Document:

Exhibit 10.51

                             AGREEMENT OF AMENDMENT
                                       TO
                          LOAN AND SECURITY AGREEMENT,
                         MORTGAGE, ASSIGNMENT OF LEASES
                               AND OTHER DOCUMENTS

     This  Agreement  of Amendment  to Loan and  Security  Agreement,  Mortgage,
Assignment of Leases and Other Documents  ("Agreement") is effective as of March
13, 2002 by and among FLEET NATIONAL BANK,  Successor in interest to SUMMIT BANK
having offices at 3670 Route 9 South,  Freehold,  New Jersey,  07728 ("Lender");
OSTEOTECH, INC., a Delaware Corporation, OSTEOTECH INVESTMENT CORPORATION, a New
Jersey Corporation, CAM IMPLANTS, INC., a Colorado Corporation, OSTEOTECH, B.V.,
H.C. IMPLANTS,  B.V., CAM IMPLANTS,  B.V.,  OSTEOTECH/CAM SERVICES, B.V., each a
Company of The Netherlands,  OSTEOTECH, S.A., and OST DEVELOPPEMENT S.A., each a
Corporation of France (jointly and severally "Borrower").

RECITALS

     A. Borrower has executed and  delivered the following  payable to the order
of Lender:

     (i) a certain Convertible Revolving Note dated June 10, 1999 in the maximum
     principal sum of up to $5,000,000.00,  as amended by Allonge to Convertible
     Revolving  Note dated March 8, 2001 and by a Second  Allonge to Convertible
     Revolving Note dated September 10, 2001 (the "Revolving Note");

     (ii) a certain Equipment Loan Note dated June 10, 1999 in the principal sum
     of  $17,000,000.00,  as amended by  Allonge  to  Equipment  Loan Note dated
     December 8, 2000 and by a Second Allonge to Equipment Loan Note dated March
     8, 2001 and a Third Allonge to Equipment Loan Note dated September 10, 2001
     (the "Equipment Loan Note"), and

     (iii) a certain  Mortgage Term Note dated December 7, 2000 in the principal
     sum of $4,500,000.00 (the "Mortgage Note").

     The  Revolving  Note,  the  Equipment  Loan Note and the Mortgage  Note are
     sometimes referred to collectively as the "Note."

     B. In connection  with the execution and delivery of the Note and to secure
payment and performance of the Note and other obligations of Borrower to Lender,
the Lender and Borrower have executed,  among other things,  a Loan and Security
Agreement  effective  June 10, 1999,  as amended by Allonge to Loan and Security
Agreement  dated  December  8,  2000 and  Second  Allonge  to Loan and  Security
Agreement dated March 8, 2001 and a Third Allonge to Loan and Security Agreement
dated September 10, 2001 ("Loan Agreement").

     C. To secure  payment of the Equipment  Loan Note and the Mortgage Note and
other  obligations  of Borrower to Lender,  Osteotech,  Inc.  has  executed  and
delivered,   among  other  things,  a  certain  Mortgage  dated  June  10,  1999
("Mortgage")  and  Assignment  of Leases  dated June 10,  1999  ("Assignment  of
Leases") in favor of Lender by which, among other things,  Osteotech has granted
Lender a lien and interest as to certain real estate.  The Mortgage was recorded
in the  office of the  Clerk of  Monmouth  County on June 22,  1999 in Book MB -
6853,  commencing  at page 575.  The  Assignment  of Leases was  recorded in the

                                                                           E-170
<PAGE>

office  of the  Clerk  of  Monmouth  County  on July  22,  1999 in Book  AM-832,
commencing at page 36.

     D. In addition to the  foregoing  documents,  the  Borrower and Lender have
executed or delivered  other related  agreements,  certificates  and instruments
perfecting or otherwise relating to the security interests created. For purposes
of this Agreement, the Note, Loan Agreement,  Mortgage, Assignment of Leases and
related  collateral  agreements,  certificates  and instruments are collectively
referred to as the "Loan Documents".

     E. Borrower has requested a modification  of the loan evidenced by the Note
subject to the Loan Documents.

     F.  Lender  and  Borrower  wish to clarify  their  rights and duties to one
another as set forth in the Loan Documents.

     NOW,   THEREFORE,   in  consideration   of  the  promises,   covenants  and
understandings  set forth in this Agreement and the benefits to be received from
the performance of such promises,  covenants and  understandings,  and for other
good and valuable consideration,  the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:

AGREEMENTS

1.  Lender  and  Borrower  reaffirm,  consent  and agree to all of the terms and
conditions of the Loan Documents as binding, effective and enforceable according
to their stated terms,  except to the extent that such Loan Documents are hereby
expressly modified by this Agreement.

2. In the case of any ambiguity or inconsistency  between the Loan Documents and
this  Agreement,  the language  and  interpretation  of this  Agreement is to be
deemed binding and paramount.

3. The Loan Documents (and any exhibits thereto) are hereby amended as follows:

     A. As to the Revolving Note:

     (1) The term "Conversion  Date" is hereby redefined as the "Maturity Date."
The Maturity Date is defined as April 30, 2004. Upon the Maturity Date, the full
amount of unpaid principal,  together with unpaid accrued  interest,  is due and
payable.

     (2) The second paragraph of the Revolving Note is hereby amended to read as
follows:

          Prior to January 1, 2002, this Note bore interest at the option of the
          Borrower,  at either Lender's Prime Rate minus  three-quarters  of one
          percent  or the  applicable  Base  LIBOR  Rate plus 175 basis  points.
          Effective  January 1, 2002 and ending  November  14,  2002,  this Note
          bears  interest and is repayable in monthly  installments  of interest
          only (and not  principal)  at a  fluctuating  interest  rate per annum
          equal  at all  times  to  either  (a)  the  Lender's  Prime  Rate  (as
          hereinafter  defined) of interest in effect from time to time plus 150
          basis  points,  each  change in such

                                                                           E-171
<PAGE>

          fluctuating rate to take effect  simultaneously with the corresponding
          change in such Prime Rate,  without  notice to the  undersigned or (b)
          the  applicable  Base LIBOR Rate as defined in the Loan Agreement plus
          400 basis points,  at the option of the Borrower  pursuant to the Loan
          Agreement.  Commencing  with  the  receipt  by  Lender  of  Borrower's
          September  30,  2002  financial  statements,  and  effective  45  days
          following  quarter end,  interest is repayable in accordance  with the
          following  at the option of Borrower,  if the ratio of the  Borrower's
          Senior Funded Debt as determined in accordance with generally accepted
          accounting  principles  consistently  applied, to EBITDA as more fully
          described below ("Ratio") is as follows:

<TABLE>
<CAPTION>
          Ratio                           Option              -or-          Option
          -----                           ------                            ------
          <S>                    <C>                                  <C>
          Less than 1.5:1        Base LIBOR +225 bp ("Libor Rate")    Prime Rate - 25bp

          1.5:1 - 2.5:1          Base LIBOR + 300 bp ("Libor Rate")   Prime Rate + 50 bp

          2.5:1 - 3.99:1         Base LIBOR + 350 bp ("Libor Rate")   Prime Rate + 100 bp

          4.1 and greater        Base LIBOR + 400 bp ("Libor Rate")   Prime Rate + 150 bp
</TABLE>

          For purposes of determining a Ratio:

          (i)  The  first  determination  will be made by  Lender  for the third
               quarter, 2002. The determination will be made by dividing (a) the
               Senior Funded Debt as of September 30, 2002 by (b) the sum of the
               first three quarters of the Borrower's EBITDA, divided by 3, then
               multiplied by 4;

          (ii) Thereafter,  each  determination  of the  Ratio  will  be made by
               Lender on a rolling four quarter basis; and

          (iii)Senior Funded Debt means all  indebtedness  of the Borrower owing
               to  financial  institutions,  all  bonds,  notes  and  debentures
               payable by the Borrower  (unless  subordinated  to Fleet National
               Bank),  all outstanding  letters of credit issued for the account
               of the Borrower, and all capital leases of the Borrower.

          Each payment is to be made on the first day of each month. In no event
          is the interest  rate to be higher than the maximum  lawful rate.  The
          Prime Rate of Lender  means the  fluctuating  Prime  Rate of  interest
          established  by Fleet  National  Bank from time to time whether or not
          such rate shall be otherwise published.  The Prime Rate is established
          for the convenience of Lender.  It is not necessarily  Lender's lowest
          rate.  In the event that there should be a change in the Prime Rate of
          Lender,  such  change  shall be  effective  on the date of such change
          without notice to Borrower or any guarantor,  endorser or surety.  Any
          such change will not effect or alter any other term or  conditions  of
          this Note.

                                                                           E-172
<PAGE>

     (3) The third  paragraph  of the  Revolving  Note is hereby  deleted in its
entirety.

     (4) The fifth  paragraph of the Revolving Note is hereby amended to read as
follows:

          All  payments  on this  Note  shall be made in  immediately  available
          lawful  money of the  United  States  by direct  charge to  Borrower's
          deposit  accounts with Lender.  In addition to the provision above for
          direct charge of payments  due,  Lender is hereby  authorized,  at its
          sole  discretion,  to debit any other of the  Borrower's  accounts for
          payments  due.  This  authorization  shall not affect  the  Borrower's
          obligations  to pay when due all  amounts  payable  under  this  Note,
          whether or not there are  sufficient  funds therefor in such accounts.
          The foregoing  authorization  is in addition to, and not in limitation
          of, any rights of setoff.  All payments  shall be applied first to the
          payment  of all  fees,  expenses  and  other  amounts  due  to  Lender
          (excluding principal and interest),  then to accrued interest, and the
          balance on account of outstanding principal;  provided,  however, that
          after  Default,  payments  will be applied to the Debt of  Borrower to
          Lender as Lender determines in its sole discretion.

     (5) The sixth  paragraph of the Revolving Note is hereby amended to read as
follows:

          In the event of  Default,  interest  accrues  on all  amounts  payable
          hereunder at a rate equal to five (5%) percent above the interest rate
          otherwise  payable.  Borrower  acknowledges  that: (i) such additional
          rate is material  inducement to Lender to make the loans;  (ii) Lender
          would not have made the loans evidenced by this Note in the absence of
          the  agreement of the Borrower to pay such  default  rate;  (iii) such
          additional rate represents  compensation  for increased risk to Lender
          that the loans  evidenced  by this Note will not be  repaid;  and (iv)
          such rate is not a penalty and represents a reasonable estimate of (a)
          the cost to Lender in  allocating  its resources  (both  personnel and
          financial)  to the  ongoing  review,  monitoring,  administration  and
          collection of the loans evidenced by this Note and (b) compensation to
          Lender for losses that are difficult to ascertain.

     (6) The seventh  paragraph of the Revolving  Note is hereby amended to read
as follows:

          In the event any payment is received by Lender more than ten (10) days
          after the date due, the undersigned  Borrower is to pay, to the extent
          permitted  by law,  Lender a late  charge of five (5%)  percent of the
          overdue payment.  Any such late charge assessed is immediately due and
          payable.  Any  payment  received  after 3:00 P.M.  on a banking day is
          deemed received on the next succeeding banking day.

     (7) The following is added to the Revolving Note:

          Upon  receipt of an  affidavit of an officer of Lender as to the loss,
          theft,  destruction  or mutilation of this Note or any other  security
          document which is not of public  record,  and, in the case of any such
          loss, theft, destruction or mutilation, upon cancellation of this

                                                                           E-173
<PAGE>

          Note or other security document (and delivery of an indemnity in favor
          of Borrower  should it be determined that the affidavit of the officer
          of Lender was false,  materially incorrect,  or the Note has been lost
          and a claim  based  upon the  lost  Note has  been  made  against  the
          Borrower), Borrower will issue, in lieu thereof, a replacement note or
          other  security  document  in the same  principal  amount  thereof and
          otherwise of like tenor.

     (8) The last  paragraph of the Revolving  Note is hereby amended to read as
follows:

          BORROWER  AND LENDER (BY  ACCEPTANCE  OF THIS  NOTE)  MUTUALLY  HEREBY
          KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY
          JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN
          CONNECTION WITH THIS NOTE, OR ANY OTHER LOAN DOCUMENTS CONTEMPLATED TO
          BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF
          DEALINGS,  STATEMENTS  (WHETHER  VERBAL OR  WRITTEN) OR ACTIONS OF ANY
          PARTY, INCLUDING, WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF
          DEALING,   STATEMENTS   OR   ACTIONS   OF  LENDER   RELATING   TO  THE
          ADMINISTRATION OF THIS NOTE OR ENFORCEMENT OF THE LOAN DOCUMENTS,  AND
          AGREE THAT NEITHER PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH
          ANY  OTHER  ACTION  IN WHICH A JURY  TRIAL  CANNOT  BE OR HAS NOT BEEN
          WAIVED.  EXCEPT AS PROHIBITED BY LAW, BORROWER HEREBY WAIVES ANY RIGHT
          IT MAY  HAVE TO  CLAIM  OR  RECOVER  IN ANY  LITIGATION  ANY  SPECIAL,
          EXEMPLARY,  PUNITIVE OR  CONSEQUENTIAL  DAMAGES OR ANY  DAMAGES  OTHER
          THAN, OR IN ADDITION TO, ACTUAL  DAMAGES.  BORROWER  CERTIFIES THAT NO
          REPRESENTATIVE, AGENT OR ATTORNEY OF LENDER HAS REPRESENTED, EXPRESSLY
          OR OTHERWISE, THAT LENDER WOULD NOT, IN THE EVENT OF LITIGATION,  SEEK
          TO ENFORCE THE FOREGOING  WAIVER.  THIS WAIVER  CONSTITUTES A MATERIAL
          INDUCEMENT FOR LENDER TO ACCEPT THIS NOTE AND MAKE THE REVOLVING LOAN.

     (9) All references to prepayment  premiums in the Revolving Note are hereby
deleted  except  during any period in which they  relate to a Loan  subject to a
LIBOR Rate.

     B. As to the Equipment Loan Note:

     (1) The second  paragraph of the Equipment  Loan Note is hereby  amended to
read as follows:

          Prior to January 1, 2002,  this Note bore  interest,  at the option of
          the Borrower at either the Lender's  Prime Rate minus  one-half of one
          percent  or the  applicable  Base  LIBOR  Rate plus 175 basis  points.
          Effective  as of the  Conversion  Date,  the  Borrower  began  monthly
          payments of principal and interest,  such principal payments repayable
          in 84 equal monthly installments,  the first of such payments was made
          as of the second month  following the Conversion  Date and on the same
          day of  each  successive  month.  As of the  Conversion  Date  through
          December 31, 2001,  this Note bore  interest at the  applicable  LIBOR
          Rate

                                                                           E-174
<PAGE>

          (Equipment)  defined in the Loan Agreement.  Effective January 1, 2002
          and  ending  November  14,  2002,  this  Note  bears  interest  and is
          repayable in monthly installments of interest,  such interest to be at
          a fluctuating interest rate per annum equal at all times to either (a)
          the Lender's Prime Rate (as hereinafter defined) of interest in effect
          from  time  to  time  plus  150  basis  points,  each  change  in such
          fluctuating rate to take effect  simultaneously with the corresponding
          change in such Prime Rate,  without  notice to the  undersigned or (b)
          the  applicable  Base LIBOR Rate as defined in the Loan Agreement plus
          400 basis points,  at the option of the Borrower  pursuant to the Loan
          Agreement.  Effective  September 10, 2001 the Borrower was to commence
          payment of  principal,  together  with  interest,  in 84 equal monthly
          installments  on the  same  day of each  successive  month  thereafter
          commencing  December  1, 2001.  Borrower  is to  continue  making such
          principal and interest  payments  and, upon the 84th such  installment
          payment (the  "Maturity  Date"),  the full amount of unpaid  principal
          together with unpaid accrued  interest is due and payable.  Commencing
          with the receipt by Lender of Borrower's  September 30, 2002 financial
          statements,  and effective 45 days following  quarter end, interest is
          repayable in accordance  with the following at the option of Borrower,
          if the ratio of the  Borrower's  Senior  Funded Debt as  determined in
          accordance with generally accepted accounting principles  consistently
          applied,  to EBITDA as more  fully  described  below  ("Ratio")  is as
          follows:

<TABLE>
<CAPTION>
          Ratio                          Option              -or-             Option
          -----                          ------                               ------
          <S>                   <C>                                   <C>
          Less than 1.5:1       Base LIBOR +225 bp ("Libor Rate")     Prime Rate - 25bp

          1.5:1 - 2.5:1         Base LIBOR + 300 bp ("Libor Rate")    Prime Rate + 50 bp

          2.5:1 - 3.99:1        Base LIBOR + 350 bp ("Libor Rate")    Prime Rate + 100 bp

          4.1 and greater       Base LIBOR + 400 bp ("Libor Rate")    Prime Rate + 150 bp
</TABLE>

          For purposes of determining a Ratio:

          (i)  The  first  determination  will be made by  Lender  for the third
               quarter, 2002. The determination will be made by dividing (a) the
               Senior Funded Debt as of September 30, 2002 by (b) the sum of the
               first three quarters of the Borrower's EBITDA, divided by 3, then
               multiplied by 4;

          (ii) Thereafter,  each  determination  of the  Ratio  will  be made by
               Lender on a rolling four quarter basis.; and

          (iii)Senior Funded Debt means all  indebtedness  of the Borrower owing
               to financial institutions, or bonds, notes and debentures payable
               by the Borrower (unless subordinated to Fleet National Bank), all
               outstanding  letters  of credit  issued  for the  account  of the
               Borrower, and all capital leases of the Borrower.

          Each payment is to be made on the first day of each month. In no event
          is the interest  rate to be higher than the maximum  lawful rate.  The
          Prime Rate of Lender  means the  fluctuating  Prime  Rate of  interest
          established  by Fleet

                                                                           E-175
<PAGE>

          National  Bank from  time to time  whether  or not such rate  shall be
          otherwise published. The Prime Rate is established for the convenience
          of Lender.  It is not  necessarily  Lender's lowest rate. In the event
          that there should be a change in the Prime Rate of Lender, such change
          shall  be  effective  on the date of such  change  without  notice  to
          Borrower or any  guarantor,  endorser or surety.  Any such change will
          not effect or alter any other term or conditions of this Note.

