OSTEOTECH INC
LOAN AGREEMENT
<DOCUMENT>
<TYPE>EX-10.46
<SEQUENCE>10
<FILENAME>d50122_ex10-46.txt
<DESCRIPTION>LOAN AGREEMENT
<TEXT>

                                                                   Exhibit 10.46

                                 LOAN AGREEMENT

     LOAN  AGREEMENT  dated as of November 27,  2000,  between  AMERICAN  TISSUE
SERVICES FOUNDATION,  a not-for-profit  corporation  organized under the laws of
Delaware  (herein  called the  "Borrower")  and  OSTEOTECH,  INC., a corporation
organized under the laws of Delaware (herein called the "Lender").

                              W I T N E S S E T H:

     SECTION 1. DEFINITIONS

     1.1 Defined Terms.  As used in this  Agreement,  the following  terms shall
have the following meanings, unless the context otherwise requires:

          "Business  Day" shall mean a day other than a Saturday,  Sunday or day
     on which  banks are  authorized  or required to close under the laws of the
     State of New Jersey.

          "Events of Default." Each of the following (individually, an "Event of
     Default" and  collectively,  the "Events of Default")  shall  constitute an
     event of default under this Agreement:

               (a) The  appointment  of a receiver or trustee of the Borrower or
          insolvency of the Borrower or its liquidation,  bankruptcy,  making an
          assignment for the benefit of creditors or reorganization,  whether or
          not  pursuant to  bankruptcy  laws,  or any other  marshalling  of the
          assets and liabilities of the Borrower;

               (b) A default in the payment of any installment of interest upon,
          or principal  of, any Note (as  hereinafter  defined)  within five (5)
          Business Days of when such payment is due and payable,  whether at the
          maturity or otherwise; and

               (c)  The  Borrower   breaches  or  violates  the  terms  of  this
          Agreement.

          "Notes" shall mean the promissory  notes of the Borrower  described in
     Section 2.2 hereof.

          "Termination  Date"  shall  mean the  earliest  of (a) the date of the
     occurrence  of an Event of Default or (b) the 90th  Business Day  following
     the giving of written  notice of  termination by either party hereto or (c)
     December 31, 2010.

     1.2 Use of Defined Terms.  All terms defined in this  Agreement  shall have
the defined meanings when used in the Notes or other documents made or delivered
pursuant to this Agreement unless the context shall otherwise require.

     1.3 Accounting Terms. All accounting terms not specifically  defined herein
shall be construed in accordance with generally accepted accounting principles.

                                                                           E-137
<PAGE>

     SECTION 2. AMOUNT AND TERMS OF CREDIT

     2.1  Credit  Commitment.  Subject  to the  terms  and  conditions  of  this
Agreement,  the Lender agrees to make loans to the Borrower at any time and from
time to time on or after the date hereof,  to but not including the  Termination
Date,  in an  aggregate  principal  amount  up to but not  exceeding  the sum of
$1,500,000  at any one time  outstanding  (herein,  as the same may be increased
from time to time at the option of the Lender by notice in  writing,  called the
"Commitment").  During the aforesaid period, the Borrower may use the Commitment
by borrowing,  paying, renewing or prepaying the Notes, in whole or in part, and
reborrowing, all in accordance with the terms and conditions of this Agreement.

     2.2 Notes.  Each  borrowing  pursuant  to  Subsection  2.1 hereof  shall be
evidenced by a Note, substantially in the form annexed hereto as Exhibit A, with
appropriate  insertions or changes  therein in accordance with the terms of this
Agreement.  Each such Note shall (a) be in the  principal  amount of the loan it
evidences;  (b) be dated the date of such  loan;  (c) be  stated to mature  five
years from the date of such loan; and (d) bear interest from the date thereof on
the unpaid principal amount thereof until such principal amount shall become due
and payable  (whether at the stated maturity or by  acceleration)  at a rate per
annum equal to the five year  Treasury  Bill rate as reported in the Wall Street
Journal  on the  date  immediately  preceding  the date of such  Note,  plus one
percent (1%).  Interest on each Note shall be Payable  quarterly on the last day
of March, June, September and December in each year,  commencing on the first of
such dates next succeeding the date of such Note and at maturity of such Note or
at such other times as shall be agreed upon by the Borrower and the Lender.

     2.3 Notice of Borrowing.  The Borrower  shall give the Lender at least five
(5)  Business  Days  prior  written  notice  of the date and the  amount of each
borrowing pursuant to the Commitment.  On the date specified in such notice, the
Lender will make the amount then to be loaned by it available to the Borrower.

     2.4 Voluntary Prepayments. The Borrower may, at its option, at any one time
or from time to time, prepay the Notes,  without premium or penalty, in whole or
in part,  upon at least one  Business  Day prior  written  notice to the Lender,
specifying  the date and amount of  prepayment,  and upon the payment of accrued
interest on the amount prepaid to the date of the prepayment.

     2.5 Computation of Interest;  Payments. Interest shall be calculated on the
basis of a 360-day year for the actual days  elapsed.  All  payments  (including
prepayments)  by the Company on account of  principal  and interest on the Notes
hereunder  shall be made to the Lender at its office  specified  in the Notes in
lawful money of the United States of America. If any payment on any Note becomes
due and payable on a day which is not a Business Day, the maturity thereof shall
be extended to the next  succeeding  Business Day and interest  thereon shall be
payable at the then applicable rate during such extension. All outstanding Notes
shall become forthwith due and payable,  together with accrued interest thereon,
without presentment,  demand,  protest or other notice of any kind, all of which
are hereby expressly waived on the earlier of the date of an Event of Default or
the Termination Date.


