Document:

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                                                                   Exhibit 10.12

                           COMMERCIAL LEASE AGREEMENT

STATE OF GEORGIA

COUNTY OF FULTON

      THIS LEASE AGREEMENT, is, made and entered into this 1st day of Nov, 1999
by and between Charles P. Garrison (hereinafter referred to as "Lessor") and
Georgia Tissue Bank (hereinafter referred to as "Lessee");

                              W I T N E S S E T H:

      1. Premises. Lessor, for and in consideration of the rents, covenants,
agreements and stipulations hereinafter mentioned, reserved and contained to be
paid, kept and performed by Lessor, has leased and rented and by these presents
does lease and rent unto Lessee, and Lessee hereby agrees to lease and take upon
the terms and conditions which hereinafter appear, the following described
property (hereinafter called "premises"), to-wit;

            The entire building which is represented by the attached floor plan
            at Exhibit A representing a 9.275 square building known as 120-138
            Hammond Drive, and the parking spaces and common areas appurtenant
            thereto.

      2. Term. To have and to hold the same for a term beginning on the 1st day
of November, 1999 and terminating at 12:00 Midnight on October 31, 2002, unless
sooner terminated as hereinafter provided.

      3. Rental. Lessee agrees to pay to Lessor promptly on the 1st day of each
month in advance during the term of this lease a monthly rental of $12,365. Said
monthly rental payments shall be payable to Lessor at such location as Lessor
shall from time to time specify. If the rental is not received by the 10th day
of the month, a 5% delinquency penalty is due.

                                                             Schedule 3.11(b)(i)

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      The monthly rental payment for any partial month shall be prorated based
upon the number of days.

      The monthly lease payments shall be increased as follows:

            November, 2000 through October, 2001 - $12,860

            November, 2001 through October, 2002 - $13,374

      4. Utility Bills. Lessee shall be responsible for and pay all utilities,
including but not limited to water, sewer, gas, electricity, fuel, telephone,
light and heat bills for the leased premises; and Lessee shall pay all charges
for janitorial, garbage collection services or other sanitary services rendered
to the leased premises or used by Lessee in connection therewith. If Lessee
fails to pay any of said utility bills or charges for garbage collection or
other sanitary services, Lessor may pay the same; and such payment may be added
to the rental of the premises next due as additional rent.

      5. Use of the Premises. Premises shall be used for General office space
and/or Laboratory/Medical Facility purposes and no other. Premises shall not be
used for any illegal purposes nor in any manner to create any nuisance or
trespass nor in any manner to vitiate the insurance or increase the rate of
insurance on premiums.

      6. Abandonment of Leased Premises. Lessee agrees not to abandon or vacate
the leased premises during the period of this lease and agrees to use said
premises for the purposes herein leased until the expiration hereof.

      7. Repairs by Lessor. Lessor agrees to keep in good repair the roof,
foundations and exterior walls of the premises (exclusive of all glass and
exclusive of all exterior doors) and underground utility and sewer pipes outside
the exterior walls of the building, except repairs rendered necessary by the
negligence of Lessee or Lessee's agents, employees or invitees. Lessor gives
Lessee exclusive control over the premises and shall be under no obligation to
inspect said premises. Lessee shall promptly report in writing to Lessor any
defective condition known to Lessee which Lessor is required to repair; and
failure to so

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report such defects shall make Lessee responsible to Lessor for any liability
incurred by Lessor by reason of such defects.

      If Lessor does not within 45 days of written request by Lessee, make
required repairs, Lessee may contract to have such repairs made, provided any
repairs exceeding $7,500 may not be made without Lessor's express written
consent. If Lessor does not pay for such repairs upon presentment of an invoice
after completion of the repairs, Lessee may set-off such amounts against
Lessee's rent obligations.

      8. Repairs by Lessee. Lessee accepts the leased premises in their present
condition and as suited for the uses intended by Lessee. Lessee shall,
throughout the initial term of this lease and all renewals hereof, at Lessee's
expense, maintain in good order and repair the leased premises, including the
building and other improvements located thereon except those repairs expressly
required to be made by Lessor. Lessee further agrees to care for the grounds
around the building, including the mowing of grass, paving, care of shrubs and
general landscaping. Lessee agrees to return said premises to Lessor at the
expiration of prior to termination of this lease in as good condition and repair
as when first received, natural wear and tear, damage by storm, fire, lighting,
earthquake or other casualty alone excepted. Elevators, if any, are accepted by
Lessee as in satisfactory operating condition on this date; and Lessee shall, as
Lessee's own expense, maintain said elevators in good operating condition during
the term of this lease and any extensions hereof.