     (2) The third paragraph of the Equipment Loan Note is hereby deleted.

     (3) The fifth  paragraph of the  Equipment  Loan Note is hereby  amended to
read as follows:

          All  payments  on this  Note  shall be made in  immediately  available
          lawful  money of the  United  States  by direct  charge to  Borrower's
          deposit  accounts with Lender.  In addition to the provision above for
          direct charge of payments  due,  Lender is hereby  authorized,  at its
          sole  discretion,  to debit any other of the  Borrower's  accounts for
          payments  due.  This  authorization  shall not affect  the  Borrower's
          obligations  to pay when due all  amounts  payable  under  this  Note,
          whether or not there are  sufficient  funds therefor in such accounts.
          The foregoing  authorization  is in addition to, and not in limitation
          of, any rights of setoff.  All payments  shall be applied first to the
          payment  of all  fees,  expenses  and  other  amounts  due  to  Lender
          (excluding principal and interest),  then to accrued interest, and the
          balance on account of outstanding principal;  provided,  however, that
          after  Default,  payments  will be applied to the Debt of  Borrower to
          Lender as Lender determines in its sole discretion.

     (4) The sixth  paragraph of the  Equipment  Loan Note is hereby  amended to
read as follows:

          In the event of  Default,  interest  accrues  on all  amounts  payable
          hereunder at a rate equal to five (5%) percent above the interest rate
          otherwise  payable.  Borrower  acknowledges  that: (i) such additional
          rate is material  inducement to Lender to make the loans;  (ii) Lender
          would not have made the loans evidenced by this Note in the absence of
          the  agreement of the Borrower to pay such  default  rate;  (iii) such
          additional rate represents  compensation  for increased risk to Lender
          that the loans  evidenced  by this Note will not be  repaid;  and (iv)
          such rate is not a penalty and represents a reasonable estimate of (a)
          the cost to Lender in  allocating  its resources  (both  personnel and
          financial)  to the  ongoing  review,  monitoring,  administration  and
          collection of the loans evidenced by this Note and (b) compensation to
          Lender for losses that are difficult to ascertain.

     (5) The seventh  paragraph of the Equipment  Loan Note is hereby amended to
read as follows:

          In the event any payment is received by Lender more than ten (10) days
          after the date due, the undersigned  Borrower is to pay, to the extent
          permitted  by law,  Lender a late  charge of five (5%)  percent of the
          overdue payment.  Any such late charge assessed is immediately due and
          payable.  Any  payment  received  after

                                                                           E-176
<PAGE>

          3:00 P.M. on a banking day is deemed  received on the next  succeeding
          banking day.

     (6) The following is added to the Equipment Loan Note:

          Upon  receipt of an  affidavit of an officer of Lender as to the loss,
          theft,  destruction  or mutilation of this Note or any other  security
          document which is not of public  record,  and, in the case of any such
          loss, theft, destruction or mutilation, upon cancellation of this Note
          or other  security  document (and delivery of an indemnity in favor of
          Borrower  should it be determined that the affidavit of the officer of
          Lender was false,  materially incorrect, or the Note has been lost and
          a claim based upon the lost Note has been made against the  Borrower),
          Borrower  will issue,  in lieu thereof,  a  replacement  note or other
          security  document in the same principal  amount thereof and otherwise
          of like tenor.

     (7) The last paragraph of the Equipment Loan Note is hereby amended to read
as follows:

          BORROWER  AND LENDER (BY  ACCEPTANCE  OF THIS  NOTE)  MUTUALLY  HEREBY
          KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY
          JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN
          CONNECTION WITH THIS NOTE, OR ANY OTHER LOAN DOCUMENTS CONTEMPLATED TO
          BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF
          DEALINGS,  STATEMENTS  (WHETHER  VERBAL OR  WRITTEN) OR ACTIONS OF ANY
          PARTY, INCLUDING, WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF
          DEALING,   STATEMENTS   OR   ACTIONS   OF  LENDER   RELATING   TO  THE
          ADMINISTRATION OF THIS NOTE OR ENFORCEMENT OF THE LOAN DOCUMENTS,  AND
          AGREE THAT NEITHER PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH
          ANY  OTHER  ACTION  IN WHICH A JURY  TRIAL  CANNOT  BE OR HAS NOT BEEN
          WAIVED.  EXCEPT AS PROHIBITED BY LAW, BORROWER HEREBY WAIVES ANY RIGHT
          IT MAY  HAVE TO  CLAIM  OR  RECOVER  IN ANY  LITIGATION  ANY  SPECIAL,
          EXEMPLARY,  PUNITIVE OR  CONSEQUENTIAL  DAMAGES OR ANY  DAMAGES  OTHER
          THAN, OR IN ADDITION TO, ACTUAL  DAMAGES.  BORROWER  CERTIFIES THAT NO
          REPRESENTATIVE, AGENT OR ATTORNEY OF LENDER HAS REPRESENTED, EXPRESSLY
          OR OTHERWISE, THAT LENDER WOULD NOT, IN THE EVENT OF LITIGATION,  SEEK
          TO ENFORCE THE FOREGOING  WAIVER.  THIS WAIVER  CONSTITUTES A MATERIAL
          INDUCEMENT FOR LENDER TO ACCEPT THIS NOTE AND MAKE THE LOAN.

     (8) All  references to a prepayment  premium in the Equipment Loan Note are
hereby  deleted  except during any period in which they relate to a Loan subject
to a LIBOR Rate.

                                                                           E-177
<PAGE>

     C. As to the Mortgage Note:

     (1) The second  paragraph of the Mortgage Note is hereby amended to read as
follows:

          Prior to January 1, 2002, this Note bore interest during each calendar
          month at a fixed  rate of 7.38% per annum.  Effective  January 1, 2002
          and  ending  November  14,  2002,  this  Note  bears  interest  and is
          repayable  in  monthly  installments  of  interest  at  a  fluctuating
          interest  rate per annum equal at all times to either (a) the Lender's
          Prime Rate (as hereinafter defined) of interest in effect from time to
          time plus 150 basis points,  each change in such  fluctuating  rate to
          take effect simultaneously with the corresponding change in such Prime
          Rate,  without notice to the  undersigned  or (b) the applicable  Base
          LIBOR Rate as defined in the Loan Agreement plus 400 basis points,  at
          the option of the Borrower pursuant to the Loan Agreement.  Commencing
          with the receipt by Lender of Borrower's  September 30, 2002 financial
          statements,  and effective 45 days following  quarter end, interest is
          repayable in accordance  with the following at the option of Borrower,
          if the ratio of the  Borrower's  Senior  Funded Debt as  determined in
          accordance with generally accepted accounting principles  consistently
          applied,  to EBITDA as more  fully  described  below  ("Ratio")  is as
          follows:

<TABLE>
<CAPTION>
          Ratio                         Option               -or-            Option
          -----                         ------                               ------
          <S>                  <C>                                   <C>
          Less than 1.5:1      Base LIBOR +225 bp ("Libor Rate")     Prime Rate - 25bp

          1.5:1 - 2.5:1        Base LIBOR + 300 bp ("Libor Rate")    Prime Rate + 50 bp

          2.5:1 - 3.99:1       Base LIBOR + 350 bp ("Libor Rate")    Prime Rate + 100 bp

          4.1 and greater      Base LIBOR + 400 bp ("Libor Rate")    Prime Rate + 150 bp
</TABLE>

          For purposes of determining a Ratio:

          (i)  The  first  determination  will be made by  Lender  for the third
               quarter, 2002. The determination will be made by dividing (a) the
               Senior Funded Debt as of September 30, 2002 by (b) the sum of the
               first three quarters of the Borrower's EBITDA, divided by 3, then
               multiplied by 4;

          (ii) Thereafter,  each  determination  of the  Ratio  will  be made by
               Lender on a rolling four quarter basis; and

          (iii)Senior Funded Debt means all  indebtedness  of the Borrower owing
               to  financial  institutions,  all  bonds,  notes  and  debentures
               payable by the Borrower  (unless  subordinated  to Fleet National
               Bank),  all outstanding  letters of credit issued for the account
               of the Borrower, and all capital leases of the Borrower.

          The first  thirteen  (13) months of  principal  and interest was to be
          paid by the Borrower to Lender in equal  installments of principal and
          interest  in the  amount of  Thirty-Six  Thousand  Two  Hundred  Three
          Dollars - 56/100  ($36,203.56)

                                                                           E-178
<PAGE>

          commencing  February  1,  2001 and on the same day of each  successive
          month thereafter. Effective as of the date of the Agreement, remaining
          principal and interest is to be paid during and  throughout the period
          of one hundred  seven (107)  months in equal  payments of principal in
          the amount of Nineteen  Thousand  Three  Hundred  Twenty-Nine - 36/100
          Dollars  ($19,329.36),  together with accrued interest by the Borrower
          to Lender on the first day of each month  commencing on April 1, 2002,
          and on the  same day of each  successive  month  thereafter.  Upon the
          107th such  installment  (the  "Maturity  Date"),  the full  amount of
          unpaid  principal,  together with unpaid  accrued  interest is due and
          payable.  In no  event  is the  interest  rate to be  higher  than the
          maximum  lawful rate.  The Prime Rate of Lender means the  fluctuating
          Prime Rate of interest established by Fleet National Bank from time to
          time whether or not such rate shall be otherwise published.  The Prime
          Rate  is  established  for  the  convenience  of  Lender.  It  is  not
          necessarily  Lender's lowest rate. In the event that there should be a
          change in the Prime Rate of Lender,  such change shall be effective on
          the date of such change  without  notice to Borrower or any guarantor,
          endorser or surety. Any such change will not effect or alter any other
          term or conditions of this Note.

     (2) The fourth  paragraph of the Mortgage Note is hereby amended to read as
follows:

          All  payments  on this  Note  shall be made in  immediately  available
          lawful  money of the  United  States  by direct  charge to  Borrower's
          deposit  accounts with Lender.  In addition to the provision above for
          direct charge of payments  due,  Lender is hereby  authorized,  at its
          sole  discretion,  to debit any other of the  Borrower's  accounts for
          payments  due.  This  authorization  shall not affect  the  Borrower's
          obligations  to pay when due all  amounts  payable  under  this  Note,
          whether or not there are  sufficient  funds therefor in such accounts.
          The foregoing  authorization  is in addition to, and not in limitation
          of, any rights of setoff.  All payments  shall be applied first to the
          payment  of all  fees,  expenses  and  other  amounts  due  to  Lender
          (excluding principal and interest),  then to accrued interest, and the
          balance on account of outstanding principal;  provided,  however, that
          after  Default,  payments  will be applied to the Debt of  Borrower to
          Lender as Lender determines in its sole discretion.

     (3) The fifth  paragraph of the Mortgage Note is hereby  amended to read as
follows:

          In the event of  Default,  interest  accrues  on all  amounts  payable
          hereunder at a rate equal to five (5%) percent above the interest rate
          otherwise  payable.  Borrower  acknowledges  that: (i) such additional
          rate is material  inducement  to Lender to make the loan;  (ii) Lender
          would not have made the loan  evidenced by this Note in the absence of
          the  agreement of the Borrower to pay such  default  rate;  (iii) such
          additional rate represents  compensation  for increased risk to Lender
          that the loan evidenced by this Note will not be repaid; and (iv) such
          rate is not a penalty and represents a reasonable  estimate of (a) the
          cost to  Lender  in  allocating  its  resources  (both  personnel  and
          financial)  to the  ongoing  review,  monitoring,  administration  and
          collection of the loan evidenced by this Note and (b)  compensation to
          Lender for losses that are difficult to ascertain.

                                                                           E-179
<PAGE>

     (4) The sixth  paragraph of the Mortgage Note is hereby  amended to read as
follows:

          In the event any payment is received by Lender more than ten (10) days
          after the date due, the undersigned  Borrower is to pay, to the extent
          permitted  by law,  Lender a late  charge of five (5%)  percent of the
          overdue payment.  Any such late charge assessed is immediately due and
          payable.  Any  payment  received  after 3:00 P.M.  on a banking day is
          deemed received on the next succeeding banking day.

     (5) The following is added to the Mortgage Note:

          Upon  receipt of an  affidavit of an officer of Lender as to the loss,
          theft,  destruction  or mutilation of this Note or any other  security
          document which is not of public  record,  and, in the case of any such
          loss, theft, destruction or mutilation, upon cancellation of this Note
          or other  security  document (and delivery of an indemnity in favor of
          Borrower  should it be determined that the affidavit of the officer of
          Lender was false,  materially incorrect, or the Note has been lost and
          a claim based upon the lost Note has been made against the  Borrower),
          Borrower  will issue,  in lieu thereof,  a  replacement  note or other
          security  document in the same principal  amount thereof and otherwise
          of like tenor.

     (6) The  following  is  substituted  as the last  paragraph of the Mortgage
Note:

          BORROWER  AND LENDER (BY  ACCEPTANCE  OF THIS  NOTE)  MUTUALLY  HEREBY
          KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY
          JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN
          CONNECTION WITH THIS NOTE, OR ANY OTHER LOAN DOCUMENTS CONTEMPLATED TO
          BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF
          DEALINGS,  STATEMENTS  (WHETHER  VERBAL OR  WRITTEN) OR ACTIONS OF ANY
          PARTY, INCLUDING, WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF
          DEALING,   STATEMENTS   OR   ACTIONS   OF  LENDER   RELATING   TO  THE
          ADMINISTRATION OF THIS NOTE OR ENFORCEMENT OF THE LOAN DOCUMENTS,  AND
          AGREE THAT NEITHER PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH
          ANY  OTHER  ACTION  IN WHICH A JURY  TRIAL  CANNOT  BE OR HAS NOT BEEN
          WAIVED.  EXCEPT AS PROHIBITED BY LAW, BORROWER HEREBY WAIVES ANY RIGHT
          IT MAY  HAVE TO  CLAIM  OR  RECOVER  IN ANY  LITIGATION  ANY  SPECIAL,
          EXEMPLARY,  PUNITIVE OR  CONSEQUENTIAL  DAMAGES OR ANY  DAMAGES  OTHER
          THAN, OR IN ADDITION TO, ACTUAL  DAMAGES.  BORROWER  CERTIFIES THAT NO
          REPRESENTATIVE, AGENT OR ATTORNEY OF LENDER

                                                                           E-180
<PAGE>

          HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT LENDER WOULD NOT, IN THE
          EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER. THIS WAIVER
          CONSTITUTES A MATERIAL  INDUCEMENT  FOR LENDER TO ACCEPT THIS NOTE AND
          MAKE THE LOAN.

     (7) All references to a prepayment  premium in the Mortgage Note are hereby
deleted  except  during any period in which they  relate to a Loan  subject to a
LIBOR Rate.

     D. As to the Loan Agreement:

     (1) The  "DEFINITIONS"  section  is hereby  amended by the  addition  of or
restatement of the following;

               "Accounts" - as defined in Exhibit "A"

               "Chattel Paper" - as defined in Exhibit "A"

               "Deposit Accounts" - as defined in Exhibit "A"

               "Equipment" - as defined in Exhibit "A"

               "Goods" - as defined in Exhibit "A"

               "Instruments" - as defined in Exhibit "A"

               "Inventory" - as defined in Exhibit "A"

     (2) Section 1.1(a) is hereby amended to read as follows:

               1.1(a)  Lender  agrees  to  provide,  at one time or from time to
               time, at the request of the Borrower, loans to Osteotech, Inc. in
               an aggregate amount up to Five Million Dollars ($5,000,000.00) on
               a  revolving  loan basis  ("Loan  I") for the  purpose of working
               capital and for other general corporate purposes, notwithstanding
               anything to the contrary herein,  including,  without limitation,
               any prior uses for capital  expenditures and costs related to the
               construction  of an approximate  65,000 square foot addition (the
               "Project")  to real  property  and  improvements  located  at 201
               Industrial Way West, Eatontown, New Jersey (the "Property"). Loan
               I is to be payable on the  earlier of (i) April 30,  2004 or (ii)
               upon a Default.

     (3) Section  1.1(b) and the second  sentence  of Section  1.4(a) are hereby
deleted.

     (4) Section 1.2(b) is hereby amended to provide that principal and interest
on Loan II is to be paid,  effective as of the date of the  Agreement,  in equal
payments of principal and accrued interest as more particularly set forth in the
Mortgage Note, as amended by the Agreement.

                                                                           E-181
<PAGE>

     (5) Section 1.3(c) is hereby deleted in its entirety, together with Exhibit
"C" and Exhibit "D."

     (6) Section 1.4(f) is hereby amended to read as follows:

          1.4(f) In the event of Default,  interest  accrues on the Loan and the
          Debt at a rate  equal to five (5%)  percent  above the  interest  rate
          otherwise  payable.  Borrower  acknowledges  that: (i) such additional
          rate is a material  inducement to Lender to make the Loan; (ii) Lender
          would not have made the Loan in the  absence of the  agreement  of the
          Borrower  to  pay  such  default  rate;  (iii)  such  additional  rate
          represents  compensation  for  increased  risk to Lender that the Loan
          will not be repaid; and (iv) such rate is not a penalty and represents
          a  reasonable  estimate  of (a) the cost to Lender in  allocating  its
          resources  (both  personnel  and  financial)  to the  ongoing  review,
          monitoring,   administration  and  collection  of  the  Loan  and  (b)
          compensation to Lender for losses that are difficult to ascertain.

