Document:

Exhibit 4.2

                     SUMMARY INSTRUCTION SHEET FOR PURCHASER

                   (to be read in conjunction with the entire
                        Purchase Agreement which follows)

A.   Complete the following items on BOTH Purchase Agreements:

     1.   Page 24 - Signature:

          (i)  Name of Purchaser (Individual or Institution)

          (ii) Name of Individual representing Purchaser (if an Institution)

          (iii) Title of Individual representing Purchaser (if an Institution)

          (iv) Signature of Individual Purchaser or Individual representing
               Purchaser

     2.   Appendix I - Stock Certificate Questionnaire/Registration Statement
          Questionnaire:

          Provide   the   information   requested   by  the  Stock   Certificate
          Questionnaire and the Registration Statement Questionnaire.

     3.   Return BOTH properly completed and signed Purchase Agreements
          including the properly completed Appendix I to:

                   Bear, Stearns & Co. Inc.
                   383 Madison Avenue
                   New York, NY  10179
                   Attention:  Private Equity Group
                               Mr. Jason Weinstein

B.   Instructions regarding the transfer of funds for the purchase of Shares
     will be sent by facsimile to the Purchaser by the Placement Agent at a
     later date.

C.   Upon the resale of the Shares by the Purchasers after the Registration
     Statement covering the Shares is effective, as described in the Purchase
     Agreement, the Purchaser:

          (i)  must deliver a current prospectus of the Company to the buyer
               (prospectuses must be obtained from the Company at the
               Purchaser's request); and

          (ii) must send a letter in the form of Appendix II to the Company so
               that the Shares may be properly transferred

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                               PURCHASE AGREEMENT

     THIS  AGREEMENT  is made as of May 8,  2002,  between  Osteotech,  Inc.,  a
corporation  organized under the laws of the State of Delaware (the  "Company"),
with its principal offices at 51 James Way, Eatontown, New Jersey 07724, and the
purchaser  whose name and address is set forth on the signature page hereof (the
"Purchaser").

     IN CONSIDERATION of the mutual covenants  contained in this Agreement,  the
Company and the Purchaser agree as follows:

     SECTION 1.  Authorization  of Sale of the Shares.  Subject to the terms and
conditions of this  Agreement,  the Company has  authorized the sale of up to an
aggregate of 2,800,000  shares (the "Shares") of the Company's common stock, par
value $0.01 per share (the "Common Stock").

     SECTION 2.  Agreement to Sell and  Purchase the Shares.  At the Closing (as
defined in Section 3), the Company will sell to the Purchaser, and the Purchaser
will buy from the Company, upon the terms and conditions  hereinafter set forth,
the number of Shares (at the purchase price) shown below:

         Number to Be           Price Per Share             Aggregate
          Purchased               In Dollars                  Price
         -------------          ---------------             ---------
                                       $                        $

     The Company  proposes  to enter into this same form of  purchase  agreement
with certain other  investors (the "Other  Purchasers")  and expects to complete
sales  of the  Shares  to them.  The  Purchaser  and the  Other  Purchasers  are
hereinafter  sometimes  collectively  referred to as the  "Purchasers," and this
Agreement and the agreements  executed by the Other  Purchasers are  hereinafter
sometimes  collectively  referred to as the  "Agreements."  The term  "Placement
Agent" shall mean Bear,  Stearns & Co. Inc. If the Closing Date has not occurred
on or  prior  to July  18,  2002,  the  Company's  obligation  to  sell  and the
Purchaser's obligation to purchase the Shares will expire as of such date.

     SECTION 3. Closing.

          3.1 Date of Closing.  The  completion  of the purchase and sale of the
Shares shall take place on one or more  occasions  (each, a "Closing") and shall
occur at the offices of Piper  Rudnick  LLP,  1251 Avenue of the  Americas,  New
York,  New  York  10020 as soon as  practicable  following  notification  by the
Securities  and Exchange  Commission  (the  "Commission")  to the Company of the
Commission's  willingness to declare effective the registration  statement to be
filed  by  the  Company  pursuant  to  Section  7.1  hereof  (the  "Registration
Statement")  at such times  (each,  a "Closing  Date") to be agreed  upon by the

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Company and the Placement  Agent and of which the Purchasers will be notified by
facsimile transmission or otherwise.

          3.2 Delivery of Shares.  At the Closing,  the Company shall deliver to
the Purchaser(s) one or more stock  certificates  registered in the name of such
Purchaser or, if so indicated on the Stock  Certificate  Questionnaire  attached
hereto as Appendix I, in such nominee name(s) as designated by the  Purchaser(s)
in writing,  representing  the number of Shares set forth in Section 2 above and
bearing an appropriate legend referring to the fact that the Shares were sold in
reliance upon the exemption from registration  under the Securities Act of 1933,
as amended (the "Securities Act") provided by Section 4(2) thereof or Regulation
D promulgated  thereunder,  or both,  relating to  transactions by an issuer not
involving any public offering and under similar  exemptions  under certain state
securities  or "blue  sky"  laws.  Subject to Section  5.13,  the  Company  will
promptly substitute one or more replacement  certificates  without the legend at
such time as the Registration Statement is effective.

          3.3 Other Closing Deliveries by the Company.

                    (a) Legal  Opinion.  At the  Closing,  Dorsey & Whitney LLP,
     counsel  to  the  Company,  will  deliver  written  legal  opinions  to the
     Purchasers and to the Placement Agent and a "negative assurances letter" to
     the  Placement  Agent,  dated  as of  such  date,  in  form  and  substance
     reasonably  acceptable  to the  Placement  Agent's  counsel.  The "negative
     assurances  letter" shall also state that each of the  Purchasers  may rely
     thereon as though it was addressed directly to such Purchaser.

                    (b) Intellectual  Property Opinion. At the Closing,  each of
     Carella,  Byrne, Bain, Gilfillan,  Cecchi, Stewart & Olstein and Dilworth &
     Barrese,  each  special  counsel to the  Company on  intellectual  property
     matters,  will deliver a written  legal  opinion to the  Purchaser  and the
     Placement  Agent  in  form  and  substance  reasonably  acceptable  to  the
     Placement Agent's counsel.

                    (c) At the Closing, Buc & Beardsley,  special counsel to the
     Company on regulatory matters,  will deliver a written legal opinion to the
     Purchaser  and  the  Placement  Agent  in  form  and  substance  reasonably
     acceptable to the Placement Agent's counsel.

                    (d) Certificate. At the Closing, the Company will deliver to
     the  Purchaser  a  certificate  executed  by the  Chairman  of the Board or
     President  and the chief  financial  or  accounting  officer of the Company
     (solely in their  capacities as such),  dated the Closing Date, in form and
     substance reasonably  satisfactory to the Purchaser, to the effect that the
     representations  and  warranties of the Company set forth in this Agreement
     are true and correct as of the date of this Agreement and the Closing Date,
     and the Company has complied in all respects  with all the  agreements  and
     satisfied  all  the  conditions  herein  on its  part  to be  performed  or
     satisfied on or prior to such Closing Date.

          3.4  Company's  Conditions  to Closing.  The  Company's  obligation to
complete the purchase and sale of the Shares and deliver the  appropriate  stock
certificate(s) to

                                     - 3 -
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the Purchaser at the Closing shall be subject to the following  conditions,  any
one or more of which may be waived by the  Company:  (a) the Company  shall have
received same day funds in the full amount of the purchase  price for the Shares
being  purchased  hereunder;  (b)  purchases  and  sales  of  Shares  under  the
Agreements with all the Other  Purchasers shall have been completed or are being
completed simultaneously with the Closing hereunder; and (c) the representations
and warranties  made by the Purchasers  shall be true and correct as of the date
of this Agreement and as of the Closing Date and (d) the  Purchasers  shall have
fulfilled their undertakings to be fulfilled by them prior to the Closing.

          3.5 Purchaser's  Conditions to Closing. The Purchaser's  obligation to
accept  delivery  of stock  certificate(s)  and to pay for the Shares  evidenced
thereby shall be subject to the following  conditions:  (a) the Commission shall
have  notified  the  Company of the  Commission's  willingness  to  declare  the
Registration Statement effective on or prior to the 60th day after the date such
Registration  Statement was filed by the Company;  (b) the  representations  and
warranties  made by the Company  herein shall be true and correct as of the date
of this  Agreement  and  shall  be  true  and  correct  as of the  Closing  Date
(provided,  however, that the representations and warranties shall not be deemed
accurate as of the Closing  Date,  if subsequent to the date hereof there occurs
an event which would  reasonably be expected to have a Material  Adverse Effect,
notwithstanding  that  the  Private  Placement  Memorandum  contains  cautionary
disclosure with respect to possible future events and the consequences thereof);
and  (c) the  Company  shall  have  fulfilled,  in all  material  respects,  all
undertakings to be fulfilled by it prior to Closing. The Purchaser's obligations
hereunder  are expressly  not  conditioned  on the purchase by any or all of the
Other  Purchasers  of the  Shares  that such  Other  Purchasers  have  agreed to
purchase from the Company.

     SECTION 4.  Representations  and  Warranties  of the  Company.  The Company
hereby represents and warrants to the Purchaser as follows:

          4.1 Organization and Qualification.  The Company is a corporation duly
incorporated,  validly existing and in good standing under the laws of the State
of Delaware  and is qualified  to do business as a foreign  corporation  in each
jurisdiction  in which  qualification  is required,  except where  failure to so
qualify would not reasonably be expected to have a material  adverse effect upon
the business,  financial condition,  properties,  operations or prospects of the
Company  and its  Subsidiaries  (as defined in Rule 405 of the  Securities  Act)
taken as a whole (a "Material  Adverse  Effect").  Each  Subsidiary is listed on
Exhibit  21.1 to the  Company's  Annual  Report on Form 10-K for the year  ended
December  31, 2001 (the "2001  10-K").  The Company does not own any interest in
any corporation,  association or other entity other than the Subsidiaries.  Each
Subsidiary is duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of  incorporation  and is qualified to do business as a
foreign  corporation in each  jurisdiction in which  qualification  is required,
except where failure to so qualify would not have a Material Adverse Effect.  No
proceeding has been instituted in any  jurisdiction  with respect to the Company
or any of its  Subsidiaries  that seeks to revoke,  limit or curtail  the power,
authority  or  qualification  of the Company or its  Subsidiaries  to so conduct
their respective businesses in such jurisdiction.

