Document:

Exhibit 10.41

                                 OSTEOTECH, INC.
                     AMENDED AND RESTATED 2000 STOCK PLAN*

Section 1. Purpose.

      The purpose of the Plan is to promote the interests of the Company and its
shareholders by aiding the Company in attracting and retaining employees,
officers, consultants, independent contractors and non-employee directors
capable of contributing to the future success of the Company, to offer such
persons incentives to put forth maximum efforts for the success of the Company's
business and to afford such persons an opportunity to acquire a proprietary
interest in the Company.

Section 2. Definitions.

      As used in the Plan, the following terms shall have the meanings set forth
below:

      (a) "Affiliate" shall mean (i) any person or entity that, directly or
indirectly through one or more intermediaries, is controlled by the Company and
(ii) any person or entity in which the Company has a significant equity
interest, in each case as determined by the Committee.

      (b) "Award" shall mean any Option, Stock Appreciation Right, Restricted
Stock, Restricted Stock Unit, Performance Award, Other Stock Grant or Other
Stock-Based Award granted under the Plan.

      (c) "Award Agreement" shall mean any written agreement, contract or other
instrument or document evidencing any Award granted under the Plan.

      (d) "Board" shall mean the Board of Directors of the Company.

      (e) "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and any regulations promulgated thereunder.

      (f) "Committee" shall mean a committee of Directors designated by the
Board to administer the Plan. The Committee shall be comprised of not less than
such number of Directors as shall be required to permit Awards granted under the
Plan to qualify under Rule 16b-3, and each member of the Committee shall be a
"Non-Employee Director" within the meaning of Rule 16b-3 and an "outside
director" within the meaning of Section 162(m) of the Code. The Company expects
to have the Plan administered in accordance with the requirements for the award
of "qualified performance-based compensation" within the meaning of Section
162(m) of the Code.

      (g) "Company" shall mean Osteotech, Inc., a Delaware corporation, and any
successor corporation.

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*     The Plan was amended by the vote of the Board of Directors on March 20,
      2003 and approved by the Stockholders on June 12, 2003 (the "June 2003
      Amendment"). The June 2003 Amendment increased the number of authorized
      shares that may be issued under the Plan from 1,000,000 to 2,250,000
      shares of Common Stock.

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      (h) "Director" shall mean a member of the Board.

      (i) "Eligible Person" shall mean any employee, officer, consultant,
independent contractor or Director providing services to the Company or any
Affiliate whom the Committee determines to be an Eligible Person.

      (j) "Fair Market Value" shall mean, with respect to any property
(including, without limitation, any Shares or other securities), the fair market
value of such property determined by such methods or procedures as shall be
established from time to time by the Committee. Notwithstanding the foregoing,
unless otherwise determined by the Committee, the Fair Market Value of Shares as
of a given date shall be, if the Shares are then quoted on the Nasdaq Stock
Market sm, the closing sales price as reported on the Nasdaq Stock Market sm on
such date or, if the Nasdaq Stock Market sm is not open for trading on such
date, on the most recent preceding date when it is open for trading.

      (k) "Incentive Stock Option" shall mean an option granted under Section
6(a) of the Plan that is intended to meet the requirements of Section 422 of the
Code or any successor provision.

      (l) "Non-Qualified Stock Option" shall mean an option granted under
Section 6(a) of the Plan that is not intended to be an Incentive Stock Option.

      (m) "Option" shall mean an Incentive Stock Option or a Non-Qualified Stock
Option, and shall include Reload Options.

      (n) "Other Stock Grant" shall mean any right granted under Section 6(e) of
the Plan.

      (o) "Other Stock-Based Award" shall mean any right granted under Section
6(f) of the Plan.

      (p) "Participant" shall mean an Eligible Person designated to be granted
an Award under the Plan.

      (q) "Performance Award" shall mean any right granted under Section 6(d) of
the Plan.

      (r) "Person" shall mean any individual, corporation, partnership,
association or trust.

      (s) "Plan" shall mean the Osteotech, Inc. Stock Plan, as amended from time
to time, the provisions of which are set forth herein.

      (t) "Reload Option" shall mean any Option granted under Section 6(a)(iv)
of the Plan.

      (u) "Restricted Stock" shall mean any Shares granted under Section 6(c) of
the Plan.

      (v) "Restricted Stock Unit" shall mean any unit granted under Section 6(c)
of the Plan evidencing the right to receive a Share (or a cash payment equal to
the Fair Market Value of a Share) at some future date.

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      (w) "Rule 16b-3" shall mean Rule 16b-3 promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended, or
any successor rule or regulation.

      (x) "Shares" shall mean shares of Common Stock, $.01 par value per share,
of the Company or such other securities or property as may become subject to
Awards pursuant to an adjustment made under Section 4(c) of the Plan.

      (y) "Stock Appreciation Right" shall mean any right granted under Section
6(b) of the Plan.

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Section 3. Administration.