     (7) Section 1.4(k) is hereby added as follows:

          Notwithstanding  the  foregoing  provisions of Section 1.4, and in the
          absence of Default,  effective January 1, 2002 and ending November 14,
          2002,  interest  accrues  on the  Loan  and is  repayable  in  monthly
          installments  of interest  at a  fluctuating  interest  rate per annum
          equal at all times to either (a) the  Lender's  Prime Rate of interest
          in effect from time to time plus 150 basis points, each change in such
          fluctuating rate to take effect  simultaneously with the corresponding
          change in such Prime Rate,  without  notice to the Borrower or (b) the
          applicable  Base LIBOR Rate as defined in the Loan  Agreement plus 400
          basis points ("LIBOR Rate"), at the option of the Borrower pursuant to
          this  Agreement.  Commencing  with the receipt by Lender of Borrower's
          September  30,  2002  financial  statements,  and  effective  45  days
          thereafter from quarter end,  interest is repayable in accordance with
          the  following  at  the  option  of  Borrower,  if  the  ratio  of the
          Borrower's  Senior  Funded  Debt  as  determined  in  accordance  with
          generally accepted  accounting  principles  consistently  applied,  to
          EBITDA as more fully described below ("Ratio") is as follows:

<TABLE>
<CAPTION>
          Ratio                         Option               -or-            Option
          -----                         ------                               ------
          <S>                  <C>                                   <C>
          Less than 1.5:1      Base LIBOR +225 bp ("Libor Rate")     Prime Rate - 25bp

          1.5:1 - 2.5:1        Base LIBOR + 300 bp ("Libor Rate")    Prime Rate + 50 bp

          2.5:1 - 3.99:1       Base LIBOR + 350 bp ("Libor Rate")    Prime Rate + 100 bp

          4.1 and greater      Base LIBOR + 400 bp ("Libor Rate")    Prime Rate + 150 bp
</TABLE>

                                                                           E-182
<PAGE>

          For purposes of determining a Ratio:

          (i)  The  first  determination  will be made by  Lender  for the third
               quarter, 2002. The determination will be made by dividing (a) the
               Senior Funded Debt as of September 30, 2002 by (b) the sum of the
               first three quarters of the Borrower's EBITDA, divided by 3, then
               multiplied by 4;

          (ii) Thereafter,  each  determination  of the  Ratio  will  be made by
               Lender on a rolling four quarter basis; and

          (iii)Senior Funded Debt means all  indebtedness  of the Borrower owing
               to  financial  institutions,  all  bonds,  notes  and  debentures
               payable by the Borrower  (unless  subordinated  to Fleet National
               Bank),  all outstanding  letters of credit issued for the account
               of the Borrower, and all capital leases of the Borrower.

     The interest  rates herein  provided also apply  following  any  applicable
Conversion Date.

     (8) Section 1.5(a) is hereby amended to read as follows:

          1.5(a) Prior to January 1, 2002,  at each and every Re-Set Date during
          the term of this  Agreement,  Borrower had the right to select  either
          the LIBOR Rate,  LIBOR Rate (Equipment) or variable rates set forth in
          Sections 1.4(a) or 1.4(c), as applicable, pursuant to the terms of the
          Agreement  to a designated  principal  balance  unless such  principal
          balance was previously  designated as being  repayable at a LIBOR Rate
          or LIBOR Rate (Equipment), and was subject to an Interest Period which
          had not yet expired. Effective January 1, 2002 the applicable interest
          rate for the Loan is governed  by the  provisions  of Section  1.4(k).
          Each  interest  rate from time to time so  selected  by Borrower is to
          take  effect  and is to end on a Re-Set  Date.  If  Borrower  does not
          select an  interest  rate by written  notice  given to Lender at least
          three (3) banking days prior to a particular Re-Set Date, the interest
          rate applicable to the principal balance for such Re-Set Date is to be
          the applicable alternate variable rate set forth in Sections 1.4(a) or
          1.4(c) (prior to January 1, 2002) or Section 1.4(k) (effective January
          1, 2002) of this Agreement.  The LIBOR Rate, LIBOR Rate (Equipment) or
          variable  rate  selected  by Borrower or  otherwise  designated  for a
          particular Re-Set Date in accordance with the foregoing  provisions of
          this  paragraph,  are to be in effect from and including the first day
          of the  Interest  Period  to which  such  rate  pertains  to,  but not
          including,  the Roll Over Date applicable to such Interest Period, and
          will  (subject  to the  following  provisions  of this  paragraph)  be
          applicable  to the portion of the  principal  balance of the Loan with
          respect to which a LIBOR Rate or LIBOR Rate  (Equipment) are due to be
          re-set on such Re-Set Date, as well as to any portion of the principal
          balance bearing interest at a variable rate and any advance  scheduled
          to be made on such Re-Set Date.

     (9) Section 1.5(b) is hereby amended to read as follows:

                                                                           E-183
<PAGE>

          1.5(b) Subject to the provisions of Section 1.5(a), the term "Interest
          Period" means the period of time during which a particular  LIBOR Rate
          or LIBOR Rate  (Equipment) will be applicable to all or any particular
          portion of the principal  balance in accordance with the provisions of
          this  Section,  it being  agreed that (a) each  Interest  Period is to
          commence  and is to  terminate  on a Re-Set  Date,  (b) each  Interest
          Period  (for a LIBOR Rate) is to be of a duration of either one month,
          two months or three months  (and,  effective  January 1, 2002,  or six
          months) and each Interest Period for a LIBOR Rate (Equipment) is to be
          of a duration  of either one month,  two months,  three  months or six
          months  (c) no  Interest  Period is to extend  beyond the term of this
          Agreement or the term of an applicable  portion of the Loan (whichever
          is earlier) and (d) the portion of the principal  balance with respect
          to which a particular Interest Period is applicable will bear interest
          at the  LIBOR  Rate  or  LIBOR  Rate  (Equipment)  pertaining  to such
          Interest  Period  from and  including  the first day of such  Interest
          Period to, but not including, the last day of such Interest Period. At
          no time are there to be more than  three (3)  Interest  Periods  under
          Loan III.  At no time is the  principal  balance  repayable  during an
          applicable Interest Period to be less than $100,000.00.

     (10) The addition to Section  1.5(g) set forth in the Third Allonge to Loan
and Security Agreement is hereby amended to read as follows:

          If any  change  in  any  law or  regulation  or in the  interpretation
          thereof by any governmental  authority charged with the administration
          or  interpretation  thereof makes it unlawful or impossible for Lender
          to make or  maintain  a LIBOR  Rate or LIBOR  Rate  (Equipment)  or to
          determine  same,  the  applicable  annual  interest rate for Loan III,
          following  conversion  (and prior to January  1,  2002),  is the Prime
          Rate.

     (11) Except as expressly  waived by this  Agreement,  all of the conditions
precedent set forth in Section 1.9 of the Loan  Agreement  are  applicable as of
the date of this  Agreement.  Section  1.9 is hereby  amended  by the  following
additional provision:

          1.9(r) Opinions of Borrower's United States counsel to the effect that
          the   Agreement  and  related   documents  are  legally   binding  and
          enforceable in accordance with their terms under New Jersey law.

     (12) The following is added as Section 2.5:

          Section 2.5 Other Obligations to Lender and Participants

          2.5(a) The  Borrower  agrees to pay and  perform,  when due, all other
          debts, liabilities and duties of every kind and character to Lender or
          any  affiliate  or  Participants   of  Lender,   whether  such  debts,
          liabilities and duties exist now or may exist in the future;

                                                                           E-184
<PAGE>

          2.5(b) Lender has the unrestricted  right at any time and from time to
          time,  and without the consent of or notice to  Borrower,  to grant to
          one  or  more  banks  or  other   financial   institutions   (each,  a
          "Participant')  participating interests in Lender's obligation to lend
          hereunder and/or any or all of the loans held by Lender hereunder.  In
          the event of any such grant by Lender of a participating interest to a
          Participant,  whether or not upon notice to Borrower,  Lender  remains
          responsible  for the  performance  of its  obligations  hereunder  and
          Borrower is to continue to deal solely with Lender in connection  with
          Lender's  rights and  obligations  hereunder.  Lender may  furnish any
          information concerning Borrower in its possession from time to time to
          prospective  Participants,  provided  that Lender may require any such
          prospective   Participant   to  agree  in  writing  to  maintain   the
          confidentiality of such information.  Lender may at any time pledge or
          assign  all or any  portion  of its  rights  under the loan  documents
          (including  any portion of the note) to any of the twelve (12) Federal
          Reserve Banks organized under Section 4 of the Federal Reserve Act, 12
          U.S.C.  Section  341.  No such  pledge or  assignment  or  enforcement
          thereof  releases  Lender from its  obligations  under any of the loan
          documents.

     (13) Article 4 is hereby amended to read as follows:

                          ARTICLE 4. SECURITY INTEREST

          (a) To secure the payment and  performance by the Borrower of the Debt
          and except as  otherwise  provided by Section  7.3,  Osteotech,  Inc.,
          Osteotech  Investment  Corporation  and CAM Implants,  Inc. are not to
          pledge,  set over,  collaterally  assign or grant a security interest,
          other  than to Lender,  in any of their  assets,  property  or rights,
          including  those more  particularly  defined on  Exhibit  "A"  annexed
          hereto and incorporated herein,  except that the Borrower may license,
          consign,  assign, sell,  exchange,  settle, or otherwise contract with
          respect to, as the case may be, its  Accounts,  Goods,  Inventory  and
          General  Intangibles  in  the  ordinary  course  of  its  business  as
          presently conducted and consistent with its past practices.

          (b) To secure the payment and  performance by the Borrower of the Debt
          to Lender, Osteotech, Inc. and Osteotech Investment Corporation hereby
          pledge,  set over, assign and grant a first and only priority security
          interest to Lender in all Accounts,  Chattel Paper,  Deposit Accounts,
          Equipment, Goods, Instruments, Inventory, and all collateral described
          on Exhibit "A-1" annexed hereto and  incorporated  herein and pursuant
          to such other  agreements more  particularly  described on Exhibit "B"
          annexed hereto and incorporated herein.

          (c) Not later than April 30, 2002,  and to further  secure the payment
          and  performance  by the  Borrower  of the Debt to Lender,  Osteotech,
          Inc., Osteotech, B.V. and H.C. Implants, B.V. are to pledge, set over,
          assign and grant a first and only priority security

                                                                           E-185
<PAGE>

          interest,  pledge and charge to Lender in sixty-five  (65%) percent of
          the issued and  outstanding  stock issued to them by Osteotech,  B.V.,
          H.C. Implants, B.V., CAM Implants, B.V., Osteotech/Cam Services, B.V.,
          Osteotech,  S.A. and OST Developpement S.A. and pursuant to such other
          agreements more  particularly  described on Exhibit "B" annexed hereto
          and incorporated herein.

          (d) The security interests pledged,  set over, assigned and granted by
          the Borrower to Lender are to be a first and only  priority  lien upon
          all such collateral, except to the extent provided by Section 7.3.

          (e) The  foregoing  is,  collectively,  the  "Collateral"  and further
          secures  payment  and  performance  by  the  Borrower  of  all  of its
          obligations in this Agreement or in the other  documents  delivered in
          connection with this Agreement.

     (14) Section 6.14 is hereby amended to read as follows:

          Section 6.14 Further Assurances

          The Borrower is to execute and/or hereby consents to the execution and
          filing by Lender of such further instruments and documents,  including
          Uniform  Commercial  Code financing  statements,  as may be reasonably
          required  by  Lender  in order  to  render  effective  the  terms  and
          conditions  of  this  Agreement.  Any  such  Uniform  Commercial  Code
          financing  statements  are to be filed in such locations as Lender may
          reasonably  require,  at Borrower's  sole expense.  If requested,  the
          Borrower  is to provide  Lender  with  satisfactory  evidence  of such
          filing(s)  prior to any  advance  under the Loan.  The  Borrower is to
          provide  Lender  with  satisfactory  evidence  that any  common law or
          statutory liens which materially impair the Collateral, including, but
          not  limited  to  landlords  lien or  materialman's  lien,  have  been
          subordinated  in favor  of  Lender's  security  interest  or  adequate
          reserves  established in the discretion of Lender prior to any advance
          under the Loan.  The  Borrower is to cause each  Subsidiary  hereafter
          formed to execute Lender's form of unlimited unconditional guaranty of
          payment of the Debt, as a guarantor, and to otherwise agree in writing
          (a) that the  terms and  conditions  of this  Agreement  apply to such
          guarantor  as if such  guarantor  were a  "Borrower"  and (b) that the
          guarantor otherwise consents to the terms of this Agreement.  The form
          of such unlimited unconditional guaranty of payment is attached hereto
          as Exhibit "G."

     (15) Section 6.15 is hereby amended to read as follows:

          Section 6.15 Fees

          6.15(a)  Unused  Facility Fee. If, for any quarter  during the term of
          this  Agreement,  the average daily unpaid balance of the

                                                                           E-186
<PAGE>

          outstanding  advances  made  pursuant  to Loan I for  each day of such
          quarter does not equal the maximum  amount of Loan I, then Borrower is
          to pay to  Lender a fee at a rate  equal to  one-half  of one  percent
          (1/2%)  per annum on the  amount by which such  maximum  exceeds  such
          average daily unpaid balance. Such fee is payable to Lender in arrears
          on the last day of each quarter.

          6.15(b)  Waiver Fee.  The Borrower is to pay to Lender a waiver fee of
          $212,000.00,  $106,000.00  of which  is  hereby  acknowledged  and the
          balance of which is payable by Borrower to Lender not later than April
          5, 2002. The fee is deemed earned upon execution of the Agreement.

     (16) Section 6.17 is hereby added as follows:

          Section 6.17 Additional Covenants

          The Borrower is to perform and/or  deliver the following,  in form and
          substance satisfactory to Lender, not later than April 30, 2002 in the
          case of  6.17(a),(b),(c),(d)  and (e) and not later than April 1, 2002
          in the case of 6.17(f):

               6.17(a) Documents by which Osteotech,  Inc., Osteotech,  B.V. and
               H.C.  Implants,  B. V. pledge, set over, assign and grant a first
               and  only  priority  security  interest,  pledge  and  charge  in
               sixty-five  (65%)  percent of the issued  and  outstanding  stock
               otherwise set forth in Article 4 of the Loan Agreement;

               6.17 (b) Opinions and certificates of Borrower's counsel that the
               pledge agreements/charge agreements executed pursuant to the Loan
               Agreement are valid and enforceable under the law of the issuers'
               jurisdiction;

               6.17(c) Report of Borrower's counsel (and meeting with Borrower's
               counsel,   if  requested  by  Lender)  regarding  the  Borrower's
               litigation,  its anticipated  litigation costs, and potential for
               economic loss if adverse to Borrower counsel;

               6.17(d)   Reimbursement  of  all  costs  incurred  by  Lender  in
               conducting a collateral  review exam of the Borrower's  Inventory
               and  Accounts  together  with  reimbursement  (within  30 days of
               presentation  of an invoice) of $3,000.00 of the cost incurred by
               Lender to conduct an appraisal of the Property;

               6.17(e)  Cancellation  of notice of unpaid  balance  and right to
               file lien  recorded on January 9, 2002 in the office of the Clerk
               of Monmouth  County in Book  0R-8074,  at page 221; in default of
               same,  Borrower  covenants  and agrees  that  Lender may  require
               Borrower  to set aside an escrow of the  Borrower's  funds in the
               full amount of such unpaid balance; and

                                                                           E-187
<PAGE>

               6.17(f)  Delivery of an Officer's  Certificate and resolutions or
               other  evidence of due  authorization  of the Loan  Documents  by
               Osteotech, S.A.

     (17) Section 7.3 is hereby amended to read as follows:

          Section 7.3 Other Liens

          During such time as either (a) any amount  remains  outstanding on the
          Loan or the  agreement  of  Lender  to lend  thereunder  has not  been
          terminated  pursuant  to the terms  thereof or (b) there then exists a
          Default,  Osteotech,  Inc., Osteotech  Investment  Corporation and CAM
          Implants,  Inc.  are not to  incur,  create  or  permit  to exist  any
          mortgage, assignment,  pledge, hypothecation,  security interest, lien
          or other  encumbrance on any of their  property or assets,  including,
          but not  limited  to, the items on Exhibit  "A,"  whether now owned or
          hereafter acquired, except (a) liens for taxes not delinquent or being
          contested in good faith; (b) those liens in favor of Lender created by
          this  Agreement  and  related  documents;  (c)  those  liens,  such as
          carrier,   warehousemen,   unemployment,   worker's  compensation,  or
          retirement liens which have been subordinated or reserves  established
          pursuant to Section 6.14,  or the rights of  consignees  and customers
          arising by operation of law in the  ordinary  course of business;  (d)
          easements, rights-of-way,  restrictions and other similar encumbrances
          which, in the aggregate,  do not materially  interfere with the use or
          occupation of those properties or assets;  (e) purchase money security
          interests  in  specific  assets  of  the  Borrower   acquired  by  the
          liabilities  incurred  and  permitted in Section 7.4; and (f) liens on
          property  or assets of any entity  existing at the time such entity is
          merged  with or into or  consolidated  with the  Borrower  pursuant to
          Section 7.1 provided such liens were in existence prior to such merger
          or consolidation.

     (18) Section 7.4 is hereby amended to read as follows:

          Section 7.4 Other Liabilities

          During such time as either (a) any amount  remains  outstanding on the
          Loan or the  agreement  of  Lender  to lend  thereunder  has not  been
          terminated  pursuant  to the terms  thereof or (b) there then exists a
          Default,  Osteotech,  Inc., Osteotech  Investment  Corporation and CAM
          Implants,  Inc.,  Osteotech,  B.V., H.C. Implants,  BV., CAM Implants,
          B.V.,   Osteotech/Cam   Services,   B.V.,  Osteotech,   S.A.  and  OST
          Developpement S.A. are not to incur, create, assume or permit to exist
          any indebtedness or

                                                                           E-188
<PAGE>

          liability to any financial  institution on account of either  borrowed
          money, the deferred  purchase price of property,  or the capital lease
          of assets or property for the conduct of business  except (i) the Debt
          to Lender;  (ii)  indebtedness  subordinated to payment of the Debt on
          terms  approved  by Lender in  writing;  (iii)  those  liabilities  of
          Osteotech,  Inc., Osteotech  Investment  Corporation and CAM Implants,
          Inc. otherwise incurred to financial  institutions in an amount in the
          aggregate less than  $500,000.00;  (iv) those leases already in effect
          as of the  effective  date of the Loan  Agreement  as disclosed in the
          Delivered Financials; or (v) those existing line of credit liabilities
          of CAM Implants, B.V. disclosed to Lender.