      9.1 Taxes and Association Fee. Lessee shall pay as additional rental
during the term of this lease and any extension or renewal thereof, the
association fees and the taxes (including but not limited to ad valorem taxes,
special assessments and any other governmental charges) attributable to the
premises for each tax year. In the event the premises are less than the entire
property, the association fee and taxes for any such year applicable to the
premises shall be determined by proration on the basis that the rental floor
area of the premises bears to the total rentable floor area of the entire
property. Lessee's pro rata portion of the association fee and taxes, as
provided herein, shall be payable on a monthly basis based upon the prior year's
actual association fees or taxes. Such estimated amounts shall be adjusted
annually.

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      9.2 Insurance. Lessee shall, upon demand, pay as additional rental during
the term of this lease and any extension or renewal thereof the property and
casualty insurance on the premises for each tax year.

      9.3 Mutual Waiver of Subrogation. The Landlord agrees that he will have
inserted in each property and casualty policy or policies of insurance, which he
may be required to carry (if any), a provision substantially as follows: "It is
hereby stipulated that this insurance shall not be invalidated should the
insured waive in writing prior to a loss any or all right of recovery against
any party for loss occurring to the property described herein" and Landlord
hereby waives, during the term of this lease, any or all rights of recovery
against the Tenant, its officers, employees, and agents for loss occurring to
the premises to the extent that indemnification would be due under such
insurance protection.

      Likewise, the Tenant agrees that he will have inserted in each property
and casualty policy or policies of insurance, which it may be required to carry,
(if any), a provision substantially as follows: "It is hereby stipulated that
this insurance shall not be invalidated should the insured waive in writing
prior to a loss any or all right of recovery against any party for loss
occurring to the property described herein" and Tenant does hereby waive, during
the term of this Lease, any and all rights of recovery against the Landlord, its
officers, employees, and agents to the extent that indemnification would be due
under such insurance protection.

      10. Destruction of or Damages to Premises. If premises are totally
destroyed by storm, fire, lightning, earthquake or other casualty, this lease
shall terminate as of the date of such destruction; and rental shall be
accounted for as between Lessor and Lessee as of that date. If premises are
damaged but not wholly destroyed by any such casualties, rental shall abate in
such proportion as use of the premises has been destroyed; and Lessor shall
restore premises to substantially the same condition as before damage as
speedily as practicable, whereupon full rental shall recommence.

      Notwithstanding the foregoing, if Lessor has not within 6 months restored
the premises to substantially the same condition as before damage, the Lessee
may terminate this lease without being treated as in default.

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      11.1 Indemnity. Lessee agrees to indemnify and save harmless Lessor
against all claims for damages to persons or property by reason of the use or
occupancy of the leased premises and all expenses incurred by Lessor because
thereof, including reasonable attorney's fees and court costs.

      11.2 Indemnity. Lessor agrees to indemnify and save harmless Lessee
against all claims for damages to persons or property by reason of the use or
occupancy by Lessor or Lessor's agents of the leased premises and all expenses
incurred by Lessee because thereof, including reasonable attorney's fees and
court costs.

      12. Governmental Orders. Lessee agrees, at Lessee's own expense, to
promptly comply with all requirements of any legally constituted public
authority made necessary by reason of Lessee's occupancy of said premises.
Lessor agrees to promptly comply with any such requirements if not made
necessary by reason of Lessee's occupancy. However, it is mutually agreed
between Lessor and Lessee that, if in order to comply with such requirements,
the cost to Lessor or Lessee, as the case may be, shall exceed a sum equal to
one year's rent, then Lessor or Lessee who is obligated to comply with such
requirements is privileged to terminate this lease by giving written notice of
termination to the other party via Certified Mail, Return Receipt Requested,
which termination shall become effective sixty (60) days after receipt of such
notice and which notice shall eliminate the necessity of compliance with such
requirement by party giving such notice unless the party receiving such notice
of termination shall, before such termination becomes effective, pays to the
party giving notice all costs of compliance in excess of one year's rent or
secures the payment of said sum in a manner satisfactory to the party giving
notice.

      13. Condemnation. If the whole of the leased premises or such portion
thereof as will make the premises unusable for the purposes herein leased shall
be condemned by any legally constituted authority for any public use or purpose,
then in either of said events the term hereby granted shall cease from the date
when possession thereof is taken by public authorities; and rental shall be
accounted for as between Lessor and Lessee as of said date. Such termination,
however, shall be without prejudice to the rights of either Lessor or Lessee to
recover compensation and damage caused by condemnation from the condemnor. It is

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further understood and agreed that neither Lessee nor Lessor shall have any
rights in any award made to the other by any condemnation authority
notwithstanding the termination of the lease as herein provided.