      (a) Power and Authority of the Committee. The Plan shall be administered
by the Committee. Subject to the express provisions of the Plan and to
applicable law, the Committee shall have full power and authority to: (i)
designate Participants; (ii) determine the type or types of Awards to be granted
to each Participant under the Plan; (iii) determine the number of Shares to be
covered by (or with respect to which payments, rights or other matters are to be
calculated in connection with) each Award; (iv) determine the terms and
conditions of any Award or Award Agreement; (v) amend the terms and conditions
of any Award or Award Agreement and accelerate the exercisability of Options or
the lapse of restrictions relating to Restricted Stock, Restricted Stock Units
or other Awards; (vi) determine whether, to what extent and under what
circumstances Awards may be exercised in cash, Shares, other securities, other
Awards or other property, or canceled, forfeited or suspended; (vii) determine
whether, to what extent and under what circumstances cash, Shares, promissory
notes, other securities, other Awards, other property and other amounts payable
with respect to an Award under the Plan shall be deferred either automatically
or at the election of the holder thereof or the Committee; (viii) interpret and
administer the Plan and any instrument or agreement, including an Award
Agreement, relating to the Plan; (ix) establish, amend, suspend or waive such
rules and regulations and appoint such agents as it shall deem appropriate for
the proper administration of the Plan; and (x) make any other determination and
take any other action that the Committee deems necessary or desirable for the
administration of the Plan. Unless otherwise expressly provided in the Plan, all
designations, determinations, interpretations and other decisions under or with
respect to the Plan or any Award shall be within the sole discretion of the
Committee, may be made at any time and shall be final, conclusive and binding
upon any Participant, any holder or beneficiary of any Award and any employee of
the Company or any Affiliate.

      (b) Delegation. The Committee may delegate its powers and duties under the
Plan to one or more Directors or a committee of Directors, subject to such
terms, conditions and limitations as the Committee may establish in its sole
discretion.

      (c) Power and Authority of the Board of Directors. Notwithstanding
anything to the contrary contained herein, the Board may, at any time and from
time to time, without any further action of the Committee, exercise the powers
and duties of the Committee under the Plan.

Section 4. Shares Available for Awards.

      (a) Shares Available. Subject to adjustment as provided in Section 4(c) of
the Plan, the aggregate number of Shares that may be issued under all Awards
under the Plan shall be 2,250,000 and shall be subject to adjustment as provided
herein and subject to the provisions of Section 422 or 424 of the Code or any
successor provision. Shares to be issued under the Plan may be either authorized
but unissued Shares or Shares acquired in the open market or otherwise. Any
Shares that are used by a Participant as full or partial payment to the Company
of the purchase price relating to an Award, or in connection with the
satisfaction of tax obligations relating to an Award, shall again be available
for granting Awards (other than Incentive Stock Options) under the Plan. In
addition, if any Shares covered by an Award or to which an Award relates are not
purchased or are forfeited, or if an Award otherwise terminates without delivery
of any Shares, then the number of Shares counted against the aggregate number of
Shares available

                                      -4-
<PAGE>

under the Plan with respect to such Award, to the extent of any such forfeiture
or termination, shall again be available for granting Awards under the Plan.

      (b) Accounting for Awards. For purposes of this Section 4, if an Award
entitles the holder thereof to receive or purchase Shares, the number of Shares
covered by such Award or to which such Award relates shall be counted on the
date of grant of such Award against the aggregate number of Shares available for
granting Awards under the Plan.

      (c) Adjustments. In the event that the Committee shall determine that any
dividend or other distribution (whether in the form of cash, Shares, other
securities or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
issuance of warrants or other rights to purchase Shares or other securities of
the Company to all holders of common stock pro rata whether as a dividend or
otherwise or other similar corporate transaction or event affects the Shares
such that an adjustment is determined by the Committee to be appropriate in
order to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, then the Committee shall, in such
manner as it may deem equitable, adjust any or all of (i) the number and type of
Shares (or other securities or other property) that thereafter may be made the
subject of Awards, (ii) the number and type of Shares (or other securities or
other property) subject to outstanding Awards and (iii) the purchase or exercise
price with respect to any Award; provided, however, that the number of Shares
covered by any Award or to which such Award relates shall always be a whole
number.

      (d) Award Limitations Under the Plan. No Eligible Person may be granted
any Award or Awards under the Plan, the value of which Award or Awards is based
solely on an increase in the value of the Shares after the date of grant of such
Award or Awards, for more than 500,000 Shares (subject to adjustment as provided
for in Section 4(c) of the Plan), in the aggregate in any calendar year. The
foregoing annual limitation specifically includes the grant of any Award or
Awards representing "qualified performance-based compensation" within the
meaning of Section 162(m) of the Code.

Section 5. Eligibility.

      Any Eligible Person shall be eligible to be designated a Participant. In
determining which Eligible Persons shall receive an Award and the terms of any
Award, the Committee may take into account the nature of the services rendered
by the respective Eligible Persons, their present and potential contributions to
the success of the Company or such other factors as the Committee, in its
discretion, shall deem relevant. Notwithstanding the foregoing, an Incentive
Stock Option may only be granted to full or part-time employees (which term as
used herein includes, without limitation, officers and Directors who are also
employees), and an Incentive Stock Option shall not be granted to an employee of
an Affiliate unless such Affiliate is also a "subsidiary corporation" of the
Company within the meaning of Section 424(f) of the Code or any successor
provision.

Section 6. Awards.

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<PAGE>

      (a) Options. The Committee is hereby authorized to grant Options to
Participants with the following terms and conditions and with such additional
terms and conditions not inconsistent with the provisions of the Plan as the
Committee shall determine:

            (i) Exercise Price. The purchase price per Share purchasable under
an Option shall be determined by the Committee, in its discretion; provided,
however, that such purchase price of Incentive Stock Options shall be the Fair
Market Value of a Share on the date of grant of such Option.

            (ii) Option Term. The term of each Option shall be fixed by the
Committee.