     (19) Section 7.6 is hereby amended to read as follows:

          Section 7.6 Loans or Investments

          From the date of the  Agreement,  the  Borrower is not to make any new
          advances  or loans  (a) in  excess  of  $100,000.00  in the  aggregate
          outstanding at any given time to Osteotech, B.V., H.C. Implants, B.V.,
          CAM Implants, B.V.,  Osteotech/Cam Services, B.V., Osteotech,  S.A. or
          OST Developpement  S.A. without the prior written consent of Lender or
          (b) in excess of $50,000.00 in the aggregate  outstanding at any given
          time to any  unrelated  entity if there  then  exists a Default or any
          amount  outstanding  on Loan I without  the prior  written  consent of
          Lender.

     (20) Section 7.7 is hereby amended to read as follows:

          Section 7.7 Impairment of Title to Collateral

          The  Borrower is not to sell,  conditionally  sell,  sell on approval,
          consign, lease, encumber, transfer, remove from its premises set forth
          on  Schedule 1 or  otherwise  dispose of any  Collateral  (other  than
          Inventory  in the ordinary  course of business or other than  Accounts
          for collection,  without recourse, in the ordinary course of business)
          without the prior written consent of Lender;  provided,  however,  the
          foregoing  restriction  does not apply to either the sale of assets of
          CAM  Implants,  B.V.  or the  sale  of  certain  patents  relating  to
          polyactive technology by Osteotech, Inc., Osteotech Investment Corp or
          H.C. Implants, B.V. (collectively,  the "Exempt Sales"), each of which
          has been  disclosed  to Lender.  The  Borrower  is not to  transfer or
          create  Chattel  Paper  without  placing a legend  thereon  indicating
          Lender's security interest. In the event of such prior written consent
          by Lender,  and unless otherwise  waived,  the Borrower is to promptly
          deliver the proceeds or other value received by the Borrower to Lender
          to reduce the amount of the Debt applied in the  discretion of Lender;
          provided, the foregoing does not apply to Exempt Sales.

                                                                           E-189
<PAGE>

     (21) Section 7.9 is hereby amended to read as follows:

          Section 7.9 Change of Location or Name

          The  Borrower  is not to change the place  where its books and records
          are  maintained,  change its name,  change its location as the term is
          now or hereafter  defined in the Uniform  Commercial code,  change the
          nature of its business in any material  respect,  or transact business
          under any other  name  without  the prior  written  consent of Lender.
          Within four (4) months of any  permitted  change,  the  Borrower is to
          authenticate or otherwise  cooperate in any action  reasonably  deemed
          necessary by lender to maintain  its rights and security  interests as
          provided in this Agreement.

     (22)  Section  7.11 is hereby  amended to add as a new  sentence at the end
thereof:

          Notwithstanding  the  preceding  sentence,  Lender  acknowledges  that
          Borrower  has made  Lender  aware of a certain  Loan  Agreement  dated
          November 27, 2000 between Osteotech, Inc. and American Tissue Services
          Foundation  ("ATSF")  which will not be deemed to violate  either this
          Section  7.11 or  Section  7.6  hereof so long as  borrowings  by ATSF
          thereunder  are not in an amount in  excess of those  consented  to in
          writing by Lender.

     (22) Section 7.15 is hereby amended as follows:

          Section 7.15 EBITDA Ratio

          Osteotech, Inc. is not to cause or permit any of the following:

               (a) For the first quarter of 2002, the earnings before  interest,
               taxes,  depreciation and amortization of Osteotech,  Inc. and its
               Subsidiaries  ("EBITDA") to be less than  $1,100,000.00  (the fee
               payable pursuant to Section  6.15(b),  attorneys' fees payable by
               the Borrower  hereunder,  appraisal fees,  collateral review exam
               fees,  counsel  fees  payable by the  Borrower to  implement  the
               pledge of stock set forth in Article  4(c) and  related  expenses
               ("Excluded   Expenses"))   are  not  to  be   included   in  this
               determination);

               (b) For the  second  quarter  of  2002,  EBITDA  to be less  than
               $1,920,000.00  (Excluded  Expenses are not to be included in this
               determination);

               (c) For the third  quarter  of 2002,  the  ratio of  EBITDA  less
               capital  expenditures,  less cash taxes  (multiplied by 4) to the
               current maturities of long term debt plus interest expense, to be
               less than 1:1  (Excluded  Expenses are not to be included in this
               determination);

                                                                           E-190
<PAGE>

               (d) For the  fourth  quarter  of 2002,  the ratio of EBITDA  less
               capital  expenditures,  less cash taxes to the current maturities
               of long term debt plus interest expense,  determined on a rolling
               four quarter  basis,  to be less than 1:1 (Excluded  Expenses are
               not to be included in this determination); or

               (e)  Thereafter,  the ratio of EBITDA less  capital  expenditures
               less cash  taxes to the  current  maturities  of long term  debt,
               determined  on a  rolling  four  quarter  basis,  to be less than
               1.25:1  (Excluded  Expenses  are  not  to  be  included  in  this
               determination).

          Non-compliance  by the Borrower with its prior covenant that its ratio
          of  EBITDA  to  scheduled  principal  payments,  actual  interest  and
          dividends  be not less than 1.5:1 for the period  ending  December 31,
          2001 is  hereby  waived  by  Lender.  Such  waiver  shall  be  without
          prejudice in the event of a Default hereunder. Such waiver is also not
          to be  deemed a waiver  of any  further  or  other  non-compliance  or
          Default.

          All of the foregoing is to be determined in accordance  with generally
          accepted accounting principles consistently applied.

     (23) The following is added as Section 7.20:

          Section 7.20 Dividends and Capital Distributions

          The  Borrower is not to declare or pay any cash  dividends  except for
          those paid by Subsidiaries to their respective parent Borrower without
          the prior written consent of Lender.

     (24) Section 8.1 is hereby amended to read as follows:

          Section 8.1 Charges Against Credit Balances

          Lender is hereby  granted a  continuing  lien,  security  interest and
          right of setoff as security for all  liabilities  and  obligations  to
          Lender,  whether now existing or hereafter  arising,  upon and against
          all of the Borrower's deposits,  credits, Collateral and property, now
          or hereafter in the  possession,  custody,  safekeeping  or control of
          Lender  or any  entity  under the  control  of  FleetBoston  Financial
          Corporation  and its  successors  and  assigns or in transit to any of
          them.  At any time,  without  demand or notice (any such notice  being
          expressly waived by Borrower),  Lender may setoff the same or any part
          thereof and apply the same to any  liability or obligation of Borrower
          even though  unmatured  and  regardless  of the  adequacy of any other
          Collateral  securing the Debt. ANY AND ALL RIGHTS TO REQUIRE

                                                                           E-191
<PAGE>

          LENDER TO EXERCISE  ITS RIGHTS OR REMEDIES  WITH  RESPECT TO ANY OTHER
          COLLATERAL  WHICH SECURES THE DEBT,  PRIOR TO EXERCISING  ITS RIGHT OF
          SETOFF WITH  RESPECT TO SUCH  DEPOSITS,  CREDITS OR OTHER  PROPERTY OF
          BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

     (25) Section 8.4 is hereby amended to read as follows:

          Section 8.4 Preservation of Collateral

          At any time prior to and following Default, Lender, without notice, in
          its sole and absolute  discretion,  may take any and all action which,
          in its sole and  absolute  discretion,  is  necessary  and  proper  to
          preserve the Collateral,  or Lender's  interests under this Agreement,
          including without limitation,  those duties of the Borrower imposed by
          this  Agreement.  Any sums so  expended by Lender are to be secured by
          the Collateral and added to the Debt. Such sums (including  reasonable
          attorneys'  fees) are to be payable  on demand  with  interest  at the
          highest  interest  rate set forth in this  Agreement  until  repaid by
          Borrower.  Lender may also require that escrow accounts be established
          to fund anticipated future expenditures.

     (26) Section 8.5 is hereby amended to read as follows:

          Section 8.5 Power of Attorney

          Lender is hereby  irrevocably  appointed and authenticated by Borrower
          as its  lawful  attorney  and agent in fact to file,  authenticate  or
          execute  financing  statements  and other  documents and agreements as
          Lender may deem  necessary for the purpose of perfecting  any security
          interests,  mortgages or liens under any  applicable  law,  including,
          without  limitation,  any filings to provide  notice of its agreements
          contained in Section 4 hereof.  Upon the  occurrence of and during the
          continuance  of a  Default,  the  Borrower  hereby  grants  a power of
          attorney  to  Lender  to  endorse   its  name(s)  on  checks,   notes,
          acceptances,  drafts and any other documents or instruments  requiring
          its endorsement(s), after Default to change the address where its mail
          should be sent and to open all mail, and at all times to do such other
          acts and things necessary to effectuate the purposes of this Agreement
          when so permitted by the terms of this  Agreement.  All acts by Lender
          or its designee are hereby ratified and approved,  and neither Lender,
          nor its  designee,  is to be  liable  for  any  acts  of  omission  or
          commission,  or for any error of judgment or mistake unless the result
          of gross  negligence  or willful  misconduct.  The powers of  attorney
          granted to Lender in this  Agreement  are coupled with an interest and
          are  irrevocable  during the term of this  Agreement.  Whenever Lender
          deems it desirable that any legal action be instituted with respect to
          any Collateral or that any other  extraordinary  action be taken in an

                                                                           E-192
<PAGE>

          attempt  to  effectuate  collection  of  any  Collateral,  Lender  may
          reassign  the item in question to the  Borrower  (without  recourse to
          Lender) and require it to proceed with such legal or other action,  at
          its sole  liability,  cost and  expense,  in which  event all  amounts
          collected  by it on such  items are to,  nevertheless,  be  treated as
          proceeds of Collateral.

     (27) The following is added as Section 8.7:

          Section 8.7 Notification of Account Debtors

          At any time following the occurrence of and during the  continuance of
          a Default,  Lender, in its sole and absolute  discretion,  may require
          the  Borrower to notify and obtain the  acknowledgment  of any account
          debtor or bailee of Lender's security  interest in the Collateral.  At
          any time following the  occurrence of and during the  continuance of a
          Default, Lender may also, in its sole and absolute discretion, without
          notice:  (1) notify any account debtors on any of the Accounts to make
          payment  directly to Lender,  and/or enforce the Borrower's  rights of
          every  type  and  nature  as  against  any  such  account  debtors  or
          collateral which secures their obligations to Borrower; or (2) endorse
          all items of  payment  or  Collateral  received  by  Lender  which are
          payable to the Borrower.  In the event that Lender elects to foreclose
          a mortgage securing any such account debtors' obligations to Borrower,
          Lender  may  record  a copy  or  abstract  of  this  Agreement  and an
          affidavit  of default in the public  records  where such  mortgage  is
          recorded.  Until such time as Lender elects to exercise  these rights,
          the  Borrower  is to act upon and  protect  the  Collateral  under the
          restrictions and terms of this Agreement only.

     (28) The following is added as Section 8.8:

          Section 8.8 Test Verifications

          At any time  following  Default and,  during the  continuance  thereof
          (and, except as necessary for Lender to conduct its Collateral review,
          which review may be conducted any time Lender  reasonably  designates)
          Lender,  without notice, in its sole and absolute discretion,  may, in
          its name or in the name of others,  make test verifications of any and
          all  Accounts in any manner and through  any medium  Lender  considers
          advisable with or without the assistance of the Borrower.

     (29) Section 9.1(h) is hereby amended to read as follows:

          9.1(h) Upon the occurrence of any event of default  otherwise  defined
          in any separate instrument,  document, or agreement

                                                                           E-193
<PAGE>

          existing now or in the future  executed by or between the Borrower and
          Lender, any Participant, or their affiliate.

     (30) The following is added as Section 9.1(r):

          9.1(r) Upon the  occurrence of any adverse and material  change in the
          condition or affairs,  financial or otherwise,  of the Borrower which,
          in the reasonable opinion of Lender, impairs the interests of Lender.

     (31) The following is added as Section 9.1(s):

          9.1(s) Upon the event that Borrower  takes any action to authorize its
          liquidation or dissolution.

     (32) Section  10.1(a),  Section  10.1(c),  10.1(e) and Section  10.1(g) are
hereby amended to read as follows:

          10.1(a)  Collection - To institute legal or deficiency  proceedings or
          otherwise enforce its rights to collect the Debt against the Borrower,
          all of which becomes immediately  payable. If a judgment is entered in
          favor of Lender, the lien of the judgment relates back to the earliest
          date of perfection of the Lender's security interests hereunder.

          10.1(c)  Accounts - To charge  and  withdraw  from any credit  balance
          which the Borrower may then have with Lender, Participant, or with any
          affiliate  of Lender  thereof,  such  amounts as may be  necessary  to
          satisfy the Debt in accordance with Section 10.2 of this Agreement.

          10.1(e) Assembly of Collateral - With or without judicial process, (i)
          to seize the  Collateral  or to require the  Borrower to assemble  the
          Collateral or (ii) to render the Collateral  unusable without need for
          Lender  to post a bond or  security  or (iii)  to make the  Collateral
          available at a Lender  designated  place for sale,  lease,  license or
          other  disposition by Lender (and if such disposition is to Lender, at
          a public auction unless the Collateral is that  customarily  sold on a
          recognized market or the subject of widely distributed  standard price
          quotations)  to satisfy  the Debt  without  any right of  Borrower  to
          adjourn  such  disposition.  Any such  sale,  lease,  license or other
          disposition may be made of the Collateral in its present  condition or
          following any commercially reasonable preparation or processing at the
          expense of Borrower.

          10.1(g)  Cumulative  Rights - To exercise  all rights and remedies set
          forth  in  this  Agreement  or  otherwise  provided  by law  or  other
          agreement  (whether  or  not  referred  to  in  this  Agreement)  on a
          cumulative or simultaneous  basis and in any order selected by Lender;
          or

                                                                           E-194
<PAGE>

     (33) The following is added as Section 10.1(h):

          10.1(h)  Rights of Transferee - A transferee  who  purchases,  leases,
          licenses  or  otherwise  receives  the  benefits of a  disposition  of
          Collateral  after  Default  takes  free of all  Borrower's  rights.  A
          transferee  is entitled to the  recording  of a transfer  statement to
          document public notice of such disposition.

     (34)  Sections  10.2,  10.3,  10.4 and 10.5 are  hereby  amended to read as
follows:

          Section 10.2 Application of Proceeds of Disposition of Collateral

          The proceeds of any sale,  lease,  license or other disposition of the
          Collateral  are to be applied to satisfy  the  following  items in the
          following order:

          10.2(a)  First,  to Lender's  expenses in preserving its interests and
          rights  hereunder,  to expenses  incurred by Lender in realizing  upon
          security  interests  created or  referred to herein,  and  expenses of
          Lender in enforcing and defending its rights as set forth in Article 2
          and Article 8 of this Agreement.

          10.2(b) Second, to the Debt as defined in this Agreement.

          10.2(c) Third,  any excess or amounts  remaining are to be paid to the
          Borrower  unless  Lender  determines  that  reserves are  warranted to
          implement the indemnification provisions of this Agreement.

          Section 10.3 Redemption of Collateral

          In the event that the  Borrower  may elect to redeem any or all of the
          Collateral prior to the sale,  lease,  license or other disposition by
          Lender, the Borrower is to pay to Lender, in full, the Debt.

          Section 10.4 Notice of Disposition of Collateral

          If the  Collateral  is  perishable,  threatens to decline  speedily in
          value, or is of a type customarily sold on a recognized market, Lender
          need not give notice of any intended disposition of the Collateral. In
          all other cases, Lender is to give authenticated  reasonable notice to
          Borrower and any other party entitled  thereto under applicable law of
          the  time  and  place  of a  public  sale,  lease,  license  or  other
          disposition of the Collateral.  Authenticated notice is presumed to be
          reasonable (a) if given ten (10) days prior to such disposition unless
          a shorter period is warranted under the circumstances,  (b) if sent to
          the  chief  executive  office  and,  if none,  to the  address  of the
          Borrower  set forth on Schedule 1 annexed  hereto in  accordance  with
          Section  11.6  hereof  and  (c)  if it  contains  a  statement  of the
          Collateral  and its  intended  disposition,  the  time  and  place  of
          disposition  and a  statement  that the  Borrower  is  entitled  to an
          accounting  of such

                                                                           E-195
<PAGE>

          disposition.  Lender may disclaim any warranties that may apply to any
          sale, lease, license or other disposition of the Collateral.

          Section 10.5 Marshaling of Assets

          Lender has no  obligation  whatsoever  to proceed first against any of
          the Collateral before  proceeding  against any other of the Collateral
          or other  collateral  for the Debt.  It is  expressly  understood  and
          agreed that all of the  Collateral  stands as equal  security  for the
          Debt and that  Lender has the right to  proceed  against or dispose of
          any/or  all of the  Collateral  or other  collateral  in any  order as
          Lender, in its sole discretion, determines.

     (35) Section 11.4 is hereby amended to read as follows:

          Section 11.4 Right to Appraise

          11.4(a) Lender has the right to appraise and  re-appraise the Property
          or Collateral at any time, including, but not limited to, a Collateral
          review and  appraisal  of the  Property not later than April 30, 2002.
          Lender also has the right to appraise and  re-appraise the Property in
          any  federally  related  transaction  defined  under  Title  XI of the
          Financial Institutions,  Reform, Recovery and Enforcement Act of 1989,
          12 U.S.C.  3310 et seq. and Section  V(b) of the Bank Holding  Company
          Act, 12 U.S.C. 1844 et seq. or upon:

          (i) Lender having reasonably determined that the quality of the credit
          shall have diminished;

          (ii) there occurs a material  adverse  change in the  condition of the
          real estate market;

          (iii) Lender having  reasonably  determined  that the condition of the
          said Collateral has deteriorated; and/or

          (iv) such  reappraisal is required by any regulatory  authority having
          jurisdiction over Lender.

