THIRD AMENDMENT TO FIRST AMENDED EXCLUSIVE DISTRIBUTION AND LICENSE AGREEMENT

Exhibit 10.23

CONFIDENTIAL TREATMENT REQUESTED BY REGENERATION TECHNOLOGIES, INC. FOR CERTAIN PORTIONS OF THIS AGREEMENT IN ACCORDANCE WITH RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

THIRD AMENDMENT TO FIRST AMENDED EXCLUSIVE

DISTRIBUTION AND LICENSE AGREEMENT

THIS THIRD AMENDMENT TO FIRST AMENDED EXCLUSIVE DISTRIBUTION AND LICENSE AGREEMENT (this “ Amendment ”) is made and entered into as of December 15, 2005 (the “ Third Amendment Effective Date ”) by and between Regeneration Technologies, Inc., a Delaware corporation (“ RTI ”), and Medtronic Sofamor Danek USA, Inc. (“ MSD ”), a Tennessee corporation.

WITNESSETH:

WHEREAS, MSD and RTI are parties to a First Amended Exclusive Distribution and License Agreement having an effective date of April 15, 2004, as amended by the First Amendment to First Amended Exclusive Distribution and License Agreement dated March 1, 2005 and as amended by the Second Amendment to First Amended Exclusive Distribution and License Agreement dated December 15, 2005 (the “ Agreement ”);

WHEREAS, MSD and RTI desire to amend the Agreement on the terms and conditions set forth herein;

AGREEMENT

NOW THEREFORE, in consideration of the representations, warranties, covenants and agreements contained herein, and for other valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties mutually agree as follows:

1. Definitions . Capitalized terms used herein and not otherwise defined herein shall have the meanings set forth in the Agreement.

2. Payment .

(a) In return for MSD’s release of exclusive distribution rights for Bone Paste for use in the spine, RTI shall make a payment to MSD in the amount of [***] Dollars [***]. Such payment shall be due and payable in eight equal installments. The first installment shall be due and payable within 30 days of the date hereof and the remaining seven installments shall be due and payable within 30 days of the first day of each MSD fiscal quarter thereafter (commencing with the fiscal quarter beginning January 28, 2006). All such payments shall be made in U.S. dollars without deduction or offset by check to an address specified in writing by MSD.

(b) Each installment of the payment set forth in Section 2(a) (other than the first installment) shall be contingent on MSD revenue from fees for the disposition of Bone Paste during the MSD fiscal quarter immediately preceding the due date for each such installment being equal to or in excess of [***] Dollars [***];

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provided that if there is (i) a Supply Shortfall for Bone Paste, (ii) a voluntary or involuntary recall of Bone Paste or (iii) an event of the type described in Section 9.4 of the Agreement, revenue shall be increased in an equitable amount to reflect the impact of any such event. If MSD fails to meet such minimum amount with respect to any particular installment, MSD’s rights to that installment of the payment will be forfeited (but not its rights to any future installments). For example, the installment due within 30 days of the fiscal quarter commencing January 28, 2006 shall be contingent on revenue during the MSD fiscal quarter ended January 27, 2006 being equal to or in excess of [***] Dollars [***].

3. Amendment . The parties mutually agree that the Agreement shall be amended and restated as of the Third Amendment Effective Date to read in its entirety as set forth in Exhibit A hereto. For convenience of reference, changes to the Agreement effected by this Amendment are marked in Exhibit A.

4. Ratification . Except as amended hereby, the Agreement is hereby ratified and confirmed in all respects. As amended by Section 3 of this Amendment, the Agreement shall be read and construed as one and the same instrument.

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IN WITNESS WHEREOF, each of the parties has caused this Third Amendment to First Amended Exclusive Distribution and License Agreement to be executed by their respective duly authorized representatives as of the date first above written.