                                     - 4 -
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          4.2 Authorized  Capital Stock. The authorized and outstanding  capital
stock of the  Company is as  described  in the  Confidential  Private  Placement
Memorandum  dated  April 8, 2002,  prepared by the  Company  (such  Confidential
Private Placement Memorandum, including all exhibits, supplements and amendments
thereto including the Supplement dated May 2, 2002,  together with all documents
incorporated  by  reference  therein  prior to the  date  hereof,  the  "Private
Placement  Memorandum"),  except for such changes  since the date thereof in the
number of: (i)  authorized  shares of  Preferred  Stock as  described  under the
sub-heading  "Preferred  Stock" in the Private  Placement  Memorandum;  and (ii)
outstanding  shares of Common  Stock since the date thereof  resulting  from the
exercise of options to purchase Common Stock under Company employee option plans
which option plans are  disclosed in the Private  Placement  Memorandum  and the
issuance of Common Stock under the employee stock purchase plan described in the
Private Placement  Memorandum.  All of the issued and outstanding  shares of the
Company's  Common Stock have been duly authorized and validly issued,  are fully
paid and  nonassessable,  have been  issued in  compliance  with all federal and
state  securities  laws,  and were not issued in  violation of or subject to any
preemptive rights or other rights to subscribe for or purchase  securities.  The
Shares to be sold pursuant to this Agreement conform in all material respects to
the description  thereof in the Private Placement  Memorandum and have been duly
and  validly  authorized,  and when issued and paid for in  accordance  with the
terms  of this  Agreement,  will be duly  and  validly  issued,  fully  paid and
non-assessable.  Except as disclosed in the Private  Placement  Memorandum,  the
Company does not have outstanding any options to purchase, any preemptive rights
or other rights to subscribe for or to purchase,  any  securities or obligations
convertible  into, or any contracts or commitments  to issue or sell,  shares of
its  capital  stock or any  such  options,  rights,  convertible  securities  or
obligations.  All the issued and outstanding shares of each Subsidiary's capital
stock  have  been  duly  authorized  and  validly  issued,  are  fully  paid and
nonassessable,  have been issued in compliance with the laws of its jurisdiction
of  organization  and all  applicable  securities  laws and were not  issued  in
violation  of or subject to any  preemptive  rights or other rights to subscribe
for or purchase  securities,  and except as disclosed  in the Private  Placement
Memorandum,  are owned directly or indirectly by the Company,  free and clear of
all liens, encumbrances,  security interests or claims. There are no outstanding
options to purchase,  preemptive  rights or other rights to subscribe  for or to
purchase,  any securities or obligations  convertible  into, or any contracts or
commitments to issue or sell, shares of such  Subsidiary's  capital stock or any
such options, rights, convertible securities or obligations.

          4.3 No Other Registration Rights or Stockholder Agreements.  No holder
of any  security of the Company has any right  (which has not been waived or has
not expired by reason of lapse of time following  notification  of the Company's
intent to file the  Registration  Statement)  to require the Company to register
the sale of any security  owned by such holder under the  Securities  Act. There
are no stockholder  agreements or voting  agreements with respect to the capital
stock of the Company to which the Company is a party.

          4.4 Authority. The Company and its Subsidiaries have all the requisite
power and  authority  and have all necessary  approvals,  licenses,  permits and
authorizations to own, operate,  or lease their properties and to carry on their
business as now  conducted,  except where the failure to have any such approval,
license, permit or authorization would not have Material Adverse Effect.

                                     - 5 -
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          4.5 Due Execution,  Delivery and  Performance of this  Agreement.  The
Company  has the  requisite  corporate  power and  authority  to enter into this
Agreement and perform the transactions  contemplated  hereby. This Agreement has
been duly  authorized,  executed and  delivered by the Company.  The  execution,
delivery and  performance of this Agreement by the Company and the  consummation
of the transactions  contemplated  hereby: (i) will not conflict with, result in
the breach or violation  of, or  constitute,  either by itself or upon notice or
the  passage  of time or both,  a  default  under,  and will not  result  in the
creation of any lien,  charge,  security interest or encumbrance upon any assets
of the Company or any Subsidiary  pursuant to the terms or provisions of (A) any
agreement, mortgage, deed of trust, lease, franchise, license, indenture, permit
or other  instrument  to which the Company or such  Subsidiary  is a party or by
which the Company or such Subsidiary or any of their  respective  properties may
be bound or affected, except for any conflict, breach or default which would not
have a Material  Adverse  Effect,  or (B) any statute or any  judgment,  decree,
order,  rule or regulation of any court or any regulatory  body,  administrative
agency or other governmental body applicable to the Company or any Subsidiary or
any of their respective properties,  except for any conflict,  breach, violation
or default  which would not have a Material  Adverse  Effect,  and (ii) will not
violate any  provision of the  certificate  of  incorporation,  by-laws or other
organizational documents of the Company or any Subsidiary. No consent, approval,
authorization  or other  order of any  court,  regulatory  body,  administrative
agency or other  governmental body is required for the execution and delivery of
this Agreement or the  consummation  of the  transactions  contemplated  by this
Agreement,  including  without  limitation,  the issue  and sale of the  Shares,
except  filings as may be required to be made with, or approvals  required to be
obtained by the Company from: (i) the Commission,  (ii) the Nasdaq Stock Market,
Inc.  (which  filing has been made and approval has been  obtained  prior to the
Closing  Date)  and  (iii)  state  blue  sky  or  other  securities   regulatory
authorities.  Assuming  the  valid  execution  thereof  by the  Purchaser,  this
Agreement  will  constitute  a valid  and  binding  obligation  of the  Company,
enforceable in accordance with its terms.

          4.6 Accountants;  Financial Statements.  Pricewaterhouse  Coopers LLP,
who has  expressed  its  opinion  with  respect  to the  consolidated  financial
statements  included  in the 2001  10-K and  incorporated  by  reference  in the
Registration  Statement  and the  Prospectus  which  forms a part  thereof,  are
independent  accountants  as  required by the  Securities  Act and the rules and
regulations   promulgated   thereunder  (the  "Rules  and   Regulations").   The
consolidated  financial  statements of the Company and its  Subsidiaries and the
related notes contained in the Private Placement Memorandum and in the 2001 10-K
present fairly the financial  position of the Company and its Subsidiaries as of
the dates indicated,  and the results of its and their operations and cash flows
for the periods therein specified.  Such financial statements have been prepared
in accordance with generally accepted accounting principles consistently applied
throughout the periods therein specified.

          4.7 Compliance  with Listing and  Maintenance  Requirements;  Form S-3
Eligibility. The Company has not received written or oral notice from the Nasdaq
Stock  Market to the  effect  that the  Company  is not in  compliance  with the
continuing  maintenance  requirements  of such  market.  The  Company  meets the
requirements for use of Form S-3 for

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registration  of the  resale of the  Shares as  contemplated  herein  and in the
Private Placement Memorandum.

          4.8 No Defaults;  Material  Contracts.  Neither the Company nor any of
its  Subsidiaries is in violation or default of any provision of its certificate
of  incorporation  or  bylaws  or  other  organizational  documents.  Except  as
disclosed  in the  Private  Placement  Memorandum,  and  except as to  defaults,
violations and breaches which  individually or in the aggregate would not have a
Material  Adverse Effect,  neither the Company nor any of its Subsidiaries is in
breach of or in default under any agreement,  judgment, decree, order, mortgage,
deed of trust, lease, franchise,  license, indenture, permit or other instrument
to which it is a party or by which it or any of its  properties  are  bound  and
there exists no  condition  which,  with notice or lapse of time or both,  would
constitute a default on the part of the Company or its Subsidiaries  thereunder,
except such defaults or conditions which  individually or in the aggregate would
not have a Material Adverse Effect. All contracts and other material  agreements
to which the  Company or any of its  Subsidiaries  is a party or by which any of
them is bound which are required to be filed with the Commission  (collectively,
"Material  Contracts") have been so filed. Each of the Material  Contracts is in
full force and effect and is  enforceable  in accordance  with its terms and the
Company and its Subsidiaries are in compliance with their respective obligations
thereunder,  except for such non-compliance  that would not,  individually or in
the aggregate,  have a Material Adverse Effect. To the Company's  knowledge,  no
event has occurred which would,  with or without the passage or time,  notice or
both,  constitute a breach or default by any party under any  Material  Contract
except where such breach or default would not, individually or in the aggregate,
have a Material Adverse Effect.

          4.9  No  Actions.   Except  as  disclosed  in  the  Private  Placement
Memorandum,  there are no  judicial,  administrative  or  governmental  actions,
suits, investigations or proceedings (collectively, "Legal Proceedings") pending
or to the  knowledge  of the  Company,  threatened  to which the  Company or its
Subsidiaries  is or may be a party or of which  property  owned or leased by the
Company or its Subsidiaries is or may be the subject, which,  individually or in
the  aggregate,  could  reasonably  be expected to result in a Material  Adverse
Effect.  All Legal  Proceedings  of a character  required to be disclosed in the
2001 10-K have been properly disclosed  therein.  Neither the Company nor any of
its  Subsidiaries  is party to or  subject  to the  provisions  of any  material
injunction,   judgment,   decree  or  order  of  any  court,   regulatory  body,
administrative  agency or other  governmental  body. No labor disturbance by the
employees of the Company or its  Subsidiaries  exists or is imminent which could
reasonably be expected to result in a Material Adverse Effect.

          4.10 No Material Change; No Material  Undisclosed  Liabilities.  Since
December 31, 2001, and except as described in or  specifically  contemplated  by
the Private Placement Memorandum:  (i) the Company and its Subsidiaries have not
incurred any liabilities or obligations (whether accrued, absolute,  contingent,
asserted or unasserted) or entered into any verbal or written agreement or other
transaction  which was not in the  ordinary  course of  business  or which would
reasonably be expected to have a Material  Adverse Effect;  (ii) the Company and
its Subsidiaries  have not sustained any material loss or interference  with its
businesses or properties from fire, flood, windstorm, accident or other calamity
not covered by insurance;  (iii) the Company and its Subsidiaries  have not paid
or declared any dividends or other

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distributions  with respect to their  capital  stock and neither the Company nor
its  Subsidiaries  are in default in the payment of principal or interest on any
outstanding debt obligations;  (iv) there has not been any change in the capital
stock of the Company or its Subsidiaries or increase in indebtedness material to
the Company and its Subsidiaries;  (v) the Company and its Subsidiaries have not
incurred  or  sustained  any other  event or change  that  would  reasonably  be
expected  to have a  Material  Adverse  Effect;  and  (vi) the  Company  and its
Subsidiaries  have  conducted  their  business  only in the  ordinary  course of
business in accordance with past practice.

          4.11 Intellectual Property.

               (a) The Company and its Subsidiaries own or have the right to use
     pursuant  to  effective  license  agreements  or  permission,  all  patent,
     copyright,  trade secret and  trademark  rights  ("Intellectual  Property")
     necessary   to  the  conduct  of  the  business  of  the  Company  and  its
     Subsidiaries,  other than  Intellectual  Property  generally  available  on
     commercially reasonable terms from other sources.

               (b) All licenses or other agreements under which: (i) the Company
     or any of its  Subsidiaries  are granted rights in  Intellectual  Property,
     other  than  Intellectual  Property  generally  available  on  commercially
     reasonable  terms from  other  sources  and (ii) the  Company or any of its
     Subsidiaries  have granted rights to others in Intellectual  Property owned
     or  licensed  by the  Company  or its  Subsidiaries,  are in full force and
     effect and no event has occurred  which would,  with or without the passage
     of time,  notice, or both,  constitute a default  thereunder default by the
     Company or any of its  Subsidiaries or any other party thereto except where
     such default would not,  individually or in the aggregate,  have a Material
     Adverse Effect.

