Document:

Exhibit 10.39

                                   ALLONGE TO
                               EQUIPMENT LOAN NOTE

This modification made this 8th day of December, 2000 to the Equipment Loan Note
dated June 10, 1999,  payable to the order of SUMMIT BANK  ("Note") and to which
Note these presents are so firmly affixed as to become a part thereof.

Notwithstanding  anything  to the  contrary  set  forth  in the  Note,  the last
sentence  of the  second  paragraph  of the Note is  hereby  amended  to read as
follows:

          The term "Conversion  Date" is defined as a date which is no more than
          twenty-one (21) months from the date hereof.

Except as specifically  modified herein,  all of the terms and conditions of the
Note shall remain in full force and effect and any term in initial  capitals and
not  otherwise  defined  herein shall have the meaning  ascribed  thereto in the
Note.

Witness:                                     OSTEOTECH, INC.
                                             A Delaware Corporation

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

Witness:                                     OSTEOTECH INVESTMENT CORPORATION
                                             A New Jersey Corporation

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

Witness:                                     CAM IMPLANTS, INC.
                                             A Colorado Corporation

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

Signatures continued ......

                                      E-10

<PAGE>

 .................. continuation of signatures to Allonge to Equipment Loan Note

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

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

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

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

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

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

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

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

Witness:                                     OST DEVELOPPEMENT
                                             A Corporation of France

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

                                      E-11Exhibit 10.40

                             DISTRIBUTION AGREEMENT

This  Distribution  Agreement  (the  "Agreement")  is made as of this ___ day of
February,  2001,  by and between  ALPHATEC  MANUFACTURING,  INC.,  a  California
corporation (hereinafter called the "Company"),  and OSTEOTECH, INC., a Delaware
corporation (hereinafter called "Distributor").

The products covered by this Agreement  include the private label version of the
Mirage(TM) top  tightening  spine  implants and  instrument  system  depicted in
Schedule A and the private label version of the Deltaloc(TM)  anterior  cervical
implants and instrument system depicted in Schedule B (collectively  referred to
as the "PLP"). Other product lines may be added from time to time and designated
by the Company to be covered hereunder, as set forth herein.

The Company and Distributor hereby agree as follows:

      1. PURCHASES BY DISTRIBUTOR

         1.1    The Company hereby grants  Distributor the right to purchase the
                PLP upon the terms hereinafter provided.

         1.2    Commencing  with the fiscal quarter after the Company  completes
                fulfillment  of  Distributor's   initial  order,  and  for  each
                subsequent  fiscal  quarter  during  the  initial  term  of this
                Agreement and one renewal term of this  Agreement,  as specified
                in Section 8.1;***

                (a)  ***

                (b)  backorders are defined as failure to deliver any portion of
                     a purchase order in accordance with the timeframe specified
                     on  such  purchase  order  or,  in the  absence  of  such a
                     timeframe,  in accordance with the timeframes  specified in
                     Schedule D.

                (c)  ***

                (d)  Distributor's  initial  purchase  order  pursuant  to  this
                     Agreement  will be submitted by  Distributor to the Company
                     no later than five (5) days after this  Agreement is signed
                     on behalf of both the Company and Distributor.

--------
***  Indicates the omission of confidential material pursuant to the request for
     confidential treatment made in accordance with Rule 24b-2 under the
     Securities Exchange Act of 1934, as amended. The confidential material is
     being filed separately with the Securities and Exchange Commission.

                                      E-12

<PAGE>

      2. SALES BY DISTRIBUTOR

         2.1    The Company grants  Distributor  the exclusive right to sell the
                PLP  within  the  United  States  and  Canada  (hereinafter  the
                "Area"), provided Distributor:

                (a)  does  not  market  the  PLP to  existing  customers  of the
                     Company  within the Area for as long as such  customers are
                     being actively supplied and serviced by the Company. A list
                     of such existing Company customers is set forth in Schedule
                     F;

                (b)  does not sell or  otherwise  distribute  any PLP for use or
                     resale  outside  of the  Area  without  the  prior  written
                     approval of the Company.

                (c)  uses its best  efforts to  promote  and sell the PLP within
                     the Area.

         2.2    The Company may not offer to any other  distributor(s)  products
                of the Company that are considered to be line  extensions of the
                PLP. Line extensions are defined as products governed by patents
                that define the Deltaloc(TM)and Mirage(TM)systems.

         2.3    ***

         2.4    Distributor  will  have  no   distributorship  or  other  rights
                regarding  products  not  depicted in  Schedules A and B and the
                Company may offer for  distribution  to other  distributors  any
                product  which is not  depicted  in  Schedule A or B;  provided,
                however,  that any line  extension  or  improvement  made by the
                Company to products  which are  depicted in Schedule A or B will
                be available to  Distributor  pursuant to this Agreement for the
                PLP.

         2.5    The Company agrees not to enter into a private label arrangement
                for the PLP in the same  markets with any other  company  during
                the initial term of this  Agreement or any renewal term thereof.
                The  Company   agrees  not  to   distribute   the   Mirage(TM)or
                Deltaloc(TM)branded  product line in any of the markets  covered
                by this  Agreement  through any agents which maintain a national
                distribution organization.

----------
***  Indicates the omission of confidential material pursuant to the request for
     confidential treatment made in accordance with Rule 24b-2 under the
     Securities Exchange Act of 1934, as amended. The confidential material is
     being filed separately with the Securities and Exchange Commission.

                                      E-13

<PAGE>

         2.6    The  Company  will  retain  the   exclusive   right  to  market,
                distribute and sell the  Mirage(TM)and  Deltaloc(TM)systems  and
                tradenames to markets both inside and outside of the Area.