            (iii) Time and Method of Exercise. The Committee shall determine the
time or times at which an Option may be exercised in whole or in part and the
method or methods by which, and the form or forms (including, without
limitation, cash, Shares, promissory notes, other securities, other Awards or
other property, or any combination thereof, having a Fair Market Value on the
exercise date equal to the relevant exercise price) in which, payment of the
exercise price with respect thereto may be made or deemed to have been made.

            (iv) Reload Options. The Committee may grant Reload Options,
separately or together with another Option, pursuant to which, subject to the
terms and conditions established by the Committee, the Participant would be
granted a new Option when the payment of the exercise price of a previously
granted option is made by the delivery of Shares owned by the Participant
pursuant to Section 6(a)(iii) of the Plan or the relevant provisions of another
plan of the Company, and/or when Shares are tendered or withheld as payment of
the amount to be withheld under applicable income tax laws in connection with
the exercise of an Option, which new Option would be an Option to purchase the
number of Shares not exceeding the sum of (A) the number of Shares so provided
as consideration upon the exercise of the previously granted option to which
such Reload Option relates and (B) the number of Shares, if any, tendered or
withheld as payment of the amount to be withheld under applicable tax laws in
connection with the exercise of the option to which such Reload Option relates
pursuant to the relevant provisions of the plan or agreement relating to such
option. Reload Options may be granted with respect to Options previously granted
under the Plan or any other stock option plan of the Company or may be granted
in connection with any Option granted under the Plan or any other stock option
plan of the Company at the time of such grant. Such Reload Options shall have a
per share exercise price as determined by the Committee in the grant of such
Option. Any Reload Option shall be subject to availability of sufficient Shares
for grant under the Plan.

      (b) Stock Appreciation Rights. The Committee is hereby authorized to grant
Stock Appreciation Rights to Participants subject to the terms of the Plan and
any applicable Award Agreement. A Stock Appreciation Right granted under the
Plan shall confer on the holder thereof a right to receive upon exercise thereof
the excess of (i) the Fair Market Value of one Share on the date of exercise
(or, if the Committee shall so determine, at any time during a specified period
before or after the date of exercise) over (ii) the grant price of the Stock
Appreciation Right as specified by the Committee, in the grant of the Stock
Appreciation Right. Subject to the terms of the Plan and any applicable Award
Agreement, the grant price, term, methods of exercise, dates of exercise,
methods of settlement and any other terms and conditions of any Stock
Appreciation Right shall be as determined by the Committee. The Committee may
impose such conditions or restrictions on the exercise of any Stock Appreciation
Right as it may deem appropriate.

      (c) Restricted Stock and Restricted Stock Units. The Committee is hereby
authorized to grant Restricted Stock and Restricted Stock Units to Participants
with the following terms and

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conditions and with such additional terms and conditions not inconsistent with
the provisions of the Plan as the Committee shall determine:

            (i) Restrictions. Shares of Restricted Stock and Restricted Stock
Units shall be subject to such restrictions as the Committee may impose
(including, without limitation, a waiver by the Participant of the right to vote
or to receive any dividend or other right or property with respect thereto),
which restrictions may lapse separately or in combination at such time or times,
in such installments or otherwise as the Committee may deem appropriate.

            (ii) Stock Certificates. Any Restricted Stock granted under the Plan
shall be registered in the name of the Participant and shall bear an appropriate
legend referring to the terms, conditions and restrictions applicable to such
Restricted Stock. In the case of Restricted Stock Units, no Shares shall be
issued at the time such Awards are granted.

            (iii) Forfeiture. Except as otherwise determined by the Committee,
upon termination of employment (as determined under criteria established by the
Committee) during the applicable restriction period, all Shares of Restricted
Stock and all Restricted Stock Units at such time subject to restriction shall
be forfeited and reacquired by the Company; provided, however, that the
Committee may, when it finds that a waiver would be in the best interest of the
Company, waive in whole or in part any or all remaining restrictions with
respect to Shares of Restricted Stock or Restricted Stock Units. Upon the lapse
or waiver of restrictions and the restricted period relating to Restricted Stock
Units evidencing the right to receive Shares, such Shares shall be issued and
delivered to the holders of the Restricted Stock Units.

      (d) Performance Awards. The Committee is hereby authorized to grant
Performance Awards to Participants subject to the terms of the Plan and any
applicable Award Agreement. A Performance Award granted under the Plan (i) may
be denominated or payable in cash, Shares (including, without limitation,
Restricted Stock and Restricted Stock Units), other securities, other Awards or
other property and (ii) shall confer on the holder thereof the right to receive
payments, in whole or in part, upon the achievement of such performance goals
during such performance periods as the Committee shall establish. Subject to the
terms of the Plan and any applicable Award Agreement, the performance goals to
be achieved during any performance period, the length of any performance period,
the amount of any Performance Award granted, the amount of any payment or
transfer to be made pursuant to any Performance Award and any other terms and
conditions of any Performance Award shall be determined by the Committee.

      (e) Other Stock Grants. The Committee is hereby authorized, subject to the
terms of the Plan and any applicable Award Agreement, to grant to Participants
Shares without restrictions thereon as are deemed by the Committee to be
consistent with the purpose of the Plan.

      (f) Other Stock-Based Awards. The Committee is hereby authorized to grant
to Participants subject to the terms of the Plan and any applicable Award
Agreement, such other Awards that are denominated or payable in, valued in whole
or in part by reference to, or otherwise based on or related to, Shares
(including, without limitation, securities convertible into Shares), as are
deemed by the Committee to be consistent with the purpose of the Plan. Shares or
other securities delivered pursuant to a purchase right granted under this
Section 6(f) shall be purchased for such consideration, which may be paid by
such method or methods and in such form or forms (including, without limitation,
cash, Shares, promissory notes, other securities,

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or any combination thereof), as the Committee shall determine in connection with
such Award.