               (c) The  Company  and  its  Subsidiaries  have  taken  all  steps
     believed by them to be required in accordance with sound business  practice
     and business judgment to establish and preserve their respective  ownership
     of all Intellectual Property material to their respective businesses.

               (d) The business,  activities and products of the Company and its
     Subsidiaries do not infringe any Intellectual Property of any other person,
     except where such infringement would not, individually or in the aggregate,
     have a Material  Adverse  Effect or is described  in the Private  Placement
     Memorandum.  Neither  the  Company  nor any of its  Subsidiaries,  to their
     knowledge,  is making  unauthorized use of any confidential  information or
     trade  secrets  of any  person.  The  activities  of the  Company  and  its
     Subsidiaries  or any of its  employees  on  behalf of the  Company  and its
     Subsidiaries, to their knowledge, do not violate any material agreements or
     arrangements  known to the Company which any such employees have with other
     persons,  if any. To the best knowledge of the Company,  no third party has
     interfered  with,  infringed upon,  misappropriated  or otherwise come into
     conflict  with  any  Intellectual  Property  of the  Company  or any of its
     Subsidiaries,  except as disclosed in the Private  Placement  Memorandum or
     where  such  interference,  infringement  or  misappropriation  would  not,
     individually or in the aggregate, have a Material Adverse Effect.

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          4.12 Compliance with Laws.

               (a)  The  Company  and  its  Subsidiaries  are  conducting  their
     respective  businesses in compliance  with all applicable  laws,  rules and
     regulations  of the  jurisdictions  in  which  they  are  conducting  their
     respective  businesses,  except where failure to be in compliance would not
     have a Material Adverse Effect.

               (b) The  Company and its  Subsidiaries,  their  products  and the
     manner in which they conduct their  respective  businesses  comply and have
     complied at all times with all applicable requirements of the Federal Food,
     Drug,  and Cosmetic Act, the National  Organ  Transplant Act and the Public
     Health Service Act, or any applicable laws of other jurisdictions, domestic
     or foreign,  and all rules,  regulations,  standards,  guidelines or orders
     promulgated by any regulatory  authority having  jurisdiction to administer
     those  laws and  regulations,  including,  without  limitation,  the United
     States Food and Drug Administration (the "FDA") except where the failure to
     be so in  compliance  would not  individually  or in the  aggregate  have a
     Material   Adverse  Effect  or  as  disclosed  in  the  Private   Placement
     Memorandum.  Neither  the  Company  nor any of its  Subsidiaries  has  ever
     received any Notice of Inspectional  Observation  (Form FDA 483), Notice of
     Adverse Findings,  Warning Letter,  subpoena or other  communication by any
     governmental or regulatory authority alleging  non-compliance with any such
     statutes, rules, regulations, standards, guidelines or orders, except where
     such Notice,  Warning Letter or other  communication would not individually
     or in the aggregate  have a Material  Adverse Effect or as disclosed in the
     Private  Placement  Memorandum.  All of the products of the Company and its
     Subsidiaries  which are regulated as "medical devices" or as biologics have
     received relevant premarket  notifications or licenses accepted or approved
     by the FDA prior to  commercialization  of such  products  except where the
     failure to have received any such premarket notifications or licenses would
     not individually or in the aggregate have a Material Adverse Effect and all
     of the Company's  facilities  are  registered as required by the FDA or any
     other regulatory  authority.  The Company and its  Subsidiaries,  and their
     operations are in compliance with the guidance for industry  promulgated by
     the FDA regarding validation for procedures for processing of human tissues
     intended  for  transplantation  and  current  "good  tissue  practice"  for
     manufacturers of human cellular and tissue-based  products  proposed by the
     FDA on January  5,  2001,  except  where any such  noncompliance  would not
     individually or in the aggregate have a Material Adverse Effect.

               (c) The  operations  of the  Company  and its  Subsidiaries  with
     respect  to any real  property  currently  leased,  owned  or by any  means
     controlled by the Company or any of its Subsidiaries  (the "Real Property")
     are in compliance in with all federal,  state, and local laws,  ordinances,
     rules, and regulations  relating to occupational  health and safety and the
     environment,  except for such non-compliance that would not have a Material
     Adverse  Effect.  There is no  pending  or,  to the best  knowledge  of the
     Company, threatened Legal Proceeding, nor has the Company or any Subsidiary
     received any written or oral notice from any  governmental  entity or third
     party, that: (i) alleges a violation of any such laws by the Company or any
     of  its  Subsidiaries;  (ii)  alleges  that  the  Company  or  any  of  its
     Subsidiaries  is a  liable  party  under  the  Comprehensive

                                     - 9 -
<PAGE>

     Environmental  Response,  Compensation,  and Liability Act, as amended,  42
     U.S.C.ss.9601 et seq. ("CERCLA"), or any state superfund law; (iii) alleges
     possible  contamination  of the  environment  by the  Company or any of its
     Subsidiaries;  or (iv) alleges possible contamination of the Real Property.
     No property which is owned, leased or occupied by the Company or any of its
     Subsidiaries  has been designated as a Superfund site pursuant to CERCLA or
     otherwise designated as a contaminated site under applicable state or local
     law.

          4.13 Offering Materials.  The Company has not distributed and will not
distribute  prior to the Closing Date any offering  material in connection  with
the offering and sale of the Shares other than the Private Placement  Memorandum
or any amendment or supplement thereto. The Company has not in the past nor will
it hereafter take any action  independent of the Placement Agent to sell,  offer
for sale or solicit  offers to buy any  securities  of the  Company  which would
bring  the  offer,  issuance  or sale of the  Shares,  as  contemplated  by this
Agreement, within the provisions of Section 5 of the Securities Act, unless such
offer,  issuance or sale was or shall be within the  exemptions  of Section 4 of
the Securities Act.

          4.14 Title.  The Company  and each of its  Subsidiaries  have good and
marketable  title to all real  property and good title to all personal  property
owned by them,  in each  case  free and  clear of all  liens,  encumbrances  and
defects except such as are described in the Private Placement Memorandum or such
as do not have a  Material  Adverse  Effect.  Any real  property,  buildings  or
personal  property held under lease by the Company and its  Subsidiaries and all
rights of use of real  property,  buildings  or  personal  property  held  under
contract  by the  Company  and its  Subsidiaries  are held by them under  valid,
subsisting  and  enforceable  leases or  contracts,  as the case may be, in each
case, except as described or contemplated in the Private Placement Memorandum or
with such exceptions that do not have a Material Adverse Effect.

          4.15 Taxes.  The Company and its  Subsidiaries  have timely  filed all
necessary foreign, federal, state and local income and franchise tax returns and
have paid all taxes shown thereon as due.  There is no tax  deficiency  that has
been or, to the best of the Company's  knowledge,  might be asserted against the
Company or any of its  Subsidiaries  that has resulted,  or might  reasonably be
expected  to result,  in a Material  Adverse  Effect.  All tax  liabilities  are
adequately provided for on the books of the Company and its Subsidiaries.

          4.16 Insurance.  The Company and its Subsidiaries  maintain  insurance
with insurers of  recognized  financial  responsibility  of the types and in the
amounts as  management  of the Company  believes to be prudent and customary for
the business in which the Company and its Subsidiaries are engaged.  Neither the
Company nor any  Subsidiary  has been refused any insurance  coverage  sought or
applied  for, and neither the Company nor any  Subsidiary  has reason to believe
that it will not be able to renew its  existing  insurance  coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may
be  necessary  to continue its business at a cost that would not have a Material
Adverse Effect.

          4.17 ERISA. No "prohibited  transaction" (as defined in Section 406 of
the Employee Retirement Income Security Act of 1974), as amended,  including the
regulations and published interpretations  thereunder ("ERISA"), or Section 4975
of the Internal Revenue Code

                                     - 10 -
<PAGE>

of 1986,  as amended from time to time (the  "Code"),  or  "accumulated  funding
deficiency"  (as defined in Section 302 of ERISA) or any of the events set forth
in Section  4043(b) of ERISA (other than events with respect to which the 30-day
notice  requirement  under  Section  4043 of ERISA has been waived) has occurred
with respect to any employee benefit plan of the Company or any Subsidiary which
could  have  a  Material  Adverse  Effect.  Each  employee  benefit  plan  is in
compliance in all material  respects with applicable law including ERISA and the
Code.  The Company nor any  Subsidiary has incurred and does not expect to incur
liability  under  Title IV of ERISA  with  respect  to the  termination  of,  or
withdrawal  from any  "pension  plan;" and each  "pension  plan" (as  defined in
ERISA) for which the Company or any Subsidiary  would have any liability that is
intended to be qualified under Section 401(a) of the Code is so qualified in all
material  respects and nothing has occurred,  whether by action or by failure to
act, which could cause the loss of such qualification.

          4.18 Accounting Controls.  The Company and its Subsidiaries maintain a
system  of  internal   accounting  controls  sufficient  to  provide  reasonable
assurances that: (i)  transactions are executed in accordance with  management's
general or specific authorizations;  (ii) transactions are recorded as necessary
to permit  preparation  of financial  statements  in conformity  with  generally
accepted accounting principles and to maintain  accountability for assets; (iii)
access to assets is permitted only in accordance  with  management's  general or
specific  authorization  and (iv) the  recorded  accountability  for  assets  is
compared with existing assets at reasonable  intervals and appropriate action is
taken with respect to any differences.

          4.19 Loans to  Affiliated  Persons.  There are no  outstanding  loans,
advances (except normal advances for business expenses in the ordinary course of
business) or guarantees of indebtedness by the Company or its Subsidiaries to or
for the  benefit  of any of the  officers  or  directors  of the  Company or its
Subsidiaries  or any of the members of the  families  of any of them,  except as
disclosed  in the  Private  Placement  Memorandum  or except for any such loans,
advances or guarantees  which would not be required to be disclosed  pursuant to
Regulation S-K.

          4.20  Contributions.  Neither the Company nor any of its  Subsidiaries
has at any time, directly or indirectly:  (i) made any unlawful  contribution to
any candidate for public office, or failed to disclose fully any contribution in
violation of law, or (ii) made any payment to any federal or state  governmental
officer or official, or other person charged with similar public or quasi-public
duties,  other than  payments  required or  permitted  by the laws of the United
States or any jurisdiction thereof.

          4.21  Investment  Company  Act.  Neither  the  Company  nor any of its
Subsidiaries  is  an  "investment  company"  or a  company  "controlled"  by  an
"investment  company" within the meaning of the Investment  Company Act of 1940,
as amended (the  "Investment  Company Act"),  and neither the sale of the Shares
nor the  transactions  contemplated  herein will cause the Company or any of its
Subsidiaries to become an "investment  company" or a company  "controlled" by an
"investment company" within the meaning of the Investment Company Act.

                                     - 11 -
<PAGE>

          4.22 Accuracy of Disclosure.  The  information  contained:  (i) in the
Private  Placement  Memorandum  as of the date  thereof  and hereof  (other than
Exhibit C  thereto),  as  amended  or  supplemented;  and (ii) the  Registration
Statement  as of the filing date and as of each  Closing  Date,  is complete and
correct and does not and will not contain an untrue statement of a material fact
or omit to state a material fact  required to be stated  therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.