      14. Assignment and Subletting. Lessee may sublease portions of the leased
premises to others provided such sublessee's operation is a part of the general
operation of Lessee and under the supervision and control of Lessee and provided
such operation is within the purposes for such said premises shall be used.
Except as provided in the preceding sentence, Lessee shall not assign this lease
or any interest hereunder or sublet premises or any part thereof or permit the
use of premises by any party other than Lessee without the prior written consent
of Lessor (not to be unreasonably withheld) endorsed hereon. At the option of
Lessor, Assignee or Lessee shall become directly liable to Lessee for all
obligations of Lessee hereunder; but no sublease or assignment by Lessee shall
relieve Lessee of any liability hereunder.

      15. Removal of Fixtures. If Lessee is not in default under this lease,
Lessee may remove all fixtures and equipment which Lessee owns, provided Lessee
repair all damage to premises caused by such removal and provided that Lessee,
at Lessee's expense, return the space to standard office space comparable to
other office space within the leased premises.

      16. Cancellation of Lease by Lessor. It is mutually agreed that, in the
event Lessee shall default in the payment of rent, including additional rent
herein reserved, when due and fails to cure said default within five (5) days
after written notice thereof from Lessor; or if Lessee shall be in default in
performing any of the terms or provisions of this lease other than the provision
requiring the payment of rent and fails to cure such default within thirty (30)
days after the date of receipt of written notice of default from Lessor; or if
Lessee is adjudicated bankrupt; or if a permanent receiver is appointed for
Lessee's property and such receiver is not removed within sixty (60) days after
written notice form Lessor to Lessee to obtain such removal; or if, whether
voluntarily or involuntarily, Lessee takes advantage of any debtor relief
proceedings under any present or future law, whereby the rent or any part
thereof is or is proposed to be reduced or payment thereof deferred; or if
Lessee makes an assignment for the benefit of creditors; or if Lessee's effects
should be levied upon or

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attached under process against Lessee and not satisfied or dissolved within
thirty (30) days after written notice from Lessor to Lessee to obtain
satisfaction thereof; then and in any of said events, Lessor (at Lessor's
option) may at once or within six (6) months thereafter (but only during
continuance of such default or condition), terminate this lease by written
notice to Lessee, whereupon this lease shall end. After an authorized assignment
or subletting of the entire premises covered by this lease, the occurring of any
of the foregoing defaults or events shall affect the lease only if caused by or
happening to the assignee or sublessee. Any notice provided in this Paragraph
may be given by Lessor or Lessor's Attorney. Upon such termination by Lessor,
Lessee will at once surrender possession of the premises to Lessor and remove
all of Lessee's effects therefrom; and Lessor may forthwith re-enter the
premises, repossess same and remove all persons and effect therefrom using such
force as may be necessary without being guilty of trespass, forcible entry,
detainer or other tort.

      17. Re-entry by Lessor. Lessor, as Lessee's agent, may (at Lessor's
option), without terminating this lease upon Lessee's breaching this lease,
enter upon and rent the premises at the best price obtainable by reasonable
effort without advertisement and by private negotiations and for any term Lessor
deems proper. Lessee shall be liable to Lessor for the deficiency, if any,
between Lessee's rent hereunder and the price obtained by Lessor on reletting.

      18. Exterior Signs. Lessee shall place no signs upon the outside walls or
roof of the leased premises except with the written consent of Lessor. Any and
all signs placed on the premises by Lessee shall be maintained in compliance
with rules and regulations governing such signs; and Lessee shall be responsible
to Lessor for any damages caused by installation, use or maintenance of said
signs. Lessee agrees to repair all damage incident to the removal of said signs
upon removal of same.

      19. Entry for Carding. Etc.. Lessor may card premises "For Rent" or "For
Sale" ninety (90) days before the termination of this lease. Lessor or his
agents may enter the premises at reasonable hours to exhibit same to prospective
purchasers or tenants and to make repairs required of Lessor under the terms
hereof.

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      20. Effect of Termination of Lease. No termination of this lease prior to
the normal ending thereof by lapse of time or otherwise shall affect Lessor's
right to collect rent for the period prior to termination thereof.

      21. Mortgagee's Rights. Lessee's rights shall be subject to any bona fide
mortgage or deed to secure debt which is now or may hereafter be placed upon the
premises by Lessor.

      22. No Estate in Land. This lease shall create the relationship of
landlord and tenant between the parties hereto; and no estate shall pass out of
Lessor. Lessee has only a usufruct not subject to levy and sale and not
assignable by Lessee except by Lessor's consent (not to be unreasonably
withheld).

      23. Holding Over. If Lessee remains in possession of premises after the
expiration of the term hereof with Lessor's acquiescence an without any express
agreement of the parties, Lessee shall be a tenant at will at the rental rate in
effect at the end of this lease; and there shall be no renewal of this lease by
operation of law.

