Exhibit 10.2

Confidential Separation Agreement and General Release and Amendment to

Confidentiality and Non-Disclosure Agreement

This Confidential Separation Agreement and General Release (hereafter
“Agreement”) is entered into by and between Orthovita Inc. (hereafter
“Orthovita” or “Company”), and Donald L. Scanlan (hereafter “Employee”). As used
in this Agreement, “Company” shall include and encompass all of the past,
present, or future parent, affiliated, related and/or subsidiary companies of
Orthovita, and its past, present or future directors, shareholders, officers,
employees, agents, attorneys and representatives.

EMPLOYEE and ORTHOVITA agree to the following terms and conditions in full and
final settlement of all matters in any way relating to, or arising out of,
EMPLOYEE’s employment and/or separation from employment with ORTHOVITA.

1. Employee’s final day of employment with the Company will be Friday, June 15,
2007 (“Termination Date”), and Employee hereby resigns as of such date.

2. Subject to Employee’s execution and nonrevocation of this Agreement and in
consideration for Employee’s obligations and agreements hereunder, the Company
will:

 

  (a) pay Employee a total of $218,000.00, payable as salary continuation for a
period of 12 months, which is equivalent to 12 months of salary continuation at
Employee’s current semi-monthly salary of $9,083.33, minus all taxes and payroll
deductions authorized by law. These payments will commence with the Company’s
next payroll period following the June 15, 2007, Termination Date, provided that
Employee has not revoked this Agreement prior to the Effective Date (hereinafter
defined) of the Agreement. Amounts due under this paragraph 2(a) shall be
payable in semi-monthly installments in accordance with Orthovita’s normal
payroll cycle;

 

  (b) If EMPLOYEE chooses to continue his group medical and dental benefits
under COBRA, ORTHOVITA will pay the COBRA premiums for such medical/dental
benefits through the twelve month period following the Agreement Date;

 

  (c) Orthovita will provide EMPLOYEE with a payment equal to any reasonable
unreimbursed business expenses through June 15, 2007 and any accrued, unused
vacation days through the Agreement Termination Date; and

 

  (d) Orthovita acknowledges that Employee’s vested status in Orthovita’s
matching contributions to Employee’s John Hancock 401(k) Retirement Account is
66% and such vested percentage will remain intact, but that Employee’s plan
account is valued on a daily basis.

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  (e) amend Employee’s non-compete provisions as specified in Section 3 herein
below.

3. The Company has elected to enforce against Employee his non-compete
obligations provided for in Section 3 (a)—(d) of Employee’s Confidentiality and
Non-Disclosure Agreement with the Company dated 1st of October 2004, attached
hereto as Exhibit A, incorporated by reference and made part hereof in its
entirety (“CDA”), provided that the Company and Employee agree that this
Agreement amends Section 3 and Section 6 of the CDA, and except as explicitly
stated herein, all other provisions in the CDA remain in full force and effect.
Further, in the event that Employee breaches the non-compete provisions of the
CDA as modified hereby, the Company shall not be obligated to make the payments
in Section 2 above. In consideration for the Company’s undertakings as described
in Section 2 herein and in accordance with the provisions of this Section 3:

 

  (a) Employee agrees that upon execution of this Agreement, Employee will
return all Company equipment, Company documents and any other Company property
including all sales and marketing literature, in Employee’s possession, custody
or control. Such Company property includes any Company equipment and materials
in Employee’s home;

 

  (b) Employee agrees to abide by the following Non-Compete Agreement:

1) The “Non-Compete Ending Date” is June 15, 2008.

2) “Competitive Areas” means bone grafting, surgical hemostasis, treatment of
vertebral compression fractures, and bioactive structural interbody fusion spine
spacer applications.