                                                                           E-138
<PAGE>

     2.6 Use of Proceeds.  The proceeds of any loan made hereunder shall be used
by the  Borrower  solely to provide  working  capital to support the  Borrower's
written  annual  business  plan and  strategy  (the  "Plan").  The Plan  must be
submitted  to the  Lender  for its  review  no later  than 30 days  prior to the
beginning  of the year  covered by the Plan and the Plan must be approved by the
Lender in writing.

     SECTION 3. MISCELLANEOUS

     3.1 Notices.

     All  notices  or other  communications  which  are  required  or  permitted
hereunder shall be deemed to be sufficient if contained in a written  instrument
given by personal delivery, air courier or registered or certified mail, postage
prepaid,  return receipt  requested,  addressed to such party at the address set
forth below or such other  address as may  thereafter be designated in a written
notice from such party to the other party:

         if to the Lender, to:

                  Osteotech, Inc.
                  51 James Way
                  Eatontown, New Jersey 07724

                  Attention: Chief Financial Officer

         if to the Borrower, to:

                  American Tissue Services Foundation
                  10922 Oak Wind Court
                  Fort Wayne, Indiana 46845

                  Attention: President

All such  notices,  advances  and  communications  shall be  deemed to have been
delivered and received (a) in the case of personal delivery, on the date of such
delivery,  (b) in the case of air  courier,  on the  Business Day after the date
when sent and (c) in the case of mailing,  on the third  Business Day  following
such mailing.

     3.2 Survival of Agreements. All agreements,  representations and warranties
made herein shall  survive the  execution  and delivery of this  Agreement,  the
Notes, and the making and renewal of loans hereunder, and shall continue in full
force and effect until the indebtedness of the Borrower under the Notes has been
paid in full.

     3.3 Successors and Assigns.  This Agreement shall be binding upon and inure
to the benefit of the  Borrower and the Lender and their  respective  successors
and  assigns,  except


                                                                           E-139
<PAGE>

that the  Borrower  may not  transfer  or assign any of its rights or  interests
hereunder without the prior written consent of the Lender.

     3.4  Severability.  If any provision of this  Agreement is determined to be
invalid or unenforceable, the remaining portion of this Agreement shall continue
in full force and effect.

     3.5  Construction.  This  Agreement  and  each  Note  and  the  rights  and
obligations of the parties  hereunder and  thereunder  shall be governed by, and
construed and interpreted in accordance  with, the internal laws of the State of
New Jersey.

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

                                       AMERICAN TISSUE SERVICES FOUNDATION



                                         By: /s/ Jeffrey J. Testin
                                             ------------------------------
                                             Name: Jeffrey J. Testin
                                             Title: President


                                       OSTEOTECH, INC.



                                         By: /s/ Michael J. Jeffries
                                             ------------------------------
                                             Name: Michael J. Jeffries
                                             Title: Exec. VP


                                                                           E-140
<PAGE>

                                                                       EXHIBIT A

                                      NOTE

$___________________                                       Eatontown, New Jersey
                                                           [Date]

     FOR VALUE RECEIVED,  the undersigned,  AMERICAN TISSUE SERVICES FOUNDATION,
promises to pay to the order of  OSTEOTECH,  INC. (the  "Lender"),  on the fifth
anniversary  of the date of the Note at the office of the  Lender  located at 51
James Way,  Eatontown,  New Jersey 07724,  in lawful money of the United States,
the principal amount of ______________ Dollars ($_____________).

     The  undersigned  further  promises  to pay  interest in like money at said
office from the date hereof on the unpaid  principal  amount  hereof  until such
principal amount shall become due and payable (whether at the stated maturity or
by  acceleration)  at a rate per annum equal to [_____ percent (__%)].  Interest
shall be  payable  quarterly  on the  last day of  March,  June,  September  and
December in each year, commencing on the first of such dates next succeeding the
data hereof.

     This Note is one of the Notes referred to in a Loan  Agreement  dated as of
November 27, 2000 between the undersigned and the Lender, and is entitled to the
benefits thereof, and may be prepaid in whole or in part as provided therein.

     Upon the  occurrence  of an Event of  Default  or the  Termination  Date as
specified in said Loan Agreement, the amounts then remaining unpaid on this Note
may become immediately due and payable as provided therein.

                                        AMERICAN TISSUE SERVICES FOUNDATION


                                        By:
                                           -------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                              ----------------------------------

                                                                           E-141
<PAGE>


                        FIRST AMENDMENT TO LOAN AGREEMENT



This  modification,  effective  January 1,  2002,  to the Loan  Agreement  dated
November  27,  2000  between  the  AMERICAN  TISSUE  SERVICES   FOUNDATION  (the
"Borrower") and OSTEOTECH, INC. (the "Lender") and to which Loan Agreement these
presents are so firmly affixed as to become a part thereof.

Notwithstanding  anything to the contrary set forth in the Loan  Agreement,  the
Loan Agreement is hereby amended to read as follows:

                      The  Commitment  made by the  Lender  to the  Borrower  as
                      detailed  in  Section  2.1  Credit   Commitment  shall  be
                      increased from $1,500,000 to $2,750,000.

Except as specifically  modified herein,  all of the terms and conditions of the
Loan  Agreement  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 Loan Agreement.



Witness:                                   AMERICAN TISSUE SERVICES FOUNDATION



      /s/ Dianne Dunfee                    By:     /s/ Jeffrey J. Testin
------------------------------------           ---------------------------------
                                                   JEFFREY J. TESTIN
                                                   President



Witness:                                   OSTEOTECH, INC.



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

                                                                           E-142

</TEXT>
</DOCUMENT>