          11.4(b)  Borrower  is to  reimburse  Lender for any  reasonable  fees,
          costs,  expenses or charges  incurred  by Lender in engaging  any such
          appraiser or reviewing and  documenting  such appraisal or reappraisal
          and such fees are part of the Debt, payable on demand.

          11.4(c)  Borrower  is to (i)  provide any  information  as  reasonably
          requested by Lender in order to perform the  appraisal or  reappraisal
          and (ii)  permit  any  appraiser  designated  by  Lender  to enter the
          Property or other location at any  reasonable  time for the purpose of
          conducting the appraisal or reappraisal.

          11.4(d)  Borrower  agrees  that  all  appraisals,  inspections  and/or
          reports prepared by Lender or commissioned by Lender are the

                                                                           E-196
<PAGE>

          exclusive property of Lender, except that Borrower will be entitled to
          a  copy  of  such  appraisal  provided  that  Borrower  executes  such
          documents reasonably requested by Lender by which Borrower will, among
          other  things,  hold  Lender  harmless  from any  statements  or other
          information contained in such appraisals or reports. Nothing contained
          in any such  appraisal  or reports  constitutes  a  representation  or
          warranty by Lender as to any matter or fact with  respect to the Loan.
          The Borrower  agrees that it will not use or rely upon such reports in
          any way,  nor is the  Borrower  to provide  the reports or any copies,
          summaries or outlines of same to any third party.

     (36) Section 11.11 is hereby amended to read as follows:

          Section 11.11 Applicable Law and Consent to Jurisdiction

          This  Agreement is to be interpreted  and enforced in accordance  with
          the laws of the State of New Jersey  (without  regard to the conflicts
          of law rules of New Jersey) except that the law of the State where the
          Borrower is located  governs  perfection  and  priority  claims to the
          Collateral  (except as  otherwise  provided in the Uniform  Commercial
          Code). Borrower hereby irrevocably consents to the jurisdiction of the
          Courts  of the  State of New  Jersey  and to the  jurisdiction  of the
          United States  District Court for the District of New Jersey,  for the
          purpose  of any suit,  action or other  proceeding  arising  out of or
          relating to this  Agreement or the Debt, or the subject  matter hereof
          or thereof.  Borrower  hereby waives,  and agrees not to assert in any
          such suit,  action or proceeding  any claim that it is not  personally
          subject to such jurisdiction, or any right to remove an action brought
          in State to Federal  Court,  or any claim  that such  suit,  action or
          proceeding  is in an  inconvenient  forum or that the venue thereof is
          improper.  Borrower hereby consents that it may be served with process
          by the notification procedure set forth in this Agreement.

     (37) Section 11.12 is hereby amended to read as follows:

          Section 11.12 Consents

          The Borrower consents:

          11.12(a)To any extension,  postponement of time of payment, indulgence
          or to any  substitution,  exchange,  release of Collateral,  or to any
          addition  to  or  release  of  any  party  or  persons   primarily  or
          secondarily liable.

          11.12(b)  Following the occurrence of and during the  continuance of a
          Default, acceptance of partial payments on any Accounts or instruments
          and the settlement, comprising or adjustment thereof.

          11.12(c) Lender has the unrestricted right at any time or from time to
          time, and without Borrower's  consent, to assign all or any

                                                                           E-197
<PAGE>

          portion of its rights and  obligations  hereunder to one or more banks
          or other financial  institutions  (each, an "Assignee"),  and Borrower
          agrees that it will execute, or cause to be executed,  such documents,
          including, without limitation, amendments to this Agreement and to any
          other  documents,  instruments  and agreements  executed in connection
          herewith  as Lender may deem  necessary  to effect the  foregoing.  In
          addition, at the request of Lender and any such Assignee,  Borrower is
          to issue one or more new promissory notes, as applicable,  to any such
          Assignee and, if Lender has retained any of its rights and obligations
          hereunder following such assignment,  to Lender,  which new promissory
          notes are to be issued in  replacement  of but not in discharge of the
          liability  evidenced  by the  promissory  note held by Lender prior to
          such  assignment  and are to  reflect  the  amount  of the  respective
          commitments  and loans held by such  Assignee  and Lender after giving
          effect  to  such  assignment.  Upon  the  execution  and  delivery  of
          appropriate  assignment   documentation,   amendments  and  any  other
          documentation  required by Lender in connection with such  assignment,
          and the payment by Assignee of the purchase  price agreed to by Lender
          and such Assignee, such Assignee is to be deemed to be a party to this
          Agreement  and  has  all of  the  rights  and  obligations  of  Lender
          hereunder  (and  under  any  and  all  other  guaranties,   documents,
          instruments  and  agreements  executed in connection  herewith) to the
          extent that such rights and  obligations  have been assigned by Lender
          pursuant  to the  assignment  documentation  between  Lender  and such
          Assignee,  and Lender is to be released from its obligations hereunder
          and  thereunder  to a  corresponding  extent.  Lender may  furnish any
          information concerning Borrower in its possession from time to time to
          prospective  Assignees,  provided  that  Lender may  require  any such
          prospective   Assignees   to  agree  in   writing  to   maintain   the
          confidentiality of such information.

     (38) Section 11.14 is hereby amended to read as follows:

          SECTION 11.14 WAIVE JURY TRIAL

          BORROWER AND LENDER (BY ACCEPTANCE OF THIS AGREEMENT)  MUTUALLY HEREBY
          KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY
          JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN
          CONNECTION   WITH  THIS   AGREEMENT,   OR  ANY  OTHER  LOAN  DOCUMENTS
          CONTEMPLATED  TO BE EXECUTED IN  CONNECTION  HEREWITH OR ANY COURSE OF
          CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
          ACTIONS OF ANY PARTY,  INCLUDING,  WITHOUT  LIMITATION,  ANY COURSE OF
          CONDUCT,  COURSE OF DEALING,  STATEMENTS OR ACTIONS OF LENDER RELATING
          TO  THE  ADMINISTRATION  OF  THE  LOAN  OR  ENFORCEMENT  OF  THE  LOAN
          DOCUMENTS,  AND AGREE THAT NEITHER PARTY WILL SEEK TO

                                                                           E-198
<PAGE>

          CONSOLIDATE  ANY SUCH  ACTION  WITH ANY  OTHER  ACTION IN WHICH A JURY
          TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.  EXCEPT AS  PROHIBITED BY LAW,
          BORROWER  HEREBY  WAIVES  ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN
          ANY  LITIGATION  ANY  SPECIAL,  EXEMPLARY,  PUNITIVE OR  CONSEQUENTIAL
          DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL  DAMAGES.
          BORROWER CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF LENDER
          HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT LENDER WOULD NOT, IN THE
          EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER. THIS WAIVER
          CONSTITUTES A MATERIAL  INDUCEMENT FOR LENDER TO ACCEPT THIS AGREEMENT
          AND MAKE THE LOAN.

     (39) The following is added as Section 11.16:

          Section 11.16 Additional Capital

          The Borrower hereby  represents its intent to raise additional  equity
          capital subject to verification by Lender.  In the event that Borrower
          has not raised at least a gross amount of $10,000,000.00 of additional
          capital  from the date of the  Agreement by June 30, 2002, a fee of 35
          basis  points on the  outstanding  balance  of the Loan as of June 30,
          2002 is due and  payable by the  Borrower  within  thirty (30) days of
          quarter end,  commencing  with the quarter  ending June 30, 2002,  and
          payable  thereafter  on the  outstanding  balance  at  the  end of the
          quarter for each quarter in which the gross  amount of  $10,000,000.00
          of additional  capital  (including capital raised during any preceding
          quarter) has not been raised. If additional capital is raised from the
          date of the  Agreement  by June 30,  2002  (including  capital  raised
          during any preceding quarter) in an amount between  $10,000,001.00 and
          $14,999,999,  a fee of 15 basis points on the  outstanding  balance of
          the Loan as of the close of such  quarter  is due and  payable  within
          thirty (30) days of quarter end,  commencing  with the quarter  ending
          June 30, 2002,  and payable  thereafter  for each quarter in which the
          additional  capital  threshold  has not been met.  There is no fee due
          from Borrower to Lender in the event that an aggregate gross amount of
          capital is raised by the Borrower in excess of $15,000,000.00 from the
          date of the Agreement to June 30, 2002.  Lender  reserves the right to
          approve,  in advance,  the form and  substance of any of the foregoing
          equity  capital  transactions  except  for common  stock  transactions
          resulting  in the  issuance  of less than 20% of the total  issued and
          outstanding  capital stock of Osteotech,  Inc. and/or its Subsidiaries
          to be determined by Lender as of the date of the transaction at issue.
          All such fees payable  pursuant to this Section are deemed earned when
          Lender is paid.

                                                                           E-199
<PAGE>

         (40) Section  14(a)(ii) is hereby deleted in its entirety except to the
         extent of the provisions of Section 1.8 hereof.

         (41)  Exhibit "A" is hereby amended per the attached.

         (42)  Exhibit "B" is hereby amended per the attached.

         E.  As to the Mortgage:

         Paragraph 1(a)(1) is hereby amended to read as follows:

               (1)  The  principal  sum of  Twenty-Five  Million  Seven  Hundred
               Ninety-One   Thousand   Five   Hundred    Seventy-Five    Dollars
               ($25,791,575.00)   advanced  by  Mortgagee  to  Mortgagor,   with
               interest  thereon at the rate specified in, and  represented  by,
               Mortgagor's  Promissory  Note(s) executed  pursuant to a Loan and
               Security  Agreement dated June 10, 1999, as amended and as may be
               subsequently amended ("Loan Agreement"),  payable to the order of
               Mortgagee,  all  Debt  defined  in the  Loan  Agreement,  and any
               renewals,  extensions and any future advances which Mortgagee, at
               its sole  discretion,  might  grant  from  time to time,  and all
               having the benefit of the priority of this  Mortgage  pursuant to
               N.J.S.A. 46:9-8.1 et seq., as amended, and

     F. As to the Assignment of Leases:

     The  Assignment of Leases is hereby  amended to refer to the  Mortgage,  as
hereby amended.

4. Borrower  represents and warrants that, except as expressly  provided hereby,
there are no defaults or events of default  pursuant to or defined in any of the
Loan Documents,  as amended hereby,  and that all warranties and covenants which
have been made or performed by Borrower in  connection  with the Loan  Documents
were true and complete when made or performed.

5. The Loan  Documents are hereby  amended to provide that a default,  breach or
failure  on the part of the  Borrower  to  perform  any  covenant  or  condition
hereunder or an event of default  otherwise  defined in either this Agreement or
any document executed in connection with this Agreement is to be deemed an event
of default for purposes of the Loan Documents.

6. Except as expressly  provided  hereby,  all  representations,  warranties and
covenants made by Borrower to Lender in the Loan  Documents are hereby  repeated
as though first made expressly in this Agreement.

7. Except as otherwise  provided  herein,  the Loan Documents  shall continue in
full force and effect,  in accordance with their  respective  terms. The parties
hereto  hereby   expressly   confirm

                                                                           E-200
<PAGE>

and  reaffirm  all of their  respective  liabilities,  obligations,  duties  and
responsibilities  under and pursuant to said Loan  Documents  and consent to the
terms of this Agreement.

8. The parties agree to sign, deliver and file any additional documents and take
any other actions that may reasonably be required by Lender  including,  but not
limited to,  affidavits,  resolutions,  or certificates  for a full and complete
consummation of the matters covered by this Agreement.

9. This Agreement is binding upon,  inures to the benefit of, and is enforceable
by the heirs, personal  representatives,  successors and assigns of the parties.
This Agreement is not assignable by Borrower  without the prior written  consent
of Lender.

10. To the extent that any  provision  of this  Agreement is  determined  by any
court or legislature to be invalid or unenforceable in whole or part either in a
particular case or in all cases,  such provision or part thereof is to be deemed
surplusage.  If that occurs,  it does not have the effect of rendering any other
provision of this Agreement  invalid or  unenforceable.  This Agreement is to be
construed  and  enforced as if such invalid or  unenforceable  provision or part
thereof were omitted.

11. This Agreement may only be changed or amended by a written  agreement signed
by all of the parties.  By the execution of this Agreement,  Lender is not to be
deemed to consent to any future renewal or extension of the Loan.

12.  This  Agreement  is  governed  by and is to be  construed  and  enforced in
accordance  with the laws of New Jersey as though made and to be fully performed
in New Jersey (without regard to the conflicts of law rules of New Jersey).

13. The parties to this Agreement  acknowledge that each has had the opportunity
to consult  independent  counsel of their own  choice,  and that each has relied
upon such counsel's advice  concerning this Agreement,  the  enforceability  and
interpretation  of the terms contained in this Agreement and the consummation of
the transactions and matters covered by this Agreement.

     IN WITNESS WHEREOF, the parties have signed this Agreement.

Witness:                                         OSTEOTECH, INC.
                                                 A Delaware Corporation

/s/ Linda M. Savoca                          By: /s/ Michael J. Jeffries
------------------------                        ------------------------------
                                                   MICHAEL J. JEFFRIES
                                                   Executive Vice President

Witness:                                         OSTEOTECH INVESTMENT
                                                 CORPORATION
                                                 A New Jersey Corporation

/s/ Linda M. Savoca                          By: /s/ Michael J. Jeffries
------------------------                        ------------------------------
                                                   MICHAEL J. JEFFRIES
                                                   Executive Vice President

                                                                           E-201
<PAGE>

Witness:                                         CAM IMPLANTS, INC.
                                                 A Colorado Corporation

/s/ Linda M. Savoca                          By: /s/ Michael J. Jeffries
------------------------                        ------------------------------
                                                   MICHAEL J. JEFFRIES
                                                   Chief Financial Officer

Witness:                                         OSTEOTECH, B.V.
                                                   A Company of The Netherlands

/s/ Linda M. Savoca                          By: /s/ Michael J. Jeffries
------------------------                        ------------------------------
                                                   MICHAEL J. JEFFRIES
                                                   Managing Director

Witness:                                         H.C. IMPLANTS, B.V.
                                                    A Company of The Netherlands

/s/ Linda M. Savoca                          By: /s/ Michael J. Jeffries
------------------------                        ------------------------------
                                                   MICHAEL J. JEFFRIES
                                                   Managing Director
Signatures continued ......

............................ continuation of signatures to Agreement of Amendment

Witness:                                         CAM IMPLANTS, B.V.
                                                    A Company of The Netherlands

/s/ Linda M. Savoca                          By: /s/ Michael J. Jeffries
------------------------                        ------------------------------
                                                   MICHAEL J. JEFFRIES
                                                   Managing Director

Witness:                                         OSTEOTECH/CAM SERVICES, B.V.
                                                    A Company of The Netherlands

/s/ Linda M. Savoca                          By: /s/ Michael J. Jeffries
------------------------                        ------------------------------
                                                   MICHAEL J. JEFFRIES
                                                   Managing Director

Witness:                                         OSTEOTECH, S.A.
                                                    A Corporation of France

/s/ Linda M. Savoca                          By: /s/ Michael J. Jeffries
------------------------                        ------------------------------
                                                   MICHAEL J. JEFFRIES
                                                   Managing Director

                                                                           E-202
<PAGE>

Witness:                                         OST DEVELOPPEMENT S.A.
                                                    A Corporation of France

/s/ Linda M. Savoca                          By: /s/ Michael J. Jeffries
------------------------                        ------------------------------
                                                   MICHAEL J. JEFFRIES
                                                   Managing Director

Witness:                                         FLEET NATIONAL BANK

/s/ Joseph Hassan                            By: /s/ David M. Nilsen
------------------------                        ------------------------------
                                                   DAVID M. NILSEN
                                                   Senior Vice President

                                                                           E-203
<PAGE>

                                    EXHIBIT A

(i)  "Accounts",  which means,  in addition to the  definition now and hereafter
contained  in the  Uniform  Commercial  Code,  all  accounts  and  any  and  all
obligations  of any kind at any time due and/or  owing to the  Borrower  and all
rights of the Borrower to receive payment or any other consideration, whether or
not earned by performance,  including  without  limitation,  invoices,  contract
rights,  Accounts, and all other debts, obligations and liabilities for property
sold, leased,  licensed,  assigned or disposed of, for services rendered,  for a
policy of insurance issued or to be issued, for a secondary obligation,  arising
out of a credit card or for health-care insurance receivable,  in whatever form,
owing to Borrower from any person, firm, governmental authority,  corporation or
any other entity,  all security  therefor,  all of which whether now existing or
hereafter acquired.

(ii)  "Chattel  Paper",  which  means,  in  addition to the  definition  now and
hereafter  contained  in the Uniform  Commercial  Code,  all  chattel  paper and
records that  evidence  both a monetary  obligation  and a security  interest or
lease in  specific  goods and  software  used in the goods,  a lease of specific
goods or a lease of specific  goods and  license of software  used in the goods,
including  electronic  chattel paper or whatever  form,  owing to Borrower or in
which the  Borrower  has an  interest,  all of which  whether  now  existing  or
hereafter acquired.

(iii)  "Deposit  Accounts",  which means,  in addition to the definition now and
hereafter  contained  in the Uniform  Commercial  Code,  all  deposit  accounts,
whether demand,  time,  savings,  passbook or similar accounts maintained by the
Borrower at any bank, all of which whether now existing or hereafter acquired.

(iv)  "Equipment",  which means, in addition to the definition now and hereafter
contained in the Uniform  Commercial Code, all equipment,  machinery,  furniture
and  all  other  related  goods,  all  replacements,   repairs,   modifications,
alterations,   additions,  controls  and  operating  accessories  therefor,  all
substitutions and replacements therefor, all accessions and additions thereto of
the Borrower, all of which whether now existing or hereafter acquired.

(v) "General  Intangibles,"  which means,  in addition to the definition now and
hereafter  contained in the Uniform Commercial Code, all general intangibles and
payment  intangibles and any and all personal  property,  choses-in-action,  and
things in action,  leases,  income tax refunds,  copyrights,  licenses,  rights,
patents, patent rights,  franchise rights,  distributorship rights,  trademarks,
tradenames,  service  marks,  trademark  rights,  formulae,  customer  lists and
goodwill  of the  Borrower,  all of which  whether  now  existing  or  hereafter
acquired.