      (g) General.

            (i) No Cash Consideration for Awards. Awards shall be granted for no
cash consideration or for such minimal cash consideration as may be required by
applicable law.

            (ii) Awards May Be Granted Separately or Together. Awards may, in
the discretion of the Committee, be granted either alone or in addition to, in
tandem with or in substitution for any other Award or any award granted under
any plan of the Company or any Affiliate other than the Plan. Awards granted in
addition to or in tandem with other Awards or in addition to or in tandem with
awards granted under any such other plan of the Company or any Affiliate may be
granted either at the same time as or at a different time from the grant of such
other Awards or awards.

            (iii) Forms of Payment under Awards. Subject to the terms of the
Plan and of any applicable Award Agreement, payments or transfers to be made by
the Company or an Affiliate upon the grant, exercise or payment of an Award may
be made in such form or forms as the Committee shall determine (including,
without limitation, cash, Shares, promissory notes, other securities, other
Awards or other property or any combination thereof), and may be made in a
single payment or transfer, in installments or on a deferred basis, in each case
in accordance with rules and procedures established by the Committee. Such rules
and procedures may include, without limitation, provisions for the payment or
crediting of reasonable interest on installment or deferred payments or the
grant or crediting of dividend equivalents with respect to installment or
deferred payments.

            (iv) Limits on Transfer of Awards. No Award (other than Other Stock
Grants) and no right under any such Award shall be transferable by a Participant
otherwise than by will or by the laws of descent and distribution; provided,
however, that, if so determined by the Committee, a Participant may, in the
manner established by the Committee, transfer Options (other than Incentive
Stock Options) or designate a beneficiary or beneficiaries to exercise the
rights of the Participant and receive any property distributable with respect to
any Award upon the death of the Participant. Each Award or right under any Award
shall be exercisable during the Participant's lifetime only by the Participant
or, if permissible under applicable law, by the Participant's guardian or legal
representative. No Award or right under any such Award may be pledged,
alienated, attached or otherwise encumbered, and any purported pledge,
alienation, attachment or encumbrance thereof shall be void and unenforceable
against the Company or any Affiliate.

            (v) Term of Awards. The term of each Award shall be for such period
as may be determined by the Committee.

            (vi) Restrictions; Securities Exchange Listing. All Shares or other
securities delivered under the Plan pursuant to any Award or the exercise
thereof shall be subject to such restrictions as the Committee may deem
advisable under the Plan, applicable federal or state securities laws and
regulatory requirements, and the Committee may cause appropriate entries to be
made or legends to be affixed to reflect such restrictions. If any securities of
the Company are traded on a securities exchange, the Company shall not be
required to deliver any Shares or other securities covered by an Award unless
and until such Shares or other securities have been admitted for trading on such
securities exchange.

Section 7. Amendment and Termination; Adjustments.

      (a) Amendments to the Plan. The Board may amend, alter, suspend,
discontinue or terminate the Plan at any time; provided, however, that,
notwithstanding any other provision of

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the Plan or any Award Agreement, without the approval of the shareholders of the
Company, no such amendment, alteration, suspension, discontinuation or
termination shall be made that, absent such approval:

            (i) would violate the rules or regulations of the Nasdaq Stock
Market sm or any securities exchange that are applicable to the Company; or

            (ii) would cause the Company to be unable, under the Code, to grant
Incentive Stock Options under the Plan.

      (b) Amendments to Awards. The Committee may waive any conditions of or
rights of the Company under any outstanding Award, prospectively or
retroactively. Except as otherwise provided herein or in the Award Agreement,
the Committee may not amend, alter, suspend, discontinue or terminate any
outstanding Award, prospectively or retroactively, if such action would
adversely affect the rights of the holder of such Award, without the consent of
the Participant or holder or beneficiary thereof.

      (c) Correction of Defects, Omissions and Inconsistencies. The Committee
may correct any defect, supply any omission or reconcile any inconsistency in
the Plan or any Award in the manner and to the extent it shall deem desirable to
carry the Plan into effect.

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Section 8.  Income Tax Withholding; Tax Bonuses.

      (a) Withholding. In order to comply with all applicable federal or state
income tax laws or regulations, the Company may take such action as it deems
appropriate to ensure that all applicable federal or state payroll, withholding,
income or other taxes, which are the sole and absolute responsibility of a
Participant, are withheld or collected from such Participant. In order to assist
a Participant in paying all or a portion of the federal and state taxes to be
withheld or collected upon exercise or receipt of (or the lapse of restrictions
relating to) an Award, the Committee, in its discretion and subject to such
additional terms and conditions as it may adopt, may permit the Participant to
satisfy such tax obligation by (i) electing to have the Company withhold a
portion of the Shares otherwise to be delivered upon exercise or receipt of (or
the lapse of restrictions relating to) such Award with a Fair Market Value equal
to the amount of such taxes or (ii) delivering to the Company Shares other than
Shares issuable upon exercise or receipt of (or the lapse of restrictions
relating to) such Award with a Fair Market Value equal to the amount of such
taxes. The election, if any, must be made on or before the date that the amount
of tax to be withheld is determined.