          4.23 No  Material  Nonpublic  Information.  At the time of the  public
announcement  of the transaction  contemplated  by the  Agreements,  the Private
Placement  Memorandum,  as  supplemented,  will  include no  material  nonpublic
information with respect to the Company and its Subsidiaries.

     SECTION 5. Representations,  Warranties and Covenants of the Purchaser. The
Purchaser represents and warrants to, and covenants with, the Company that:

          5.1   Investment   Experience.   The   Purchaser   is   knowledgeable,
sophisticated  and  experienced in making,  and is qualified to make,  decisions
with respect to investments in shares  representing an investment  decision like
that involved in the purchase of the Shares, including investments in securities
issued by the Company, and has requested,  received, reviewed and considered all
information  it deems  relevant in making an informed  decision to purchase  the
Shares.

          5.2 Purchase For Own Account. The Purchaser is acquiring the number of
Shares set forth in Section 2 above in the  ordinary  course of its business and
for its own  account  for  investment  only and  with no  present  intention  of
distributing  any of such Shares or any  arrangement or  understanding  with any
other persons regarding the distribution of such Shares (this representation and
warranty not limiting the Purchaser's right to sell pursuant to the Registration
Statement  or, other than with respect to any claims  arising out of a breach of
this representation and warranty, the Purchaser's right to indemnification under
Section 7.3).

          5.3 No Transfer;  Compliance with Securities  Laws. The Purchaser will
not,  directly or  indirectly,  offer,  sell,  pledge,  sell short,  transfer or
otherwise  dispose of (or  solicit  any  offers to buy,  purchase  or  otherwise
acquire  or take a pledge of) any of the Shares  except in  compliance  with the
Securities Act, the Rules and Regulations and the Exchange Act of 1934.

          5.4 Accuracy of  Disclosure.  The Purchaser has completed or caused to
be completed the Registration Statement Questionnaire attached hereto as part of
Appendix  I,  for use in  preparation  of the  Registration  Statement,  and the
answers  thereto are true and correct as of the date hereof and will be true and
correct as of the effective date of the Registration Statement and the Purchaser
will  notify  the  Company  immediately  of any  material  change  in  any  such
information provided in the Registration Statement Questionnaire occurring prior
to the sale by it of all of the Shares.

          5.5 No Additional  Information.  The Purchaser has, in connection with
its  decision  to  purchase  the  number of Shares set forth in Section 2 above,
relied solely upon the

                                     - 12 -
<PAGE>

Private Placement  Memorandum and the documents included therein or incorporated
by reference and the  representations  and  warranties of the Company  contained
herein.

          5.6 Accredited  Investor.  The Purchaser is an  "accredited  investor"
within  the  meaning  of Rule  501(a)  of  Regulation  D  promulgated  under the
Securities Act.

          5.7 Reliance Upon Purchaser Representations. The Purchaser understands
that the Shares  are being  offered  and sold to it in  reliance  upon  specific
exemptions from the  registration  requirements of Securities Act, the Rules and
Regulations  and state  securities laws and that the Company is relying upon the
truth and accuracy of, and the Purchaser's compliance with, the representations,
warranties, agreements,  acknowledgments and understandings of the Purchaser set
forth herein in order to determine the  availability  of such exemptions and the
eligibility of the Purchaser to acquire the Shares.

          5.8   Confidentiality;   No  Disclosure.   Until  the  filing  of  the
Registration  Statement,  the Purchaser  agrees with the Placement Agent and the
Company to keep confidential all information  concerning this private placement.
The  Purchaser  understands  that  the  information  contained  in  the  Private
Placement Memorandum is strictly confidential and proprietary to the Company and
has been  prepared  from the Company's  publicly  available  documents and other
information and is being submitted to the Purchaser  solely for such Purchaser's
confidential  use. The Purchaser agrees to use the information  contained in the
Private  Placement  Memorandum  for the sole  purpose of  evaluating  a possible
investment  in the  Shares  and the  Purchaser  hereby  acknowledges  that it is
prohibited from reproducing and distributing the Private Placement Memorandum to
third parties, this Purchase Agreement, or any other offering materials or other
information   provided  by  the  Company  in  connection  with  the  Purchaser's
consideration  of its  investment  in the  Company,  in  whole  or in  part,  or
divulging or discussing  any of their contents to third  parties.  Further,  the
Purchaser  understands  that the existence and nature of all  conversations  and
presentations,  if any,  regarding  the Company and this  offering  must be kept
strictly  confidential.  The Purchaser  understands that the federal  securities
laws  impose  restrictions  on  trading  based  on  information  regarding  this
offering.  In addition,  the Purchaser  hereby  acknowledges  that  unauthorized
disclosure  of  information  regarding  this  offering  may cause the Company to
violate  Regulation  FD and  agrees  not to  engage  in  any  such  unauthorized
disclosure.

          5.9 Ability to Bear Risks of  Investment.  The  Purchaser  understands
that its investment in the Shares involves a significant degree of risk and that
the market price of the Common  Stock has been and  continues to be volatile and
that no representation is being made as to the future value or trading volume of
the Common Stock.  The  Purchaser has the knowledge and  experience in financial
and business  matters as to be capable of evaluating  the merits and risks of an
investment  in the Shares and has the ability to bear the  economic  risks of an
investment in the Shares.

          5.10 No Endorsement.  The Purchaser  understands that no United States
federal  or state  agency or any other  government  or  governmental  agency has
passed upon or made any recommendation or endorsement of the Shares.

                                     - 13 -
<PAGE>

          5.11  Restrictions  on Transfer;  Rule 144. The Purchaser  understands
that, until such time as the Registration  Statement has been declared effective
or the Shares may be sold pursuant to Rule 144 under the  Securities Act without
any  restriction as to the number of securities as of a particular date that can
then  be  immediately  sold,  the  Shares  may  bear  a  restrictive  legend  in
substantially  the  following  form  (and a  stop-transfer  order  may be placed
against transfer of the certificates for the Shares):

               "The  securities  represented by this  certificate  have not been
               registered  under the  Securities  Act of 1933,  as amended.  The
               securities  may  not be  sold,  transferred  or  assigned  in the
               absence of an effective registration statement for the securities
               under said Act, or an opinion of counsel, in form,  substance and
               scope reasonably  acceptable to the Company, that registration is
               not required  under said Act or unless sold  pursuant to Rule 144
               under said Act."

          5.12  Purchaser's   Principal  Offices.   The  Purchaser's   principal
executive  offices  are in the  jurisdiction  set  forth  immediately  below the
Purchaser's name on the signature pages hereto.

          5.13  Compliance  with  Securities  Laws Upon Transfer.  The Purchaser
hereby  covenants  with the Company  not to make any sale of the Shares  without
complying in all material  respects with the provisions of this Agreement,  and,
if applicable,  without effectively causing the prospectus delivery  requirement
under the Securities  Act to be satisfied,  and the Purchaser  acknowledges  and
agrees that such Shares are not  transferable on the books of the Company unless
the  certificate  submitted  to the  transfer  agent  evidencing  the  Shares is
accompanied by a separate Purchaser's Certificate of Subsequent Sale in the form
of Appendix II hereto,  executed  by an officer of, or other  authorized  person
expressly  designated by, the Purchaser.  The Purchaser  acknowledges that there
may  occasionally  be  times  when  the  Company  must  suspend  the  use of the
prospectus forming a part of the Registration  Statement (a "Suspension")  until
such time as an amendment to the  Registration  Statement  has been filed by the
Company and  declared  effective  by the  Commission,  or until such time as the
Company  has filed an  appropriate  report with the  Commission  pursuant to the
Exchange Act or supplemented  the prospectus  forming a part of the Registration
Statement.  The  Purchaser  hereby  covenants  that it will not sell any  Shares
pursuant to said  prospectus  during the period  commencing at the time at which
the Company gives the Purchaser  written  notice of the Suspension of the use of
said  prospectus and ending at the time the Company gives the Purchaser  written
notice  that  the  Purchaser  may  thereafter  effect  sales  pursuant  to  said
prospectus,  except as permitted in the second  paragraph of Section 7.2 of this
Agreement; provided, however, that the Purchaser shall be in compliance with the
provisions  contained in the first paragraph of Section 7.2; provided,  further,
that the Company will use its best efforts to cause the  prospectus so suspended
to be promptly resumed.

          5.14  Authority;  Execution;  Enforceability.  The  Purchaser  further
represents  and warrants  to, and  covenants  with,  the Company  that:  (i) the
Purchaser  has full  right,  power,

                                     - 14 -
<PAGE>

authority  and  capacity  to enter into this  Agreement  and to  consummate  the
transactions contemplated hereby and has taken all necessary action to authorize
the execution,  delivery and  performance of this  Agreement,  and (ii) upon the
execution and delivery of this  Agreement,  this  Agreement  shall  constitute a
legal, valid and binding obligation of the Purchaser,  enforceable in accordance
with its terms.

          5.15 Reliance by Placement Agent.  The Purchaser  hereby  acknowledges
that  the  Placement  Agent  may  rely on the  representations,  warranties  and
covenants set forth in this Section 5 as if such representations, warranties and
covenants were made to the Placement Agent directly.

     SECTION  6.  Survival  of   Representations,   Warranties  and  Agreements.
Notwithstanding  any investigation made by any party to this Agreement or by the
Placement Agent, all covenants, agreements,  representations and warranties made
by the Company,  and the Purchaser herein and in the certificates for the Shares
delivered  pursuant  hereto  shall  survive  the  Closing,  the  delivery to the
Purchaser of the Shares being purchased and the payment therefor.

     SECTION 7. Registration of the Shares; Compliance with the Securities Act.