(vi)  "Goods,"  which means,  in addition to the  definition  now and  hereafter
contained in the Uniform  Commercial  Code,  all goods  (except  human  tissue),
fixtures  and  embedded  computer  programs  and all things and  property of the
Borrower which are not otherwise defined in this Exhibit A, all of which whether
now existing or hereafter acquired.

(vii)  "Instruments",  which  means,  in  addition  to the  definition  now  and
hereafter contained in the Uniform Commercial Code, all instruments,  negotiable
instruments  or other  writings that evidence a right of the Borrower to payment
of a monetary  obligation  that is  transferable  in the ordinary  course of the
Borrower's business with any necessary  endorsement or assignment,  all of which
whether now existing or hereafter acquired.

(viii) "Inventory", which means, in addition to the definition now and hereafter
contained in the Uniform  Commercial  Code,  all inventory and all goods (except
human tissue),  merchandise or other personal  property held by the Borrower for
sale or lease or under a contract of service or to be furnished under labels and
other  devices,  names or marks  affixed

                                                                           E-204
<PAGE>

thereto for  purposes  of selling or  identification,  and all right,  title and
interest of the Borrower therein and thereto,  all raw materials,  packaging and
shipping materials,  work or goods in process or materials and supplies of every
nature used, consumed or to be consumed in the Borrower's business, all of which
whether now existing or hereafter acquired.

(ix) All promissory notes,  documents,  software and supporting obligations (and
security interests and liens securing them) of the Borrower as now and hereafter
defined in the  Uniform  Commercial  Code  whether  now  existing  or  hereafter
acquired.

(x) As to all of the foregoing (i) through (ix)  inclusive,  all cash  proceeds,
non-cash  proceeds and  products  thereof,  additions  and  accessions  thereto,
replacements and substitutions therefor.

                                                                           E-205
<PAGE>

                                   EXHIBIT A-1

(i)  "Accounts",  which means,  in addition to the  definition now and hereafter
contained  in the  Uniform  Commercial  Code,  all  accounts  and  any  and  all
obligations  of any kind at any time due and/or  owing to the  Borrower  and all
rights of the Borrower to receive payment or any other consideration, whether or
not earned by performance,  including  without  limitation,  invoices,  contract
rights,  Accounts, and all other debts, obligations and liabilities for property
sold, leased,  licensed,  assigned or disposed of, for services rendered,  for a
policy of insurance issued or to be issued, for a secondary obligation,  arising
out of a credit card or for health-care insurance receivable,  in whatever form,
owing to Borrower from any person, firm, governmental authority,  corporation or
any other entity,  all security  therefor,  all of which whether now existing or
hereafter acquired.

(ii)  "Chattel  Paper",  which  means,  in  addition to the  definition  now and
hereafter  contained  in the Uniform  Commercial  Code,  all  chattel  paper and
records that  evidence  both a monetary  obligation  and a security  interest or
lease in  specific  goods and  software  used in the goods,  a lease of specific
goods or a lease of specific  goods and  license of software  used in the goods,
including  electronic  chattel paper or whatever  form,  owing to Borrower or in
which the  Borrower  has an  interest,  all of which  whether  now  existing  or
hereafter acquired.

(iii)  "Deposit  Accounts",  which means,  in addition to the definition now and
hereafter  contained  in the Uniform  Commercial  Code,  all  deposit  accounts,
whether demand,  time,  savings,  passbook or similar accounts maintained by the
Borrower at any bank, all of which whether now existing or hereafter acquired.

(iv)  "Equipment",  which means, in addition to the definition now and hereafter
contained in the Uniform  Commercial Code, all equipment,  machinery,  furniture
and  all  other  related  goods,  all  replacements,   repairs,   modifications,
alterations,   additions,  controls  and  operating  accessories  therefor,  all
substitutions and replacements therefor, all accessions and additions thereto of
the Borrower,  all of which whether now existing or hereafter  acquired with the
proceeds  of Loan III or  otherwise  located on the  Premises  described  in the
Mortgage.

(v) " Goods,"  which  means,  in addition to the  definition  now and  hereafter
contained in the Uniform  Commercial  Code,  all goods  (except  human  tissue),
fixtures located at the Premises described in the Mortgage and embedded computer
programs  and all things and property of the  Borrower  which are not  otherwise
defined in this  Exhibit  A-1,  all of which  whether now  existing or hereafter
acquired.

(vii)  "Instruments",  which  means,  in  addition  to the  definition  now  and
hereafter contained in the Uniform Commercial Code, all instruments,  negotiable
instruments  or other  writings that evidence a right of the Borrower to payment
of a monetary  obligation  that is  transferable  in the ordinary  course of the
Borrower's business with any necessary  endorsement or assignment,  all of which
whether now existing or hereafter acquired.

(viii) "Inventory", which means, in addition to the definition now and hereafter
contained in the Uniform  Commercial  Code,  all inventory and all goods (except
human tissue),  merchandise or other personal  property held by the Borrower for
sale or lease or under a contract of service or to be furnished under labels and
other  devices,  names or marks  affixed  thereto  for  purposes  of  selling or
identification,  and all right,  title and interest of the Borrower  therein and
thereto, all raw materials,  packaging and shipping materials,  work or goods in
process or  materials  and  supplies  of every  nature  used,  consumed or to be
consumed  in the  Borrower's  business,  all of which  whether  now  existing or
hereafter acquired.

                                                                           E-206
<PAGE>

(ix) All promissory notes,  documents,  software and supporting obligations (and
security interests and liens securing them) of the Borrower as now and hereafter
defined in the  Uniform  Commercial  Code  whether  now  existing  or  hereafter
acquired.

(x) As to all of the foregoing (i) through (ix)  inclusive,  all cash  proceeds,
non-cash  proceeds and  products  thereof,  additions  and  accessions  thereto,
replacements and substitutions therefor.

                                                                           E-207
<PAGE>

                                    EXHIBIT B

(i) "Mortgage,"  which means the Mortgage and Security  Agreement dated June 10,
1999, or as it may be subsequently  amended,  executed by the Borrower as to the
Property, and the Premises defined therein, together with all proceeds, products
and insurance as to any and all of the foregoing.

(ii) "Assignment of Leases," which means the Assignment of Leases dated June 10,
1999, or as it may be subsequently  amended,  executed by the Borrower,  and the
Leases defined therein, together with all proceeds, products and insurance as to
any and all of the foregoing.

(iii) Such pledge  agreements/charge  agreements  executed by  Osteotech,  Inc.,
Osteotech, B.V. and H.C. Implants, B.V. pursuant to Article 4 hereof.

                                                                           E-208
<PAGE>

STATE OF NEW JERSEY   )
COUNTY OF MONMOUTH    ) ss:

On March 13, 2002,  before me, the  subscriber,  a NOTARY PUBLIC of the State of
New Jersey, personally appeared MICHAEL J. JEFFRIES, who, I am satisfied, is the
person who signed the annexed  document and I having first made known to him the
contents thereof, he acknowledged that he signed,  sealed and delivered the same
as his voluntary act and deed for the uses and purposes therein expressed.

Sworn and Subscribed to
before me this 13 day
of March, 2002.

/s/ Linda Manning Savoca
------------------------

                                                                           E-209
<PAGE>

STATE OF NEW JERSEY   )
COUNTY OF MONMOUTH    ) ss:

On March 13, 2002,  before me, the  subscriber,  a Notary Public of the State of
New Jersey,  personally  appeared DAVID M. NILSEN,  who, I am satisfied,  is the
person who signed the annexed  document and I having first made known to him the
contents thereof, he acknowledged that he signed,  sealed and delivered the same
as his voluntary act and deed for the uses and purposes therein expressed.

Sworn and Subscribed to
before me this 13th day
of March, 2002.

/s/ Irene Gutierrez
-------------------

                                                                           E-210
<PAGE>

                            AGREEMENT OF AMENDMENT TO
                          LOAN AND SECURITY AGREEMENT,
                         MORTGAGE, ASSIGNMENT OF LEASES
                               AND OTHER DOCUMENTS

                              RECORD AND RETURN TO:

                                PAUL H. SHUR, ESQ
                                 REED SMITH LLP
                                 136 MAIN STREET
                                   PO BOX 7839
                             PRINCETON NJ 9853-7839

                                                                           E-211<PAGE>

                                                                   EXHIBIT 10.15

                   AUTHORIZED EXCLUSIVE DISTRIBUTOR AGREEMENT

       This Agreement is made and entered into as of Sept. 12, 2000 ("Effective
Date") between Transmeta Corporation, a California corporation with its
principal place of business at 3940 Freedom Circle, Santa Clara, CA 95054
("Transmeta"), and Siltrontech Electronics Corporation, a corporation
maintaining its principal place of business at 11 F No. 20 Alley 1, Lane 768,
Sec 4. PA TE RD, Taipei, Taiwan R.O.C. ("Distributor").

                                    RECITALS

       A. Transmeta develops, manufactures and distributes certain computer
hardware products, including the products listed in Exhibit A ("Transmeta
Products"). This Agreement pertains only to "Transmeta Products" as listed in
Exhibit A and not to any other products developed, manufactured or distributed
by Transmeta.

       B. Transmeta and Distributor desire that Distributor be authorized to act
as an independent distributor of Transmeta Products under the terms and
conditions set forth below.

              NOW, THEREFORE, Transmeta and Distributor agree as follows:

       1. Appointment as Authorized Transmeta Distributor.

              (a) Exclusive Appointment. Subject to the terms of this Agreement,
Transmeta appoints Distributor, and Distributor accepts such appointment, as the
independent, exclusive distributor of Transmeta Products in and limited to the
territory set forth in Exhibit B (the "Territory"). As long as Distributor
satisfies all of its obligations under this Agreement, and unless Distributor's
exclusive status is terminated pursuant to Section 2(c)(iii) of this Agreement,
Transmeta will not appoint another distributor of Transmeta Products located in
the Territory.

              (b) Exclusivity Limitations. Notwithstanding Distributor's
exclusive appointment, Transmeta reserves the right at any time to offer,
license and sell any Transmeta Products, directly or indirectly, with no
obligation to pay compensation to Distributor (i) to original equipment
manufacturers, wherever located, who may in turn distribute Transmeta Products
in the Territory, and (ii) to the customers identified in Exhibit C.

              (c) Transmeta's Reserved Rights. Transmeta reserves the rights
from time to time, in its sole discretion and without liability to Distributor,
to:

                     (i) change, add to, or delete from the list of Transmeta
Products;

                     (ii) change or terminate the level or type of service or
support that Transmeta makes available; and

                     (iii) add to or delete from the Territory by written notice
to Distributor at least thirty (30) days prior to the effective date of the
change.

              (d) Nature of Distribution. Subject to the terms of this
Agreement, to the extent that any Transmeta Product contains or consists of
software, Distributor's appointment only grants to Distributor a non-exclusive,
non-transferable license to distribute such Transmeta Product in the Territory,
and does not transfer any right, title or interest to any such software to
Distributor or Distributor's customers. Distributor may not distribute any
Transmeta Products containing or consisting of software to any third party
unless such third party is subject to an end

<PAGE>

user software license agreement with Transmeta that Transmeta will provide to
Distributor. Transmeta will sell Transmeta Products to Distributor only to the
extent such Transmeta Products consist of non-software items on the terms
specified herein. Use of the terms "sell," "license," "purchase," "license fees"
and "price" will be interpreted in accordance with this Section.

       2. Obligations of Distributor.

              (a) Promotion Efforts. Distributor will use its best efforts to
(i) vigorously promote the distribution of Transmeta Products in the Territory
in accordance with the terms and policies of Transmeta as announced from time to
time; and (ii) satisfy those reasonable criteria and policies with respect to
Distributor's obligations under this Agreement communicated in writing to
Distributor by Transmeta from time to time.

              (b) Adaptation For Local Market. Distributor will be responsible
for translating, at its expense, all Transmeta manuals, packaging, advertising,
and promotional materials used in connection with Transmeta Products into the
language(s) of the Territory if so instructed by Transmeta in writing.
Distributor will consult with Transmeta as to what changes need to be made to
written materials pursuant to this Section 2(b), and will obtain Transmeta's
prior written consent to each such change to written materials. Distributor
hereby assigns to Transmeta all of Distributor's right, title and interest in
all such translated and modified materials, including but not limited to all
related copyrights and moral rights.

              (c) Minimum Commitments. Distributor agrees to order and pay for,
during each of the periods set forth in Exhibit D, at least the minimum
quantities of each Transmeta Product indicated in Exhibit D for such periods.
Transmeta, at its sole discretion, shall have the right to amend Exhibit D upon
thirty (30) days prior written notice to Distributor. If Distributor fails to
order and pay for such minimum quantities during any period, it will provide
Transmeta within thirty (30) days of the end of such period with a written
report explaining Distributor's failure to meet its minimum quantity, and
Transmeta will determine in its sole discretion which of the following steps is
appropriate: (i) mutual agreement as to revision of future minimum quantities;
or (ii) an undertaking by Distributor to effect steps necessary to ensure that
it will meet its minimum quantities for the ensuing periods.

              (d) Advertising Obligations. Distributor will aggressively
advertise Transmeta Products in the Territory in accordance with this Agreement,
provided that Distributor will not use advertisements that have not been
approved in writing by Transmeta before such use. Transmeta will set aside
advertising funds equal to up to one half percent (0.5%) of Distributor's annual
purchases. Using such funds, Transmeta shall reimburse Distributor up to the
amount in such funds for any expenses actually incurred by Distributor in
connection with advertising of the Transmeta Products, provided that such
advertising has been approved in advance by Transmeta.

              (e) Inventory. Distributor will maintain at least one warehouse
facility in the Territory, and will maintain an inventory of Transmeta Products
and warehousing facilities sufficient to serve adequately the needs of its
customers on a timely basis. As a minimum, such inventory shall include not less
than the quantity of Transmeta Products necessary to meet Distributor's
reasonably anticipated demands for a thirty (30) day period. Transmeta will
authorize an inventory stock rotation twice (2 times) per year, April 1st and
September 1st, the maximum amount to be authorized will be 5% of the previous
six (6) months purchases at cost in US$ from Transmeta by Distributor. A new
stocking order of equal dollar amount must accompany the stock rotation request
from the Distributor.

                                      -2-
<PAGE>

              (f) Distributor Personnel. Distributor will train and maintain a
sufficient number of capable technical and sales personnel having the knowledge
and training necessary to: (i) inform customers properly concerning the features
and capabilities of Transmeta Products and, if necessary, competitive products;
(ii) service and support Transmeta Products in accordance with Distributor's
obligations under this Agreement; and (iii) otherwise carry out the obligations
and responsibilities of Distributor under this Agreement.

              (g) Technical Expertise. Distributor and its staff will be
conversant with the technical language conventional to Transmeta Products and
similar computer products in general, and will develop sufficient knowledge of
the industry, of Transmeta Products and of products competitive with Transmeta
Products (including specifications, features and benefits) so as to be able to
explain in detail to its customers the differences between Transmeta Products
and competitive products.

              (h) Training. Distributor will send at least one of its technical
and/or sales personnel for training on Transmeta Products and services. The
training will be provided free of charge at the Transmeta offices shown on page
one of this Agreement, the amount of training time will be reasonable and
appropriate in Transmeta's judgment, all such training will be in English, and
Distributor will bear all travel and living expenses for such personnel sent to
Transmeta for training.

              (i) Service and Support. Distributor will provide prompt pre-and
post-sales or license service and support for all Transmeta Products located in
the Territory. Distributor will provide necessary and useful assistance and
consultation on the use of Transmeta Products; timely respond to customers'
general questions concerning use of Transmeta Products; and assist customers in
the diagnosis and correction of problems encountered in using Transmeta
Products.

              (j) Meetings and Trade Show Attendance. Distributor will at its
expense: (i) attend, and aggressively promote Transmeta Products in, such trade
shows, conventions and exhibits as Transmeta reasonably requests; (ii) attend
any sales meetings held by Transmeta to which Transmeta invites Distributor with
reasonable notice; and (iii) notify Transmeta of Distributor's sales meetings
and provide Transmeta personnel adequate opportunity to provide sales and
promotion information regarding Transmeta Products in such meetings.

              (k) Distributor Financial Condition. Distributor will maintain and
employ in connection with Distributor's business under this Agreement such
working capital and net worth as may be required in Transmeta's reasonable
opinion to enable Distributor to carry out and perform all of Distributor's
obligations and responsibilities under this Agreement. From time to time, on
reasonable notice by Transmeta, Distributor will furnish such financial reports
and other financial data as Transmeta may reasonably request as necessary to
determine Distributor's financial condition.

              (l) Transmeta Packaging. Except as provided in section 2(b),
Distributor will distribute Transmeta Products with all packaging, warranties,
disclaimers and license agreements intact as shipped from Transmeta, and will
instruct its customers as to the terms of such documents applicable to Transmeta
Products.

              (m) No Competing Products. Distributor will not represent or
distribute during the term of this Agreement any products which, in Transmeta's
opinion, compete, directly or indirectly, with Transmeta Products. Exhibit E
contains a list of products which, as of the Effective Date, compete with
Transmeta Products. Upon thirty (30) days prior written notice to Distributor,
Transmeta may, at its sole discretion, update or modify the list specified by
Exhibit E at any time during the term of this Agreement.

                                      -3-
<PAGE>

              (n) Distributor Covenants. Distributor will: (i) conduct business
in a manner that reflects favorably at all times on Transmeta Products and the
good name, good will and reputation of Transmeta;(ii) avoid deceptive,
misleading or unethical practices that are or might be detrimental to Transmeta,
Transmeta Products or the public; (iii) make no false or misleading
representations with regard to Transmeta or Transmeta Products; (iv) not publish
or employ, or cooperate in the publication or employment of, any misleading or
deceptive advertising material with regard to Transmeta or Transmeta Products;
(v) make no representations, warranties or guarantees to customers or to the
trade with respect to the specifications, features or capabilities of Transmeta
Products that are inconsistent with the literature distributed by Transmeta; and
(vi) not enter into any contract or engage in any practice detrimental to the
interests of Transmeta in Transmeta Products. Distributor agrees that: (1) it
will not disassemble, decompile, or reverse engineer any Transmeta Products, (2)
it will not copy or otherwise reproduce any Transmeta Products, in whole or in
part, and (3) it will not modify the Transmeta Products in any manner.