      (b) Tax Bonuses. The Committee, in its discretion, shall have the
authority, at the time of grant of any Award under this Plan or at any time
thereafter, to approve cash bonuses to designated Participants to be paid upon
their exercise or receipt of (or the lapse of restrictions relating to) Awards
in order to provide funds to pay all or a portion of federal and state taxes due
as a result of such exercise or receipt (or the lapse of such restrictions). The
Committee shall have full authority in its discretion to determine the amount of
any such tax bonus.

Section 9. General Provisions.

      (a) No Rights to Awards. No Eligible Person, Participant or other Person
shall have any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of Eligible Persons, Participants or
holders or beneficiaries of Awards under the Plan. The terms and conditions of
Awards need not be the same with respect to any Participant or with respect to
different Participants.

      (b) Award Agreements. No Participant will have rights under an Award
granted to such Participant unless and until an Award Agreement shall have been
duly executed on behalf of the Company and, if requested by the Company, signed
by the Participant.

      (c) No Limit on Other Compensation Arrangements. Nothing contained in the
Plan shall prevent the Company or any Affiliate from adopting or continuing in
effect other or additional compensation arrangements, and such arrangements may
be either generally applicable or applicable only in specific cases.

      (d) No Right to Employment. The grant of an Award shall not be construed
as giving a Participant the right to be retained in the employ of the Company or
any Affiliate, nor will it affect in any way the right of the Company or an
Affiliate to terminate such employment at any time, with or without cause. In
addition, the Company or an Affiliate may at any time dismiss a Participant from
employment free from any liability or any claim under the Plan or any Award,
unless otherwise expressly provided in the Plan or in any Award Agreement.

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      (e) Governing Law. The validity, construction and effect of the Plan or
any Award, and any rules and regulations relating to the Plan or any Award,
shall be determined in accordance with the laws of the State of Delaware.

      (f) Severability. If any provision of the Plan or any Award is or becomes
or is deemed to be invalid, illegal or unenforceable in any jurisdiction or
would disqualify the Plan or any Award under any law deemed applicable by the
Committee, such provision shall be construed or deemed amended to conform to
applicable laws, or if it cannot be so construed or deemed amended without, in
the determination of the Committee, materially altering the purpose or intent of
the Plan or the Award, such provision shall be stricken as to such jurisdiction
or Award, and the remainder of the Plan or any such Award shall remain in full
force and effect.

      (g) No Trust or Fund Created. Neither the Plan nor any Award shall create
or be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any Affiliate and a Participant or any other
Person. To the extent that any Person acquires a right to receive payments from
the Company or any Affiliate pursuant to an Award, such right shall be no
greater than the right of any unsecured general creditor of the Company or any
Affiliate.

      (h) No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Committee shall determine
whether cash shall be paid in lieu of any fractional Shares or whether such
fractional Shares or any rights thereto shall be canceled, terminated or
otherwise eliminated.

      (i) Headings. Headings are given to the Sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.

Section 10. Effective Date of the Plan.

      The Plan shall be effective as of February 9, 2000, subject to approval by
the shareholders of the Company within one year thereafter.

Section 11. Term of the Plan.

      No Award shall be granted under the Plan after February 8, 2010 or any
earlier date of discontinuation or termination established pursuant to Section
7(a) of the Plan. However, unless otherwise expressly provided in the Plan or in
an applicable Award Agreement, any Award theretofore granted may extend beyond
such date.

                                      -11-Exhibit 10.42

                          UNITED STATES DISTRICT COURT
                         CENTRAL DISTRICT OF CALIFORNIA
                              LOS ANGELES DIVISION

GENSCI ORTHOBIOLOGICS, INC.,                     Case No. CV  99-10111-MRP (EEx)

             Plaintiff/Counterclaim
             Defendant,

    v.                                           JOINT SETTLEMENT
                                                 AGREEMENT AND
                                                 AGREEMENTS FOR
OSTEOTECH, INC.,                                 RELEASE OF CLAIMS AND
                                                 AMENDMENT OF PLAN OF
            Defendant/Counterclaim               REORGANIZATION
            Plaintiff/Third Party
            Plaintiff.

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

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

      WHEREAS, the parties hereto, GenSci Orthobiologics, Inc. and GenSci
Regeneration Sciences, Inc. (collectively, "GenSci"), and Osteotech, Inc.
("Osteotech"), desire to resolve by settlement the following actions pending in
the United States District Court for the Central District of California: Case
Nos. 99-10111-MRP, 00-2313-MRP, and 00-11342-MRP (collectively, the
"Litigation") and all issues raised in the bankruptcy cases filed by GenSci and
currently pending in this District as Case Nos. SA 01-20438 RA and SA 01-20439
RA ( the "Chapter 11 Cases"); and

      WHEREAS, the parties desire to resolve by settlement of the Litigation all
disputes known or posited currently to exist between them, and those that may be
reasonably contemplated, arising from GenSci's manufacturing, using, selling or
offering for sale certain demineralized bone tissue products, DynaGraft Gel,
DynaGraft Putty and Orthoblast (the "Accused Products"), which are alleged in
the Litigation to infringe United States Patent Nos. 5,290,558 (the "`558
patent"), 5,284,655 (the "'655 patent") and/or 5,676,146 (the "'146 patent");
and

<PAGE>

      WHEREAS, Case No. 99-10111-MRP was tried to a jury commencing on October
31, 2001 and GenSci was found by the jury to infringe the `558 and the `655
patents by manufacturing, using, marketing, selling or offering for sale
DynaGraft Gel and DynaGraft Putty, and the jury awarded Osteotech damages in the
amount of $17,533,634 (less the stipulated offset amount of $3,000,000); and

      WHEREAS, mediation and settlement discussions were conducted between and
among the parties by the Honorable Matthew Byrne, Senior Judge of the United
States District Court on March 6, 2003, and under his direction the parties have
reached this agreement.

