THIS AGREEMENT effective the 1st day of January, 1998 (the "Effective Date") between OSTEOTECH,
INC., a Delaware corporation (the "Corporation") and MICHAEL JEFFRIES (the "Employee").
WHEREAS, the Corporation desires to retain the Employee as its Executive Vice President, Chief Operating
Officer and Chief Financial Officer; and
WHEREAS, the Employee desires to maintain 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 continues the employment of the Employee, and the Employee hereby
accepts continued employment by the Corporation as the Executive Vice President, Chief Operating Officer and
Chief Financial 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
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 be employed in an executive capacity as the Executive Vice President, Chief
Operating Officer and Chief Financial Officer of the Corporation. The Employee shall perform such duties and
services, consistent with his positions, as may be assigned to him from time to time by the Chief Executive Officer
of the Corporation. In furtherance of the foregoing, the