THIS AGREEMENT entered into the 5th day of December, 1996 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
officer; and WHEREAS, the Employee desires to accept such employment upon the terms and conditions set
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. The term of this Agreement shall commence on December 5, 1996 (the "Effective Date") and end on
the day prior to the second anniversary of the Effective Date of this Agreement (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 responsibilities.
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,
holidays and personal days and absences due to temporary illness, during the Term of Employment and except as
approved by the Board of Directors.
b. During the Term of Employment, the Employee shall not be engaged in any other business activity. Employee
hereby represents that he is not a party to any agreement which would be an impediment to entering into this
Agreement and that he is permitted to enter into this Agreement and perform the obligations hereunder.
5. Compensation; Reimbursement. 5.1a. During t