      NOW, THEREFORE, IN CONSIDERATION OF the mutual covenants and agreements
set forth herein and other good and valuable consideration, GenSci and Osteotech
MUTUALLY SPECIFY AND AGREE THAT:

      1. All terms, conditions, payments and stipulations of this Settlement
Agreement shall be incorporated by reference in a Plan of Reorganization and
Disclosure Statement (the "Plan") and filed with the United States Bankruptcy
Court, Santa Ana Division (the "Bankruptcy Court"). GenSci agrees that prior to
filing the Plan and any revisions or amendments thereto with the Bankruptcy
Court for its approval, GenSci will provide a copy of the Plan and any revisions
or amendments thereto to Osteotech for its review and comments at least three
(3) business days prior to the filing with the Bankruptcy Court. The Plan shall
be subject to final approval of the Bankruptcy Court and the entry of a final
Order of the Bankruptcy Court. Osteotech will agree to the treatment of its
claims and security thereof in accordance with the terms of the Plan provided
such terms are consistent with the provisions of this Settlement Agreement.
Osteotech reserves the right to object to the Plan based upon any other grounds.

                                       2
<PAGE>

      2. GenSci acknowledges that DynaGraft Gel and DynaGraft Putty, the
products at issue in Case No. 99-10111, infringe one or more claims of each of
the `558 and `655 patents.

      3. GenSci acknowledges that Orthoblast, the product at issue in Case No.
00-11342, infringes one or more claims of the `558 and `146 patents.

      4. GenSci acknowledges the validity of the `558 and `655 patents.

      5. GenSci acknowledges the enforceability of the `558 and `655 patents.

      6. GenSci agrees not to seek reexamination by the Patent and Trademark
Office of the `558, or `655 patents.

      7. GenSci will not challenge the validity or enforceability of the `146
patent as long as Osteotech does not assert the `146 patent against any GenSci
product other than the Orthoblast product.

      8. Simultaneously with the execution of this Agreement, the parties shall
enter into a consent judgment in Case No. 99-10111-MRP in the form attached
hereto as Exhibit A (the "Consent Judgment") by which GenSci stipulates to an
injunction against infringement of the `558 and/or `655 patents by the DynaGraft
Gel and DynaGraft Putty products for the duration of the term of each such
patent, and further agree to cooperate fully in taking all steps necessary to
enter the Consent Judgment consistent with appropriate procedures and the
continuing jurisdiction of the United States District Court for the Central
District of California.

      9. GenSci represents that the manufacture of DynaGraft Gel and DynaGraft
Putty ceased on September 16, 2002 and that it has not used, sold or offered for
sale DynaGraft Gel

                                       3
<PAGE>

and DynaGraft Putty in the United States since that date. GenSci further
represents that the manufacture of Orthoblast ceased on or about September 16,
2002, that shipment of material quantities of Orthoblast terminated by the end
of the fourth quarter of 2002, and that shipment of remnants and returns of
Orthoblast terminated on April 18, 2003. GenSci and its subsidiaries (including,
but not limited to GenSci OCF, Inc.), officers, directors, employees and agents,
and those in active concert or participation with them, agree not to
manufacture, use, sell or offer to sell the Accused Products and any other
product containing demineralized osteogenic bone powder in a polyhydroxy carrier
where the carrier is enumerated in the claims of the `558 or `655 patents (e.g.,
Pluronic F127 is an acyclic polyhydric alcohol and a polyalkylene glycol) in the
United States, and in Belgium, Germany, France, Great Britain, Italy, the
Netherlands and Japan, where Osteotech has counterpart patents.

      10. GenSci acknowledges that payments made to Osteotech pursuant to this
Settlement Agreement are a contemporaneous exchange of consideration for damages
resulting from GenSci's infringement of the `558 and `655 patents, taking into
account the risks of litigation, and shall not be construed as a reasonable
royalty. For purposes of implementing this settlement, Osteotech shall be deemed
to have an Allowed Undisputed Unsecured Claim of $7,500,000 plus interest to be
paid under the terms of the Plan as follows:

            (a) No later than eleven (11) days after entry of a final order
      confirming GenSci's Plan (the "Effective Date"), GenSci shall pay
      Osteotech the sum of US$1,000,000 by wire transfer of such funds to an
      account to be designated by Osteotech.

            (b) In addition to the payment set forth in paragraph 10(a) herein,
      GenSci shall pay or cause to be paid to Osteotech the sum of US$6,500,000,
      to be paid in twenty (20) consecutive quarterly installments, each in the
      amount of US$325,000. The first quarter payment shall be made by the tenth
      day of the first full quarter following the Effective Date and thereafter
      the quarterly payments shall be made on or before the first

                                       4
<PAGE>

      business day of the quarter. Additionally, with each quarterly payment
      described herein, GenSci shall pay accrued interest at the federal
      judgment rate (up to a cap of 3% per annum), calculated at the rate in
      existence for the week preceding the end of the quarter, on the portion of
      the US$6,500,000 outstanding from time to time, commencing on the date of
      confirmation of the Plan. If GenSci is in default of any payment due under
      this paragraph, then Osteotech shall provide GenSci with written notice of
      such default by facsimile, e-mail or overnight courier to the address
      specified herein. Upon the sending of that notice, GenSci shall have
      thirty (30) calendar days to cure such default. If the default is not
      cured within that period, Osteotech, without limiting its rights under
      applicable law, shall have the right to accelerate all payments then owed
      under this paragraph and as may be fully set forth in the Plan, with all
      rights and remedies including but not limited to 11 U.S.C. ss. 1112, and
      remedies related to the drawing on a clean, irrevocable, standby letter of
      credit or payments from an irrevocable escrow agreement satisfactory to
      Osteotech as set forth in Paragraph 12 hereof.