         2.7    The Company will notify Distributor of any new product system it
                develops,  and Distributor will have a right of first refusal to
                enter  into a  distribution  agreement  with  the  Company  with
                respect to such new product system.  Distributor and the Company
                shall  negotiate in good faith  regarding any such  distribution
                agreement.  If such a distribution agreement is not entered into
                between the Company and  Distributor  within ninety (90) days of
                Distributor's  receipt  of the  Company's  notice  of  such  new
                product system,  then Distributor's  right of first refusal with
                respect to such new product system shall expire, and the Company
                shall  be  entitled  to  enter  into  a  distribution  agreement
                concerning such new product system with any other party.

      3. PRODUCTS, INVENTORY AND PRODUCT CHANGES

         3.1    Distributor  agrees to stock and distribute the full line of the
                PLP,  as set  forth  in  Schedules  A and B.  Additional  PLP or
                product lines  designated by the Company at the Company's option
                from time to time may, upon mutual  agreement of Distributor and
                the Company, be distributed pursuant to this Agreement, in which
                case this Agreement will be amended accordingly.

         3.2    All changes to the PLP, other than for custom instruments,  must
                be mutually agreed to by both parties.  The Company will make no
                changes to the PLP without  prior  notification  and approval of
                Distributor.  The Company  will  determine  if any such  changes
                require updated FDA filings.

         3.3    Any  improvements  made  to the PLP  shall  be  covered  by this
                Agreement.  Furthermore,  Distributor  will have the  ability to
                develop  custom  instruments,  specific  to  individual  surgeon
                requests, to support sales of the PLP.

         3.4    Except  as  specified  in  1.2(b),   if  the  Company  has  used
                commercially  reasonable  efforts to fill a properly  authorized
                purchase  order for the PLP the Company  shall have no liability
                for any  failure to supply the PLP ordered by  Distributor.  The
                Company shall make all reasonable efforts to provide Distributor
                advance notice  regarding  potential for failure to complete any
                order in  accordance  with the terms of this  Agreement  and the
                applicable purchase order.  Notwithstanding anything herein, the
                Company  agrees to keep a  quantity  of the full line of the PLP
                available  for  shipment  to  help  meet  increases  in  demand.
                Quantity

                                      E-14

<PAGE>

                shall be defined as a thirty (30) day supply, as calculated from
                the 12 month rolling forecast.

         3.5    The Company  represents and warrants to Distributor that all the
                PLP is designed and manufactured in accordance with all federal,
                state and local laws, rules and regulations.

         3.6    The Company agrees to provide  necessary  instrument  repairs to
                the PLP purchased by Distributor  pursuant to this Agreement for
                a period of two (2) years  from  Distributor's  receipt  of such
                PLP, at no charge to  Distributor,  and to complete such repairs
                within twenty (20) working days of receipt of the PLP item to be
                repaired.  If the  Company  is not  able  to  meet  such  repair
                requirement with respect to any PLP item, the Company authorizes
                Distributor  to  obtain  repair  of  such  item  using  its  own
                resources. The Company will not repair drill bits, taps or other
                cutting  instruments  that may become dull after  repeated  use.
                Distributor  and  the  Company  will  each  be  responsible  for
                shipping  costs  they incur in  shipping  the PLP  purchased  by
                Distributor  pursuant to this  Agreement  between  themselves in
                connection with repairs pursuant to this Section 3.6.

      4. SELLING RESPONSIBILITIES AND REQUIREMENTS

         4.1    Distributor  agrees to  provide  to its  customers  (physicians,
                nurses and  related  hospital  staff) all  relevant  product and
                instrument   indications,   instructions   for  use,   operative
                technique  guides (both video and  written) and package  inserts
                provided  by the  Company,  to  ensure  the  correct  use of the
                Company's  products.  Distributor  additionally agrees to advise
                its customers of any and all  contraindications  which relate to
                the PLP and as  detailed  in the  insert  contained  within  the
                packaging  of each PLP or as detailed  in the written  operative
                technique guide.

         4.2    The Company  agrees to provide  Distributor  with  accurate  and
                complete  FDA filings  specific to the  distributed  PLP.  These
                documents  include,  but are not limited to, the  Mirage(TM) and
                Deltaloc(TM)  510(K)  filings,  Medical Device Reports  (MDR's),
                recalls,  market  withdrawals,  Establishment  Registration  and
                Service  listings,  Establishment  Inspection  reports including
                inspectional  observations responses,  FDA Form 483, and package
                inserts.

         4.3    Distributor   and  the  Company   agree  to  abide  by  all  FDA
                regulations related to manufacturing, marketing and distribution
                requirements,  including applicable QSR regulations. Distributor
                agrees to report to the Company  material  adverse events within
                forty-eight  (48)  hours of  learning  of them and MDR's  within
                seventy-two (72)

                                      E-15

<PAGE>

                hours of their filing.  Distributor  will forward all complaints
                received  related to the  manufacture  or labeling of the PLP to
                the Company. The Company will investigate all such complaints in
                accordance with applicable federal regulations,  and the Company
                will  submit MDR  reports to the FDA as  necessary.  The Company
                will  prepare  and submit any  reports  required  by  applicable
                federal regulations.

         4.4    The  Company  will  provide  necessary  information  to  support
                Distributor's  registration  of the PLP in the United States and
                Canada.

         4.5    Distributor  shall  not  incur  any  liability  on behalf of the
                Company or obligate the Company in any manner.

