OSTEOTECH INC
1994 EMPLOYEE STOCK PURCHASE PLAN
<DOCUMENT>
<TYPE>EX-10.55
<SEQUENCE>2
<FILENAME>d64810_ex10-55.htm
<DESCRIPTION>1994 EMPLOYEE STOCK PURCHASE PLAN
<TEXT>
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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"  SIZE=2><B>OSTEOTECH,
INC.<BR>
1994 EMPLOYEE STOCK PURCHASE PLAN </B></FONT><B><SUP><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>1</FONT></SUP></B></P>

<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"  SIZE=2><B>SECTION
1. INTRODUCTION</B></FONT></P>

<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Osteotech, Inc. 1994 Employee Stock Purchase Plan (the &#147;Plan&#148;) is designed to
provide employees of Osteotech, Inc. (the &#147;Company&#148;) and its subsidiaries with
the incentive and opportunity to acquire or increase their holdings of the
Company&#146;s common stock, $.01 par value (the &#147;Stock&#148;) by granting Stock Purchase
Rights (each an &#147;SPR&#148; and collectively, &#147;SPRs&#148;) to such employees on July 1,
October 1, January 1 and April 1 of each year in which the Plan is in effect
(each such date hereafter referred to as the &#147;Grant Date&#148;). The first Grant
Date under the Plan shall be July 1, 1994. The SPRs granted on July 1 shall be
exercised on September 30; SPRs granted on October 1 shall be exercised on
December 31; SPRs granted on January 1 shall be exercised on March 31; and SPRs
granted on April 1 shall be exercised on June 30, in accordance with the terms
hereof. Each September 30, December 31, March 31 and June 30 shall be referred to
herein as an &#147;Exercise Date&#148;. It is the intention of the Company to have the
Plan qualify as an &#147;employee stock purchase plan&#148; under Section 423 of the
Internal Revenue Code of 1986, as amended (the &#147;Code&#148;). The provisions of this
Plan shall be construed so as to extend
and limit participation in a manner consistent with the requirements of that
section of the Code.</FONT></P>

<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"  SIZE=2><B>SECTION
2. ELIGIBLE EMPLOYEES; LIMITS ON GRANTS</B></FONT></P>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
person is eligible to participate in the Plan if (i) on the first date of the
month immediately preceding the month in which the Grant Date occurs and (ii)
on the Grant Date, such employee is an employee of the Company. The term
&#147;employee&#148; means a full-time </FONT></P>


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 <TR style="font-size:1px">
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  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="95%" VALIGN=TOP>
  <P>&nbsp;</P>
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 <TR>
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  <P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><SUP>1</SUP></FONT></P>
  </TD>
  <TD  VALIGN=BOTTOM>
  <P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>On March 19, 1999 Osteotech&#146;s stock split so that
  for every two shares outstanding a holder would receive 3 shares. Therefore,
  the number of shares issuable pursuant to the Plan increased from 250,000 to
  375,000. The Plan was amended by the
  stockholders of the Company on June 13, 2002, increasing he number of shares
  issuable pursuant to he plan from 375,000 to 575,000. The Plan was further amended by the
  stockholders of the Company on June 9, 2005, extending the expiration date of
  the plan to July 1, 2009.</FONT></P>
  </TD>
 </TR>
</TABLE>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>employee of either the Company or of a subsidiary corporation
(&#147;Subsidiary&#148;) of the Company including, but not limited to, HC Implants BV,
Osteotech BV, CAM Implants BV and CAM Implants Inc. For purposes of this Plan,
a full-time employee is an employee who completes at least twenty (20) hours of
work each week for the Company or any Subsidiary. For purposes of this Plan,
the term &#147;Subsidiary&#148; shall mean any present or future corporation which (i)
would be a &#147;subsidiary corporation&#148; of the Company, as the term is defined in
Code Section 424(f) and (ii) is designated as a participant in the Plan by the
Compensation Committee of the Board of Directors of the Company (the
&#147;Compensation Committee&#148;).</FONT></P>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
the foregoing, an employee will not be granted an SPR under the Plan to the
extent the grant of such SPR would cause such employee: (i) immediately after
such SPR is granted, to own Stock possessing five percent (5%) or more of the
total combined voting power or value of all classes of stock of the Company or
any Subsidiary, (for purposes of determining stock ownership under this
Section, the rules of Code Section 424(d) shall apply); or (ii) to hold stock
purchase rights under all employee stock purchase plans qualified under Code
Section 423, including SPRs under this Plan, which are exercisable for the
first time during any calendar year under the terms of this Plan and all other
such plans for Stock with a fair market value (determined at the time the SPR
is granted hereunder) in excess of $25,000. For purposes of the limitation
contained in clause (ii) above &#147;employee stock purchase plans&#148; shall not
include the Company&#146;s or a Subsidiary&#146;s stock option plans. For purposes hereof
the fair market value of the Stock shall be the reported last sale price as
reported on the National Association of Securities Dealers Automated Quotation
National Market System (&#147;NASDAQ-NMS&#148;) on the relevant Grant Date.</FONT></P>