      24. Attorney's Fees and Homestead. If any rent owing under this lease is
collected by or through an attorney at law, Lessee agrees to pay reasonable
attorney's fees incurred by Lessor. Lessee waives all homestead rights and
exemptions which Lessee may have under the law as against any obligation owing
under this lease. Lessee hereby assigns to Lessor all Lessee's homestead and
exemption.

      25. Rights Cumulative. All rights, powers and privileges conferred
hereunder upon parties hereto shall be cumulative but not restrictive to those
given by law.

      26. Service of Notice. Lessee hereby appoints as Lessee's agent to receive
service of all dispossessory or distraint proceedings and notices hereunder and
all notices required under this lease, the person in charge of the leased
premises at the time or the person occupying said premises, and if no person is
in charge of or occupying said premises, then such service or notice may be made
by attaching the same on the main entrance to said

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premises. A copy of all notices under this lease shall also be sent to Lessee's
last-known address if different from said premises.

      27. Waiver of Rights. No failure of Lessor to exercise any power given
Lessor hereunder or to insist upon strict compliance by Lessee with Lessee's
obligations hereunder and no custom or practice of the parties at variance with
the terms hereof shall constitute a waiver of Lessor's right to demand exact
compliance with the terms hereof.

      28. Time of Essence. Time is of the essence of this lease agreement.

      29. Definitions. "Lessor" as used herein shall include first party and
first party's heirs, representatives, assigns, and successors in title to the
premises. "Lessee" shall include second party and second party's heirs and
representatives and, if this lease shall be validly assigned or sublet, shall
include also Lessee assignees or sublessees as to the premises covered by such
assignment or sublease. "Lessor" and "Lessee" shall include male and female,
singular and plural, corporation, partnership or individual as may fit the
particular parties.

      30. Security Deposit. Upon execution of this lease, Lessee shall pay a
security deposit in the amount of Twelve Thousand Three Hundred Sixty-Five
Dollars ($12,365.00) to Lessor. Upon termination of this lease and surrender of
the premises by Lessee to Lessor, the security deposit shall be returned to
Lessee, provided that Lessor may hold the security deposit for a period of
thirty (30) days following surrender of possession and may deduct from the
amount refunded any rental due and payable, the costs of repairing any damage or
replacing any damaged portion of the premises and costs of cleaning the premises
if Lessee fails to do so prior to surrender of possession.

      31. Special Stipulations. In so far as the following stipulations conflict
with any of the foregoing provisions, the following shall control:

N/A
--------------------------------------------------------------------------------

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      32. Entire Agreement. This lease contains the entire agreement between the
parties hereto; and no representations, inducements, promises or agreements,
oral or otherwise between the parties and not embodied herein shall be of any
force or effect.

      33. Lease Contingent Upon Simultaneous Closing. This lease is void unless
simultaneous with the execution of this lease, the contracts dated November __,
1999 between NTBN-GTB, Inc., Georgia Tissue Bank, Inc. and Dr. Charles P.
Garrison are also consummated.

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      IN WITNESS WHEREOF, the parties have hereunto executed this lease
agreement as of the day and year first above written.

AS TO LESSOR:

SIGNED, SEALED AND DELIVERED              /s/ Charles P. Garrison, M.D.
IN THE PRESENCE OF:                       --------------------------------------
                                          CHARLES P. GARRISON, M.D.

-----------------------------------
WITNESS

/s/ W. Courtney Lafon                      [SEAL]
-----------------------------------   W. Courtney Lafon
NOTARY PUBLIC                              NOTARY
                                           EXPIRES
                                           GEORGIA
                                        AUG. 27, 2002
                                           PUBLIC
                                        FULTON COUNTY

AS TO LESSEE:                             GEORGIA TISSUE BANK, INC.

SIGNED, SEALED AND DELIVERED              /s/ Jamie M. Groom
IN THE PRESENCE OF:                       --------------------------------------
                                          By: Jamie M. Groom, PRESIDENT

/s/ [ILLEGIBLE]
-----------------------------------
WITNESS

/s/ Marsha D. Foreman                    [SEAL]            Marsha D. Foreman
-----------------------------------   NOTARY PUBLIC      Commission # CC747340
NOTARY PUBLIC                       STATE OF FLORIDA     Expires July 12, 2002
                                                              BONDED THRU
                                                      ATLANTIC BONDING CO., INC.

Guaranty of Lease

      All provisions of the above lease and any extension thereto, are fully
guaranteed by Regeneration Technologies, Inc.

                                         REGENERATION TECHNOLOGIES, INC.