         4.6    The  Company  will  assist  Distributor  in the  development  of
                marketing materials by providing existing artwork,  photographs,
                test data, training materials, labeling, etc.

         4.7    The Company will provide  Distributor with historical sales data
                on product mix, at the product code level, to aid Distributor in
                developing an appropriate initial inventory order.

         4.8    The  Company  will  provide   assistance  with  initial  product
                training.  Distributor  will be  responsible  for  all  expenses
                associated  with training  with the exception of travel,  meals,
                and lodging for the Company's employees.

      5. PRICE AND PRODUCT CHANGES

         5.1    Distributor   shall  purchase  from  the  Company  each  PLP  in
                accordance with the prices specified on Schedule H.***

      6. SALES FORECAST

         6.1    Pursuant  to  Schedule  D,  Distributor  agrees to  provide  the
                Company with a twelve (12) month  rolling  forecast for the PLP.
                Such  forecasts  will be  provided  monthly,  and  will  provide
                updates to months after the current and two  successive  months.
                Such  forecasts are for production  planning  purposes only, and
                are not  purchase  orders.  Shipments of product will be made to
                Distributor  only on receipt of  approved  purchase  orders from
                Distributor.

----------
***  Indicates the omission of confidential material pursuant to the request for
     confidential treatment made in accordance with Rule 24b-2 under the
     Securities Exchange Act of 1934, as amended. The confidential material is
     being filed separately with the Securities and Exchange Commission.

                                      E-16

<PAGE>

      7. DELIVERY, SHIPMENT, PAYMENT AND RETURNS

         7.1    Delivery shall be ex works  factory/shipping  point.  All orders
                will be shipped via surface  carrier,  usually Federal  Express,
                unless  otherwise  specified  by  Distributor  and agreed by the
                Company. All liability for damage or lost shipments shall be the
                responsibility  of the  carrier  and the  Company  shall have no
                liability therefor. With the exception of the initial order, all
                shortages  or  shipment  discrepancies  must be  reported to the
                Company by Distributor  within ten (10) working days of shipment
                receipt.  Shortages or discrepancies  found in the initial order
                must be reported  within  twenty (20)  working  days of shipment
                receipt.

         7.2    Distributor's net prices and shipping  charges,  insurance costs
                and terms of  payment  shall be set forth on  invoices  from the
                Company,  and all amounts  invoiced shall be due net thirty (30)
                days  from date of the  receipt  of the PLP by  Distributor.  If
                Distributor  fails to pay invoices  when due,  the  Company,  in
                addition to any other  action it may take under this  Agreement,
                may  suspend  credit and ship the PLP to  Distributor  only upon
                receipt of payment in advance or by C.O.D.

         7.3    ***

         7.4    The PLP may not be returned without prior written consent of the
                Company.  The Company will only accept  returns due to defective
                product.  The  Company  and  Distributor  will  agree on testing
                methods and  specifications  which will be used to  determine if
                the  PLP   shipped   to   Distributor   is   within   applicable
                specifications.

      8. TERMS

         8.1    The  initial  term of this  Agreement  shall  commence  once the
                Company has delivered the completed  initial  purchase  order to
                Distributor  and  shall  continue  for a period of two (2) years
                thereafter.   This  Agreement  will   automatically   renew  for
                subsequent terms of two (2) years each unless, no later than six
                (6) months  prior to the  expiration  of the initial term or any
                renewal term of this Agreement, either party gives notice to the
                other party of its desire not to renew this Agreement,  in which
                event this Agreement shall expire, and be of no further force or
                effect,  upon the  expiration of the term of this Agreement then
                in effect.

----------
***  Indicates the omission of confidential material pursuant to the request for
     confidential treatment made in accordance with Rule 24b-2 under the
     Securities Exchange Act of 1934, as amended. The confidential material is
     being filed separately with the Securities and Exchange Commission.

                                      E-17

<PAGE>

         8.2    This Agreement can be modified only by mutual written  agreement
                of both parties.

         8.3    The first order from  Distributor will be the PLP version of the
                Mirage(TM)and    Deltaloc(TM)systems,     consisting    of    30
                Mirage(TM)systems and 50  Deltaloc(TM)systems  and an additional
                quantity of  implants  and  instruments  to  establish  stocking
                inventory.

         8.4    ***

      9. INDEMNIFICATION

         9.1    Indemnification  by  Company.   The  Company  hereby  agrees  to
                indemnify, defend and hold Distributor harmless from any damages
                awarded  against  Distributor  (including,  without  limitation,
                reasonable costs and legal fees incurred by Distributor) arising
                out of (i) any claims, liabilities, losses or expenses caused by
                the Company's breach of any of its obligations,  representations
                or  warranties  made  in this  Agreement  or  (ii)  any  claims,
                liability,  losses or expenses  arising from  product  liability
                claims,  or (iii) any suit,  claim or other legal action ("Legal
                Action")  brought by a third party that alleges (a) that the PLP
                infringes any patent,  or trade secrets of a third party located
                in the  Area or (b) that  the  Mirage(TM)or  Deltaloc(TM)systems
                infringe any copyright, trademark,  servicemark, patent or trade
                secrets of a third party in the Area or (c)  personal  injury or
                death  resulting from the use of the PLP. If the PLP is found to
                infringe  any such third party  intellectual  property  right in
                such a Legal Action,  the Company,  at its sole  discretion  and
                expense,  may (a) obtain a license from such third party for the
                benefit of Distributor; (b) replace or modify the PLP so that it
                is no longer  infringing;  or (c) if neither of the foregoing is
                commercially feasible,  terminate this Agreement with no further
                liability to Distributor.