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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"  SIZE=2><B>SECTION
3. STOCK</B></FONT></P>

<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
stock subject to the SPRs shall be Stock which is authorized, but unissued or
reacquired. The aggregate number of shares which may be issued under this Plan
shall not exceed 575,000 shares of Stock, provided, however, that in the event
it becomes necessary to reduce the number of shares subject to the Plan for any
reason, the Compensation Committee reserves the right at any time to reduce the
number of shares subject to the Plan, to the extent necessary. The number of
shares of Stock available for purchase under the Plan may be increased, subject
to the approval of the Company&#146;s stockholders. </FONT></P>

<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"  SIZE=2><B>SECTION
4. GRANT OF SPR</B></FONT></P>

<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SPRs
to purchase shares of Stock will be granted on each Grant Date. The period
between each Grant Date and the corresponding Exercise Date shall be the &#147;SPR
Period.&#148;</FONT></P>

<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"  SIZE=2><B>SECTION
5. ELECTIONS TO PURCHASE SHARES <BR>
AND PAYROLL DEDUCTIONS</B></FONT></P>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An
eligible employee may purchase shares of Stock under the Plan only by payroll
deductions. Each eligible employee who elects to participate in the Plan (a
&#147;participant&#148;) shall deliver to the Company during the enrollment period, as
defined in Section 5.4, a written payroll deduction authorization on a form
approved by the Compensation Committee (i) giving notice of the participant&#146;s
election to have amounts deducted from such participant&#146;s compensation from the
Company or a Subsidiary which will be used by the participant to purchase
shares of Stock under the Plan and (ii) designating the percentage of the
participant&#146;s compensation to be deducted by the Company or a Subsidiary from
such participant&#146;s compensation during the SPR Period, which designation shall
equal no less than one percent (1%) and no more than seven and one-half percent
(7.5%) of that portion of the participant&#146;s Annual Compensation actually paid
to the participant during the SPR Period;</FONT></P>