          7.1 Registration Procedures and Expenses. The Company shall:

               (a)  subject  to  receipt  of  necessary   information  from  the
     Purchasers, as promptly as practicable,  but in no event later than 10 days
     after the date that the Agreements  are executed,  file with the Commission
     the Registration Statement on Form S-3 relating to the resale of the Shares
     by the Purchaser and the Other  Purchasers  from time to time on the Nasdaq
     National  Market or the facilities of any national  securities  exchange on
     which  the  Common   Stock  is  then  traded  or  in   privately-negotiated
     transactions;

               (b) use its reasonable  efforts,  subject to receipt of necessary
     information  from the  Purchasers,  to cause the  Commission  to notify the
     Company  of  the  Commission's  willingness  to  declare  the  Registration
     Statement  effective  within 60 days after the  Registration  Statement  is
     filed by the Company;

               (c) promptly prepare and file with the Commission such amendments
     and  supplements to the  Registration  Statement and the prospectus used in
     connection therewith as may be necessary to keep the Registration Statement
     effective  and in  compliance  with  applicable  securities  laws until the
     earliest  of: (i) two years after the  effective  date of the  Registration
     Statement;  (ii)  the  date  on  which  the  Shares  may be  resold  by the
     Purchasers  without  registration  by  reason  of  Rule  144(k)  under  the
     Securities Act or any other rule of similar  effect;  or (iii) such time as
     all Shares purchased by such Purchaser under this Agreement have been sold;

               (d)  furnish  to  the  Purchaser   with  respect  to  the  Shares
     registered under the Registration  Statement (and to each  underwriter,  if
     any, of such Shares) such number of copies of  prospectuses  and such other
     documents as the Purchaser may reasonably

                                     - 15 -
<PAGE>

     request, in order to facilitate the public sale or other disposition of all
     or  any  of the  Shares  by the  Purchaser;  provided,  however,  that  the
     obligation  of  the  Company  to  deliver  copies  of  prospectuses  to the
     Purchaser  shall be subject to the  receipt  by the  Company of  reasonable
     assurances  from the  Purchaser  that the  Purchaser  will  comply with the
     applicable provisions of the Securities Act and of such other securities or
     blue  sky  laws as may be  applicable  in  connection  with any use of such
     prospectuses, and the resale of the Shares;

               (e) file  documents  required  of the Company for normal blue sky
     clearance  in states  specified in writing by the  Purchaser  and keep such
     qualification  or  registration  in effect for so long as the  Registration
     Statement is in effect;  provided,  however,  that the Company shall not be
     required  to qualify to do business or consent to service of process in any
     jurisdiction  in which it is not now so qualified or has not so  consented;
     and

               (f) advise the Purchaser,  promptly after it shall receive notice
     or obtain  knowledge  of the issuance of any stop order by the SEC delaying
     or suspending the  effectiveness  of the  Registration  Statement or of the
     initiation of any proceeding for that purpose; and it will promptly use its
     reasonable  efforts to prevent the  issuance of any stop order or to obtain
     its withdrawal at the earliest practicable moment if such stop order should
     be issued.

     The Company  understands that the Purchaser disclaims being an underwriter,
but the  Purchaser  being  deemed  an  underwriter  shall  not,  subject  to the
Purchaser's  compliance  with  applicable  law and the  Agreement,  relieve  the
Company of any obligations it has hereunder. A draft of the proposed form of the
Registration  Statement is included in the Private  Placement  Memorandum  and a
questionnaire  related  thereto to be  completed  by the  Purchaser  is attached
hereto as Appendix I.

          7.2 Transfer of Shares After  Registration.  The Purchaser agrees that
it will not effect any  disposition  of the Shares or its right to purchase  the
Shares that would  constitute a sale within the meaning of the  Securities  Act,
except as contemplated in the Registration Statement referred to in Section 7.1,
and that it will  promptly  notify in  writing  the  Company  of any  changes or
additions to the information set forth in the Registration  Statement  regarding
the Purchaser or its plan of  distribution  or any  disposition.  The obligation
shall cease when the Purchaser shall have disposed of all its Shares.

     Notwithstanding any other provisions of this Agreement, the Purchaser shall
not be  prohibited  from selling  Shares under the  Registration  Statement as a
result of  Suspensions  on more than two occasions of not more than 30 days each
in any twelve month period,  unless, in the good faith judgment of the Company's
Board of  Directors,  upon  advice  of  counsel,  the sale of  Shares  under the
Registration  Statement in reliance on this paragraph could be reasonably likely
to cause a violation  of the  Securities  Act or the  Exchange Act and result in
potential liability to the Company.

                                     - 16 -
<PAGE>

          7.3 Indemnification.

               (a) The  Company  agrees  to  indemnify  and  hold  harmless  the
     Purchasers,  each  affiliate of the Purchasers and each person who controls
     the Purchasers (or any affiliate of the  Purchasers)  within the meaning of
     Section 15 of the  Securities  Act or Section 20 of the  Exchange Act (each
     such person, a "Purchaser/Affiliate"), against any losses, claims, damages,
     liabilities  or expenses,  joint or several  (collectively,  "Losses"),  to
     which such  Purchasers  or such  Purchaser/Affiliates  may become  subject,
     under the  Securities  Act, the Exchange Act, or any other federal or state
     statutory law or  regulation,  or at common law or otherwise  (including in
     settlement of any claims or litigation, if such settlement is effected with
     the written consent of the Company),  insofar as such Losses (or actions in
     respect thereof as  contemplated  below) arise out of or are based upon, in
     whole or in part: (i) any untrue  statement or alleged untrue  statement of
     any material fact contained in the Registration  Statement (for purposes of
     this Section 7.3, the term "Registration Statement" shall include any final
     prospectus,  financial statements and schedules,  exhibits,  supplements or
     amendments  thereto and any documents  incorporated by reference therein or
     filed as part  thereof) at the time of  effectiveness  of the  Registration
     Statement,  including any information deemed to be a part thereof as of the
     time of  effectiveness  pursuant to paragraph (b) of Rule 430A, or pursuant
     to Rule 434, of the Rules and Regulations,  or the prospectus,  in the form
     first  filed with the  Commission  pursuant to Rule 424(b) of the Rules and
     Regulations,  or filed as part of the Registration Statement at the time of
     effectiveness if no Rule 424(b) filing is required (the  "Prospectus"),  or
     any amendment or supplement thereto;  (ii) the omission or alleged omission
     to state in the  Registration  Statement  or  Prospectus  a  material  fact
     required to be stated  therein or necessary to make the  statements  in the
     Registration Statement or the Prospectus, or any amendment or supplement to
     the Registration  Statement or the Prospectus,  not misleading in the light
     of the  circumstances  under which such  statements were made; or (iii) any
     inaccuracy in the  representations  and warranties of the Company contained
     in this Agreement, or any failure of the Company to perform its obligations
     hereunder or under law. The Company will  reimburse each Purchaser and each
     Purchaser/Affiliate  for any legal and other  expenses as such expenses are
     reasonably  incurred  by  such  Purchaser  or such  Purchaser/Affiliate  in
     connection with investigating,  defending, settling, compromising or paying
     any Losses;  provided,  however,  that the Company  will not be liable to a
     Purchaser  or  Purchaser/Affiliate  in any such case to the extent that any
     such Losses  arise out of or are based  upon:  (i) an untrue  statement  or
     alleged  untrue  statement  or  omission  or alleged  omission  made in the
     Registration  Statement,  the  Prospectus or any amendment or supplement to
     the  Registration  Statement  or the  Prospectus  in  reliance  upon and in
     conformity  with  written  information  furnished  to the  Company by or on
     behalf of such  Purchaser  expressly  for use therein;  (ii) the failure of
     such  Purchaser  to comply  with its  covenants  and  agreements  contained
     herein,  including  Sections 5.13 or 7.2 hereof  respecting the sale of the
     Shares,  or to perform its  obligations  under law; (iii) the inaccuracy of
     any  representations  or warranties made by such Purchaser  herein; or (iv)
     any statement or omission in any  Prospectus or any amendment or supplement
     thereto that is corrected in any subsequent  Prospectus or any

                                     - 17 -
<PAGE>

     amendment or supplement  thereto that was delivered to such Purchaser prior
     to the pertinent sale or sales by such Purchaser.

               (b) Each Purchaser will severally, but not jointly, indemnify and
     hold harmless the Company, each of its directors,  each of its officers who
     signed the Registration Statement and each person, if any, who controls the
     Company  within the meaning of Section 15 of the  Securities Act or Section
     20 of the Exchange  Act,  against any Losses to which the Company,  each of
     its directors,  each of its officers who signed the Registration  Statement
     or controlling  person may become  subject,  under the Securities  Act, the
     Exchange Act, or any other federal or state statutory law or regulation, or
     at  common  law or  otherwise  (including  in  settlement  of any  claim or
     litigation, if such settlement is effected with the written consent of such
     Purchaser)  insofar  as such  Losses  (or  actions  in  respect  thereof as
     contemplated below) arise out of or are based upon: (i) any failure by such
     Purchaser to comply with its covenants  and  agreements  contained  herein,
     including Sections 5.13 or 7.2 hereof respecting the sale of the Shares, or
     to  perform  its  obligations   under  law;  (ii)  the  inaccuracy  of  any
     representation  or  warranty  made by such  Purchaser  herein  or (iii) any
     untrue or alleged  untrue  statement of any material fact  contained in the
     Registration Statement,  the Prospectus,  or any amendment or supplement to
     the  Registration  Statement or the Prospectus,  or the omission or alleged
     omission to state therein a material fact required to be stated  therein or
     necessary  to make the  statements  in the  Registration  Statement  or the
     Prospectus, or any amendment or supplement to the Registration Statement or
     Prospectus,  not misleading in the light of the  circumstances  under which
     they were made,  in each case to the extent,  but only to the extent,  that
     such untrue  statement or alleged  untrue  statement or omission or alleged
     omission was made in the  Registration  Statement,  the Prospectus,  or any
     amendment or supplement  thereto,  in reliance upon and in conformity  with
     written  information  furnished to the Company by such Purchaser  expressly
     for use therein.  Such Purchaser  will  reimburse the Company,  each of its
     directors,  each of its officers who signed the  Registration  Statement or
     controlling person for any legal and other expense  reasonably  incurred by
     the  Company,  each of its  directors,  each of its officers who signed the
     Registration   Statement  or   controlling   person  in   connection   with
     investigating, defending, settling, compromising or paying any such Losses.
     Notwithstanding  any other provisions of this Section 7.3(b),  no Purchaser
     shall be required to  indemnify  any party in excess of the gross  proceeds
     paid by such  Purchaser  for Shares  purchased  pursuant to its  respective
     Agreement  or  if  the  Purchaser   shall  sell  Shares   pursuant  to  the
     Registration  Statement, if greater, the proceeds received by the Purchaser
     from those sales.

               (c) Promptly  after  receipt by an  indemnified  party under this
     Section 7.3 of notice of the threat or  commencement  of any  action,  such
     indemnified party will, if a claim in respect thereof is to be made against
     an   indemnifying   party  under  this  Section  7.3  promptly  notify  the
     indemnifying party in writing thereof;  however,  the failure to notify the
     indemnifying party will not relieve it from any liability which it may have
     to any  indemnified  party for  contribution  or  otherwise  than under the
     indemnity  agreement  contained  in this  Section  7.3 or to the extent the
     indemnifying  party is not prejudiced as a result of such failure.  In case
     any  such  action  is  brought  against  any  indemnified  party

                                     - 18 -
<PAGE>

     and such  indemnified  party  seeks or  intends to seek  indemnity  from an
     indemnifying  party, the indemnifying party will be entitled to participate
     in,  and,  to  the  extent  that  it  may  wish,  jointly  with  all  other
     indemnifying parties similarly notified, to assume the defense thereof with
     counsel  reasonably  satisfactory  to  such  indemnified  party;  provided,
     however,  if the defendants in any such action include both the indemnified
     party  and the  indemnifying  party  and,  based  upon the  advice  of such
     indemnified  party's counsel,  the indemnified  party shall have reasonably
     concluded that there may be a conflict of interest between the positions of
     the indemnifying  party and the indemnified party in conducting the defense
     of any such  action or that  there may be legal  defenses  available  to it
     and/or other indemnified  parties which are different from or additional to
     those available to the indemnifying party, the indemnified party or parties
     shall  have the right to select  separate  counsel  to  assume  such  legal
     defenses  and to  otherwise  participate  in the  defense of such action on
     behalf of such  indemnified  party or parties.  Upon receipt of notice from
     the  indemnifying  party to such  indemnified  party of its  election so to
     assume  the  defense  of  such  action  and  reasonable   approval  by  the
     indemnified party of counsel,  the indemnifying party will not be liable to
     such  indemnified  party  under  this  Section  7.3 for any  legal or other
     expenses subsequently incurred by such indemnified party in connection with
     the defense thereof unless:  (i) the indemnified  party shall have employed
     such  counsel  in  connection  with the  assumption  of legal  defenses  in
     accordance with the proviso to the preceding sentence (it being understood,
     however,  that the indemnifying  party shall not be liable for the expenses
     of more than one separate counsel, representing the indemnified parties who
     are parties to such action, plus local counsel, if appropriate) or (ii) the
     indemnifying party shall not have employed counsel reasonably  satisfactory
     to the  indemnified  party to  represent  the  indemnified  party  within a
     reasonable time after notice of  commencement  of action,  in each of which
     cases the  reasonable  fees and expenses of counsel shall be at the expense
     of the indemnifying party.