         9.2    Indemnification  by  Distributor.  Distributor  hereby agrees to
                indemnify,  defend  and  hold  the  Company  harmless  from  any
                damages,  costs or liabilities  (including,  without limitation,
                any reasonable  costs or legal fees incurred by Company) arising
                out of any claims,  liabilities,  losses or  expenses  caused by
                Distributor's   (i)   breach   of  any   of   its   obligations,
                representations  or warranties made in this  Agreement;  or (ii)
                false and  misleading  representation  made by any  employee  or
                authorized agent of Distributor regarding the PLP.

----------
***  Indicates the omission of confidential material pursuant to the request for
     confidential treatment made in accordance with Rule 24b-2 under the
     Securities Exchange Act of 1934, as amended. The confidential material is
     being filed separately with the Securities and Exchange Commission.

                                      E-18

<PAGE>

         9.3    Indemnification  Procedure. A party seeking  indemnification (an
                "indemnified   party")   shall   give  the   other   party   (an
                "indemnifying  party") written notice of any Legal Action within
                ten (10) days of the first knowledge  thereof.  The indemnifying
                party  shall have sole and  exclusive  control of the defense of
                any Legal  Action,  including  the choice and direction of legal
                counsel.  The  indemnified  party shall have the right to engage
                its own counsel,  at its own expense.  The indemnified party may
                not settle or  compromise  any Legal Action  without the written
                consent of the indemnifying party.

         9.4    The  Company  will use its best  efforts  to obtain an  adequate
                amount of insurance for the purpose of indemnification.

         9.5    Paragraphs  9.1  through  and  including  9.3 shall  survive the
                termination of this Agreement.

      10. TERMINATION

         10.1   The Company may terminate or modify this  Agreement  immediately
                and without  notice if  Distributor  fails to pay for the PLP as
                provided herein beyond a cure period of thirty (30) days.

         10.2   The Company may terminate  this  Agreement upon ninety (90) days
                written  notice if Distributor  fails to materially  comply with
                any other term or provision of this Agreement.

         10.3   This  Agreement  may be terminated by either party if a party is
                insolvent, or enters into bankruptcy. Either party may terminate
                this  Agreement  if that  party  is  insolvent  or  enters  into
                bankruptcy  proceedings which are not resolved after a period of
                sixty (60) days.

         10.4   This Agreement shall automatically terminate upon dissolution or
                liquidation of either party.

         10.5   Upon  termination of this  Agreement for any reason,  all orders
                accepted by the Company prior to termination  will terminate and
                the Company  will have no  obligations  thereunder.  Any partial
                payments or advances  made against such orders shall be returned
                to Distributor upon termination.

         10.6   Should either party terminate this Agreement,  Distributor  will
                have  the  right  to sell its  existing  inventory,  and in such
                event,  the Company  will not accept any  inventory  for returns
                unless such inventory is defective.

                                      E-19

<PAGE>

      11. STATUS OF THE PARTIES

         11.1   Distributor shall not have the power to assign this Agreement or
                any right or obligation  hereunder  unless prior written consent
                is received by Distributor  from the Company.  Not  withstanding
                anything herein,  the Distributor and the Company shall have the
                right to assign this  Agreement to any  subsidiary  or affiliate
                without the prior written consent of the other party, as long as
                such subsidiary or affiliate acknowledges and agrees to be bound
                by the terms of this Agreement.

         11.2   This Agreement will remain in force should a third party acquire
                the  Company.   Any   acquisition   by  a  third  party  of  the
                Mirage(TM)and  Deltaloc(TM)product lines during the term of this
                Agreement will be subject to this Agreement.

      12. DISPUTES

         12.1   In the event of a dispute  between the Company and  Distributor,
                the parties agree to attempt to resolve the dispute through good
                faith efforts.

      13. MISCELLANEOUS

         13.1   This  Agreement,  including the Schedules  attached  hereto,  as
                amended from time to time, embodies the entire  understanding of
                the  parties.  All prior  arrangements  between  the Company and
                Distributor are canceled or superseded by this Agreement. In the
                event of any conflict between this Agreement and purchase orders
                or  other  forms  utilized  by the  parties,  the  terms of this
                Agreement shall prevail.

         13.2   No  failure  or delay  on the part of  either  party  hereto  in
                exercising any right,  power,  or privilege under this Agreement
                shall  operate  as a waiver  thereof  nor  shall  any  single or
                partial  exercise  of any right,  power or  privilege  hereunder
                preclude any other or further  exercise  thereof or the exercise
                of any  right,  power or  privilege.  The  rights  and  remedies
                expressly specified in this Agreement are cumulative and are not
                exclusive  of any rights or remedies  which  either  party would
                otherwise have.

         13.3   The Company  acknowledges  that this Agreement is a confidential
                document, and acknowledges that Distributor is a public company.
                Therefore,  the Company  agrees that  Distributor  will have the
                right to issue public and press announcement regarding the terms
                of this  Agreement  and the resulting  relationship  between the
                Company and Distributor.  Nonetheless, Distributor shall provide
                a courtesy copy of any such  announcement to the Company for its
                review and

                                      E-20

<PAGE>

                information in advance of its release.  The Company acknowledges
                that any such advance copy must remain confidential and might be
                deemed  under  Securities  and  Exchange  Commission  rules  and
                regulations to be inside information.  Additionally, the Company
                acknowledges  that  Distributor  may need to file a copy of this
                Agreement and any  amendments  thereto with the  Securities  and
                Exchange Commission.

         13.4   Notices under this Agreement may be given to:

                (i)  the  Company  by  being  handed  to  the  President  of the
                     Company.