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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>provided, however, that in no event will the amount
deducted exceed seven and one-half percent (7.5%) of the participant&#146;s Annual
Compensation (as defined below). Deductions shall commence, for each
participant, on the first payday during the SPR Period immediately following
the enrollment of such participant. The amount to be deducted each payday shall
equal the percentage of compensation set forth in the participant&#146;s written
payroll deduction authorization form delivered to the Company hereunder.</FONT></P>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
purposes of Section 5.1, &#147;Annual Compensation&#148; means all cash compensation,
including without limitation, commissions, incentives and bonuses, overtime, or
other special payments, fees or allowances actually paid to an employee in any
one year period.</FONT></P>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
as permitted under Section 7 or as required to comply with the limitation set
forth in Section 5.1 or as otherwise may be required by law, payroll deduction
authorizations made pursuant to Section 5.1 shall not be changed.</FONT></P>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
enrollment period applicable to each Grant Date shall be no less than the one
month prior to such Grant Date and shall be determined by the Compensation
Committee, which shall announce such enrollment period in advance to the
eligible employees.</FONT></P>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
stock purchase account shall be established for each participant (the
&#147;Account&#148;), to which all payroll deductions made for that participant will be
credited. Amounts credited to Accounts will be under the control of the
Company, may be commingled with any other funds of the Company, may be
maintained or controlled as a single fund or account, and may be used for any
corporate purpose. Amounts credited to Accounts for participants who are
employees of a Subsidiary will be remitted to the Company from time to time. No
interest will be paid or credited to any participant or such participant&#146;s
Account under the Plan.</FONT></P>


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<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the event that any law or regulation, in the opinion of counsel for the
Company, may prohibit the handling or use of all or any part of the funds in
the manner contemplated by the Plan, the Company may deal with such funds in
any lawful manner it may deem advisable, including (without limitation) the
deposit of any such funds in individual bank accounts opened for participants.</FONT></P>

<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"  SIZE=2><B>SECTION
6. EXERCISE OF SPRS</B></FONT></P>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
as otherwise provided herein, on each Exercise Date shares of Stock will be
issued to each participant pursuant to SPRs granted to such participant on the
immediately preceding Grant Date in consideration for the funds credited to
such participant&#146;s Account and the number of shares of Stock issued to each
participant on the Exercise Date pursuant to SPRs granted to such participant
hereunder shall equal the quotient obtained by dividing the total amount of
funds credited to such participant&#146;s Account as of the close of business on the
Exercise Date by the Per Share Purchase Price (as determined in accordance with
Section 6.2). Upon each Exercise Date the funds credited to each Participant&#146;s
Account used to purchase shares of Stock hereunder shall be credited to the
capital of the Company and become the property of the Company. Unless the
Company&#146;s Director of Human Resources (the &#147;DHR&#148;) is otherwise notified in
writing by a participant, any balance in each participant&#146;s Account after
payment of the purchase price paid for the shares of Stock issued upon exercise
of an SPR (or, in the event the participant elects not to purchase shares
pursuant to this Section 6.1, the total amount in such Account) shall be
credited to the participant&#146;s Account for the following SPR Period. Upon
receipt by the DHR of a written notice from a participant requesting the return
of any balance in a participant&#146;s Account, such balance shall be promptly
refunded to the participant, without interest.</FONT></P>


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<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
purchase price per share of Stock under this Plan shall be an amount equal to
85% of the reported last sale price of the Company&#146;s Stock as reported on
NASDAQ-NMS on the applicable Exercise Date (the &#147;Per Share Purchase Price&#148;).</FONT></P>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company will issue and deliver to each participant, in the participant&#146;s name,
certificates representing the number of whole shares of Stock acquired on
account of the exercise of the SPR as soon as practicable following the
Exercise Date. Fractional shares will not be issued under the Plan and any
accumulated payroll deductions which would have been used to purchase
fractional shares will be applied to the participant&#146;s Account for the
following SPR Period or upon written request of the participant, promptly
returned, without interest, to such participant following the applicable
Exercise Date. The participant shall be entitled to all rights as a holder of
the shares of Stock issued to such participant hereunder, including the right
to vote the shares and receive dividends thereon, as of the date such shares
are issued.</FONT></P>

<P><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the Company is required to obtain any governmental authority to issue such
shares of Stock, including but not limited to, registration of the issuance of
shares of Stock under this Plan under the Securities Act of 1933, as amended
(the &#147;Securities Act&#148;), the Company will take all reasonable steps to obtain
that authority. The inability of the Company to obtain any governmental
authority considered necessary for the lawful issuance of such shares shall
relieve the Company from liability to any participant in the Plan except to
return the amount of the balance in the participant&#146;s Account, without
interest.</FONT></P>