3) Commencing on the Employee’s June 15, 2007, Termination Date of employment
with the Company, and continuing through and including the Non-Compete Ending
Date of June 15, 2008, (the “Restriction Period”), Employee will not, without
the Company’s express prior written consent, directly or indirectly own, manage,
create, operate, sell, market, license, join, control, finance or participate in
the ownership, management, operation, control or financing of, or be connected
as an officer, director, employee, partner, principal, agent, representative,
consultant or otherwise with, or use or permit his name to be used in connection
with, any person, business, firm, organization, enterprise or entity that
develops, designs, manufactures, sells, licenses, markets or provides advice on
any technologies, products or products in development in the Competitive Areas
(a “Competing Business”), or sell or license to, or develop for or with a
Competing Business any technologies or products in the Competitive Areas. Such
products and technologies include, without limitation, those products and
technologies which (i) the Company or any of its

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divisions and/or subsidiaries or affiliates has developed, manufactured, sold,
licensed or marketed; (ii) have been disclosed to Employee verbally or in
writing during the course of his employment, during any consulting arrangement
or as of the Termination Date as being in the process of development,
manufacturing, selling, licensing or marketing by the Company, its divisions
and/or its affiliates; and (iii) to Employee’s knowledge, the Company may be in
the process of developing, manufacturing, selling, licensing or marketing now or
through the Restriction Period.

It is recognized by Employee that the business of the Company, its divisions
and/or its affiliates and Employee’s connection therewith has been, is or will
be involved in activity throughout the world, and that more limited geographical
limitations on this non-competition covenant are therefore not appropriate.

The foregoing restrictions shall not be construed to prohibit the ownership by
Employee of less than one percent of any class of securities of any corporation
which is engaged in any of the foregoing businesses having a class of securities
registered pursuant to the Securities Exchange Act of 1934 (the “Exchange Act”),
provided that such ownership represents a passive investment and that neither
Employee nor any group of persons including Employee in any way, either directly
or indirectly, manages or exercises control of any such corporation, guarantees
any of its financial obligations, otherwise takes any part in its business,
other than exercising his rights as a shareholder, or seeks to do any of the
foregoing.

4. Employee on behalf of himself and his successors, assigns, heirs and legal
representatives (“Releasors”), hereby voluntarily and knowingly remises,
releases, acquits and forever discharges the Company and its representatives,
its parent, affiliated and subsidiary corporations, and its and their
predecessors, successors, affiliates, officers, directors, agents, assigns,
employees, attorneys, employee benefit plans, employee benefit plan
administrators, and employee benefit plan fiduciaries (“Releasees”), from any
and all claims, rights, expenses, debts, demands, costs, contracts, liabilities,
obligations, actions, and causes of action of any nature, known or unknown,
based upon any fact, circumstance, or event occurring or existing at or prior to
Employee’s execution of this Agreement, including, but not limited to, any and
all matters relating to Employee’s employment with the Company or the
termination of that employment. This Release specifically includes, but is not
limited to, any claims or actions arising out of or during Employee’s employment
with the Company and/or separation of employment, including any claim under the
Age Discrimination in Employment Act (“ADEA”), 29 U.S.C. §621 et seq.; Title VII
of the Civil Rights Act of 1964, 42 U.S.C. §2000e et seq.; the Americans with
Disabilities Act, 42 U.S.C. §12101 et seq.; the Employee Retirement Income
Security Act, 29 U.S.C. §1101 et seq.; 42 U.S.C. §1981 (“Section 1981”); the
Pennsylvania Human Relations Act (“PHRA”), 43 P.S. §951 et seq.; the
Pennsylvania Wage Payment and Collection Law (“WPCL”), 43 P.S. §260.1 et seq.;
the Family and Medical Leave Act (“FMLA”) and any and all other federal, state
or local laws, and any common law claims now or hereafter recognized, as well as
all claims for counsel fees and costs. The claims being waived and released
include, without limitation, (a) any and all claims arising from or relating to
Employee’s recruitment, hire, employment and termination of employment with the
Company; (b) any and all claims of wrongful discharge, emotional distress,

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defamation, misrepresentation, fraud, detrimental reliance, breach of
contractual obligations, promissory estoppel, negligence, assault and battery,
violation of public policy; (c) any and all claims of unlawful discrimination,
harassment and retaliation under applicable federal, state and local laws and
regulations; (d) any and all claims of violation of any federal, state, and
local law relating to recruitment, hiring, terms and conditions of employment,
and termination of employment; and (e) any and all claims for monetary damages
and any other forms of personal relief. This Release is not intended to apply to
claims that cannot be waived by private agreement under applicable law.