               (d) If the  indemnification  provided  for in this Section 7.3 is
     required  by its terms but is for any reason held to be  unavailable  to or
     otherwise   insufficient  to  hold  harmless  an  indemnified  party  under
     paragraphs (a) or (b) of this Section 7.3 in respect to any Losses referred
     to herein, then each applicable  indemnifying party shall contribute to the
     amount paid or payable by such indemnified  party as a result of any Losses
     referred to herein: (i) in such proportion as is appropriate to reflect the
     relative  economic  benefits received by the Company and the Purchaser from
     the placement of the Common Stock contemplated by this Agreement or (ii) if
     the allocation  provided by clause (i) above is not permitted by applicable
     law, in such  proportion as is appropriate to reflect not only the relative
     benefits  referred  to in clause  (i) above but the  relative  fault of the
     Company and the  Purchaser  that  resulted in such  Losses,  as well as any
     other relevant equitable considerations.  The relative benefits received by
     the Company,  on the one hand, and each Purchaser,  on the other,  shall be
     deemed to be in the same proportion as the amount paid by such Purchaser to
     the Company  pursuant to this  Agreement  for the Shares  purchased by such
     Purchaser that were sold pursuant to the  Registration  Statement  bears to
     the difference  (the  "Difference")  between the amount such Purchaser paid
     for the Shares that were sold  pursuant to the  Registration  Statement and
     the amount received by such Purchaser from such sale. The relative fault of
     the Company,  on the one hand, and

                                     - 19 -
<PAGE>

     each  Purchaser,  on the other,  shall be determined by reference to, among
     other things, whether the untrue or alleged statement of a material fact or
     the omission or alleged omission to state a material fact or the inaccurate
     or the alleged inaccurate representation or warranty relates to information
     supplied  by the Company or by such  Purchaser  and the  parties'  relative
     intent,  knowledge,  access to  information  and  opportunity to correct or
     prevent such statement or omission and/or its distribution. The amount paid
     or payable by a party as a result of the Losses  referred to above shall be
     deemed to include, subject to the limitations set forth in paragraph (c) of
     this Section 7.3, any legal or other fees or expenses  reasonably  incurred
     by such party in connection with  investigating  or defending any action or
     claim.  The  provisions set forth in paragraph (d) of this Section 7.3 with
     respect  to the notice of the threat or  commencement  of any action  shall
     apply if a claim for  contribution  is to be made under this paragraph (d);
     provided, however, that no additional notice shall be required with respect
     to any threat or action for which notice has been given under paragraph (c)
     for purposes of indemnification.  The Company and each Purchaser agree that
     it would not be just and equitable if contribution pursuant to this Section
     7.3 were determined  solely by pro rata  allocation  (even if the Purchaser
     were  treated  as one entity for such  purpose)  or by any other  method of
     allocation  which  does not take  account of the  equitable  considerations
     referred  to in this  paragraph.  Notwithstanding  the  provisions  of this
     Section 7.3, no  Purchaser  shall be required to  contribute  any amount in
     excess of the  amount by which the  Difference  exceeds  the  amount of any
     damages that such Purchaser has otherwise been required to pay by reason of
     such untrue or alleged untrue statement or omission or alleged omission. No
     person  guilty of  fraudulent  misrepresentation  (within  the  meaning  of
     Section 11(f) of the Securities Act) shall be entitled to contribution from
     any  person who was not guilty of such  fraudulent  misrepresentation.  The
     Purchasers'  obligations  to  contribute  pursuant to this  Section 7.3 are
     several and not joint.

          7.4 Termination of Restrictions on Transfer.  The restrictions imposed
by Section 5 or this  Section 7 upon the  transferability  of the  Shares  shall
cease and terminate as to any  particular  number of the Shares upon the passage
of two years from the effective date of the Registration Statement covering such
Shares or at such time as an opinion of counsel reasonably  satisfactory in form
and  substance to the Company  shall have been  rendered to the effect that such
restrictions are not necessary in order to comply with the Securities Act.

          7.5 Information  Available.  So long as the Registration  Statement is
effective covering the resale of Shares owned by the Purchaser, the Company will
furnish to the Purchaser:

               (a) as soon as practicable after it becomes  available,  one copy
     of:  (i)  its  Annual  Report  to  Stockholders  (which  Annual  Report  to
     Stockholders shall contain financial  statements audited in accordance with
     generally  accepted  accounting  principles by a national firm of certified
     public accountants); (ii) if not included in substance in the Annual Report
     to  Stockholders,  upon the request of the Purchaser,  its Annual Report on
     Form 10-K; (iii) upon the request of the Purchaser,  its Quarterly  Reports
     on Form 10-Q;  (iv) upon the request of the Purchaser,  its Current Reports
     on Form 8-K; and (v) a full

                                     - 20 -
<PAGE>

     copy of the  particular  Registration  Statement  covering  the Shares (the
     foregoing, in each case, excluding exhibits);

               (b) upon the request of the Purchaser,  all exhibits  excluded by
     the parenthetical to subparagraph (a)(v) of this Section 7.5; and

               (c) upon the request of the  Purchaser,  a  reasonable  number of
     copies of the  prospectuses  to supply to any other  party  requiring  such
     prospectuses;

and the Company,  upon the reasonable  request of the Purchaser,  will meet with
the  Purchaser or a  representative  thereof at the  Company's  headquarters  to
discuss  information  relevant  for  disclosure  in the  Registration  Statement
covering the Shares and will otherwise  reasonably  cooperate with any Purchaser
conducting  an  investigation  for the  purpose  of  reducing  such  Purchaser's
exposure  to  liability  under the  Securities  Act,  including  the  reasonable
production of information at the Company's headquarters,  subject to appropriate
confidentiality limitations.

     SECTION 8.  Broker's  Fee.  The  Purchaser  acknowledges  that the  Company
intends to pay to the Placement Agent a fee in respect of the sale of the Shares
to the  Purchaser.  Each of the parties  hereto hereby  represents  that, on the
basis of any actions and agreements by it, there are no other brokers or finders
entitled  to  compensation  in  connection  with the sale of the  Shares  to the
Purchaser.

     SECTION  9.   Notices.   All   notices,   requests,   consents   and  other
communications  hereunder  shall be in writing,  shall be mailed by  first-class
registered or certified airmail,  confirmed  facsimile or nationally  recognized
overnight  express  courier postage  prepaid,  and shall be deemed given when so
mailed and shall be delivered as addressed as follows:

               (a)  if to the Company, to:

                    Osteotech, Inc.
                    51 James Way
                    Eatontown, New Jersey  07724
                    Attention: Mr. Michael J. Jeffries
                    Facsimile: 732-935-0626

                    with a copy to:

                    Dorsey & Whitney LLP
                    250 Park Avenue
                    New York, New York 10177
                    Attention: Kevin T. Collins, Esq.
                    Facsimile: 212-953-7201

                    or to such other  person at such other  place as the Company
                    shall designate to the Purchaser in writing; and

                                     - 21 -
<PAGE>

               (b) if to the  Purchaser,  at its address as set forth at the end
     of this  Agreement,  or at such other address or addresses as may have been
     furnished to the Company in writing.

     SECTION 10.  Changes.  This Agreement may not be modified or amended except
pursuant to an instrument in writing signed by the Company and the Purchaser.

     SECTION  11.  Headings.  The  headings  of the  various  sections  of  this
Agreement have been inserted for  convenience of reference only and shall not be
deemed to be part of this Agreement.

     SECTION 12. Severability. In case any provision contained in this Agreement
should be  invalid,  illegal or  unenforceable  in any  respect,  the  validity,
legality and enforceability of the remaining  provisions  contained herein shall
not in any way be affected or impaired thereby.

     SECTION  13.  Governing  Law.  This  Agreement  shall  be  governed  by and
construed in  accordance  with the laws of the State of New York and the federal
law of the United States of America.

     SECTION 14.  Counterparts.  This  Agreement  may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument,  and shall become effective
when  one or more  counterparts  have  been  signed  by each  party  hereto  and
delivered to the other parties.  Facsimile  signatures  shall be deemed original
signatures.

     SECTION 15. Entire Agreement. This Agreement and the instruments referenced
herein  contain  the entire  understanding  of the parties  with  respect to the
matters covered herein and therein and, except as specifically  set forth herein
or therein,  neither the Company  nor the  Purchaser  makes any  representation,
warranty, covenant or undertaking with respect to such matters.

     SECTION 16. Third Party Beneficiaries.  Subject to Section 7.3 hereof, this
Agreement is intended for the benefit of the parties hereto and their respective
permitted  successors  and  assigns,  and is not for the benefit of, nor may any
provision  hereof  be  enforced  by,  any  other  person.   Notwithstanding  the
foregoing,  the Placement Agent may rely on the representations,  warranties and
covenants  made in Sections 4 and 5 as if such  representations,  warranties and
covenants were made to the Placement Agent directly.

     SECTION  17.  Confidential   Disclosure   Agreement.   Notwithstanding  any
provision  of  this  Agreement  to the  contrary,  any  confidential  disclosure
agreement  previously  executed by the Company and the  Purchaser in  connection
with the transactions  contemplated by this Agreement shall remain in full force
and  effect  in  accordance  with its  terms  following  the  execution  of this
Agreement and the consummation of the transactions contemplated hereby.

     SECTION  18.  Assignment.  This  Agreement  and  rights  of  the  Purchaser
hereunder may be assigned by the Purchaser with the prior written consent of the
Company except such consent

                                     - 22 -
<PAGE>

shall not be required in cases of assignments:  (x) by operation of the law; (y)
by the Purchaser to its wholly-owned subsidiary; or (z) by an investment adviser
to a fund for which it is the adviser or by or among funds that are under common
control,  provided that, in any such case,  such assignee  agrees to be bound by
the terms of this Agreement.

