sch13da2_osteotech.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

SCHEDULE 13D/A

[Rule 13d-101]

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO §240.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO §240.13d-1(a)

(Amendment No. 2)

OSTEOTECH, INC.

(Name of Issuer)

Common Stock, par value $0.01 per share

(Title of Class of Securities)

688582105

(CUSIP Number)

February 4, 2010

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [X]

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP NO. 688582105

Schedule 13G

Page of 2 of 5 Pages

1	Names of Reporting Persons. John F. White James F. Rice Kenneth L. Wolfe Foster L. Aborn Kairos Partners III Limited Partnership
2	Check the Appropriate Box if a Member of a Group (See Instructions)
	(a) [ ]
	(b) [ ]
3	SEC Use Only
4	Source of Funds WC
5	Check if disclosure of legal proceedings is required pursuant to Item 2(d) or 2(e)[ ]
6	Citizenship or Place of Organization. John F. White -- United States James F. Rice -- United States Kenneth L. Wolfe -- United States Foster L. Aborn -- United States Kairos Partners III Limited Partnership -- Delaware
Number of Shares Beneficially Owned by Each Reporting Person With		7 Sole Voting Power John F. White -- 0 shares James F. Rice -- 0 shares Kenneth L. Wolfe -- 0 shares Foster L. Aborn -- 0 shares Kairos Partners III Limited Partnership -- 0 shares
		8 Shared Voting Power John F. White -- 953,057 shares James F. Rice -- 953,057 shares Kenneth L. Wolfe -- 953,057 shares Foster L. Aborn -- 953,057 shares Kairos Partners III Limited Partnership -- 953,057 shares Refer to Item 5 below.
		9 Sole Dispositive Power John F. White -- 0 shares James F. Rice -- 0 shares Kenneth L. Wolfe -- 0 shares Foster L. Aborn -- 0 shares Kairos Partners III Limited Partnership -- 0 shares
		10 Shared Dispositive Power John F. White -- 953,057 shares James F. Rice -- 953,057 shares Kenneth L. Wolfe -- 953,057 shares Foster L. Aborn -- 953,057 shares Kairos Partners III Limited Partnership -- 953,057 shares Refer to Item 5 below.
11	Aggregate Amount Beneficially Owned by Each Reporting Person John F. White -- 953,057 shares James F. Rice -- 953,057 shares Kenneth L. Wolfe -- 953,057 shares Foster L. Aborn -- 953,057 shares Kairos Partners III Limited Partnership -- 953,057 shares Refer to Item 5 below.
12	Check if the Aggregate Amount in Row (9) Excludes Certain Shares (See Instructions) [ ] Not applicable.
13	Percent of Class Represented by Amount in Row (9)* John F. White -- 5.29% James F. Rice -- 5.29% Kenneth L. Wolfe -- 5.29% Foster L. Aborn -- 5.29% Kairos Partners III Limited Partnership -- 5.29%
14	Type of Reporting Person (See Instructions) John F. White -- IN James F. Rice -- IN Kenneth L. Wolfe -- IN Foster L. Aborn -- IN Kairos Partners III Limited Partnership -- PN

* All share numbers and ownership percentages reported herein are as of February 4, 2010.

* All percentage ownerships reported herein are based on 18,017,849 shares of common stock issued and outstanding as of November 4, 2009, as reported by Osteotech, Inc. in its Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009, filed with the Securities and Exchange Commission on November 9, 2009.

CUSIP NO. 688582105

Schedule 13D

Page 3 of 5 Pages

Explanatory Note.

This Amendment No. 2 relates to and amends the Schedule 13D initially filed jointly by John F. White, James F. Rice, Kenneth L. Wolfe, Foster L. Aborn and Kairos Partners III Limited Partnership with the Securities and Exchange Commission on November 23, 2009, as amended by Amendment No. 1 to Schedule 13D filed on December 1, 2009 (collectively, the “Schedule 13D Statement”), with respect to the Common Stock, $0.01 par value, of Osteotech, Inc. (the “Issuer”).

