THIS AGREEMENT entered into the 4th day of December, 1998 between OSTEOTECH, INC., a Delaware
corporation (the "Corporation") and Richard W. Bauer (the "Employee").
WHEREAS, the Corporation desires to continue to employ the Employee as its President and Chief Executive
WHEREAS, the Employee desires to accept such employment upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and obligations hereinafter set forth, the parties
hereto agree as follows:
1. Employment. The Corporation hereby employs the Employee, and the Employee hereby accepts employment
by the Corporation as President and Chief Executive Officer of the Corporation upon the terms and conditions
set forth herein.
2. Term. Unless sooner terminated in accordance with this Agreement, the term of this Agreement and the term
of employment of the Employee shall be for two (2) years commencing on the Effective Date hereof and shall be
automatically renewable for successive additional two (2) year terms unless at least three (3) months prior to the
initial two-year period or any subsequent two-year term the Corporation terminates this Agreement by written
notice to the Employee, whereupon this Agreement shall be terminated at the end of the applicable two year
period (with such initial two year term and any two year renewal thereof, unless sooner terminated in accordance
with this Agreement being the "Term of Employment").
3. Duties. The Employee shall perform such duties and services and shall be allocated such resources, consistent
with his position, as may be assigned to him from time to time by the Board of Directors of the Corporation. In
furtherance of the foregoing, the Employee hereby agrees to perform well and faithfully such duties and
4. Time to be Devoted to Employment.
(a) The Employee shall devote his full time and energy to the business of the Corporation except for vacations,