     SECTION 19. Publicity. Except in connection with filing of the Registration
Statement, the Company will not issue any public statement, press release or any
other  public  disclosure,  that  includes  the  Purchaser's  name,  without the
Purchaser's  prior written consent.  If the Company is required by an applicable
law,  resolution,  or securities exchange rule to disclose the Purchaser's name,
the  Company  will  give  the  Purchaser   reasonable  notice  of  the  required
disclosure.

                                     - 23 -
<PAGE>

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
executed by their duly authorized  representatives  as of the day and year first
above written.

                                             OSTEOTECH, INC.

                                             By: _______________________________
                                                 Name:
                                                 Title:

                                     - 24 -
<PAGE>

                       Print or Type:     Name of Purchaser
                                          (Individual or Institution):

                                          ______________________________________

                                          Name of Individual representing
                                          Purchaser (if an Institution):

                                          ______________________________________

                                          Title of Individual representing
                                          Purchaser (if an Institution):

                                          ______________________________________

Signature by:                             Individual Purchaser or Individual
                                          representing Purchaser:

                                          ______________________________________

                                          Address:    __________________________

                                          Telephone:  __________________________

                                          Facsimile:  __________________________

                                     - 25 -
<PAGE>

                                                                      Appendix I
                                                                    (one of two)

OSTEOTECH, INC.
STOCK CERTIFICATE QUESTIONNAIRE

         Pursuant  to  Section 3 of the  Agreement,  please  provide us with the
following information:

1.   The exact name that your Shares are to be
     registered in (this is the name that will
     appear on your stock certificate(s)). You may
     use a nominee name if appropriate:             ____________________________

2.   The relationship between the Purchaser of the
     Shares and the Registered Holder listed in
     response to item 1 above:                      ____________________________

3.   The mailing address of the Registered Holder
     listed in response to item 1 above:            ____________________________
                                                    ____________________________
                                                    ____________________________
                                                    ____________________________

4.   The Social Security Number or Tax
     Identification Number of the Registered
     Holder listed in response to item 1 above:     ____________________________

                                   Appendix I

<PAGE>

                                                                      Appendix I
                                                                    (two of two)

                                 OSTEOTECH, INC.
                      REGISTRATION STATEMENT QUESTIONNAIRE

     In connection with the preparation of the  Registration  Statement,  please
provide us with the following information:

1.   Pursuant  to  the  "Selling   Stockholder"   section  of  the  Registration
     Statement,  please  state your or your  organization's  name  exactly as it
     should appear in the Registration Statement:

2.   Please provide the number of shares that you or your  organization will own
     immediately after Closing,  including those Shares purchased by you or your
     organization pursuant to this Purchase Agreement and those shares purchased
     by you or your organization through other transactions:

3.   Have you or your  organization  had any position,  office or other material
     relationship   within  the  past  three  years  with  the  Company  or  its
     affiliates?

                           _____ Yes         _____ No

          If yes, please indicate the nature of any such relationships below:

          ______________________________________________________________________

          ______________________________________________________________________

          ______________________________________________________________________

4.   Are  you (i) an NASD  Member  (see  definition),  (ii) a  Controlling  (see
     definition) shareholder of an NASD Member, (iii) a Person Associated with a
     Member of the NASD (see  definition),  or (iv) an  Underwriter or a Related
     Person (see  definition) with respect to the proposed  offering;  or (b) do
     you own any shares or other  securities of any NASD Member not purchased in
     the open market; or (c) have you made any outstanding subordinated loans to
     any NASD Member?

                                  Appendix I-2
<PAGE>

          Answer: [_] Yes [_] No If "yes," please describe below

          ______________________________________________________________________

          ______________________________________________________________________

          ______________________________________________________________________

                                  Appendix I-3
<PAGE>

     NASD  Member.  The term  "NASD  member"  means  either any broker or dealer
admitted to membership in the National  Association of Securities Dealers,  Inc.
("NASD"). (NASD Manual, By-laws Article I, Definitions)

     Control. The term "control" (including the terms "controlling," "controlled
by" and "under common control with") means the  possession,  direct or indirect,
of the  power,  either  individually  or with  others,  to  direct  or cause the
direction  of the  management  and  policies  of a person,  whether  through the
ownership of voting securities,  by contract, or otherwise.  (Rule 405 under the
Securities Act of 1933, as amended)

     Person  Associated  with a member of the NASD. The term "person  associated
with a member  of the NASD"  means  every  sole  proprietor,  partner,  officer,
director,  branch manager or executive representative of any NASD Member, or any
natural person occupying a similar status or performing  similar  functions,  or
any natural person engaged in the investment banking or securities  business who
is directly or indirectly controlling or controlled by a NASD Member, whether or
not such person is registered or exempt from registration with the NASD pursuant
to its bylaws. (NASD Manual, By-laws Article I, Definitions)

     Underwriter or a Related Person. The term "underwriter or a related person"
means, with respect to a proposed offering, underwriters, underwriters' counsel,
financial  consultants  and  advisors,   finders,  members  of  the  selling  or
distribution  group, and any and all other persons associated with or related to
any of such persons. (NASD Interpretation)

                                  Appendix I-4
<PAGE>

                                                                     APPENDIX II

Attention:

                   PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE

     The undersigned, [an officer of, or other person duly authorized by]

_____________________________________________________________ hereby certifies
    [fill in official name of individual or institution]

that he/she [said  institution] is the Purchaser of the shares evidenced by the

attached  certificate,  and as such,  sold  such  shares on  _______________  in
                                                                  [date]
accordance with Registration Statement number
____________________________________________________________________ and
[fill in the number of or otherwise identify Registration Statement]

the  requirement  of  delivering  a current  prospectus  by the Company has been

complied with in connection with such sale.

Print or Type:

     Name of Purchaser
     (Individual or
     Institution):              __________________

     Name of Individual
     representing
     Purchaser (if an
     Institution)               __________________

     Title of Individual
     representing
     Purchaser (if an
     Institution):              __________________

     Signature by:
     Individual Purchaser
     or Individual repre-
     senting Purchaser:         __________________

                                   Appendix II<PAGE>
                                                                   EXHIBIT 10.34

                                    EXECUTIVE

                         SEVERANCE AGREEMENT AND RELEASE

                                    RECITALS

        This Executive Severance Agreement and Release ("Agreement") is made by
and between Andrew D. Wahl ("Employee") and PC Tel, Inc. ("Company"),
collectively referred to as the ("Parties"):

        A. Employee was employed by the Company as Vice President, IP/IR;

        B. The Company and Employee have entered into a Confidential and
Proprietary Information Agreement (the "Confidentiality Agreement");

        C. Employee has mutually agreed to resign his position effective March
8, 2002 ("Resignation Date");

        D. The Parties, and each of them, wish to resolve any and all disputes,
claims, complaints, grievances, charges, actions, petitions and demands that the
Employee may have against the Company as defined herein, including, but not
limited to, any and all claims arising or in any way related to Employee's
employment with, or separation from, the Company;

        NOW THEREFORE, in consideration of the promises made herein, the Parties
hereby agree as follows:

                                    COVENANTS

        1. Consideration.

               (a) Commencing with the Resignation Date, the Company agrees to
pay Employee a severance payment of five months salary, which is Seventy Five
Thousand ($75,000) Dollars, in exchange for the covenants and releases herein.

               (b) Payment. The Company shall pay employee a Lump Sum payment of
$92,306.00 (less all legally required and authorized deduction), within 5 days
of the Effective Date of this Agreement. This represents five month's salary as
well as accumulated PTO.

<PAGE>
               (c) Vesting of Stock. As of Employee's Resignation Date (March 8,
2002), you will have six months to exercise 98,876 options, consistent with the
terms of the Company's Stock Option Plan. Employee shall continue to be subject
to the terms and conditions of the Company's Stock Option Plan and the
applicable Stock Option Agreement between Employee and the Company. (See
Attachment A.)

               (d) Benefits. Health benefit coverage for the Employee shall
cease as of March 30, 2002. Employee shall have the right to convert his health
insurance benefits to individual coverage pursuant to COBRA, effective April 1,
2002. Should Employee elect COBRA coverage, the Company will pay the cost of
said COBRA coverage for a period up to 4 months, or until July 31, 2002.

        2. Confidential Information. Employee shall continue to maintain the
confidentiality of all confidential and proprietary information of the Company
and shall continue to comply with the terms and conditions of the
Confidentiality Agreement between Employee and the Company. Employee shall
return all of the Company's property and confidential and proprietary
information in his possession to the Company on the Resignation Date of this
Agreement.

        3. Payment of Salary. Employee acknowledges and represents that the
Company has paid all salary, wages, bonuses, accrued vacation, commissions and
any and all other benefits due to Employee once the above noted payments and
benefits are received.

        4. Release of Claims. The Parties agree that the consideration set forth
in this Agreement represents settlement in full of all outstanding obligations
owed by one Party to the other. The Parties, on their own behalves, and on
behalf of their respective heirs, family members, executors, officers,
directors, administrators, affiliates, divisions, subsidiaries, predecessor and
successor corporations, and assigns, hereby fully and forever releases the other
Party, and the other Party's heirs, family members, executors, officers,
directors, employees, investors, shareholders, administrators, affiliates,
divisions, subsidiaries, predecessor and successor corporations, and assigns,
from, and agree not to sue concerning, any claim, duty, obligation or cause of
action relating to any matters of any kind, whether presently known or unknown,
suspected or unsuspected, that they may possess arising from any omissions, acts
or facts that have occurred up until and including the Effective Date of this
Agreement including, without limitation:

               (a) Any and all claims relating to or arising from Employee's
employment relationship with the Company and the termination of that
relationship;

               (b) Any and all claims relating to, or arising from, Employee's
right to purchase, or actual purchase of shares of stock of the Company,
including, without limitation, any claims for fraud, misrepresentation, breach
of fiduciary duty, breach of duty under applicable state corporate law, and
securities fraud under any state or federal law;

               (c) Any and all claims under the law of any jurisdiction
including, but not limited to, wrongful discharge of employment; constructive
discharge from employment; termination in violation of public policy;
discrimination; breach of contract, both express and implied; breach of a
covenant of good faith and fair dealing, both express and implied; promissory
estoppel; negligent or

<PAGE>
intentional infliction of emotional distress; negligent or intentional
misrepresentation; negligent or intentional interference with contract or
prospective economic advantage; unfair business practices; defamation; libel;
slander; negligence; personal injury; assault; battery; invasion of privacy;
false imprisonment; and conversion;

               (d) Any and all claims for violation of any federal, state or
municipal statute, including, but not limited to, Title VII of the Civil Rights
Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment
Act of 1967, the Americans with Disabilities Act of 1990, the Fair Labor
Standards Act, the Employee Retirement Income Security Act of 1974, The Worker
Adjustment and Retraining Notification Act, Older Workers Benefit Protection
Act; the California Fair Employment and Housing Act, and Labor Code section 201,
et seq. and section 970, et seq.;

               (e) Any and all claims for violation of the federal, or any
state, constitution;

               (f) Any and all claims arising out of any other laws and
regulations relating to employment or employment discrimination;

               (g) Any claim for any loss, cost, damage, or expense arising out
of any dispute over the non-withholding or other tax treatment of any of the
proceeds received by Employee as a result of this Agreement; and

               (h) Any and all claims for attorneys' fees and costs.