                (ii) Distributor  or the  Company by being  sent to the  address
                     provided  below  adjacent to the  signature of the party in
                     question, by facsimile, telex or registered, return receipt
                     requested  first-class  mail  and by  express  mail,  where
                     appropriate.

         13.5   During  the  term of this  Agreement  and  for  one  year  after
                expiration of the last term of this  Agreement,  the Company and
                Distributor  agree not to  recruit  each  other's  employees  or
                independent sales agents.  Notwithstanding  anything herein, the
                Company  and  Distributor   acknowledge  the  existing   overlap
                regarding the Company's  independent sales agent, Rock Surgical.
                This  agent  will be allowed  to  represent  both the  Company's
                products and Distributor's PLP.

         13.6   In the event any provision of this  Agreement is held by a court
                of  competent  jurisdiction  to  be  unenforceable,   the  other
                provisions  of this  Agreement  shall  remain in  effect  and be
                enforceable in accordance with their terms.

         13.7   This Agreement  will be interpreted  under the laws of the State
                of California

      14. WARRANTY AND LIMITATION OF REMEDIES

         14.1   ALL PLP SOLD TO  DISTRIBUTOR  UNDER THIS AGREEMENT ARE WARRANTED
                BY THE COMPANY ONLY IN ACCORDANCE WITH THE WARRANTIES  EXPRESSLY
                SET FORTH ON THE  PACKAGING OR IN THE  LABELING OR  INSTRUCTIONS
                FOR USE OF SUCH PLP. SUCH  WARRANTIES  MAY BE MODIFIED FROM TIME
                TO TIME BY THE COMPANY DURING THE TERM OF THIS  AGREEMENT.  SUCH
                WARRANTIES  ARE IN  LIEU OF ALL  OTHER  WARRANTIES,  EXPRESS  OR
                IMPLIED,  WHICH  ARE  HEREBY  DISCLAIMED  AND  EXCLUDED  BY  THE

                                      E-21

<PAGE>

                COMPANY.  DISTRIBUTOR  ACKNOWLEDGES  THAT THE COMPANY IS NOT THE
                MANUFACTURER OF SOME OR ALL OF THE PLP THAT THE COMPANY PROVIDES
                NO  WARRANTIES,   EXPRESS  OR  IMPLIED,  BEYOND  THE  WARRANTIES
                PROVIDED  BY THE  MANUFACTURER  OF ANY OF THE PLP.  THE  COMPANY
                DISCLAIMS  ALL IMPLIED  WARRANTIES,  INCLUDING  ANY  WARRANTY OF
                TITLE, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

         14.2   The Company shall not be liable for any loss or damage caused by
                delay in furnishing the PLP or services or any other performance
                under or  pursuant to this  Agreement  when such delay is due to
                acts of God,  labor  disputes  or other such  causes  beyond its
                control.

                                      E-22

<PAGE>

IN WITNESS  WHEREOF,  the parties hereto have executed this Agreement on the day
and year first above written:

OSTEOTECH, INC.                            ALPHATEC MANUFACTURING, INC.
"Distributor"                              "The Company"

By: /s/                                    By: /s/
    ---------------------------------          ---------------------------------
    Title  President                           Title: President

Address: 51 James Way                      Address:  42-160 State Street
         Eatontown, N.J.  07724                      Palm Desert, CA  92211

Telephone: (732) 542-2800                  Telephone: (760) 779-8250

WITNESS:                                   WITNESS:

/s/ Donna Haag                             /s/ Kurt Stephensen
-------------------------------------      -------------------------------------

                                  E-23

<PAGE>

               Schedule A - Mirage(TM) Top Tightening Spine System
            For purposes of this agreement, Mirage(TM) is defined as

PART                     MIRAGE SPINAL SYSTEM
NUM.                     Alphatec DESCRIPTION

                               IMPLANTS

65301 - 04        Ti - ROD  /  .2500,  (4cm)  TI6--4E
65301 - 05        Ti - ROD  /  .2500,  (5cm)  T16--4E
65301 - 07        Ti - ROD  /  .2500,  (7cm)  T16--4E
65301 - 09        Ti - ROD  /  .2500,  (9cm)  TI6--4E
65301 - 11        Ti - ROD  /  .2500,  (11cm)  T16--4E
65301 - 13        Ti - ROD  /  .2500,  (13cm)  T16--4E
65301 - 15        Ti - ROD  /  .2500,  (15cm)  T16--4E
65301 - 17        Ti - ROD  /  .2500,  (17cm)  T16--4E
65301 - 45        Ti - ROD  /  .2500,  (45cm)  TI6--4E
65301 - 50        Ti - ROD  /  .2500,  (50cm)  T16--4E

66603             TT LAMINAR HOOK,  LG
66604             TT LAMINAR HOOK,  SM
66605             TT NARROW LAMINAR HOOK,  LG
66606             TT NARROW LAMINAR HOOK,  SM
66607             TT ELEVATED LAMINAR HOOK,  LG
66608             TT ELEVATED LAMINAR HOOK,  SM
66609             TT THORACIC LAMINAR HOOK,  LG
66610             TT THORACIC LAMINAR HOOK,  SM
66611             TT PEDICLE HOOK,  SM
66612             TT TRANSVERSE PROCESS HOOK
66613             TT CRANIAL ANGLED HOOK
66614             TT CAUDAL ANGLED HOOK
66615             TT PEDICLE HOOK,  SM

66625 - 45        TT BRIDGE ASSY    4.5cm - TI64ELI
66625 - 65        TT BRIDGE ASSY    6.5cm - TI64ELI
66625 - 85        TT BRIDGE ASSY    8.5cm - TI64ELI