<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"  SIZE=2><B>SECTION
7. CHANGES IN ELECTION TO PURCHASE</B></FONT></P>

<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At any time
during the SPR Period, a participant may give written notice to the DHR that
the participant&#146;s payroll deductions shall cease and, in such notice, shall
designate whether the amounts in such participant&#146;s Account shall be withdrawn
or left in the Account to permit such </FONT></P>


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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"  SIZE=2>participant to purchase shares of Stock on the
Exercise Date. Upon receipt of the notice, the participant&#146;s payroll deductions
shall cease as soon as administratively practicable and the participant shall
not be eligible to resume payroll deductions during the SPR Period. If the
participant has specified in the notice required hereinabove that the amount in
such participant&#146;s Account shall be withdrawn, the amount shall be paid to the
participant, without interest. In all other cases, the amount credited to the
participant&#146;s account shall be applied in the manner specified in Section 6.1.</FONT></P>

<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"   SIZE=2><B>SECTION
8. CHANGE IN EMPLOYMENT STATUS</B></FONT></P>

<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
a participant&#146;s status as an eligible employee (as defined in Section 2)
terminates for a reason other than death during the SPR Period and while the
participant has an election under Section 5 in effect, such participant shall
have the right, exercisable only by written notice to the DHR at any time after
the participant&#146;s termination (but no later than the corresponding Exercise
Date), to withdraw all funds in such participant&#146;s Account. If such notice is
given, all funds in the terminated participant&#146;s Account shall be paid to the
participant, without interest. In all other cases, the amount credited to the participant&#146;s
Account shall be applied in the manner specified in Section 6.1.</FONT></P>

<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
a participant commences an unpaid leave of absence while an election under
Section 5 is in effect with respect to the participant and such participant returns
to active service during the SPR Period, the participant&#146;s payroll deductions
will be resumed if administratively practicable. </FONT></P>
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If a participant dies
  during the SPR Period when an election under Section 5 is in effect with
  respect to such participant, such participant&#146;s beneficiary (as defined in
  Section 9.3) may, within 45 days after such participant&#146;s death but not later
  than the corresponding Exercise Date, by written notice to the DHR elect to
  either:</FONT></P>
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<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="600">
 <TR style="font-size:1px">
  <TD WIDTH="8%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="6%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="85%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
 </TR>
 <TR>
  <TD  VALIGN=TOP>
  <P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"  SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"  SIZE=2>(a)</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"  SIZE=2>have the amount then credited to the participant&#146;s
  Account applied in the manner specified in Section 6.1 and take the shares of
  Stock purchased, if any, subject to the same terms that would have applied to
  the participant had the participant survived; or</FONT></P>
  </TD>
 </TR>

<TR>
  <TD  VALIGN=TOP>
  <P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"  SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"  SIZE=2>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"  SIZE=2>&nbsp;</FONT></P>
  </TD>
 </TR>


 <TR>
  <TD  VALIGN=TOP>
  <P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"  SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"  SIZE=2>(b)</FONT></P>
  </TD>
  <TD  VALIGN=TOP>
  <P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"  SIZE=2>withdraw the entire amount in the participant&#146;s
  Account, without interest, and terminate the participant&#146;s election to
  purchase Stock.</FONT></P>
  </TD>
 </TR>
</TABLE>

<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"  SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the event the beneficiary of such a participant shall fail to give notice
within the prescribed period, the amount then credited to the participant&#146;s
Account shall be paid in cash to such beneficiary, without interest.</FONT></P>

<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"   SIZE=2><B>SECTION
9. NON-ASSIGNABILITY AND TRANSFER RESTRICTIONS;<BR>
DESIGNATION OF BENEFICIARY</B></FONT></P>