        The Company and Employee agree that the release set forth in this
section shall be and remain in effect in all respects as a complete general
release as to the matters released. This release does not extend to any
obligations incurred under this Agreement, any stock option agreement entered
into with Employee, or to the Company obligation under its Indemnification
Agreement with Employee, or to the Company's obligations to Indemnify Employee
pursuant to the Company's Articles of Incorporation, By-Laws as otherwise
provided by law.

        5. Acknowledgement of Waiver of Claims Under ADEA. Employee acknowledges
that he is waiving and releasing any rights he may have under the Age
Discrimination in Employment Act of 1967 ("ADEA") and that this waiver and
release is knowing and voluntary. Employee and the Company agree that this
waiver and release does not apply to any rights or claims that may arise under
ADEA after the Effective Date of this Agreement. Employee acknowledges that the
consideration given for this waiver and release agreement is in addition to
anything of value to which Employee was already entitled. Employee further
acknowledges that he has been advised by this writing that

               (a) He should consult with an attorney prior to executing this
        Agreement;

               (b) He has up to twenty-one (21) days within which to consider
        this Agreement;

               (c) He has been advised in writing by the Company of the class,
        unit, or group of individuals covered by the severance program, and the
        job titles and ages of all individuals who participated and did not
        participate in the program;

<PAGE>
               (d) He has seven (7) days following his execution of this
        Agreement to revoke the Agreement;

               (e) This Agreement shall not be effective until the revocation
        period has expired; and

               (f) Nothing in this Agreement prevents or precludes Employee from
        challenging or seeking a determination in good faith of the validity of
        this waiver under ADEA, nor does it impose any condition precedent,
        penalties or costs for doing so, unless specifically authorized by
        federal law.

        6. Civil Code Section 1542. The Parties represent that they are not
aware of any claim by either of them other than the claims that are released by
this Agreement. Employee and the Company acknowledge that they have been advised
by legal counsel and are familiar with the provisions of California Civil Code
Section 1542, which provides as follows:

                A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
                DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
                EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
                MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

        Employee and the Company, being aware of said code section, agree to
expressly waive any rights they may have thereunder, as well as under any other
statute or common law principles of similar effect.

        7. No Pending or Future Lawsuits. Employee and the Company represent
that they have no lawsuits, claims, or actions pending in their names, or on
behalf of any other person or entity, against the other or any other person or
entity referred to herein. Employee and the Company also represents that they do
not intend to bring any claims on their own behalf or on behalf of any other
person or entity against the other or any other person or entity referred to
herein.

        8. Confidentiality. The Parties acknowledge that Employee's agreement to
keep the terms and conditions of this Agreement confidential was a material
factor on which all Parties relied in entering into this Agreement. Employee
hereto agrees to use his best efforts to maintain in confidence the existence of
this Agreement, the contents and terms of this Agreement, the consideration for
this Agreement, and any allegations relating to the Company or his employment
with the Company except as otherwise provided for in this Agreement (hereinafter
collectively referred to as "Settlement Information"). Employee agrees to take
every reasonable precaution to prevent disclosure of any Settlement Information
to third parties, and agrees that there will be no publicity, directly or
indirectly, concerning any Settlement Information. Employee agrees to take every
precaution to disclose Settlement Information only to those attorneys,
accountants, governmental entities, financial advisors and family members who
have a reasonable need to know of such Settlement Information.

<PAGE>
        9. No Cooperation. Employee agrees he will not act in any manner that is
intended to damage the business of the Company. Employee agrees that he will not
counsel or assist any attorneys or their clients in the presentation or
prosecution of any disputes, differences, grievances, claims, charges, or
complaints by any third party against the Company and/or any officer, director,
employee, agent, representative, shareholder or attorney of the Company, unless
under a subpoena or other court order to do so. Employee further agrees both to
immediately notify the Company upon receipt of any court order, subpoena, or any
legal discovery device that seeks or might require the disclosure or production
of the existence or terms of this Agreement, and to furnish, within three (3)
business days of its receipt, a copy of such subpoena or legal discovery device
to the Company.

        10. Non-Disparagement. Employee and the Company agree to refrain from
any defamation, libel or slander of the other or tortuous interference with the
contracts and relationships of the other.

        11. Non-Solicitation. Employee agrees that for a period of twelve (12)
months immediately following the Resignation Date of this Agreement, Employee
shall not either directly or indirectly solicit, induce, recruit or encourage
any of the Company's employees to leave their employment, or attempt to solicit,
induce, recruit, encourage, take away or hire employees of the Company, either
for him or any other person or entity.

        12. No Admission of Liability. The Parties understand and acknowledge
that this Agreement constitutes a compromise and settlement of disputed claims.
No action taken by the Parties hereto, or either of them, either previously or
in connection with this Agreement shall be deemed or construed to be:

               (a) An admission of the truth or falsity of any claims heretofore
        made or

               (b) An acknowledgment or admission by either Party of any fault
        or liability whatsoever to the other Party or to any third party.

        13. Costs. The Parties shall each bear their own costs, expert fees,
attorneys' fees and other fees incurred in connection with this Agreement.

        14. Tax Consequences. The Company makes no representations or warranties
with respect to the tax consequences of the payment of any sums to Employee
under the terms of this Agreement. Employee agrees and understands that he is
responsible for payment, if any, of local, state and/or federal taxes on the
sums paid hereunder by the Company and any penalties or assessments thereon.
Employee further agrees to indemnify and hold the Company harmless from any
claims, demands, deficiencies, penalties, assessments, executions, judgments, or
recoveries by any government agency against the Company for any amounts claimed
due on account of Employee's failure to pay federal or state taxes or damages
sustained by the Company by reason of any such claims, including reasonable
attorneys' fees.

        15. Indemnification. The Parties agree to indemnify and hold harmless
the other from and against any and all loss, costs, damages or expenses,
including, without limitation, attorneys' fees or expenses incurred by the non -
breaching Party arising out of the breach of this Agreement by the other, or
from any false representation made herein by the other, or from any action or
proceeding

<PAGE>
which may be commenced, prosecuted or threatened by the other or for the other's
benefit, upon the other's initiative, or with the other's aid or approval,
contrary to the provisions of this Agreement. The Parties further agrees that in
any such action or proceeding, this Agreement may be pled by the non-breaching
Party as a complete defense, or may be asserted by way of counterclaim or
cross-claim.

D&O Insurance: Employee will continue to be covered under the current D&O
Insurance plan for past, present, and future claims against the Company that are
incurred.

        16. Arbitration. The Parties agree that any and all disputes arising out
of the terms of this Agreement, their interpretation, and any of the matters
herein released, shall be subject to binding arbitration in Santa Clara County
before the American Arbitration Association under its Employment Dispute
Resolution Rules, or by a judge to be mutually agreed upon. The Parties agree
that the prevailing party in any arbitration shall be entitled to injunctive
relief in any court of competent jurisdiction to enforce the arbitration award.
The Parties agree that the prevailing party in any arbitration shall be awarded
its reasonable attorneys' fees and costs. THE PARTIES HEREBY AGREE TO WAIVE
THEIR RIGHT TO HAVE ANY DISPUTE BETWEEN THEM RESOLVED IN A COURT OF LAW BY A
JUDGE OR JURY.

        17. Authority. The Company represents and warrants that the undersigned
has the authority to act on behalf of the Company and to bind the Company and
all who may claim through it to the terms and conditions of this Agreement.
Employee represents and warrants that he has the capacity to act on his own
behalf and on behalf of all who might claim through him/her to bind them to the
terms and conditions of this Agreement. Each Party warrants and represents that
there are no liens or claims of lien or assignments in law or equity or
otherwise of or against any of the claims or causes of action released herein.

        18. No Representations. Each Party represents that it has had the
opportunity to consult with an attorney, and has carefully read and understands
the scope and effect of the provisions of this Agreement. Neither Party has
relied upon any representations or statements made by the other Party hereto
which are not specifically set forth in this Agreement.

        19. Severability. In the event that any provision hereof becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision so long as the remaining provisions remain intelligible and continue
to reflect the original intent of the Parties.

        20. Entire Agreement. This Agreement, and the Confidentiality Agreement,
constitutes the entire agreement and understanding between the Parties
concerning the subject matter of this Agreement and all prior representations,
understandings, and agreements concerning the subject matter of this Agreement
have been superseded by the terms of this Agreement.

        21. No Waiver. The failure of any Party to insist upon the performance
of any of the terms and conditions in this Agreement, or the failure to
prosecute any breach of any of the terms and conditions of this Agreement, shall
not be construed thereafter as a waiver of any such terms or conditions. This
entire Agreement shall remain in full force and effect as if no such forbearance
or failure of performance had occurred.

<PAGE>
        22. No Oral Modification. Any modification or amendment of this
Agreement, or additional obligation assumed by either Party in connection with
this Agreement, shall be effective only if placed in writing and signed by both
Parties or by authorized representatives of each Party. No provision of this
Agreement can be changed, altered, modified, or waived except by an executed
writing by the Parties.

        23. Governing Law. This Agreement shall be deemed to have been executed
and delivered within the State of California, and it shall be construed,
interpreted, governed, and enforced in accordance with the laws of the State of
California.

        24. Attorneys' Fees. In the event that either Party brings an action to
enforce or effect its rights under this Agreement, the prevailing party shall be
entitled to recover its costs and expenses, including the costs of mediation,
arbitration, litigation, court fees, plus reasonable attorneys' fees, incurred
in connection with such an action.

        25. Effective Date. This Agreement is effective eight (8) days after it
has been signed by both Parties, unless revoked by Employee within seven (7)
days of execution.

        26. Counterparts. This Agreement may be executed in counterparts, and
each counterpart shall have the same force and effect as an original and shall
constitute an effective, binding agreement on the part of each of the
undersigned.

        27. Voluntary Execution of Agreement. This Agreement is executed
voluntarily and without any duress or undue influence on the part or behalf of
the Parties hereto, with the full intent of releasing all claims. The Parties
acknowledge that:

               (a) They have read this Agreement;

               (b) They have been represented in the preparation, negotiation,
        and execution of this Agreement by legal counsel of their own choice or
        that they have voluntarily declined to seek such counsel;

               (c) They understand the terms and consequences of this Agreement
        and of the releases it contains; and

               (d) They are fully aware of the legal and binding effect of this
        Agreement.

<PAGE>
        IN WITNESS WHEREOF, the Parties have executed this Agreement on the
respective dates set forth below.

Dated:  3/5/02                              By: /s/ John Schoen
                                            --------------------------------
                                            John Schoen
                                            COO/CFO

                                            Andrew Wahl, an individual

Dated:  3/6/02                              /s/ Andrew Wahl
                                            --------------------------------
                                            Andrew Wahl

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