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Exhibit A

Form of First Amended and Restated Exclusive License and Distribution Agreement (as

amended by the Third Amendment)

FIRST AMENDED EXCLUSIVE

DISTRIBUTION AND LICENSE AGREEMENT

Specialty Allografts and Bone Paste

This First Amended Exclusive Distribution and License Agreement (this “ Agreement ”) is effective as of the      day of April, 2004, (the “ Effective Date ”) by and between Regeneration Technologies, Inc., a Delaware corporation (“ RTI ”), and Medtronic Sofamor Danek USA, Inc., a Tennessee corporation (“ MSD ”). RTI and MSD are sometimes individually referred to herein as a “ Party ” and collectively as the “ Parties .”

WHEREAS, RTI and MSD each acknowledge that the processing and use of human tissue for human transplantation purposes is in the public interest and in the interest of medicine generally, and that this Agreement will enhance these interests through facilitating the availability of processed tissue for use in medical procedures and thereby advance the medical and scientific application thereof;

WHEREAS, the Parties are successors in interest to each of that certain Management Services Agreement, dated July 23, 1996, between The University of Florida Tissue Bank, Inc. (“ UFTB ”) and Sofamor Danek Group, Inc. (“ SDG ”), as amended (the “ 1996 Management Services Agreement ”), and that certain Management Services Agreement - Bone Paste, dated May 11, 1998, between UFTB and SDG, as amended (the “ 1998 Management Services Agreement ” and, together with the 1996 Management Services Agreement, the “ Original Agreements ”);

WHEREAS, the Parties entered into that certain Exclusive Distribution and License Agreement (the “2002 Agreement”) as of June 1, 2002 (the “Original Effective Date”) and the Parties now wish to redefine the terms governing their relationship by entering into this Agreement;

WHEREAS, MSD and RTI each desire that RTI process and produce certain human specialty allograft tissue listed in Schedule 2.1 attached hereto (the “ Specialty Allografts ”) and paste products containing demineralized bone, gelatin, and particulate mineral (“ Bone Paste ”) including but not limited to cortical and/or cancellous chips listed in Schedule 2.1 attached hereto, and MSD desires to distribute such Specialty Allografts and Bone Paste in accordance with the terms and conditions contained herein;

WHEREAS, MSD desires to obtain a license from RTI to market, promote and distribute Specialty Allografts and Bone Paste; and

WHEREAS, the Parties desire to work together to develop new technology and products for use in medical procedures;

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NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth below, the Parties hereby represent, covenant and agree as follows:

ARTICLE I

AMENDMENT AND TERMINATION OF ORIGINAL AGREEMENTS AND 2002 AGREEMENT

1.1 Amendment . In order to facilitate continued service to patients and efficient use of human tissue, prior to November 1, 2002, (the “ Implementation Date ”) the Parties continued to operate under the Original Agreements and agreed as follows:

(a) Management Services Fee . Beginning on the Original Effective Date and ending on the day immediately prior to the Implementation Date, (i) with respect to UFTB Allografts, the Management Services Fee (as such terms are defined in the 1996 Agreement) was [###] and (ii) with respect to UFTB Paste Products, the Management Services Fee (as such terms are defined in the 1998 Agreement) was [###].

(b) Effect . Except as set forth expressly herein, all terms of the Original Agreements remained in full force and effect until the Implementation Date.

1.2 Termination . As of the Implementation Date, the Parties agree and acknowledge that, without any additional action on either Party’s behalf, the Original Agreements terminated and are of no further force or effect; provided, however, such termination did not relieve either Party from liabilities arising prior to the Implementation Date under the terms of the Original Agreements. The parties further acknowledge and agree that as of the Effective Date, the 2002 Agreement terminated and was superceded in all respects by this Agreement.

1.3 Arbitration . RTI and MSD covenant and agree to use best efforts to resolve all outstanding disputes under the Original Agreements by the Effective Date, including but not limited to those matters currently in arbitration.