66655 - 25        5.5mm  BONE SCREW - 25mm LENGTH
66655 - 30        5.5mm  BONE SCREW - 30mm LENGTH
66655 - 35        5.5mm  BONE SCREW - 35mm LENGTH
66655 - 40        5.5mm  BONE SCREW - 40mm LENGTH
66655 - 45        5.5mm  BONE SCREW - 45mm LENGTH
66655 - 50        5.5mm  BONE SCREW - 50mm LENGTH
66655 - 55        5.5mm  BONE SCREW - 55mm LENGTH
66665 - 25        6.5mm  BONE SCREW - 25mm LENGTH
66665 - 30        6.5mm  BONE SCREW - 30mmLENGTH
66666 - 35        6.5mm  BONE SCREW - 35mm LENGTH
66665 - 40        6.5mm  BONE SCREW - 40mm LENGTH

                                      E-24

<PAGE>

66665 - 45        6.5mm  BONE SCREW - 45mm LENGTH
66665 - 50        6.5mm  BONE SCREW - 50mm LENGTH
66665 - 55        6.5mm  BONE SCREW - 55mm LENGTH
66675 - 25        7.5mm  BONE SCREW - 25mm LENGTH
66675 - 30        7.5mm  BONE SCREW - 30mm LENGTH
66675 - 35        7.5mm  BONE SCREW - 35mm LENGTH
66675 - 40        7.5mm  BONE SCREW - 40mm LENGTH
66675 - 45        7.5mm  BONE SCREW - 45mm LENGTH
66675 - 50        7.5mm  BONE SCREW - 50mm LENGTH
66675 - 55        7.5mm  BONE SCREW - 55mm LENGTH
66685 - 25        8.5mm  BONE SCREW - 25mm LENGTH
66685 - 30        8.5mm  BONE SCREW - 30mm LENGTH
66685 - 35        8.5mm  BONE SCREW - 35mm LENGTH
66685 - 40        8.5mm  BONE SCREW - 40mm LENGTH
66685 - 45        8.5mm  BONE SCREW - 45mm LENGTH
66685 - 50        8.5mm  BONE SCREW - 50mm LENGTH
66685 - 55        8.5mm  BONE SCREW - 55mm LENGTH

66681     LINK, SM, TI64ELI
66681 - L18LINK, SM, LH 18 DEGREE
66681 - R18LINK, SM, RH 18 DEGREE
66662     LINK, MEDIUM, TI64ELI
66682 - L28LINK, MEDIUM. LH 28 DEGREE
66682 - R28LINK, MEDIUM, RH 28 DEGREE
66683     LINK, LG, LH 18 DEGREE
66683 - L28LINK, LARGE, LH 28 DEGREE
66683 - R28LINK, LARGE, RH 28 DEGREE
66684     HOOK LINK, SM
66684     HOOK LINK, MED
66684     HOOK LINK, LG

66691     NUT

66696     WASHER  TI64ELI

                        Implant Total

                        INSTRUMENTS

65302             ROD TEMPLATE  45cm
65404             MODULAR RATCHET HANDLE
65408             DEFLECTION BEAM TORQUE WRENCH
65426             T-HANDLE RATCHET
65435             TI-ROD ROTATION WRENCH
65443             TI-ROD PUSHER
65444             TI-ROD CUTTER
65445             ALPHA TI-ROD HOLDER

                                      E-25

<PAGE>

65446             TI-ROD BENDER
65452             HOOK SPREADER
65453             HOOK COMPRESSOR
65454             HOOK SPREADER, LG
65455             PROBE, CRVD
65456             PROBE, FLAT
65457             PROBE, ROUND
65458             PROBE, STRAIGHT
65461             K-WIRE INSERTER/DEPTH GAUGE
65462             T-BAR/CLEANING WIRE
65550 - 250       ROD HOLDER FCPS
66401             TOP TIGHTENING HOOK HOLDER
66402             AWL
66403             LINK E-Z CLAMP
66404             SCREW DRIVER/LIMITER
66405             SCREW INSERTER, W/PLASTIC SLEEVE
66405 - 02        SCREW INSERTER PLASTIC SLEEVE
66406             HEX DRIVER FOR TT BRIDGE
66407             NUT & WASHER INSERTER
66408             3/8" TORQUE WRENCH EXTENSION
66409             HOOK NUT INSERTER
66410             SCREW DRIVER/INSERTER
66420             HOOK IMPACTOR
66426             TT BRIDGE/CLAMP HOLDER
65429             T WRENCH/SQUARE DRIVE ADAPTOR
66430             TT TI-ROD LOCATOR
66431             ANTI-TORQUE ROD STABILIZER
66439-01          TORQUE WRENCH NUT TIGHTENER
66439-02          REVERSE TORQUE WRENCH SCREW DRIVER
66439-03          TORQUE WRENCH, T-HANDLE NUT TIGHTENER
66441             IN SITU ROD/BRIDGE BENDER
66446             FRENCH ROD BENDER
66451             LINK SPREADER
66452             LINK REMOVER
66455             TT BONE SCREW TAP 5.5mm
66463             SCREW ADJUSTER
66465             TT DONE SCREW TAP 6.5mm
66466             TT HOOK INSERTER
66471             TT SCREW TEMPLATE
66475             TT BONE SCREW TAP 7.5mm
66485             TT BONE SCREW TAP 8.5mm
66501             SPINAL IMPLANT CASE
66501-04          SCOLIOSIS IMPLANT TRAY
66504             SPINAL INSTRUMENT CASE
66677             NUT & WASHER BLOCK
65460             K-WIRE