      11. GenSci's obligations to Osteotech under Paragraph 10 herein, shall be
evidenced by, and shall be subject to the terms and conditions of the Plan and
as set forth in a promissory note in the form of Exhibit B hereto (the
"Promissory Note") in the principal amount of US$6,500,000, being executed by
GenSci in favor of Osteotech and delivered on or before the Effective Date.

      12. To further secure the amounts due to Osteotech from GenSci pursuant to
Paragraph 10 herein, on the Effective Date, GenSci shall provide to Osteotech a
clean irrevocable standby letter of credit in a form acceptable to Osteotech
from a national banking institution having reserves not less than US $50,000,000
(the "Letter of Credit") or an irrevocable escrow agreement satisfactory to
Osteotech (the "Escrow Agreement") for the benefit of Osteotech in the principal
amount of US$5,000,000. In the event of default and acceleration pursuant to
Paragraph 10 herein, and as amplified by the Plan, Osteotech shall have the
right to present a sight draft on the Letter of Credit or demand payment of the
escrow funds pursuant to the Escrow Agreement in the aggregate accelerated
amount upon presentation of an officer's certificate with respect to the Letter
of Credit or a notice of default pursuant to the

                                       5
<PAGE>

Escrow Agreement stating that an event of default has occurred and the time for
any cure has elapsed. The Parties agree that amounts provided as security for
the Letter of Credit or deposited in escrow pursuant to the Escrow Agreement do
not constitute property of the GenSci estate as defined in 11 U.S.C. ss. 541.

      13. In addition to the Letter of Credit or Escrow Agreement securing the
balance of the US$6,500,000 due to Osteotech pursuant to Paragraph 10 herein,
GenSci shall secure the remaining balance of US$1,500,000 due to Osteotech
pursuant to Paragraph 10 herein by delivering to Osteotech as a part of the Plan
on or before the Effective Date a Security Agreement in the form of Exhibit C
hereto (the "Security Agreement"), pursuant to which GenSci grants Osteotech an
attached and perfected security interest to secure the balance of US$1,500,000,
in all personal property of GenSci, including but not limited to all now
existing or after acquired accounts, inventory, equipment, general intangibles
and intellectual property. This security interest shall be subordinate only to
liens granted by GenSci to secure indebtedness incurred by it for working
capital purposes from commercial or institutional lenders. The grant of the
security interest is in addition to and not in replacement of the Letter of
Credit or Escrow Agreement. Without limiting the provisions of the Security
Agreement, GenSci hereby represents and warrants that such assets are free of
any liens and encumbrances, except as set forth on Schedule A, and GenSci hereby
agrees that, except for commercial or institutional lenders, it shall not grant
to any person other than Osteotech a lien or encumbrance on any of its assets,
except as provided by the Security Agreement. This restriction shall not apply
if a) GenSci pays or causes to be paid to Osteotech the US$1,500,000 amount
secured by the Security Agreement; or b) if Osteotech otherwise agrees.

                                       6
<PAGE>

      14. Within ten (10) days of the Effective Date, the parties shall cause
their respective counsel to execute and file stipulated dismissals with
prejudice in the Litigation, with the parties bearing their own costs and
attorneys' fees.

      15. The Plan and documents and exhibits relating thereto (the "Plan
Related Documents") shall be in form and substance reasonably satisfactory in
all respects to GenSci, Osteotech, and their respective counsel and advisors.

      16. In connection with the filing of the Plan, GenSci shall:

                  (i) Make all filings with applicable governmental authorities
            as may be required by applicable law; and

                  (ii) Use its reasonable best efforts to obtain confirmation of
            the Plan as promptly as practicable and in any event not later than
            November 1, 2003, with such date to be amended if not feasible, and
            proceed diligently to obtain the dismissal of all appeals,
            applications and motions for reconsideration with respect to the
            Disclosure Statement, Plan, other order or ruling or order
            confirming the Plan, as promptly as practicable.

      17. The Plan shall also provide for a release by GenSci to Osteotech by
which GenSci releases, acquits, discharges and covenants not to sue Osteotech,
its successors and assigns, and their affiliates, parents, subsidiaries,
officers, directors, shareholders, employees, agents and attorneys from any and
all claims, causes of action, rights, allegations, liabilities or damages
whatsoever that GenSci has asserted, could have asserted or sought leave to
assert against Osteotech in the Litigation.

      18. The Plan shall also provide for the delivery by Osteotech of a release
to GenSci by which Osteotech releases, acquits, discharges and covenants not to
sue GenSci, its agents, distributors, representatives, customers, successors and
assigns, and their affiliates, parents,

                                       7
<PAGE>

subsidiaries, officers, directors, shareholders, employees, agents and attorneys
from any and all claims, causes of action, rights, allegations, liabilities or
damages whatsoever that Osteotech has asserted, could have asserted or sought
leave to assert against GenSci, its agents, distributors or representatives in
the Litigation.