1.4 Quarterly Meetings . Senior management of RTI (Brian Hutchison or his successor) and MSD (Pete Wehrly and/or Michael DeMane or their successors) shall meet either in person or telephonically each quarter as their respective schedules permit to discuss all outstanding issues under the Agreement and specifically to exchange information about past and future developments in the relationship between MSD and RTI and the growth potential for distribution and development of RTI products and biologic products generally, and to agree upon what portion of such information may be publicly disclosed. If an agreement to disclose cannot be reached then the party who owns that information will make the final determination of disclosure of that information; provided however that no party shall be prohibited from disclosing any information which it is required to disclose under applicable federal, state or foreign law.

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ARTICLE II

LICENSE GRANT

2.1 License; Sublicensing Rights; Field of Use . Subject to the provisions of this Agreement, RTI hereby grants to MSD a worldwide and royalty free license to distribute Specialty Allografts and Bone Paste throughout the world (the “ Territory ”). Schedule 2.1 attached hereto contains a list of all Specialty Allografts and Bone Paste as of the date hereof, including a list of Specialty Allografts for which the license grant hereunder is exclusive in the Exclusive Territory (as defined in Section 3.1(a) herein) and non-exclusive in the remainder of the Territory, subject to Section 3.1(e), and a list of Specialty Allografts for which the license grant hereunder is nonexclusive throughout the Territory. The license grant hereunder for Bone Paste is non-exclusive throughout the Territory.

2.2 License of RTI Marks . RTI grants to MSD a royalty free license to use under the quality control of RTI the RTI name and logo and all goodwill associated therewith, and all trademarks, service marks, trade names, designs, graphics and logos associated with the Specialty Allografts or the Bone Paste, (the “ Current RTI Marks ”) in connection with the marketing and distribution of Specialty Allografts and Bone Paste as provided in this Agreement. RTI further grants to MSD a royalty free license to use under the quality control of RTI service marks or trademarks adopted and/or used by RTI and associated specifically with Specialty Allografts or Bone Paste (the “ Future RTI Marks ,” and, together with the Current RTI Marks, the “ RTI Marks ,”) in connection with the marketing and distribution of Specialty Allografts and Bone Paste as provided in this Agreement. A list of all Current RTI Marks and their filing status (if any) is attached hereto as Schedule 2.2. RTI shall update Schedule 2.2. with all Future RTI Marks within thirty (30) days after they have been adopted or used by RTI.

2.3 Additional Specialty Allografts and Bone Paste . The parties shall update Schedule 2.1 to include all line extensions of Specialty Allografts and any jointly developed Specialty Allografts as described in Section 6.3 herein. Line extensions shall include any improvements or modifications to, or substitute or alternative products for, Specialty Allografts reasonably anticipated to be used primarily for spinal fusion surgery that are competitive with any Specialty Allograft identified in Schedule 2.1. If the parties are unable to agree on whether a product should be added to Schedule 2.1, the parties shall refer the matter to a special master jointly selected by the parties to determine the issue and the determination of the special master shall be binding and non-appealable. The Special Master shall be selected using the same process as the selection of the arbitrator under Section 9.12 hereof. The license grant hereunder for Bone Paste includes the current formulation (and any previous formulations) of Bone Paste. In addition, MSD shall have the right to negotiate for the exclusive manufacture and supply by RTI for distribution by MSD in all applications of new formulations of Bone Paste developed solely by MSD or its agents.

