE              PATENT STATUS               INVENTORS                         SUMMARY
-------------------------------------------------------------------------------------------------------
<S>                         <C>                       <C>                                  <C>
    SURGICAL ADHESIVE          U.S. PATENT NO.        SIERRA, D.; LUCK, E.;
        MATERIAL                  5,290,552                 BROWN, D.
 (CO-OWNED WITH MATRIX)            GRANTED:
                              AUSTRIA, BELGIUM,                                            Text Deleted
                               CANADA, GERMANY,
                            EUROPE, SPAIN FRANCE,
                            GREECE, ITALY, JAPAN,
                               LUXENBOURG, THE
                             NETHERLANDS, SWEDEN.
-------------------------------------------------------------------------------------------------------
 COMPOSITIONS CONTAINING         U.S. ALLOWED        PRIOR, J.; WALLACE, D.;
      THROMBIN AND                                   DELUSTRO, F.; SIERRA, D.
MICROFIBRILLAR COLLAGEN,      PCT FILED 6/17/98                                            Text Deleted
     AND METHODS FOR
   PREPARATION AND USE
         THEREOF
-------------------------------------------------------------------------------------------------------
 CELL SEPARATION DEVICE        U.S. PATENT NO.       FREEMAN, A.; SIERRA, D.;
AND INLINE ORIFICE MIXER          5,968,018          FULLER, G.; CONSTON, S.;
         SYSTEM                                            MICHAELS, A.                    Text Deleted
                                   PENDING:
                              CANADA, EPO, JAPAN
-------------------------------------------------------------------------------------------------------
     STERILE SYRINGE             U.S. ALLOWED              ESPOSITO, D.
 PACKAGING AND HANDLING
     "PORTED POUCH"               PCT FILED                                                Text Deleted
-------------------------------------------------------------------------------------------------------
 CELL SEPARATION DEVICE          U.S. ALLOWED         DURONIO, J.; SIMONYI,
  AND METERING SYRINGE                                  V.; HNOJEWYJ, O.;
       "CELLPAKER"                PCT FILED                STEARNS, B.;                    Text Deleted
                                                           FREEMAN, A.;
                                                         SCHOENBERG, S.;
                                                           ESPOSITO, D.
-------------------------------------------------------------------------------------------------------
</TABLE>

                                       27
<PAGE>   28

                                   EXHIBIT A-2
                                   TRADEMARKS

<TABLE>
<CAPTION>
        MARK                      COUNTRY                      STATUS
<S>                               <C>                       <C>
  CellPaker(R)                     United States            Text Deleted

  CellPaker(TM)                    Canada                   Text Deleted

                                   CTM                      Text Deleted

                                   Japan                    Text Deleted

   CoStasis(TM)                    United States            Text Deleted

                                   Australia                Text Deleted

                                   Canada                   Text Deleted

                                   CTM                      Text Deleted

                                   Japan                    Text Deleted
</TABLE>

                                       28
<PAGE>   29

                                   EXHIBIT A-3

                                COSTASIS PRODUCTS

<TABLE>
<S>                                                   <C>
               4.5 CoStasis (Europe)                  FXP 010

               2.0 CoStasis (Europe)                  FXP 007

               1.0 CoStasis (Europe)                  FXP 011

               4.5 CoStasis (U.S.)                    FXP 004

               2.0 CoStasis (U.S.)                    FXP 006

               1.0 CoStasis (U.S.)                    FXP 012

               CellPaker 1X                           FXP 009

               CellPaker 10X                          FXP 008

               Centrifuge                             TBD
</TABLE>

                                       29
<PAGE>   30

                                   EXHIBIT A-4

                               DOMESTIC TERRITORY

United States

                                       30
<PAGE>   31

                                   EXHIBIT A-5

                             INTERNATIONAL TERRITORY

1. All Countries in the European Union as of the Effective Date of this
Agreement, per the Terms identified in Section 3.1 of this Agreement.

2. Eastern Europe (defined to include Poland, the Czech Republic, Slovakia,
Hungary, Romania, Bulgaria, Estonia, Lithuania, Latvia, Albania, and the
countries formed from the former Yugoslavia).

3. Middle East (defined to include Israel, Egypt, Syria, Lebanon, Jordan, Saudi
Arabia, Kuwait, Qatar, U.A.E., Oman and Yemen).

4. Australia.

5. New Zealand.

6. India.

7. Latin America, to include Mexico, Central and South America.

                                       31
<PAGE>   32

                                   EXHIBIT 2.1

                           TRADEMARK LICENSE AGREEMENT

        THIS AGREEMENT (the "Agreement"), dated and effective as of November 22,
1999 by and between Cohesion Technologies, Inc. ("Cohesion"), a corporation duly
organized and existing under the laws of the State of Delaware and having its
principal place of business at 2500 Faber Place, Palo Alto, CA 94303, and United
States Surgical, a division of Tyco Healthcare Group LP ("USS"), a limited
partnership duly organized and existing under the laws of the State of Delaware
and having its principal place of business at 150 Glover Avenue, Norwalk,
Connecticut 06856, and Tyco Healthcare Group AG, a corporation organized and
existing under the laws of Switzerland and having its principal place of
business at Bahnhofstrasse 8, CH-8200 Schaffhausen, Switzerland ("THG")
(Cohesion, USS and THG, each a "Party" and collectively, the "Parties").