SIGNED, SEALED AND DELIVERED              /s/ Jamie M. Groom
IN THE PRESENCE OF:                       --------------------------------------
                                          By: Jamie M. Groom, PRESIDENT

/s/ [ILLEGIBLE]
-----------------------------------
WITNESS

/s/ Marsha D. Foreman                    [SEAL]            Marsha D. Foreman
-----------------------------------   NOTARY PUBLIC      Commission # CC747340
NOTARY PUBLIC                       STATE OF FLORIDA     Expires July 12, 2002
                                                              BONDED THRU
                                                      ATLANTIC BONDING CO., INC.

                                      -11-<PAGE>

                                                                  Exhibit 10.13

                              EMPLOYMENT AGREEMENT

            THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
by and between REGENERATION TECHNOLOGIES, INC., a Florida corporation (the
"Corporation") and JAMES M. GROOMS ("Employee").

            WHEREAS, the Corporation is engaged in the business of manufacturing
products from human and animal tissue in Alachua, Florida; and

            WHEREAS, the Corporation desires to employ Employee and Employee
desires to accept such employment during the term of this Agreement and upon the
terms and conditions set forth herein.

            NOW, THEREFORE, in consideration of the mutual promises and the
benefits accruing to the parties hereto, the parties agree as follows:

            1. Employment. The Corporation hereby agrees to employ Employee, and
Employee hereby agrees to accept such employment, to render services on behalf
of the Corporation as Chief Executive Officer and President. The duties of
Employee shall be those established by the Corporation's Board of Directors from
time to time.

            2. Devotion to Employment. During the term of this Agreement,
Employee shall devote his full time on behalf of the Corporation, and he shall
not engage in any other gainful employment without the written consent of the
Corporation; provided, however, that nothing contained herein shall prohibit
Employee from investing or trading in stocks, bonds, commodities or other forms
of investment, including real property.
<PAGE>

            3. Term of Agreement. This Agreement shall be effective as of
February 9, 1998, and it shall continue in full force and effect for a period of
five (5) years unless sooner terminated as hereinafter provided.

            4. Compensation.

                  (a) Annual Salary. The Corporation shall pay to Employee as
compensation for his services a salary of One Hundred Ninety-Two Thousand Three
Hundred Ninety-Five Dollars ($192,395.00) per year, payable in equal monthly
installments. Employee's salary shall be reviewed annually by the Corporation's
Board of Directors, at which time Employee's salary may be adjusted as agreed
upon by Corporation's Board of Directors.

                  (b) Performance Bonus. To provide greater incentive for
Employee by rewarding him with additional compensation, a cash bonus may be paid
to Employee at any time during the year, or after the close of the year, based
upon the performance of the Corporation and the performance of Employee during
such year; provided, however, that the payment of any such bonus and the amount
thereof shall be within the sole discretion of the Corporation's Board of
Directors. In making such determination, the Directors will consider the
following:

                        (i) The net profits of the Corporation for the year;

                        (ii) The base salary of Employee;

                        (iii) Employee's overall performance as an employee of
      the Corporation;

                        (iv) A comparison of Employee's performance with the
      performance of the other employees of the Corporation; and

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                        (v) Such other matters as may be considered appropriate
      by the Directors.

                  (c) Withholding, FICA, FUTA. Employee's compensation hereunder
shall be subject to, and reduced by, applicable federal income tax withholding
and FICA tax, and any other taxes imposed by law.

            5. Fringe Benefits. During the term of this Agreement, Employee
shall be entitled to all fringe benefits offered generally to the Corporation's
managerial employees as established or modified from time to time by the
Corporation, subject always to the rules in effect regarding participation in
such plans. In addition, the Corporation shall obtain and maintain in force
during the term of this Agreement a life insurance policy covering Employee's
life in a face value of not less than one million dollars ($1,000,000.00). The
death benefit of such policy shall be made payable to the beneficiary or
beneficiaries Employee may from time to time designate in writing.

            6. Business Expenses. Except as otherwise provided herein, the
Corporation shall pay, either directly or by reimbursement to Employee, such
reasonable and necessary business expenses incurred by him, in the course of his
employment by the Corporation as are consistent with the Corporation's policies
in existence from time to time, subject to such dollar limitations and
verification and record keeping requirements as may be established from time to
time by the Corporation.

            7. Vacation Time. Employee shall be entitled to four (4) weeks paid
vacation time each calendar year, prorated in accordance with Corporation
policy. All vacations shall be taken by Employee at such time or times as may be
approved by the Corporation. There

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will be no carryover of unused vacation time from one year to another, and no
compensation for such unused vacation or sick leave, if any.