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ARTICLE III

EXCLUSIVITY; MSD DISTRIBUTION SERVICES; SPECIALTY ALLOGRAFT AND

BONE PASTE SUPPLY

3.1 Exclusivity .

(a) Exclusive Distributor Appointment . Subject to MSD’s right to subcontract or delegate in whole or in part to one or more third parties its obligations and responsibilities as distributor of Specialty Allografts as expressly set forth in this Agreement, during the term of this Agreement, MSD shall be (i) the exclusive distributor for Specialty Allografts throughout the United States, Canada and Puerto Rico (the “Exclusive Territory”), (ii) the non-exclusive distributor for Specialty Allografts in all other parts of the Territory, and (iii) the non-exclusive distributor for Bone Paste throughout the Territory; provided, however, with respect to Bone Paste, the grant of rights herein shall be exclusive for the use of the trademark, service mark, trade name, design, graphics and logos associated with “Osteofil.” RTI agrees that any Bone Paste delivered other than pursuant to this Agreement shall contain a different brand name and label than the Bone Paste delivered pursuant to this Agreement. MSD shall be entitled to distribute Bone Paste for use in all applications, including all musculoskeletal applications (orthopedic, trauma, etc.). RTI shall not, and RTI shall ensure that any third party distributor does not, utilize or reference, directly or indirectly, in any manner the “Osteofil” name or any data with respect to the Osteofil product (including clinical and pre-clinical data) in any marketing and promotional materials or in any materials filed with any applicable regulatory authority. RTI agrees that, during the period commencing with the Third Amendment Effective Date and ending on August 31, 2007, the only companies that will have the right to distribute in the Exclusive Territory any product from the “Osteofil” family of Bone Paste are Exactech, Inc. and RTI (and, as set forth above, RTI and Exactech, Inc. shall not have the right to the trademark, service mark, trade name, design, graphics and logos associated with “Osteofil” in connection with such distribution). During such period, RTI shall ensure that RTI and Exactech, Inc. distribute such Bone Paste only through sales personnel that are employees of RTI or Exactech, Inc. as the case may be, or through the regional distributors identified in Schedule 3.1(a). RTI shall have the right from time to time to add to Schedule 3.1(a); provided that RTI obtains the prior written consent of MSD, such consent not to be unreasonably withheld by MSD.

(b) RTI Covenant . Except as otherwise provided for under this Agreement, RTI shall not, during the term of this Agreement, in any manner, directly or indirectly or by assisting others, (i) produce, manufacture, distribute, or assist with the marketing of Specialty Allografts, (ii) engage in any manufacturing, distribution or marketing activities on behalf of any other individual or entity with respect to any Specialty Allografts or (iii) have an equity, profit or joint venture interest in, or render services (of an executive, marketing, manufacturing, research and development, administrative, financial or consulting nature) to any business that produces, manufactures, distributes, or assists with the marketing of Specialty Allografts or (iv) engage in any activities described in (i), (ii)

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or (iii) above with respect to any allograft tissue (other than Bone Paste) intended or expected to be primarily used in the spine.

(c) MSD Right to Compete . Notwithstanding any provision of this Agreement to the contrary, nothing in this Agreement shall prohibit MSD from manufacturing, marketing or distributing allograft tissue or other products that compete, either directly or indirectly, with Specialty Allografts and Bone Paste. Schedule 3.1(c) attached hereto contains a list of all allograft tissue or other products that MSD manufactures, markets or distributes that MSD believes may compete, either directly or indirectly, with Specialty Allografts. MSD shall update Schedule 3.1(c) within fifteen (15) days of the first day of each calendar quarter starting July 1, 2004.

(d) Release of Exclusivity . MSD may release RTI from the exclusivity provisions of this Agreement with respect to a specific Specialty Allograft by giving written notice thereof, upon which time MSD’s rights hereunder with respect to such Specialty Allograft shall become nonexclusive but shall otherwise remain in full force and effect. In addition, if the Binding Orders submitted by MSD for [###] for a specific Specialty Allograft are less than [###] of the average value of Binding Orders submitted by MSD to RTI for the same specific Specialty Allograft for the immediately preceding [###], then RTI may notify MSD in writing of such shortfall. The Initial Stocking Order shall not be used in the calculation of the average value of Binding Orders submitted by MSD. Upon receipt of such notice, MSD shall [###] in which to submit additional Binding Orders such that the total Binding Orders submitted by MSD for the [***] are not less than [###] of the average value of Binding Orders submitted by MSD for the same specific Specialty Allograft for the immediately preceding [###]. If MSD fails to submit such additional Binding Orders, MSD’s rights hereunder with respect to such Specialty Allograft shall become nonexclusive but shall otherwise remain in full force and effect. Notwithstanding the foregoing, in the event that RTI delays or fails to deliver Specialty Allografts in sufficient quantity to meet a MSD Forecast or an MSD Binding Order, or regulatory actions delay delivery of the Specialty Allografts then RTI shall not have the right to provide notice of a shortfall for any such period. With respect to a New Allograft, the average value of Binding Orders submitted by MSD and actually filled by RTI for the first full year of such New Allograft shall be used for the purposes of this Section 3.1(d), provided, however, that MSD may submit an initial stocking order with respect to such New Allograft that will not be included in such calculation.