<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
SPR granted under the Plan shall be transferable by an employee. Except as
provided in Section 8.3, each SPR shall be exercisable only by the employee to
whom it has been granted. Any attempted voluntary assignment or transfer shall
be void. Except as provided in Section 8.3, any purported involuntary
assignment or transfer of an employee&#146;s SPR granted under the Plan, whether by
operation of law or otherwise, shall have the effect of terminating such SPR,
and the amount then credited to the participant&#146;s Account shall be paid in cash
to the participant or to such participant&#146;s beneficiary, as the case may be,
without interest.</FONT></P>

<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares
of Stock will not be issued pursuant to this Plan unless such issuance is
registered at the time thereof under an effective registration statement under
the Securities Act. If Stock is sold by a participant prior to the later of two
years after the Grant Date of the SPRs pursuant to which such Stock was issued
or one year after the issuance of such Stock to the participant, such sale will
disqualify the issuance of such Stock from treatment under Code Section 421(a).</FONT></P>


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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
participant may file a written designation of a beneficiary who is to receive
any Stock and/or cash. Such designation of a beneficiary may be changed by the
participant at any time by written notice to the DHR. Upon the death of a
participant and upon receipt by the Company of proof of identity and existence
at the participant&#146;s death of a beneficiary validly designated by him under the
Plan, the Company shall deliver such Stock and/or cash to such beneficiary. In
the event of the death of a participant and in the absence of a beneficiary
validly designated under the Plan who is living at the time of such
participant&#146;s death, the Company shall deliver such stock and/or cash to the
executor or administrator of the estate of the participant, or if no such
executor or administrator has been appointed (to the knowledge of the Company),
the Company, in its discretion, may deliver such Stock and/or cash to the
spouse or to any one or more dependents of the participant as the Company may
designate. No beneficiary shall, prior to the death of the participant by whom
he has been designated, acquire any interest in the Stock or cash credited to
the participant under the Plan.</FONT></P>

<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"   SIZE=2><B>SECTION
10. ADMINISTRATION AND REPORTS</B></FONT></P>

<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1&nbsp;&nbsp;&nbsp;&nbsp;The
Plan shall be administered by the Compensation Committee. The Compensation
Committee shall have the sole and absolute power and authority to construe and
interpret the Plan and adopt from time to time such rules and regulations as it
deems necessary to carry out the Plan. Determinations, interpretations or other
actions made or taken by the Compensation Committee pursuant to the provisions
of the Plan shall be final, binding and conclusive for all purposes and upon
all participants.</FONT></P>

<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2&nbsp;&nbsp;&nbsp;&nbsp;Participants
will receive at least annually, individual reports as to the number of shares
of Stock purchased by such participant under the Plan during the preceding
year.</FONT></P>


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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"   SIZE=2><B>SECTION
11. AMENDMENT AND TERMINATION</B></FONT></P>

<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1&nbsp;&nbsp;&nbsp;&nbsp;The
Compensation Committee shall have the right to suspend, terminate, amend or
modify the Plan in any respect at any time without notice; provided, however,
that, except as otherwise explicitly set forth herein, no suspension,
termination, amendment or modification (collectively, a &#147;Change&#148;) may be made
more than once within a six month period, nor shall any such Change impair the
rights of an employee with respect to any outstanding SPR without the consent
of such employee, unless such Change is necessary to comply with any applicable
law. Furthermore, without the approval of the stockholders of the Company, the
Plan may not be amended in any manner that will (a) increase the number of
shares of Stock subject to the Plan, (b) cause SPRs issued under the Plan to
fail to meet the requirements of &#147;employee stock purchase plan&#148; as defined in
Code Section 423, (c) materially increase the benefits to participants under
the Plan or (d) materially modify the requirements as to eligibility for
participation in the Plan.</FONT></P>