              (o) Compliance with Law. Distributor will comply with all
applicable international, national, state, regional and local laws and
regulations in performing its duties hereunder and in any of its dealings with
respect to Transmeta Products.

              (p) Compliance with U.S. Export Laws. Distributor acknowledges
that all Transmeta Products including documentation and other technical data are
subject to export controls imposed by the U.S. Export Administration Act of
1979, as amended (the "Act"), and the regulations promulgated thereunder.
Distributor will not export or reexport (directly or indirectly) any Transmeta
Products or documentation or other technical data therefor without complying
with the Act and the regulations thereunder.

              (q) Governmental Approval. If any approval with respect to this
Agreement, or the notification or registration thereof, will be required at any
time during the term of this Agreement, with respect to giving legal effect to
this Agreement in the Territory, or with respect to compliance with exchange
regulations or other requirements so as to assure the right of remittance abroad
of U.S. dollars pursuant to Section 5(e) hereof or otherwise, Distributor will
immediately take whatever steps may be necessary in this respect, and any
charges incurred in connection therewith will be for the account of Distributor.
Distributor will keep Transmeta currently informed of its efforts in this
connection. Transmeta will be under no obligation to ship Transmeta Products to
Distributor hereunder until Distributor has provided Transmeta with satisfactory
evidence that such approval, notification or registration is not required or
that it has been obtained.

              (r) Market Conditions. Distributor will advise Transmeta promptly
concerning any market information that comes to Distributor's attention
respecting Transmeta, Transmeta Products, Transmeta's market position or the
continued competitiveness of Transmeta Products in the marketplace. Distributor
will confer with Transmeta from time to time at the request of Transmeta on
matters relating to market conditions, sales forecasting and product planning
relating to Transmeta Products.

              (s) Costs and Expenses. Except as expressly provided herein or
agreed to in writing by Transmeta and Distributor, Distributor will pay all
costs and expenses incurred in the performance of Distributor's obligations
under this Agreement.

       3. Inspections, Records and Reporting.

                                      -4-
<PAGE>

              (a) Reports. Within ten (10) days of the end of each calendar
month, Distributor will provide to Transmeta a written report showing, for the
time periods Transmeta reasonably requests, (i) Distributor's point of sale
report showing shipments of Transmeta Products by customer name, address, zip
code, Transmeta part number, number of units sold, and revenue value, (ii)
Distributor's customer backlog report, and (iii) Distributor's current inventory
levels of Transmeta Products, in the aggregate and by Transmeta Product.

              (b) Notification. Distributor will: (i) notify Transmeta in
writing of any claim or proceeding involving Transmeta Products within ten (10)
days after Distributor learns of such claim or proceeding; (ii) report promptly
to Transmeta all claimed or suspected product defects; and (iii) notify
Transmeta in writing not more than thirty (30) days after any change in the
management of Distributor or any transfer of more than twenty-five percent (25%)
of Distributor's voting control or a transfer of substantially all its assets.

              (c) Records. Distributor will maintain, for at least two years
after termination of this Agreement, its records, contracts and accounts
relating to distribution of Transmeta Products, and will permit examination
thereof by authorized representatives of Transmeta at all reasonable times.

       4. Order Procedure.

              (a) Transmeta Acceptance. All orders for Transmeta Products by
Distributor shall be subject to acceptance in writing by Transmeta at its
principal place of business and shall not be binding until the earlier of such
acceptance or shipment, and, in the case of acceptance by shipment, only as to
the portion of the order actually shipped.

              (b) Controlling Terms. The terms and conditions of this Agreement
and of the applicable Transmeta invoice or confirmation will apply to each order
accepted or shipped by Transmeta hereunder. The provisions of Distributor's form
of purchase order or other business forms will not apply to any order
notwithstanding Transmeta's acknowledgment or acceptance of such order.

              (c) Cancellation. Transmeta reserves the right to cancel any
orders placed by Distributor and accepted by Transmeta as set forth above, or to
refuse or delay shipment thereof, if Distributor (i) fails to make any payment
as provided in this Agreement or under the terms of payment set forth in any
invoice or otherwise agreed to by Transmeta and Distributor, (ii) fails to meet
reasonable credit or financial requirements established by Transmeta, including
any limitations on allowable credit, or (iii) otherwise fails to comply with the
terms and conditions of this Agreement. Transmeta also reserves the right to
discontinue the manufacture or distribution of any or all Transmeta Products at
any time (with at least 30 days written notice to Distributor and to offer to
Distributor an End of Life Buy a.k.a. EOL on such terms and conditions as
Transmeta, in its sole discretion, shall specify in an End of Life Buy Letter),
and to cancel any orders outside of the 30-day notice period for such
discontinued Transmeta Products without liability of any kind to Distributor or
to any other person. No such cancellation, refusal or delay will be deemed a
termination (unless Transmeta so advises Distributor) or breach of this
Agreement by Transmeta.

       5. Prices, License Fees and Payment.

              (a) Prices and License Fees. During the term of this Agreement,
Transmeta shall inform Distributor as to current prices and license fees to
Distributor for Transmeta Products. Transmeta may change its prices and license
fees to Distributor from time to time upon at least thirty (30) days prior
written notice.

                                      -5-
<PAGE>

              (b) Price and License Fees Increase. In the event Transmeta
increases the price or license fees to Distributor for any Transmeta Product,
the increase shall apply to: any order received by Transmeta after the effective
date of the increase; and any order or portion thereof to be shipped after the
effective date of the increase regardless of the date the order was received;
provided, however, that any order or portion thereof transmitted by Distributor
prior to Transmeta's announcement of the increase and affected thereby, may be
cancelled without penalty by Distributor by written notice to Transmeta within
ten (10) days of such announcement.

              (c) Price and License Fee Decrease. In the event that Transmeta
decreases the price or license fee to Distributor for any Transmeta Product, the
decrease shall apply to all units of such product in Distributor's inventory
that are still new as of the effective date of the decrease, and that had been
shipped to Distributor no more than ninety (90) days prior to such effective
date. For each unit of product as to which this section applies, Distributor
will receive a credit against the price or license fee of a subsequent unit
purchased from Transmeta within ninety (90) days of the effective date of the
price or license fee decrease.

              (d) Taxes, Tariffs, Fees. Transmeta's prices and license fees do
not include any national, state or local sales, use, value added or other taxes,
customs duties, or similar tariffs and fees which Transmeta may be required to
pay or collect upon the delivery of Transmeta Products or upon collection of the
prices and license fees or otherwise. Should any tax or levy be made,
Distributor agrees to pay such tax or levy and indemnify Transmeta for any claim
for such tax or levy demanded. Distributor represents and warrants to Transmeta
that all Transmeta Products acquired hereunder are for redistribution in the
ordinary course of Distributor's business, and Distributor agrees to provide
Transmeta with appropriate resale certificate numbers and other documentation
satisfactory to the applicable taxing authorities to substantiate any claim of
exemption from any such taxes or fees. Distributor will pay any withholding
taxes required by applicable law. Distributor will supply Transmeta with
evidence of such payment of withholding tax, in a form acceptable to Transmeta
to meet the requirements for claiming foreign tax credits on Transmeta's federal
income tax return.

              (e) Payment Terms. All payments shall be made in United States
dollars, free of any currency control or other restrictions to Transmeta at the
address designated by Transmeta. Unless otherwise agreed by Transmeta in
writing, at the time of submission of any order for Transmeta Products
hereunder, Distributor will either:

                     (i) Cash Payment. Pay by certified check or wire transfer
to a bank account designated by Transmeta the amount of the aggregate prices and
license fees of the Transmeta Products ordered (plus any applicable taxes,
shipping and other charges); or

                     (ii) Letter of Credit Payment. Cause to be issued by a bank
acceptable to Transmeta, and confirmed by a bank designated by Transmeta, one or
more irrevocable letters of credit to be equal to the aggregate prices and
license fees of the Transmeta Products ordered (plus any applicable taxes,
shipping and other charges) and to provide for payment at sight upon
presentation of Transmeta's invoices and receipted shipping documents evidencing
delivery of the invoiced Transmeta Products to the carrier or freight forwarder.

              (f) Credit Terms. At Transmeta's option, shipments may be made on
Transmeta's credit terms in effect at the time an order is accepted. Transmeta
reserves the right, upon written notice to Distributor, to declare all sums
immediately due and payable in the event of a breach by Distributor of any of
its obligations to Transmeta, including the failure of

                                      -6-
<PAGE>

Distributor to comply with credit terms. Furthermore, Transmeta reserves the
right at all times either generally or with respect to any specific order by
Distributor to vary, change or limit the amount or duration of credit to be
allowed to Distributor. Distributor agrees to pay for Transmeta Products as
invoiced.

              (g) Interest. Interest shall accrue on any delinquent amounts owed
by Distributor for Transmeta Products at the lesser of eighteen percent (18%)
per annum or the maximum rate permitted by applicable usury law.

              (h) No Setoff. Distributor will not setoff or offset against
Transmeta's invoices amounts that Distributor claims are due to it. Distributor
will bring any claims or causes of action it may have in a separate action and
waives any right it may have to offset, setoff or withhold payment for Transmeta
Products delivered by Transmeta. Distributor will notify Transmeta in writing of
any claims or causes of action it may have. Transmeta will respond to an such
written documentation within thirty (30) days.

       6. Shipment, Risk of Loss and Delivery.

              (a) Shipment. All Transmeta Products will be shipped by Transmeta
Ex-Works Factory (as defined in I.C.C. document 350), Transmeta's point of
shipment. Shipments will be made to Distributor's identified warehouse
facilities or freight forwarder, subject to approval in writing by Transmeta in
advance of shipment. Transmeta will specify its point of shipment, which may
change from time to time. Unless specified in Distributor's order, Transmeta
will select the mode of shipment and the carrier. Distributor will arrange, be
responsible for and pay all packing, shipping, freight and insurance charges
from Transmeta's point of shipment to Distributor.

              (b) Title and Risk of Loss. Title (except to the extent Transmeta
Products contain or consist of software) and all risk of loss of or damage to
Transmeta Products will pass to Distributor upon delivery by Transmeta to the
carrier, freight forwarder or Distributor, whichever first occurs.

              (c) Partial Delivery. Unless Distributor clearly advises Transmeta
to the contrary in writing, Transmeta may make partial shipments on account of
Distributor's orders, to be separately invoiced and paid for when due. Delay in
delivery of any installment shall not relieve Distributor of its obligation to
accept the remaining deliveries.

              (d) Delivery Schedule; Delays. Transmeta will use reasonable
efforts to meet Distributor's requested delivery schedules for Transmeta
Products, but Transmeta reserves the right to refuse, cancel or delay shipment
to Distributor when Distributor's credit is impaired, when Distributor is
delinquent in payments or fails to meet other credit or financial requirements
established by Transmeta, or when Distributor has failed to perform its
obligations under this Agreement. Should orders for Transmeta Products exceed
Transmeta's available inventory, Transmeta will allocate its available inventory
and make deliveries on a basis Transmeta deems equitable, in its sole
discretion, and without liability to Distributor on account of the method of
allocation chosen or its implementation. In any event, Transmeta will not be
liable for any damages, direct, consequential, special or otherwise, to
Distributor or to any other person for failure to deliver or for any delay or
error in delivery of Transmeta Products for any reason whatsoever.

       7. Distributor Determines Its Own Prices and License Fees.

                                      -7-
<PAGE>

              Although Transmeta may publish suggested wholesale or retail
prices, these are suggestions only and Distributor will be entirely free to
determine the actual prices and license fees at which Transmeta Products will be
sold or licensed to its customers.

       8. Trademarks, Trade Names, Logos, Designations and Copyrights.

              (a) Use During Agreement. During the term of this Agreement and
subject to the terms and conditions specified herein, Transmeta grants to
Distributor a nonexclusive, nontransferable, limited license to use, in the
Territory, Transmeta's trademarks, trade names, logos and designations as set
forth on Exhibit F only as necessary for Distributor to fulfill its obligations
hereunder. Distributor's use of such trademarks, trade names, logos and
designations will be in accordance with Transmeta's policies in effect from time
to time, including but not limited to trademark usage and cooperative
advertising policies. Transmeta's current trademark use policy is attached in
Exhibit F. Changes to this trademark use policy, that Transmeta in its sole
discretion will specify, shall be effective upon thirty (30) days' written
notice to Distributor. Distributor agrees not to attach any additional
trademarks, trade names, logos or designations to any Transmeta Product.
Distributor further agrees not to use any Transmeta trademark, trade name, logo
or designation in connection with any non-Transmeta Product. Transmeta reserves
the right to review planned uses of its trademarks, trade names, logos and
designations to confirm that they are within the guidelines, prior to usage of
such trademarks by Distributor.

              (b) Copyright and Trademark Notices. Distributor will include on
each Transmeta Product that it distributes, and on all containers and storage
media therefor, all trademark, copyright and other notices of proprietary rights
included by Transmeta on such Transmeta Product. Distributor agrees not to
alter, erase, deface or overprint any such notice on anything provided by
Transmeta. Distributor also will include the appropriate trademark notices when
referring to any Transmeta Product in advertising and promotional materials.

              (c) Distributor Does Not Acquire Proprietary Rights. Distributor
has paid no consideration for the use of Transmeta's trademarks, trade names,
logos, designations or copyrights, and nothing contained in this Agreement will
give Distributor any right, title or interest in any of them. Distributor
acknowledges that Transmeta owns and retains all trademarks, trade names, logos,
designations, copyrights and other proprietary rights in or associated with
Transmeta Products, and agrees that it will not at any time during or after this
Agreement assert or claim any interest in or do anything that may adversely
affect the validity of any trademark, trade name, logo, designation or copyright
belonging to or licensed to Transmeta (including, without limitation any act or
assistance to any act, which may infringe or lead to the infringement of any of
Transmeta's proprietary rights).

              (d) No Continuing Rights. Upon expiration or termination of this
Agreement, Distributor will immediately cease all display, advertising and use
of all Transmeta trademarks, trade names, logos and designations and will not
thereafter use, advertise or display any trademark, trade name, logo or
designation which is, or any part of which is, similar to or confusing with any
trademark, trade name, logo or designation associated with any Transmeta
Product.

              (e) Obligation to Protect. Distributor agrees to use reasonable
efforts to protect Transmeta's proprietary rights and to cooperate at
Distributor's expense in Transmeta's efforts to protect its proprietary rights.
Distributor agrees to promptly notify Transmeta of any known or suspected breach
of Transmeta's proprietary rights that comes to Distributor's attention.

       9. Assignment.

                                      -8-
<PAGE>

              Transmeta has entered into this Agreement with Distributor because
of Distributor's commitments in this Agreement, and further because of
Transmeta's confidence in Distributor, which confidence is personal in nature.
This Agreement will not be assignable by either party, and Distributor may not
delegate its duties hereunder without the prior written consent of Transmeta;
provided, however, that Transmeta may (i) assign this Agreement to a subsidiary
or entity controlling, controlled by or under common control with Transmeta, or
(ii) as part of a corporate restructuring, reorganization, divestiture, merger,
acquisition or sale or other transfer of all or substantially all of the assets
of Transmeta, assign the rights and delegate the obligations of this Agreement
without the consent of Distributor. The provisions hereof shall be binding upon
and inure to the benefit of the parties, their successors and permitted assigns.
Any attempt to assign this Agreement in derogation of this Section 9 will be
null and void.

       10. Duration and Termination of Agreement.

              (a) Term. This Agreement will begin on the Effective Date and will
continue until December 31, 2002 unless terminated earlier in accordance with
the provisions hereof. Nothing shall be interpreted as requiring either party to
renew or extend this Agreement.

              (b) Transmeta Termination For Cause. Transmeta may terminate this
Agreement at any time prior to the expiration of its stated term in the event
that:

                     (i) Distributor defaults in any payment due to Transmeta
and such default continues unremedied for a period of ten (10) days following
written notice of such default;

                     (ii) Distributor fails to perform any other obligation,
warranty, duty or responsibility or is in default with respect to any term or
condition undertaken by Distributor under this Agreement and such failure or
default continues unremedied for a period of twenty (20) days following written
notice of such failure or default;

                     (iii) Distributor is merged, acquired, consolidated, sells
all or substantially all of its assets, or implements or suffers any substantial
change in management or control; or

                     (iv) Any bill or regulation granting Distributor
extracontractual compensation upon termination or expiration of this Agreement
is introduced into or passed by the legislature or other governing body of the
Territory.

              (c) Termination At Will. Distributor or Transmeta may terminate
this Agreement at will, at any time during the term of this Agreement, with or
without cause, by written notice given to the other party not less than sixty
(60) days prior to the effective date of such termination.

              (d) Automatic Termination. This Agreement terminates
automatically, with no further act or action of either party, if: (1) a receiver
or trustee is appointed for Distributor or its property or Distributor is
adjudged bankrupt, (2) Distributor makes an assignment for the benefit of its
creditors, (3) Distributor becomes the subject of a voluntary petition in
bankruptcy or any voluntary proceeding relating to insolvency, receivership,
liquidation, or composition for the benefit of creditors, (4) Distributor
becomes the subject of an involuntary petition in bankruptcy or any involuntary
proceeding relating to insolvency, receivership, liquidation, or composition for
the benefit of creditors, if such petition or proceeding is not dismissed within
sixty (60) days of filing, or (5) Distributor is liquidated or dissolved.

                                      -9-
<PAGE>

              (e) Orders After Termination Notice. In the event that any notice
of termination of this Agreement is given, Transmeta will be entitled to reject
all or part of any orders received from Distributor after notice but prior to
the effective date of termination if availability of Transmeta Products is
insufficient at that time to meet the needs of Transmeta and its customers
fully. Notwithstanding any credit terms made available to Distributor prior to
such notice, any Transmeta Products shipped thereafter shall be paid for by
certified or cashier's check prior to shipment.