(e) International Distribution . MSD’s agreement in Section 3.1(a) hereof to allow the distribution of Specialty Allografts or other allograft tissue products in territories outside of the Exclusive Territory is specifically conditioned on the following conditions being met at all times:

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(i) Prior to any such distribution RTI must use commercially reasonable efforts to assure that no Specialty Allografts will be distributed to anyone who further distributes or intends to distribute such Specialty Allografts into the Exclusive Territory and if such Specialty Allografts are distributed by any party other than MSD in the Exclusive Territory then RTI will cease all distribution to that customer and immediately use its best efforts to enjoin such distribution and recover inventory from that distributor;

(ii) Specialty Allografts for MSD’s distribution shall receive priority with respect to donors, processing and manufacturing over any distribution by RTI or third parties, except for tissue suitable for Bone Paste to be distributed by Exactech, which is subject to Section 3.4(e)(ii)(B);

(iii) Marketing materials that reference BioCleanse will be provided to MSD concurrent with or prior to their distribution to the public;

(iv) Distribution by RTI or any third party as allowed by this Section 3.1(e) will not violate any MSD Intellectual Property Rights; and

(v) RTI shall provide advance notice of RTI’s intent to distribute or the existence of any proposed agreement with distributors in any country in which MSD then has distribution of Specialty Allografts on a non-exclusive basis and in all cases RTI and MSD shall meet to address issues related to price, ownership of product registrations and trade names prior to the entry into any such agreement or RTI’s own distribution outside of the Exclusive Territory.

In the event of any breach of the conditions of Sections 3.1(e)(i), (ii), (iv) or (v) hereof, RTI will immediately cease distribution of Specialty Allografts in any country outside of the Exclusive Territory related to such breach.

3.2 MSD’s Distribution Services . MSD shall use commercially reasonable efforts to distribute, or facilitate the marketing and distribution of, Specialty Allografts in the Territory, in accordance with this Agreement (the “ Services ”). The Services shall include, without limitation: (i) developing marketing and training literature and aids for Specialty Allografts; (ii) training MSD marketing and distribution personnel; (iii) conducting training courses and seminars to educate medical professionals, surgeons, customer support staff, hospital personnel and buying groups related to Specialty Allografts in the use of Specialty Allografts, including educating surgeons and staff on Specialty Allograft design, ordering, delivery and stocking procedures; (iv) exhibiting Specialty Allografts at medical society meetings; (v) promoting Specialty Allografts in association with MSD’s other educational services and marketing efforts; and (vi) supporting at a clinical level the marketing and distribution efforts of both RTI and MSD by providing surgical case coverage for Specialty Allografts. Subject to RTI’s ability to satisfy each Scheduled Order (as defined in Section 3.4(d)) and each Interim Order (as defined in Section 3.4(d)), MSD shall order from RTI and maintain sufficient units of Specialty Allografts for samples, exhibits and training purposes. MSD shall be solely responsible for training, service and support for Specialty Allografts and Bone Paste distributed by MSD, and shall have no right

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to reimbursement or contribution for any costs related to such responsibilities. MSD shall have no obligation to market or promote Bone Paste.