        WHEREAS, Cohesion is the sole and exclusive owner of the entire right,
title and interest in and to trademark(s) and trade name(s) (collectively
referred to as "CoStasis Trademarks") used by Cohesion in connection with the
promotion and sale of CoStasis Products (as defined in the License and
Distributorship Agreement executed on even date herewith); and

        WHEREAS, USS/THG is desirous of acquiring royalty-free, exclusive rights
and licenses to use the CoStasis Trademarks solely for the purpose of marketing
and promoting CoStasis Products in the Field within the Territory; and

WHEREAS, Cohesion is willing to grant such licenses.

        NOW, THEREFORE, in consideration of the mutual considerations set forth
and other good and valuable consideration, the receipt and sufficiency of which
is acknowledged by each of the parties, it is understood and agreed as follows:

1. GRANT OF THE LICENSES

        1.1 Subject to the terms and conditions hereinafter set forth, Cohesion
hereby grants to USS/THG for the term of this Agreement a royalty-free,
exclusive right and license, with right to sublicense, to use CoStasis
Trademarks solely in connection with the marketing, promotion and sale of
CoStasis Products in the Field within their respective Territories. Nothing in
this Agreement is intended to permit USS/THG to use the CoStasis Trademarks for
any other purpose than described above, and nothing in this Agreement is
intended to nor shall it limit or impair Cohesion's rights, during the Term, to
use or otherwise license the CoStasis Trademarks to the extent not licensed to
USS/THG hereunder.

                                       32
<PAGE>   33

        1.2 The license includes the right to grant sublicenses, provided that
any such sublicense must be in writing and subject to the terms of this
Agreement.

2. TERM

        2.1.   This Agreement shall be effective as of the date it is executed.

        2.2 The term of this Agreement shall continue for the term of the
License and Distributorship Agreement executed on even date herewith. In the
event of a material breach of this Agreement by either party, the non-breaching
party shall provide the breaching party written notice which describes with
specificity the nature of such breach. The breaching party will thereafter have
sixty (60) days to cure such breach. If the breaching party does not cure such
breach within said sixty (60) days, the non-breaching party may terminate this
Agreement upon ten (10) days prior written notice of termination.

        2.3 This Agreement shall terminate immediately upon the termination of
the License and Distributorship Agreement.

        2.4 Upon termination of this Agreement: (i) the license granted herein
shall terminate; (ii) USS/THG shall cease, and cause its sublicensees to cease,
using the CoStasis Trademarks; and (iii) USS/THG shall execute and deliver to
Cohesion any documents reasonably requested by Cohesion to confirm Cohesion's
ownership of the CoStasis Trademarks and the termination of the License.

3. QUALITY CONTROL

        3.1 Cohesion licenses USS/THG to use the CoStasis Trademarks upon the
terms herein set forth and during the period of this Agreement, in advertising,
identifying and selling CoStasis Products in case, and only in case, such
CoStasis Products are of approved standards and are not advertised, labeled or
packaged in any manner tending to mislead or deceive the public.

        3.2 USS/THG shall (i) not modify the CoStasis Trademarks in any manner
without the prior consent of Cohesion, (ii) use the CoStasis Trademarks only in
a manner and form as set forth in Exhibit A-2 and any other quality control
restrictions imposed by and followed by Cohesion; and (iii) use the CoStasis
Trademarks only in a manner and form which complies with all applicable federal,
state, local and foreign laws, rules and regulations, including, without
limitation, all applicable trademark laws, rules and regulations.

4. PROTECTION OF COSTASIS TRADEMARKS

        USS/THG acknowledges Cohesion's exclusive right, title and interest in
and to the CoStasis Trademarks and will not, in any way, directly or indirectly,
do or cause to be done any act or thing contesting or in any way impairing or
tending to impair any part of said right, title and interest in connection with
the use of CoStasis Trademarks. USS/THG shall not in any manner represent that
it has any ownership in CoStasis Trademarks or any registration thereof

                                       33
<PAGE>   34

and USS/THG acknowledges that use of CoStasis Trademarks by it shall not create
in USS/THG any right, title or interest in or to the CoStasis Trademarks, but
all use of CoStasis Trademarks shall inure to the benefit of Cohesion.

        IN WITNESS WHEREOF the parties hereto have executed this Agreement
effective November 22, 1999.

COHESION TECHNOLOGIES, INC.

By: /s/ DAVID FOSTER
    -------------------------------

Name: David Foster
Title: CEO

UNITED STATES SURGICAL

By: /s/ STEVEN AMELIO
    -------------------------------

Name: Steven Amelio
Title: VP & Controller USS

TYCO HEALTHCARE GROUP AG

By: /s/ FELIX HEUSLER
    -------------------------------
Name: Felix Heusler
Title: Director

                                       34
<PAGE>   35

                                   Exhibit 2.2

                 Diagram of CoStasis syringe and delivery system

                                       35

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