                                      E-26

<PAGE>

                Schedule B- Deltaloc(TM) Anterior Cervical System
           For purposes of this agreement, Deltaloc(TM) is defined as

-------------------------------------------------------------------------------
PART                             Alphatec DESCRIPTION
NUM.                             DELTALOC - ANTERIOR CERVICAL PLATE
-------------------------------------------------------------------------------

69040 - 0104.0mm. x 10mm VARIABLE ANGLE SCREW
69040 - 0124.0mm. x 12mm VARIABLE ANGLE SCREW
69040 - 0144.0mm. x 14mm VARIABLE ANGLE SCREW
65040 - 0164.0mm. x 16mm VARIABLE ANGLE SCREW
59041 - 0104.0mm. x 10mm FIXED ANGLE SCREW
69041 - 0124.0mm. x 12mm FIXED ANGLE SCREW
69041 - 0144.0mm. x 14mm FIXED ANGLE SCREW
69041 - 0164.0mm. x 16mm FIXED ANGLE SCREW
69045 - 0104.5mm. x 10mm VARIABLE ANGLE SCREW
69045 - 0124.5mm. x 12mm VARIABLE ANGLE SCREW
69045 - 0144.5mm. x 14mm VARIABLE ANGLE SCREW
69045 - 0164.5mm. x 16mm VARIABLE ANGLE SCREW
69046 - 0104.5mm. x 10mm FIXED ANGLE SCREW
69046 - 0124.5mm. x 12mm FIXED ANGLE SCREW
69046 - 0144.5mm. x 14mm FIXED ANGLE SCREW
69046 - 0164.5mm. x 16mm FIXED ANGLE SCREW

69001 - 01414mm LEVEL 1 PLATE
69001 - 01616mm LEVEL 1 PLATE
69001 - 01818mm LEVEL 1 PLATE
69001 - 02020mm LEVEL 1 PLATE
69001 - 02222mm LEVEL 1 PLATE
69001 - 02424mm LEVEL 1 PLATE
69001 - 02626mm LEVEL 1 PLATE
69002 - 02828mm LEVEL 2 PLATE
69002 - 03131mm LEVEL 2 PLATE
69002 - 03434mm LEVEL 2 PLATE
69002 - 03737mm LEVEL 2 PLATE
69002 - 04040mm LEVEL 2 PLATE
69002 - 04343mm LEVEL 2 PLATE
69002 - 04646mm LEVEL 2 PLATE
69003 - 04545mm LEVEL 3 PLATE
69003 - 04848mm LEVEL 3 PLATE
69003 - 05151mm LEVEL 3 PLATE
69003 - 05454mm LEVEL 3 PLATE
69003 - 05757mm LEVEL 3 PLATE
69003 - 06060mm LEVEL 3 PLATE
69003 - 06363mm LEVEL 3 PLATE
69003 - 06666mm LEVEL 3 PLATE
69003 - 06969mm LEVEL 3 PLATE

                                      E-27

<PAGE>

69004 - 06060mm LEVEL 4 PLATE
69004 - 06464mm LEVEL 4 PLATE
69004 - 06868mm LEVEL 4 PLATE
69004 - 07272mm LEVEL 4 PLATE
69004 - 07676mm LEVEL 4 PLATE
69004 - 08080mm LEVEL 4 PLATE
69004 - 06484mm LEVEL 4 PLATE

                          INSTRUMENTS

69100             PLATE HOLDER
69110             FIXED ANGLE DRILL GUIDE
69115             VARIABLE ANGLE DRILL GUIDE
69116             LIMITED ANGLE DRILL GUIDE
69120             BENDING PLIERS
69130             QUICK CONNECT HANDLE
69150             TAP
69160             HEX DRIVER
69170             LOCKING TOOL
69171             UNLOCKING TOOL
69180             DISTRACTOR / COMPRESSOR
69181             DISTRACTOR / COMPRESSOR POST
69182             POST DRIVER
69190             CERVICAL PLATE STERILIZATION CASE
69140 - 01010mm   DRILL BIT
69140 - 01212mm   DRILL BIT
69140 - 01414mm   DRILL BIT
69140 - 01616mm   DRILL BIT

                                      E-28

<PAGE>

                   Schedule C -- Purchase Schedule of Products

***

--------------
***  Indicates the omission of confidential material pursuant to the request for
     confidential  treatment  made in  accordance  with  Rule  24b-2  under  the
     Securities Exchange Act of 1934, as amended.  The confidential  material is
     being filed separately with the Securities and Exchange Commission.

                                      E-29

<PAGE>

         Schedule D - Purchase Commitment Adjustments Due to Backorders,
                  Purchase Lead Times and Distributor Forecasts

***

--------------
***  Indicates the omission of confidential material pursuant to the request for
     confidential  treatment  made in  accordance  with  Rule  24b-2  under  the
     Securities Exchange Act of 1934, as amended.  The confidential  material is
     being filed separately with the Securities and Exchange Commission.

                                      E-30

<PAGE>

                    Schedule F - Company's Existing Customers

For purposes of this Agreement, a customer is defined to mean a surgeon within a
particular hospital.

This list includes surgeons who have done a Mirage or Deltaloc case within the
last 6 months or who have committed to do a surgery within the next 30 days. If
they do not do a case within 30 days of when this agreement is signed, they will
be removed from the list.