3.3 Taxes . MSD shall have the sole responsibility for collection and payment to the appropriate taxing authorities of any taxes, tariffs, duties or excise, sales or use, value added or other taxes or levies imposed upon Specialty Allografts or Bone Paste, as the case may be, as a result of MSD’s distribution of Specialty Allografts or Bone Paste, as the case may be, to customers. RTI shall have the sole responsibility for payment to the appropriate taxing authorities of any taxes, tariffs, duties or excise, sales or use, value added or other taxes or levies imposed on the services provided by RTI under this Agreement.

3.4 Specialty Allograft and Bone Paste Supply; Forecasts . The Parties acknowledge and agree that donated human tissue is necessary for the production of Specialty Allografts and Bone Paste, and that at times the demand for such products may exceed the supply due to limited amounts of donated human tissue. The Parties agree to use their mutual best efforts, including MSD’s knowledge of the needs of its customers and RTI’s expertise in processing tissue, to match the available supply to the requirements of patients and healthcare providers for Specialty Allografts. Accordingly, the Parties agree to do the following:

(a) MSD Forecasts . [###]

(b) RTI Forecasts . [###]

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(c) Transmission of Forecasts . [###]

(d) Binding Orders . [###]

(e) Allocation Priority . [###]

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(f) Shortfall . [###]

3.5 Shipping Procedures . RTI shall ship Specialty Allografts and Bone Paste corresponding to Binding Orders to MSD at least once per week at RTI’s sole cost and expense, provided that MSD shall reimburse RTI for actual and reasonable expenses incurred by RTI in expediting shipments or making additional shipments pursuant to Interim Orders at MSD’s request.

3.6 Returned and Rejected Specialty Allografts and Bone Paste .

(a) Returned Specialty Allografts and Bone Paste . The return policy for Specialty Allografts and Bone Paste is set forth in Schedule 3.6(a) (the “ Return Policy ”).

(b) Rejected Specialty Allografts and Bone Paste . With respect to latent defects, MSD shall promptly notify RTI after receiving notification from a customer of such customer’s discovery thereof, and MSD and such customer shall have the right to reject such Specialty Allografts or Bone Paste. For the avoidance of doubt, and notwithstanding any provision of the Return Policy, MSD shall be permitted to reject Specialty Allografts or Bone Paste due to latent defects at any time after discovery of such latent defects or at any time after receiving notification from a customer of such customer’s discovery of such latent defects. Any notification of rejection to RTI shall state the basis for the rejection.

(c) Effect of Return or Rejection . The customer shall be bound by the terms of the Return Policy; provided, however, that in the event of a conflict between the terms of the Return Policy and the terms of this Agreement, the terms of this Agreement shall govern and control in all respects. Neither MSD nor the customer shall be obligated to pay for any rejected shipment of Specialty Allografts or Bone Paste shipped to such customer which fails to meet the Specialty Allograft Specifications or the Specialty Allograft Packaging Specifications or the Bone Paste Specifications or the Bone Paste Packaging Specifications or otherwise breaches the RTI Specialty Allograft Warranty or Bone Paste

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Warranty, as the case may be, set forth on Schedule 4.3(a) and Schedule 4.3(b), respectively, hereof. The customer shall not be obligated to pay for any shipment of Specialty Allografts or Bone Paste rejected by a customer. If a customer fails to pay for any rejected shipment of Specialty Allografts or Bone Paste, MSD shall not be obligated to pay any license or service fee to RTI for such Specialty Allografts or Bone Paste, and MSD shall be entitled to receive, in its sole discretion, either (i) a credit against future license or service fees in the amount of any such fee MSD had previously paid to RTI for any such rejected Specialty Allografts or Bone Paste or (ii) a replacement Specialty Allograft or Bone Paste, as the case may be. Unless otherwise waived by MSD, all Specialty Allografts and Bone Paste shipped to MSD by RTI under this Agreement shall have remaining shelf life of at least sixty percent (60%) of the appropriate shelf life for such Specialty Allografts or Bone Paste (as the case may be).