This release covers any claims Employee may have up to and including the date of
this Agreement, but does not cover claims that arise after the date of this
Agreement or those relating to the enforcement of this Agreement, nor will it
affect those benefits which are intended to survive Employee’s termination as an
Employee of the Company, such as conversion of group insurance. This Release
does not amount to a waiver of any claims for accrued, vested benefits under any
employee benefit or pension plan of RELEASEES, subject to the terms and
conditions of such plans and applicable law.

Employee acknowledges that this Agreement resolves any and all legal claims that
Employee may have against the Company as of the date of this Agreement, whether
known or unknown.

5. Employee represents and covenants that Employee will not communicate or
disclose the terms of this Agreement to any persons other than any federal,
state or local taxing authorities, Employee’s immediate family, Employee’s
attorney or attorneys, and Employee’s accountant or accountants, who will be
instructed by Employee to agree to be bound by the confidential nature of this
Agreement. Nothing herein is intended to limit Employee’s ability to disclose or
discuss the tax treatment or tax structure of the payments made to Employee as
necessary to address or clarify the appropriate tax treatment of the payments to
be made pursuant to Section 2. Employee recognizes and agrees that should it be
determined, in a court of law, that Employee violated this section, Employee
shall be required to refund to the Company all monies payable under this
Agreement, in addition to any other legal or equitable relief that may be
available and awarded to the Company. Nothing in this section, or elsewhere in
this Agreement, is intended to prevent or prohibit Employee from: (i) providing
information regarding Employee’s former employment relationship with the
Company, as may be required by law or legal process; or (ii) cooperating,
participating, or assisting in any government entity investigation or
proceeding.

6. Employee understands and agrees that in the course of employment with the
Company, Employee may have acquired confidential information and trade secrets
concerning the Company’s business, its future plans and its methods of doing
business, including, without limitation, information about its products,
services, product development, customers, technology, financial circumstances,
marketing, pricing, costs, compensation and other matters (hereinafter
collectively called “Trade Secrets”).

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Employee may not reveal or disclose, sell, use, lecture upon, or publish any
such Trade Secrets, or authorize anyone else to do so at any time subsequent to
Employee’s employment with the Company. Employee will return all copies and
originals of the Company documents, files, lists and other information of a
business nature to the Company immediately, (whether or not such includes Trade
Secrets) and any future use of same by Employee is prohibited.

7. Employee and the Company mutually agree to refrain from making disparaging,
defaming, derogatory, critical or negative comments regarding each other, the
Company’s products, services or officers, directors, employees or former
employees of the Company with respect to any past, present or future issues,
except if testifying truthfully in response to a lawfully served subpoena.

8. Neither the negotiation, undertaking or signing of this Agreement constitutes
or operates as an acknowledgment or admission that the Company, or any person
acting on behalf of the Company, has violated or failed to comply with any
provisions of federal or state constitution, statute, law, regulation, municipal
ordinance, or principle of common law. This agreement is made voluntarily to
provide an amicable conclusion to Employee’s employment relationship with the
Company.

9. Employee agrees and understands that the Company does not have, and will not
have, any further obligations to provide Employee at any time with any payment,
benefit or consideration other than those recited in Section 2 above.

10. Employee hereby agrees and recognizes that Employee’s employment
relationship with the Company has been permanently and irrevocably severed as of
the June 15, 2007 Termination Date and that the Company has no obligation,
contractual or otherwise, to hire, rehire or re-employ Employee in the future.

11. Employee agrees that Employee shall reasonably cooperate with the Company
following the Termination Date to assist with legal proceedings with respect to
matters for which Employee was responsible during Employee’s employment with the
Company.

12. In signing this Agreement, Employee acknowledges that:

(a) Employee has signed this Agreement voluntarily and knowingly in exchange for
the consideration described herein, which Employee acknowledges as adequate and
satisfactory.