<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.2&nbsp;&nbsp;&nbsp;&nbsp;Whenever
any change is made in the Stock as a result of a stock dividend, stock split,
subdivision, combination or reclassification, appropriate action will be taken
by the Company to adjust accordingly the price of shares of Stock subject to
SPRs outstanding under the Plan.</FONT></P>

<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.3&nbsp;&nbsp;&nbsp;&nbsp;The
Plan shall terminate upon the earlier of the issuance of all of the shares of
Stock reserved for issuance under the Plan or July 1, 2009. </FONT></P>

<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"   SIZE=2><B>SECTION
12. NO RIGHT TO EMPLOYMENT</B></FONT></P>

<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"  SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Neither
the adoption of the Plan nor the granting of an SPR under the Plan shall confer
upon any employee of the Company or any Subsidiary any right to continued
employment or participation in the Plan nor shall it interfere with the right
of the Company and any Subsidiary</FONT></P>


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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"  SIZE=2>to terminate the Plan or employment of any of their
employees at any time, with or without cause.</FONT></P>

<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"   SIZE=2><B>SECTION
13. GOVERNING LAW</B></FONT></P>

<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"  SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Plan and all determinations made and actions taken pursuant to the Plan shall
be construed and enforced in accordance with the laws of the State of Delaware,
without regard to its conflicts of law principles. The provisions of the Plan
shall be interpreted in a manner necessary to sustain its legality and
enforceability. The unenforceability of any provision of the Plan in a specific
situation shall not affect the enforceability of that provision in another
situation or the other provisions of the Plan.</FONT></P>

<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"   SIZE=2><B>SECTION
14. DISPUTES</B></FONT></P>

<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"  SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
disputes arising out of the interpretation or application of the Plan shall be
decided by the Compensation Committee. In the event of a dispute with a
participant, the Compensation Committee shall provide that participant with a
written determination within 30 days of its decision with respect to the
dispute.</FONT></P>

<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"   SIZE=2><B>SECTION
15. CERTAIN PARTICIPANTS</B></FONT></P>

<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"  SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With
respect to directors, officers and employees of the Company (&#147;Section 16
Persons&#148;) who are required to report their holdings and transfers of Stock
under Section 16(a) of the Securities Exchange Act of 1934, as amended (the
&#147;Exchange Act&#148;), transactions under this plan are intended to comply with all
applicable conditions of Rule 16b-3 or any replacement rules or regulations
under the Exchange Act and, with respect to such Section 16 Persons, the
Compensation Committee may take such additional actions and/or require such
additional or different agreements of such persons (with such persons&#146; consent)
as it deems necessary or appropriate (on the advice of counsel to the Company)
to ensure that transactions involving Section 16 Persons hereunder are exempt
under Section 16 of the Exchange Act. To the extent </FONT></P>


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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"  SIZE=2>any provision of the Plan or action by the
Compensation Committee fails to comply with all applicable conditions of Rule
16b-3 or any replacement rules or regulations under the Exchange Act, it shall
be deemed null and void, to the extent permitted by law and deemed advisable by
the Compensation Committee.</FONT></P>

<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"   SIZE=2><B>SECTION
16. APPROVAL OF STOCKHOLDERS</B></FONT></P>

<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"  SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Plan shall take effect upon its approval by the stockholders of the Company.
Plan initially approved by the stockholders of the Company on June 23, 1994.</FONT></P>

<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"  SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
March 19, 1999 Osteotech&#146;s stock split so that for every two shares outstanding
a holder would receive 3 shares. Therefore, the number of shares issuable
pursuant to the Plan increased from 250,000 to 375,000. </FONT></P>

<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"  SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Plan was amended by the stockholders of the Company on June 13, 2002,
increasing he number of shares issuable pursuant to he plan from 375,000 to
575,000. </FONT></P>

<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"  SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Plan was further amended by the stockholders of the Company on June 9, 2005,
extending the expiration date of the plan to July 1, 2009.</FONT></P>


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