ARTICLE IV

SPECIFICATIONS; PACKAGING SPECIFICATIONS; SPECIALTY ALLOGRAFT

AND BONE PASTE LABELING; REGULATORY APPROVAL; RTI WARRANTIES

4.1 Specifications .

(a) Specialty Allografts . Specialty Allografts shall meet the specifications set forth on Schedule 4.1(a) hereto (the “ Specialty Allograft Specifications ”).

(b) Bone Paste . Bone Paste shall meet the specifications set forth on Schedule 4.1(b) hereto (the “ Bone Paste Specifications ”).

4.2 Packaging Specifications .

(a) Specialty Allografts . RTI shall supply all packaging and labeling information and designs, including without limitation all artwork and pharmacological information, usage instructions and warnings to be applied to Specialty Allografts (the “ Specialty Allograft Packaging Specifications ”). Once Specialty Allografts are supplied and initially packaged by RTI, MSD will not without RTI’s concurrence remove, alter or modify any Specialty Allograft Packaging Specifications of such Specialty Allografts.

(b) Bone Paste . RTI shall supply all packaging and labeling information and designs, including without limitation all artwork and pharmacological information, usage instructions and warnings to be applied to Bone Paste (the “ Bone Paste Packaging Specifications ”). Once Bone Paste is supplied and initially packaged by RTI, MSD will not without RTI’s concurrence remove, alter or modify any Bone Paste Packaging Specifications of such Bone Paste.

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4.3 Warranties .

(a) Specialty Allografts . RTI has listed specific warranty information with respect to Specialty Allografts on Schedule 4.3(a) and RTI shall use its best efforts to keep Schedule 4.3(a) updated to include all applicable warranties.

(b) Bone Paste . RTI has listed specific warranty information with respect to Bone Paste on Schedule 4.3(b) and RTI shall use its best efforts to keep Schedule 4.3(b) updated to include all applicable warranties.

(c) Warranty Obligation . All warranty obligations of the respective Parties listed with respect to Specialty Allografts and Bone Paste shall be solely the obligation and responsibility of RTI.

4.4 Labeling . All Specialty Allografts and Bone Paste distributed pursuant to this Agreement shall be labeled by RTI in accordance with this Section 4.4. Any Specialty Allograft or Bone Paste which is improperly labeled shall not be deemed delivered until properly identified by MSD, and RTI shall credit MSD’s account for its reasonable costs incurred while (i) identifying Specialty Allografts and Bone Paste that were inappropriately labeled and (ii) correcting orders both to RTI and from its customers.

(a) RTI Processed Specialty Allografts and Bone Paste . All Specialty Allografts and Bone Paste processed or manufactured by RTI (the “ RTI Processed Specialty Allografts and Bone Paste ”) shall be sterilized, labeled and packaged by RTI

using the RTI Marks. The costs of labeling the RTI Processed Specialty Allografts and Bone Paste is included in the applicable LSF (as defined in Section 5.1) and shall not be charged to MSD.

(b) Third Party Processed Specialty Allografts and Bone Paste . In the event MSD exercises its right to process or manufacture, or appoints a Third Party Supplier to process or manufacture, Specialty Allografts or Bone Paste pursuant to Section 3.4(f) herein (the “ Third Party Processed Specialty Allografts and Bone Paste ”), at MSD’s sole discretion and expense, RTI shall sterilize, package and label as sterilized by RTI such Third Party Processed Specialty Allografts and Bone Paste. MSD shall pay RTI a commercially reasonable fee for such sterilization, packaging and labeling of the Third Party Processed Specialty Allografts and Bone Paste; provided, however, such fee shall not exceed the consideration RTI receives from any other third parties for substantially similar services.

(c) Sterilization Validation . During the term of this Agreement, RTI shall use commercially reasonable efforts to validate its processes to allow for and substantiate a “sterile” product label claim on all Specialty Allografts and Bone Paste.