            8. Time Off. Employee shall be entitled to such time off with pay
for attendance at seminars, courses, meetings and conventions as is authorized
by the Corporation from time to time. The specific seminars, courses, meetings
and conventions to be attended by Employee shall be subject to the Corporation's
prior approval.

            9. Automobile. Employee shall provide an automobile for his use in
the conduct of the Corporation's business as a condition of his employment.
During the term of this Agreement, the Corporation shall reimburse Employee for
Employee's use of his automobile and all incidental costs associated therewith
(including, but not limited to, gas, oil, repairs, maintenance, insurance and
car telephone) in the conduct of the Corporation's business based upon the
standard mileage rate as announced from time to time by the Internal Revenue
Service for use in computing deductible costs for operating a passenger
automobile; provided, however, Employee shall be required to submit written
verification to the Corporation of the mileage, destination and purpose of each
trip for which reimbursement is requested pursuant to this Paragraph

            10. Termination of Employment.

                  (a) Voluntary Termination. Employee or the Corporation may
voluntarily terminate Employee's employment with the Corporation (and, except as
otherwise specifically provided hereunder, this Agreement) at any time, by
delivering to the other party written notice of such intention not less than
thirty (30) days prior to the effective date of termination. Notwithstanding the
foregoing, if notice of termination is given by Employee to the Corporation,
then the Corporation shall have the option of advancing the effective date of
such

                                      -4-
<PAGE>

termination to any date after receipt of such notice from Employee, which option
shall be exercised by the Corporation within three (3) business days of receipt
of such notice.

                  (b) Termination for Cause. The Corporation may immediately
terminate Employee's employment with the Corporation (and, except as otherwise
specifically provided hereunder, this Agreement) for "cause" by giving written
notice (without regard to the thirty (30) day period provided above) of such
termination to Employee specifying the grounds therefor. A termination for
"cause" shall only be for any one or more of the following reasons:

                        (i) Willfully or negligently damaging the Corporation's
      property, business, reputation or goodwill.

                        (ii) Willfully injuring any employee of the Corporation.

                        (iii) Willfully injuring any person in the course of the
      performance of services for the Corporation.

                        (iv) Lawfully charged with commission of a felony.

                        (v) Stealing, dishonesty, fraud or embezzlement.

                        (vi) Deliberate and continuous neglect of duty.

                        (vii) Use of alcohol or narcotics to the extent it
      prevents, in the sole judgment of the Corporation's Board of Directors,
      Employee from effectively performing the duties set forth in Paragraph 1
      above.

                        (viii) Violating the covenants set forth in Paragraphs
      11 or 12 of this Agreement.

                  The decision to terminate Employee's employment for "cause"
shall be made by the Corporation's Board of Directors in its sole discretion.

                                      -5-
<PAGE>

                  (c) Termination Upon Death, Incompetency or Disability.
Notwithstanding Subparagraph 10(a) above, the Corporation shall have the right
to terminate Employee's employment with the Corporation (and, except as
otherwise specifically provided hereunder, this Agreement) immediately and
without prior written notice to Employee in the event that Employee dies or is
adjudicated incompetent, or is "permanently disabled" as hereinafter defined. As
used herein, the term "permanently disabled" shall mean that Employee is unable
to adequately perform his regular duties hereunder as a result of sickness or
accident and such condition appears to be permanent. The determination of
"permanent disability" shall be made by the Corporation's Board of Directors in
its sole and absolute discretion and its decision shall be final and binding on
Employee unless found to be arbitrary or capricious by a court of competent
jurisdiction.

                  (d) Performance of Duties During Notice Period. In the event
that either party terminates Employee's employment with the Corporation in
accordance with the terms of Subparagraph 10(a), Employee, if requested by the
Corporation, shall continue to render services hereunder on behalf of the
Corporation for the thirty (30) day period until the effective date of
termination, and shall, in such event, be paid the compensation due him
hereunder for the remainder of such period.

            11. Confidential Information. Employee acknowledges and recognizes
that, in connection with the performance of his duties and obligations for the
Corporation, Employee has and will have access to certain confidential
information of the Corporation, including, but not limited to, any intellectual
property of the Corporation, the identity of the Corporation's clients,