              (f) Effect of Termination or Expiration. Upon termination or
expiration of this Agreement:

                     (i) Transmeta, at its option and sole discretion, may
reacquire any or all Transmeta Products then in Distributor's possession at
prices and refunded license fees not greater than the prices and license fees
paid by Distributor for such Products (or, if the Products are not in unopened
factory sealed boxes, eighty percent (80%) of current published price on
Standard Distributor Price List. Upon receipt of any Transmeta Products so
reacquired from Distributor, Transmeta shall issue an appropriate credit to
Distributor's account.

                     (ii) The due dates of all outstanding invoices to
Distributor for Transmeta Products automatically will be accelerated so they
become due and payable on the effective date of termination, even if longer
terms had been provided previously. All orders or portions thereof remaining
unshipped as of the effective date of termination shall automatically be
cancelled.

                     (iii) For a period of two (2) years after the date of
termination or expiration, Distributor shall make available to Transmeta for
inspection and copying all books and records of Distributor that pertain to
Distributor's performance of and compliance with its obligations, warranties and
representations under this Agreement.

                     (iv) Distributor shall cease using any Transmeta trademark,
trade name, trade dress, service mark, service name, logo or designation.

              (g) No Damages For Termination or Expiration. NEITHER TRANSMETA
NOR DISTRIBUTOR SHALL BE LIABLE TO THE OTHER FOR DAMAGES OF ANY KIND, INCLUDING
INCIDENTAL OR CONSEQUENTIAL DAMAGES, ON ACCOUNT OF THE TERMINATION OR EXPIRATION
OF THIS AGREEMENT IN ACCORDANCE WITH THIS SECTION 10. DISTRIBUTOR WAIVES ANY
RIGHT IT MAY HAVE TO RECEIVE ANY COMPENSATION OR REPARATIONS ON TERMINATION OR
EXPIRATION OF THIS AGREEMENT UNDER THE LAW OF THE TERRITORY OR OTHERWISE, OTHER
THAN AS EXPRESSLY PROVIDED IN THIS AGREEMENT. Neither Transmeta nor Distributor
will be liable to the other on account of termination or expiration of this
Agreement for reimbursement or damages for the loss of goodwill, prospective
profits or anticipated income, or on account of any expenditures, investments,
leases or commitments made by either Transmeta or Distributor or for any other
reason whatsoever based upon or growing out of such termination or expiration.
Distributor acknowledges that (i) Distributor has no expectation and has
received no assurances that any investment by Distributor in the promotion of
Transmeta Products will be recovered or recouped or that Distributor will obtain
any anticipated amount of profits by virtue of this Agreement, and (ii)
Distributor will not have or acquire by virtue of this Agreement or otherwise
any vested, proprietary or other right in the promotion of Transmeta Products or
in "goodwill" created by its efforts hereunder. THE PARTIES ACKNOWLEDGE THAT
THIS SECTION HAS BEEN INCLUDED AS A MATERIAL INDUCEMENT FOR TRANSMETA TO ENTER
INTO THIS AGREEMENT AND THAT TRANSMETA WOULD

                                      -10-
<PAGE>

NOT HAVE ENTERED INTO THIS AGREEMENT BUT FOR THE LIMITATIONS OF LIABILITY AS SET
FORTH HEREIN.

              (h) Survival. Transmeta's rights and Distributor's obligations to
pay Transmeta all amounts due hereunder, as well as Distributor's obligations
under Sections 3(b), 3(c), 5(d), 5(e), 5(f), 5(g), 5(h), 5(i), 8, 12, 13, 14,
15, 16(c), 16(d), 16(g), 16(h), 16(i) and 16(j) shall survive termination or
expiration of this Agreement.

       11. Relationship of the Parties.

              Distributor's relationship with Transmeta during the term of this
Agreement will be that of an independent contractor. Nothing in this Agreement
will be construed as creating or implying a partnership, joint venture,
employment, franchise, agency, or any other form of legal association (other
than as expressly set forth herein) between the parties. Distributor will not
have, and will not represent that it has, any power, right or authority to bind
Transmeta, or to assume or create any obligation or responsibility, express or
implied, on behalf of Transmeta or in Transmeta's name, except as herein
expressly provided.

       12. Indemnification.

              (a) Indemnification of Distributor. Transmeta will, at its
expense, defend Distributor against and, subject to the limitations set forth
herein, pay all costs and damages made in settlement or awarded against
Distributor resulting from any claim based on an allegation that a Transmeta
Product as supplied by Transmeta hereunder infringes a U.S. patent or copyright
of a third party, provided that Distributor (i) gives Transmeta prompt written
notice of any such claim, (ii) allows Transmeta to direct the defense and
settlement of the claims, and (iii) provides Transmeta with the information and
assistance necessary for the defense and settlement of the claim. If a final
injunction is obtained in an action based on any such claim against
Distributor's use of a Transmeta Product by reason of such infringement, or if
in Transmeta's opinion such an injunction is likely to be obtained, Transmeta
may, at its sole option, either (i) obtain for Distributor the right to continue
using the Transmeta Product, (ii) replace or modify the Transmeta Product so
that it becomes noninfringing, or (iii) if neither (i) nor (ii) can be
reasonably effected by Transmeta, credit to Distributor the prices and license
fees paid for the Transmeta Product during the twelve (12) months prior to the
credit, provided that such Transmeta Products are returned to Transmeta in an
undamaged condition.

              (b) No Combination Claims. Notwithstanding subpart (a) of this
Section 12, Transmeta shall not be liable to Distributor for any claim arising
from or based upon the combination, operation or use of any Transmeta Product
with equipment, data, programming or materials not supplied by Transmeta, or
arising from any alteration or modification of Transmeta Products.

              (c) Limitation. THE PROVISIONS OF THIS SECTION SET FORTH THE
ENTIRE LIABILITY OF TRANSMETA AND THE SOLE REMEDIES OF DISTRIBUTOR WITH RESPECT
TO INFRINGEMENT AND ALLEGATIONS OF INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS
OR OTHER PROPRIETARY RIGHTS OF ANY KIND IN CONNECTION WITH THE INSTALLATION,
OPERATION, DESIGN, DISTRIBUTION OR USE OF TRANSMETA PRODUCTS.

              (d) Indemnification of Transmeta. Distributor agrees to indemnify
Transmeta (including paying all reasonable attorneys' fees and costs of
litigation) against and hold Transmeta harmless from, any and all claims by any
other party resulting from Distributor's acts

                                      -11-
<PAGE>

(other than the mere marketing of Transmeta Products), omissions or
misrepresentations, regardless of the form of action.

       13. Limited Warranty; Disclaimer of Warranties.

              (a) Limited Warranty. TRANSMETA MAKES NO WARRANTIES OR
REPRESENTATIONS AS TO PERFORMANCE OF TRANSMETA PRODUCTS OR AS TO SERVICE TO
DISTRIBUTOR OR TO ANY OTHER PERSON, EXCEPT AS SET FORTH IN TRANSMETA'S LIMITED
WARRANTY ACCOMPANYING DELIVERY OF TRANSMETA PRODUCTS. TRANSMETA RESERVES THE
RIGHT TO CHANGE THE WARRANTY AND SERVICE POLICY SET FORTH IN SUCH LIMITED
WARRANTY, OR OTHERWISE, AT ANY TIME, WITHOUT FURTHER NOTICE AND WITHOUT
LIABILITY TO DISTRIBUTOR OR TO ANY OTHER PERSON.

              (b) Disclaimer of Warranties. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ALL IMPLIED WARRANTIES, INCLUDING BUT NOT LIMITED TO IMPLIED
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND
NONINFRINGEMENT, ARE HEREBY DISCLAIMED BY TRANSMETA.

              (c) Distributor Warranty. Distributor will make no warranty,
guarantee or representation, whether written or oral, on Transmeta's behalf.

       14. Limited Liability.

              (a) REGARDLESS WHETHER ANY REMEDY SET FORTH HEREIN OR IN
TRANSMETA'S LIMITED WARRANTY ACCOMPANYING DELIVERY OF TRANSMETA PRODUCTS FAILS
OF ITS ESSENTIAL PURPOSE OR OTHERWISE, TRANSMETA WILL NOT BE LIABLE FOR ANY LOST
PROFITS OR FOR ANY DIRECT, INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR
OTHER SPECIAL DAMAGES SUFFERED BY DISTRIBUTOR, ITS CUSTOMERS OR OTHERS ARISING
OUT OF OR RELATED TO THIS AGREEMENT OR TRANSMETA PRODUCTS, FOR ALL CAUSES OF
ACTION OF ANY KIND (INCLUDING TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY AND
BREACH OF WARRANTY) EVEN IF TRANSMETA HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES.

              (b) EXCEPT FOR LIABILITY FOR PERSONAL INJURY OR PROPERTY DAMAGE
ARISING FROM TRANSMETA'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, IN NO EVENT
WILL TRANSMETA'S TOTAL CUMULATIVE LIABILITY IN CONNECTION WITH THIS AGREEMENT OR
TRANSMETA PRODUCTS, FROM ALL CAUSES OF ACTION OF ANY KIND, INCLUDING TORT,
CONTRACT, NEGLIGENCE, STRICT LIABILITY AND BREACH OF WARRANTY, EXCEED THE
AGGREGATE NET AMOUNT PAID BY DISTRIBUTOR HEREUNDER DURING THE SIX (6) MONTHS
PRIOR TO THE DATE SUCH CAUSE OF ACTION AROSE.

              (c) Distributor agrees that the limitations of liability and
disclaimers of warranty set forth in this Agreement will apply regardless of
whether Transmeta has tendered delivery of Transmeta Products or Distributor has
accepted any Transmeta Product. Distributor acknowledges that Transmeta has set
its prices and license fees and entered into this Agreement in reliance on the
disclaimers of liability, the disclaimers of warranty and the limitations of
liability set forth in this Agreement and that the same form an essential basis
of the bargain between the parties.

       15. Proprietary Information.

                                      -12-
<PAGE>

              (a) Obligation. Distributor acknowledges that in the course of
performing its obligations under this Agreement, it may obtain information
relating to Transmeta and Transmeta Products which is of a confidential and
proprietary nature to Transmeta ("Proprietary Information"). Such Proprietary
Information includes without limitation trade secrets, know-how, formulas,
compositions of matter, inventions, techniques, processes, programs, diagrams,
schematics, customer and financial information and sales and marketing plans.
Distributor will (a) use such Proprietary Information only in connection with
fulfilling its obligations under this Agreement, (b) during the term of this
Agreement and for a period of seven (7) years thereafter, hold such Proprietary
Information in strict confidence and exercise due care with respect to its
handling and protection of such Proprietary Information, consistent with its own
policies concerning protection of its own proprietary and/or trade secret
information and (c) disclose, divulge or publish the same only to such of its
employees or representatives as are Qualified Personnel (as defined below) and
to no other person or entity, whether for its own benefit or for the benefit of
any other person or entity. Distributor further agrees to return all copies of
all Proprietary Information in its possession, control or custody immediately
upon termination or expiration of this Agreement. As used herein, the term
"Qualified Personnel" means such employees and representatives of Distributor
who (i) have a need to know or have access to Transmeta's Proprietary
Information in order for such employees or representatives to carry out the
purposes of this Agreement and (ii) have executed nondisclosure agreements
binding them not to use or disclose such Proprietary Information except as
permitted herein.

              (b) Exceptions. The obligations contained in Section 15(a) will
not apply to Proprietary Information which (a) is or becomes public knowledge
without the fault or action of Distributor, (b) is received by Distributor from
a source other than Transmeta, which source received the information without
violation of any confidentiality restriction, (c) is independently developed by
Distributor without violation of any confidentiality restriction or (d) is or
becomes available to Distributor on an unrestricted basis from Transmeta.

       16. General.

              (a) Waiver. The waiver by either party of any default by the other
shall not waive subsequent defaults of the same or different kind.

              (b) Notices. All notices and demands hereunder will be in writing
and will be served by personal service, mail or confirmed facsimile transmission
at the address of the receiving party set forth in this Agreement (or at such
different address as may be designated by such party by written notice to the
other party). All notices or demands by mail shall be by certified or registered
airmail, return receipt requested, and shall be deemed complete upon receipt.

              (c) Attorneys' Fees. In the event any litigation is brought by
either party in connection with this Agreement, the prevailing party in such
litigation shall be entitled to recover from the other party all the costs,
attorneys' fees and other expenses incurred by such prevailing party in the
litigation.

              (d) Execution of Agreement, Controlling Law, Jurisdiction and
Severability. This Agreement will become effective only after it has been signed
by Distributor and has been accepted by Transmeta at its principal place of
business, and its effective date shall be the date on which it is signed by
Transmeta. It shall be governed by and construed in accordance with the laws of
the State of California, excluding the Convention on Contracts for the
International Sale of Goods and that body of law known as conflicts of laws. Any
suit hereunder will be brought in the federal or state courts in the Northern
District of California and Distributor hereby submits to the personal
jurisdiction thereof. The English-language version of this Agreement controls
when

                                      -13-
<PAGE>

interpreting this Agreement. Distributor consents to the enforcement of any
judgment rendered in the United States in any action between Distributor and
Transmeta. Any and all defenses concerning the validity and enforceability of
the judgment shall be deemed waived unless first raised in a court of competent
jurisdiction in the United States.

              (e) Severability. In the event that any of the provisions of this
Agreement shall be held by a court or other tribunal of competent jurisdiction
to be unenforceable, such provision will be enforced to the maximum extent
permissible and the remaining portions of this Agreement shall remain in full
force and effect.

              (f) Force Majeure. Transmeta shall not be responsible for any
failure to perform due to unforeseen circumstances or to causes beyond
Transmeta's reasonable control, including but not limited to acts of God, war,
riot, embargoes, acts of civil or military authorities, fire, floods, accidents,
strikes, failure to obtain export licenses or shortages of transportation,
facilities, fuel, energy, labor or materials. In the event of any such delay,
Transmeta may defer the delivery date of orders for Transmeta Products for a
period equal to the time of such delay.

              (g) Equitable Relief. Distributor acknowledges that any breach of
its obligations under this Agreement with respect to the proprietary rights or
confidential information of Transmeta will cause Transmeta irreparable injury
for which there are inadequate remedies at law, and therefore Transmeta will be
entitled to equitable relief in addition to all other remedies provided by this
Agreement or available at law.

              (h) Entire Agreement. This Agreement constitutes the complete and
exclusive agreement between the parties pertaining to the subject matter hereof,
and supersedes in their entirety any and all written or oral agreements
previously existing between the parties with respect to such subject matter.
Distributor acknowledges that it is not entering into this Agreement on the
basis of any representations not expressly contained herein. Any modifications
of this Agreement must be in writing and signed by both parties hereto. Any such
modification shall be binding upon Transmeta only if and when signed by one of
its duly authorized officers.

              (i) Release of Claims. Any and all claims against Transmeta
arising under prior agreements, whether oral or in writing, between Transmeta
and Distributor are waived and released-by Distributor by acceptance of this
Agreement.

              (j) Choice of Language. The original of this Agreement has been
written in English. Distributor waives any right it may have under the law of
Distributor's Territory to have this Agreement written in the language of
Distributor's Territory.

              (k) Due Execution. The party executing this Agreement represents
and warrants that he or she has been duly authorized under Distributor's charter
documents and applicable law to execute this Agreement on behalf of Distributor.

              (l) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

              (m) Captions. The captions to sections of this Agreement have been
inserted for identification and reference purposes only and shall not be used to
construe or interpret this Agreement.

                                      -14-
<PAGE>

       IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective on the date specified below.

TRANSMETA CORPORATION

Signature: /s/ Merle McClendon
           -----------------------------------

Printed Name: Merle McClendon
              --------------------------------

Title: CFO
       ---------------------------------------

Date: 9/12/00
      ----------------------------------------

DISTRIBUTOR

Signature: /s/ Tony Chou
           -----------------------------------

Printed Name: Tony Chou
              --------------------------------

Title: General Manager
       ---------------------------------------

Date: Sep. 17 `00
      ----------------------------------------

                                      -15-
<PAGE>

                                    EXHIBIT A

                               TRANSMETA PRODUCTS

Any products that appear on the Worldwide Distributor Price List.

Transmeta                                   Distributor

Signature: /s/ Merle McClendon              Signature: /s/ Tony Chou
           ---------------------------                 -------------------------

                                      -16-
<PAGE>

                                    EXHIBIT B

                                    TERRITORY

Taiwan, Hong Kong, China

Transmeta                                   Distributor

Signature: /s/ Merle McClendon              Signature: /s/ Tony Chou
           ---------------------------                 -------------------------

                                      -17-
<PAGE>

                                    EXHIBIT C

                               TRANSMETA ACCOUNTS

All Tier 1 Notebook Manufacturers.

Tier 1 Notebook Manufacturers include but are not limited to the following:

         Compaq
         Acer
         Hewlett Packard
         IBM
         Sony
         Fujitsu
         Gateway
         Dell
         NEC
         Hitachi
         Quanta

Transmeta                                   Distributor

Signature: /s/ Merle McClendon              Signature: /s/ Tony Chou
           ---------------------------                 -------------------------

                                      -18-
<PAGE>

                                    EXHIBIT D

                                 MINIMUM QUOTAS

Year 2000
Quotas will be equal to Transmeta Distributor Forecast

Transmeta                                   Distributor

Signature: /s/ Merle McClendon              Signature: /s/ Tony Chou
           ---------------------------                 -------------------------

                                      -19-
<PAGE>

                                    EXHIBIT E

                               COMPETING PRODUCTS

Any microprocessor, microcontroller, processor, control unit or other central
processing unit that is designed, manufactured or distributed by or on behalf of
Intel Corporation, National Semiconductor Corporation or Advanced Micro Devices
Inc. or any of their subsidiaries or affiliates.

Transmeta                                   Distributor

Signature: /s/ Merle McClendon              Signature: /s/ Tony Chou
           ---------------------------                 -------------------------

                                      -20-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00035-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00035-of-00352.parquet"}]]