4.5 Regulatory Approval .

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(a) United States . RTI warrants that Specialty Allografts, Bone Paste, Specialty Allograft Specifications, the Bone Paste Specifications, the Specialty Allograft Packaging Specifications and the Bone Paste Packaging Specifications shall be in conformity in all respects with all applicable federal, state, and local laws, rules and regulations relating thereto within the United States, including, without limitation, the Federal Food, Drug and Cosmetic Act (including Good Tissue Practices Regulations), the National Organ Transplant Act, FDA tissue regulations, and American Association of Tissue Banks (the “ AATB ”) or other generally accepted industry standards. RTI will continue to maintain and fulfill such regulatory approval of the federal, state and local governing bodies, and be responsible for all filings and other documents necessary to continue to meet said regulatory requirements, including, without limitation, fulfilling all applicable reporting, tracking and other requirements of regulatory agencies, self-regulatory organizations or governmental entities that have jurisdiction with respect to RTI, Specialty Allografts and Bone Paste. MSD shall cooperate in preparing any such filings to the extent reasonably requested by RTI. MSD shall be fully responsible for compliance with regulatory requirements with respect to all Specialty Allograft and Bone Paste distribution activities performed by MSD, including, if necessary, registration as a Tissue Bank under FDA 21 CFR 1271 and under any state licensure requirements. MSD shall be responsible for assuring that applicable AATB requirements are met with respect to MSD’s distribution activities. RTI shall be responsible for any market withdrawal or recall activities with respect to Specialty Allografts or Bone Paste as required pursuant to applicable laws, rules, regulations or standards. In the event RTI fails to perform any required market withdrawal or recall activities with respect to Specialty Allografts or Bone Paste, then MSD may perform such market withdrawal or recall activities. Each Party shall fully cooperate in any market withdrawal or recall activities on request of the other Party. MSD shall provide post-market feedback information to RTI in accordance with regulatory requirements.

(b) AATB Accreditation . The Parties acknowledge that RTI is a member of the AATB. RTI warrants that it will use its best efforts to continue its membership in good standing in the AATB and retain its AATB accreditation at all time during the term of this Agreement.

(c) All International Markets . MSD shall be fully responsible for market approvals, product registration and licensure for all markets in the Exclusive Territory and any other countries where MSD proposes to begin distributing RTI products and those products have not been previously registered, licensed and approved. RTI will use commercially reasonable efforts to support such registration activities. The purpose of this Section is to assign responsibility to satisfy licensure requirements in particular countries. The inability of MSD or RTI to obtain licensure in a particular market shall not, in and of itself, constitute a material breach of this Agreement.

(d) Costs . All costs associated with obtaining and/or maintaining any regulatory or governmental approval, within the United States, or accreditation with AATB as set forth in this Section 4.5 shall be borne solely by RTI insofar as those costs relate to activities performed by RTI. All costs associated with regulatory requirements, or AATB

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accreditation related to distribution activities performed by MSD, shall be borne by MSD. All costs associated with obtaining international market approvals, product registrations and licensure for any markets outside the Exclusive Territory where MSD proposes to begin distributing RTI products and where those products have not been previously registered, licensed and approved shall be the responsibility of MSD. MSD shall be responsible for costs associated with its responsibilities under Section 4.5(c).

(e) Allograft or Bone Paste products to be used in clinical investigations . MSD shall inform RTI in advance of any and all clinical investigations where Specialty Allografts or Bone Paste are to be used to ensure that proper donor consent, if required, has been received. MSD shall provide RTI with study outlines and all results of any such clinical investigations pertinent to the use and performance of Specialty Allografts or Bone Paste. RTI shall assist in clinical activities in regard to provision of information to FDA in support of MSD clinical investigations.

4.6 Additional RTI Representations and Warranties . RTI hereby represents and warrants to MSD the following:

(a) it is the owner of or the exclusive licensee under patent rights, if any, stemming from U.S. Patent Application S/N 08/816,079, dated March 13, 1997, attached as Exhibit A, including any continuations, continuations-in-part, or divisions of thi