                                      -6-
<PAGE>

the identity of prospective clients, the existence of negotiations with
prospective clients of the Corporation, all drawings, records, sketches, models,
financial information, customer information, trade secrets, and trade secrets
relating to services of the Corporation, and products being developed by the
Corporation (the "Confidential Information"). Employee hereby acknowledges that
the maintenance of the confidentiality of the Confidential Information and
restrictions on the use of the Confidential Information is essential to the
Corporation. Employee shall not, at any time, whether during the term of this
Agreement or after the termination of Employee's employment with the Corporation
for any reason whatsoever, divulge or reveal any of the Confidential Information
to any person, party or entity, directly or indirectly. In addition, Employee
shall not utilize any of the Confidential Information for his own benefit, for
the benefit of any subsequent employer or competitor of the Corporation.
Employee shall maintain the Confidential Information in strict confidence and
shall not copy, duplicate or otherwise reproduce, in whole or in part, such
Confidential Information, except as necessary for Employee to perform services
for the Corporation. Upon the termination of Employee's employment by the
Corporation, or at the earlier request of the Corporation, Employee shall
immediately surrender to the Corporation any and all memoranda, records, files
or other documents and any other materials (including photocopies or other
reproductions) containing or relating to the Confidential Information. Employee
shall indemnify and hold the Corporation harmless from any loss, damage,
expense, cost or liability arising out of any unauthorized use or disclosure of
the Confidential Information by Employee. The provisions of this Paragraph 11
shall survive the termination of Employee's employment with the Corporation and
the termination of this Agreement.

                                      -7-
<PAGE>

            12. Employee Developments. Employee is aware and understands that,
during the term of Employee's employment with the Corporation or with the
financial and other assistance that may be provided by the Corporation, Employee
may invent, create, develop and improve certain valuable property such as, but
not limited to, patents, trademarks, inventions, other patentable inventions and
other trade secrets and formula, where such valuable property is (1) created
during Employee's normal work hours; (2) created using the equipment or
facilities of the Corporation; (3) created by Employee under the supervision or
guidance of the Corporation; or (4) within the field of use which includes human
or animal allograft tissue ("Employee Developments"). Employee agrees that all
Employee Developments that may be developed or produced by Employee during
Employee's employment by the Corporation are and will be the property of the
Corporation, and that Employee further agrees that he will, at the request of
the Corporation, execute such documents as the Corporation may reasonably
request from time to time, to assign and transfer all of the right, title and
interest in Employee Developments that are the property of the Corporation to
the Corporation and he will cooperate with the Corporation in connection with
any patent applications. In this regard, Employee will, at all times, fully
advise and inform the Corporation of all matters that Employee may be developing
or working on while employed by the Corporation. Employee further agrees that
upon the termination of his employment with the Corporation for any reason
whatsoever, he shall immediately deliver and surrender to the Corporation any
and all plans, documents and other materials of any nature relating to Employee
Developments. The Corporation may provide additional compensation to Employee as
consideration for Employee Developments in

                                      -8-
<PAGE>

accordance with any patent policy of the Corporation. The provisions of this
Paragraph 12 shall survive the termination of this Agreement.

            13. Limitation of Employment.

                  (a) In the event of the termination of Employee's employment
with the Corporation by the Corporation for cause (as defined in Subparagraph
10(b) above), Employee agrees that for a period of one (1) year following the
effective date of such termination, he will not engage in any business which
receives, processes, or distributes human tissue within the United States. In
the event of the termination of Employee's employment with the Corporation by
the Corporation without cause, Employee agrees that for a period of one (1) year
following the effective date of such termination, Employee will not engage in
any business which receives, processes, or distributes human tissue (or in any
business that competes with the Corporation) within the United States; provided,
however, that Employee shall then be entitled to a severance payment in the
amount of one (1) times his then-current salary (computed without reference to
shares of stock in the Corporation, fringe benefits, or any other form of
compensation). The Corporation may require Employee to execute a release of
claims against the Corporation as a condition precedent to its obligation to
make the severance payment described herein.

                  (b) Employee acknowledges that this restrictive covenant is
reasonably necessary to protect the Corporation's legitimate business interests,
which are represented by, among other things, the substantial relationships
between the Corporation and its licensees and tissue sources, as well as the
goodwill established by the Corporation with licensees and tissue sources in the
United States and other countries where the Corporation's products are
manufactured or distributed over a protracted period.

                                      -9-
<PAGE>

                  (c) Employee recognizes the fact that the Corporation would
not sign this Agreement without the inclusion of this covenant, and Employee
confirms the sufficiency of the consideration received by him, in the form of
employment by the Corporation, in accepting this covenant as a material term of
the Agreement.

                  (d) The period set forth in subparagraph (a) above will be
tolled during any time in which Employee is in violation of the restrictive
covenant contained in this Paragraph 13, and that period will begin to run again
from the date Employee ceases such violation.

                  (e) This Paragraph 13 will survive the termination of this
Agreement and the termination of Employee's employment with the Corporation.