(b) Employee has been advised by the Company to consult with an attorney before
signing this Agreement;

(c) Employee has been given a period of at least twenty-one (21) calendar days
after the date Employee received this Agreement, within which to review and
consider this Agreement, to discuss it with an attorney of Employee’s own
choosing, and to decide whether or not to sign this Agreement.

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(d) The Employee has consulted with an attorney of his own choosing during this
time period.

(e) In addition, for the period of seven (7) calendar days after the date
Employee signs this Agreement (“Revocation Period”), Employee may revoke it by
delivering written notice of revocation to the Company by hand-delivery or by
facsimile or e-mail transmission (and retaining proof of successful
transmission) using the street, facsimile, or e-mail address to: Patricia A.
Twomey, Vice President, Human Resources, Orthovita Inc., 77 Great Valley
Parkway, Malvern, PA, 610.640.9206 (facsimile), PTwomey@Orthovita.com (email);
and

(f) Neither the Company, nor any of its employees, agents, representatives, or
attorneys has made any representations to Employee concerning the terms or
effects of this Agreement and other than those contained herein.

13. In the event that any one or more provisions (or portion thereof) of this
Agreement is held to be invalid, unlawful, or unenforceable for any reason, the
invalid, unlawful, or unenforceable provision (or portion thereof) shall be
construed or modified so as to provide the Company and Affiliates with the
maximum protection that is valid, lawful and enforceable, consistent with the
intent of the Company and Employee in entering into this Agreement. If such
provision (or portion thereof) cannot be construed or modified so as to be
valid, lawful and enforceable, that provision (or portion thereof) shall be
construed as narrowly as possible and shall be severed from the remainder of the
Agreement (or provision), and the remainder shall remain in effect and be
construed as broadly as possible, as if such invalid, unlawful or unenforceable
provision (or portion thereof) had never been contained in this Agreement.

14. This Agreement shall take effect on the first day following the expiration
of the Revocation Period, provided this Agreement has not been revoked by
Employee as provided in Section 12 above during such Revocation Period (the
“Effective Date”).

15. It is agreed and understood that this Agreement contains and comprises the
entire understanding of the parties and that there are no additional or other
promises, representations, terms or provisions other than those expressly
contained herein. This Agreement shall not be modified except in writing signed
by each of the parties. This Agreement supersedes all other prior agreements
concerning the terms of Employee’s employment with the Company, except for the
CDA as amended hereby.

16. Employee agrees to the jurisdiction of any court in the Commonwealth of
Pennsylvania over all disputes, which may arise involving this Agreement and
Employee hereby consents to the assertion of personal jurisdiction over Employee
by any such Court in any such action instituted by the Company pursuant to this
section. This Agreement and the obligations of the parties shall be construed,
interpreted and enforced in accordance with the laws of Pennsylvania without
regard to choice of law provisions.

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I HAVE READ THIS AGREEMENT. I UNDERSTAND THAT I AM GIVING UP IMPORTANT RIGHTS
PER SECTION 4, ABOVE. I AM AWARE OF MY RIGHT TO CONSULT WITH AN ATTORNEY OF MY
OWN CHOOSING DURING THE CONSIDERATION PERIOD, AND THAT THE COMPANY HAS ADVISED
ME TO UNDERTAKE SUCH CONSULTATION BEFORE SIGNING THIS AGREEMENT. I SIGN THIS
AGREEMENT FREELY AND VOLUNTARILY, WITHOUT DURESS OR COERCION.

IN WITNESS WHEREOF, and intending to be legally bound and under seal, the
parties have executed the foregoing Confidentiality Separation Agreement and
General Release and Amendment to Confidentiality and Non-Disclosure Agreement.

 

Dated: June 21, 2007 By:  

/s/ Donald L. Scanlan

ORTHOVITA, INC. Dated: June 25, 2007 By:  

/s/ Antony Koblish

 

President & CEO

Witness:  

/s/ Patricia A. Twomey