                             ALPHATEC SPINE SURGEONS

Dr. Paul Asdourian         Baltimore, Maryland
Dr. John Barry             Baltimore, Maryland
Dr. James York             Baltimore, Maryland
Dr. Joseph Jamaris         Baltimore, Maryland
Dr. Shane Pak              Baltimore, Maryland
Dr. Rick Delamarter        Los Angeles, California
Dr. Michael Tooke          Los Angeles, California
Dr. DeGrange               Los Angeles, California
Dr. Shahim Etebar          Rancho Mirage, California
Dr. Duncan McBride         Los Angeles, California
Dr. Wang                   Los Angeles, California
Dr. Hannani                Los Angeles, California
Dr. Tahernia               San Diego, California
Dr. Akbarnia               San Diego, California
Dr. McGuire                San Diego, California
Dr. Richard Ozuna          Boston, Massachusetts
Dr. Ardnt                  Boston, Massachusetts
Dr. Brick                  Boston, Massachusetts
Dr. Puccio                 Boston, Massachusetts
Dr. John Gorup             Lafayette, Indiana
Dr. Joseph Riina           Indianapolis, Indiana
Dr. Svavada                Indianapolis, Indiana
Dr. Jatana                 Denver, Colorado
Dr. Michael Ramsey         Midland/Odessa, Texas
Dr. Scott Smith            Midland, Texas
Dr. Mcgavorn               Midland, Texas
Dr. Gordon                 Texas
Dr. Duarte                 San Angelo, Texas
Dr. LaGrande               San Angelo, Texas
Dr. Fisher                 San Angelo, Texas
Dr. Alexander              San Angelo, Texas
Dr. Meeks                  Odessa, Texas
Dr. Alex Echeverry         Corpus Christi, Texas
Dr. Willman                Corpus Christi. Texas
Dr. Karreh                 Corpus Christi, Texas
Dr. Robert Arranabar       San Antonio, Texas
Dr. Rafael Parra           San Antonio, Texas
Dr. Skuerhut               San Antonio, Texas
Dr. Garzavail              San Antonio, Texas
Dr. Kuwamara               San Antonio, Texas
Dr. Meadows                San Antonio, Texas
Dr. Ward                   San Antonio, Texas
Dr. Gurhwitts              San Antonio. Texas
Dr. Kingman                San Antonio, Texas
Dr. Gultierrez             San Antonio, Texas
Dr. Neely                  Austin, Texas
Dr. Hanson                 Austin, Texas
Dr. O'Grady                Austin. Texas
Dr. Patel                  Austin, Texas
Dr. Betts                  Austin, Texas
Dr. Todd                   Arlington, Texas
Dr. Highcamp               Arlington, Texas
Dr. Acosta                 Arlington, Texas
Dr. Rosentein              Arlington., Texas
Dr. Maxwell                Abilene, Texas
Dr. Torraz                 Abilene, Texas
Dr. Chittwood              Abilene, Texas

                                      E-31

<PAGE>

Dr. Mcdonna                Abilene, Texas
Dr. Mark Cwikla            Dallas, Texas
Dr. Schwickla              Dallas, Texas
Dr. J. White               Dallas, Texas
Dr. Kutana                 Dallas, Texas
Dr. Mitchell               Ft. Worth, Texas
Dr. Rosenstein             Ft. Worth; Texas
Dr. Weavor                 Ft. Worth, Texas
Dr. Wheeler                Ft. Worth, Texas
Dr. Rahlston               Ft. Worth, Texas
Dr. Meyer                  Ft. Worth, Texas
Dr. Cosmoski               Ft. Worth, Texas
Dr. Coffman                Ft. Worth, Texas
Dr. Danielson              Tyler, Texas
Dr. Piskin                 Amarillo, Texas
Dr. Pollis                 Amarillo, Texas
Dr. Cone                   Amarillo, Texas
Dr. Berg                   Amarillo, Texas
Dr. LaGrone                Amarillo, Texas
Dr. Franco Cerrabono       New York, New York
Dr. Arnold Swartz          New York, New York
Dr. Chris Hamil            New York, New York
Dr. Bursick                Pittsburgh, Pennsylvania
Dr. Kaufman                Pittsburgh Pennsylvania
Dr. Palmer                 Pittsburgh, Pennsylvania
Dr. Alan Hilibrand         Philadelphia, Pennsylvania
Dr. Bennett                Newport Richey, Florida
Dr. Maser                  Florida
Dr. Sweeney                Sarasota, Florida
Dr. Lonstein               Sarasota, Florida
Dr. Peterson               Florida
Dr. Piper                  St. Louis, Missouri
Dr. Chibot                 St. Louis, Missouri
Dr. Robert Peterson        Salt Lake City, Utah
Dr. Darrel Brodke          Salt Lake City, Utah
Dr. Eboh                   Ohio
Dr. Lewis                  Jackson, Mississippi
Dr. Wood                   Jackson, Mississippi
Dr. Lee                    Mississippi
Dr. Senter                 Jackson, Mississippi
Dr. Barrett                Jackson, Mississippi
Dr. Molleston              Mississippi
Dr. Alexander              Jackson, Mississippi
Dr. Prevost                Jackson, Mississippi
Dr. Stringer               Jackson, Mississippi
Dr. Alexander              Jackson, Mississippi
Dr. Lewis                  Jackson, Mississippi
Dr. Frenz                  Jackson, Mississippi
Dr. Mollsten               Hattiesburg, Mississippi

                                      E-32

<PAGE>

                            Schedule H: - Price List

***

----------
***  Indicates the omission of confidential material pursuant to the request for
     confidential treatment made in accordance with Rule 24b-2 under the
     Securities Exchange Act of 1934, as amended. The confidential material is
     being filed separately with the Securities and Exchange Commission.

                                      E-33

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