This Agreement is executed on the dates set forth below by and between MICHAEL J. JEFFRIES ("Jeffries"),
residing at 67 Schindler Way, Fairfield, New Jersey 07004, and OSTEOTECH, INC. ("Osteotech"), located at
51 James Way, Eatontown, New Jersey 07724.
W I T N E S S E T H:
In consideration of the mutual covenants and obligations hereinafter set forth, Jeffries and Osteotech agree as
1. Jeffries and Osteotech confirm that (i) Jeffries shall retire from his employment at Osteotech upon the close of
business on December 31, 2005 (the "Retirement Date"); (ii) Jeffries shall resign as a Director of Osteotech,
effective December 31, 2005; and (iii) Jeffries shall resign as a Director of any Osteotech subsidiary companies,
effective December 31, 2005.
2. Following Jeffries' retirement in accordance with Section 1 hereof, Jeffries will have the right commencing on,
and not before, January 1, 2006 to receive an amount equal to 15 months of his base salary in the sum of three
hundred seventy-seven thousand five hundred dollars ($377,500.00). Such payment shall be made by check in
twenty-eight (28) semi-monthly installments, between January 15, 2006 and March 1, 2007, each in the amount
of twelve thousand five hundred eighty three dollars and thirty four cents ($12,583.34) gross, plus a final payment
that shall be made by no later than March 15, 2007 in the amount of twenty five thousand one hundred sixty six
dollars and sixty eight cents ($25,166.68) gross, all subject to applicable deductions. In December 2005, Jeffries
shall receive compensation corresponding to all unused vacation pay that Jeffries will have accrued as of
December 31, 2005. In the event that Osteotech files for bankruptcy protection in the U.S. Bankruptcy Court
prior to March 15, 2007, then, at Jeffries' option, all of the above amounts unpaid at the time of such filing shall
be accelerated and become immediately due and payable.
3. Consistent with past practice, including the payment of a portio