      19. GenSci represents that the GenSci products currently marketed under
the names Accell, DynaGraft II and OrthoBlast II (the "New Products") do not
infringe the `558 or `655 patents or any valid claim of the `146 patent, in that
they do not contain any hydroxyl groups and the formula for the carrier in the
DynaGraft II and OrthoBlast II products is as depicted in claim 1 of GenSci's
patent application no. 20030044445, as filed. GenSci has provided to Osteotech's
counsel, Dorsey & Whitney LLP, on an attorneys' eyes only basis, the following
documents that GenSci represents are true and correct and accurately describe
the New Products: SOPs of the preparation of the DynaGraft II and OrthoBlast II
products, but not of the carrier itself used therein; the procedure for the
treatment of Pluronic that GenSci represents is used by its supplier; a patent
application generally describing how Pluronic may be modified to eliminate
hydroxyl groups; certifications that the carrier in the DynaGraft II and
OrthoBlast II products does not contain hydroxyl groups and a flowchart
describing in general terms the process for making the Accell product. Based
upon Osteotech's counsels' analysis of the information provided and
representations made by GenSci about the formulation, composition and
manufacturing procedures for the New Products, and the determination by
Osteotech, in reliance on such information and representations, that the New
Products do not infringe the `558 or `655 patents or any valid claims of the
`146 patent, Osteotech covenants not to sue GenSci, its agents, distributors,
representatives, customers, successors and assigns, and their affiliates,
parents, subsidiaries, officers, directors, shareholders, employees, agents and
attorneys for infringement

                                       8
<PAGE>

of its patents with respect to the manufacturing, using, marketing, selling or
offering for sale of the New Products, provided that the formulation and
composition of such products remains substantially the same as the formulation
and composition analyzed by Osteotech's counsel.

      20. The parties agree that any press release or public statement
concerning this Settlement Agreement shall be limited to the terms of the
Settlement Agreement and shall not include quotations from the parties or their
representatives.

      21. Except as specifically provided herein, the parties expressly agree
and understand that this Settlement Agreement does not extend to any other
person or entity, and that it does not affect Osteotech's rights against any
other person or entity that Osteotech may charge with infringement of its
patents, including the `558, `655 or `146 patents.

      22. The parties declare and represent that: (a) no promise,
representation, inducement or agreement not expressed in this Settlement
Agreement has been made to any of them; (b) they are not relying on any promise,
representation, inducement or agreement in entering into this Agreement except
as expressly set forth in this Settlement Agreement; (c) this Settlement
Agreement (including all attached exhibits) contains the entire agreement
between the parties relating to its subject matter; (d) the parties have
consulted with counsel of their own choosing prior to entering into this
Settlement Agreement; and (e) the terms of this Settlement Agreement are
contractual and not mere recitals and will be more fully set forth in the Plan.

      23. GenSci shall have the right to assign or transfer any of its rights
and obligations under this Settlement Agreement provided that the assignee
assumes all of GenSci's obligations under this Settlement Agreement. GenSci and
the issuer of any Letter of Credit or the grantors

                                       9
<PAGE>

of any Escrow Agreement shall remain liable for its obligations under this
Settlement Agreement, notwithstanding any such assignment.

      24. Osteotech shall have the right to assign or transfer any of its rights
and obligations under this Settlement Agreement.

      25. The persons executing this Settlement Agreement on behalf of the
parties each represent and warrant that they have full and complete authority to
do so.

      26. This Settlement Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but such counterparts together shall constitute but one and the same
instrument.

      27. Except as otherwise expressly provided herein, any notice required or
desired to be served, given or delivered pursuant to this Settlement Agreement
or the Plan shall be in writing, and shall be sent by manual delivery, facsimile
electronic transmission, overnight courier or United States mail (postage
prepaid) addressed to the party to be notified, and shall be effective as of the
date of delivery if manually delivered, on the date of sending if sent by
facsimile, on the first business day after the date of sending if sent by
overnight courier and four days after the date of mailing if mailed, at the
address of the party set forth below:

            (a)   If to GENSCI at:

                  2 Goodyear
                  Irvine, CA  92618
                  ATTN: Douglas Watson
                  Fax No. 949-595-8711
                  email:   dougw@gensciinc.com

                  with a copy to:

                                       10
<PAGE>

                  Richard J. Codding, Esq.
                  Howrey Simon Arnold & White
                  550 South Hope Street
                  Los Angeles, CA  90071
                  Fax No. 213-892-2300
                  email:   coddingr@howrey.com

            (b)   If to OSTEOTECH at:

                  51 James Way
                  Eatontown, NJ  07724
                  ATTN:  Michael Jeffries
                  Fax. No. 732-935-0626
                  email:   jeffries@osteotech.com

                  with a copy to:

                  Mark S. Sullivan, Esq.
                  Dorsey & Whitney LLP
                  250 Park Avenue
                  New York, NY  10177
                  Fax No. 212-953-7201
                  email:   sullivan.mark@dorseylaw.com

                                       11
<PAGE>

      IN WITNESS HEREOF, the undersigned certify their assent to the terms of
this Agreement. OSTEOTECH, INC. GENSCI ORTHOBIOLOGICS, INC.

By:___________________________________    By:___________________________________
Name:_________________________________    Name:_________________________________
Title:________________________________    Title:________________________________

Date:_________________________________    Date:_________________________________

                                          GENSCI REGENERATION SCIENCES, INC.

                                          By:___________________________________
                                          Name:_________________________________
                                          Title:________________________________

                                          Date:_________________________________

                                       12

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