            14. Remedies For Breach. The parties understand and agree that no
amount of money would adequately compensate the Corporation for damages which
the parties acknowledge would be suffered as a result of a violation by Employee
of the covenants contained in Paragraphs 11, 12 or 13 above, and that,
therefore, the Corporation shall be entitled, upon application to a court of
competent jurisdiction, to obtain injunctive relief to enforce the provisions of
Paragraphs 11, 12 and/or 13, which injunctive relief shall be in addition to any
other rights or remedies available to the Corporation. If such a violation
occurs, Employee shall be responsible for the payment of reasonable attorney's
fees and other costs and expenses incurred by the Corporation in enforcing the
covenants contained in Paragraphs 11, 12 and/or 13 above, whether incurred at
the trial level or in any appellate proceeding. The provisions of this Paragraph
14 shall survive the termination of this Agreement.

                                      -10-
<PAGE>

            15. Limitations on Authority. Without the express written consent of
the Corporation's Board of Directors, Employee shall have no authority to do any
of the following:

                  (a) Pledge the credit of the Corporation or any of its other
employees;

                  (b) Bind the Corporation under any contract, agreement, note,
mortgage or other obligation, except as provided in the Corporation's Standard
Operating Procedures;

                  (c) Release or discharge any debt due the Corporation unless
the Corporation has received the full amount thereof; or

                  (d) Sell, mortgage, transfer or otherwise dispose of any
assets of the Corporation.

      Notwithstanding the foregoing, Employee may bind the Corporation under
contracts, agreements, notes, mortgages or other obligations up to a value of
$100,000, provided the approval and signature of either the Corporation's Chief
Operating Officer or Chief Financial Officer is also obtained with respect to
same.

            16. Severability. If any provision of this Agreement shall be
declared invalid or unenforceable by a court of competent jurisdiction, the
invalidity or unenforceability of such provision shall not affect the other
provisions hereof, and this Agreement shall be construed and enforced in all
respects as if such invalid or unenforceable provision was omitted.

            17. Attorney's Fees and Costs. Except as provided in Paragraph 14
above, in the event a dispute arises between the parties hereto and suit is
instituted, the prevailing party in such litigation shall be entitled to recover
reasonable attorney's fees and other costs and expenses from the nonprevailing
party, whether incurred at the trial level or in any appellate proceeding.

                                      -11-
<PAGE>

            18. Governing Law; Venue. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida, and venue for any
legal proceeding or action at law arising out of or construing this Agreement
shall lie in the state courts of Alachua County, Florida, or the United States
District Court for the Northern District of Florida, Gainesville Division.

            19. Completeness of Agreement. All understandings and agreements
heretofore made between the parties hereto with respect to the subject matter of
this Agreement are merged into this document which alone fully and completely
expresses their agreement. No change or modification may be made to this
Agreement except by instrument in writing duly executed by the parties hereto
with the same formalities as this document.

            20. Notices. Any and all notices or other communications provided
for herein shall be given in writing and shall be hand delivered or sent by
United States mail, postage prepaid, registered or certified, return receipt
requested, addressed as follows:

                        If to the Corporation:

                        Regeneration Technologies, Inc.
                        One Innovation Drive
                        Alachua, Florida 32615
                        Attn: Board of Directors - Compensation Committee

                        If to Employee:

                        James M. Grooms
                        5131 NW 76th Lane
                        Gainesville, Florida 32653

provided, however, that any party may, from time to time, give notice to the
other party of some other address to which notices or other communications to
such party shall be sent, in which

                                      -12-
<PAGE>

event, notices or other communications to such party shall be sent to such
address. Any notice or other communication shall be deemed to have been given
and received hereunder as of the date the same is actually hand delivered or, if
mailed, when deposited in the United States mail, postage prepaid, registered or
certified, return receipt requested.

            21. Assignment. Neither party to this Agreement may assign its
rights or obligations hereunder without the prior written consent of the other
party.

            22. Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the respective parties hereto, their heirs, legal
representatives, successors and permitted assigns.

            23. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, and all of which shall
constitute but one and the same instrument.

            24. Captions. The captions appearing in this Agreement are inserted
only as a matter of convenience and in no way define, limit, construe or
describe the scope or intent of any provisions of this Agreement or in any way
affect this Agreement.

            25. Employee Handbook. Employee agrees to follow and be bound by the
guidelines contained in the Corporation's Employee Handbook, as same may be
modified from time to time.

                         (Signatures on following page)

                                      -13-
<PAGE>

            IN WITNESS WHEREOF, the undersigned have executed this Agreement on
this 12th day of February, 1998.

WITNESSES:                          "CORPORATION"

                                    Regeneration Technologies, Inc.

/s/ [ILLEGIBLE]                     By: /s/ [ILLEGIBLE]
------------------------------      ------------------------------------

------------------------------

                                    "EMPLOYEE"

/s/ [ILLEGIBLE]                     /s/ James M. Grooms
------------------------------      ------------------------------------
                                    James M. Grooms

-------------------------------

                                      -14-

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