As used herein, the term “Partnership” refers to “Kairos Partners III Limited Partnership;” the term “Managers” refers to John F. White, James F. Rice, Kenneth L. Wolfe and Foster L. Aborn collectively; and the term “Reporting Persons” refers to the Partnership and the Managers collectively. All capitalized terms used and not expressly defined herein have the respective meanings ascribed to such terms in the Schedule 13 D Statement.

Item 4.

Purpose of Transaction

The Reporting Persons, as long-time and concerned stockholders of the Issuer, continually evaluate their alternatives with respect to their investment in the Issuer and possible means to maximize stockholder value. The Reporting Persons are considering various strategies to increase the value of the Reporting Persons’ investment in the Issuer.

Previously, on November 24, 2009, John White, one of the Reporting Persons, submitted a letter to Mr. Kenneth P. Fallon, III, Chairman of the Issuer’s board of directors. In the letter, Mr. White recommended to the Issuer’s Board of Directors that they hire a strategic advisor to explore all possibilities, including the sale of the company, in order to realize value for the Issuer’s stockholders.

On February 4, 2010, John White, submitted another letter to Mr. Kenneth P. Fallon, III, Chairman of the Issuer’s board of directors. In the letter, Mr. White requested that the Issuer respond to his previous letter of November 24, 2009 and confirm whether the Issuer had considered hiring a strategic advisor and to inform him as to why the Issuer had adopted a stockholder rights plan on January 22, 2010.

A copy of the letter submitted on February 4, 2010 is filed as Exhibit C to this Schedule 13D filing and is incorporated herein by reference. The foregoing and subsequent references to, and descriptions of, the letter, are qualified in their entirety by reference to such letter. The Reporting Persons disclaim any admission that they constitute a “group”, as such term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, with any entity associated with the Issuer as a result of the submission of the letter to the Issuer or by any other actions.

The Reporting Persons intend to review their investment in the Issuer on a continuing basis. Depending on various factors including, without limitation, the Issuer’s financial position and strategic direction, the Issuer’s response to the letters sent by John White, price levels of the Issuer’s stock, conditions in the securities market and general economic and industry conditions, the Reporting Persons may in the future take such actions with respect to their investment in the Issuer as they deem appropriate by selling some or all of their shares of common stock.

Item 5. Interest in Securities of the Issuer

(a)	Amount beneficially owned and percentage of class:

John F. White	953,057 shares, representing 5.29% of the Issuer’s common stock
James F. Rice	953,057 shares, representing 5.29% of the Issuer’s common stock
Kenneth L. Wolfe	953,057 shares, representing 5.29% of the Issuer’s common stock
Foster L. Aborn	953,057 shares, representing 5.29% of the Issuer’s common stock
Kairos Partners III Limited Partnership	953,057 shares, representing 5.29% of the Issuer’s common stock

(b) Voting and disposition powers:

Sole power to vote or direct the vote:

John F. White	0 shares, representing 0% of the Issuer’s common stock
James F. Rice	0 shares, representing 0% of the Issuer’s common stock
Kenneth L. Wolfe	0 shares, representing 0% of the Issuer’s common stock
Foster L. Aborn	0 shares, representing 0% of the Issuer’s common stock
Kairos Partners III Limited Partnership	0 shares, representing 0% of the Issuer’s common stock

Shared power to vote or direct the vote:

John F. White	953,057 shares, representing 5.29% of the Issuer’s common stock
James F. Rice	953,057 shares, representing 5.29% of the Issuer’s common stock
Kenneth L. Wolfe	953,057 shares, representing 5.29% of the Issuer’s common stock
Foster L. Aborn	953,057 shares, representing 5.29% of the Issuer’s common stock
Kairos Partners III Limited Partnership	953,057 shares, representing 5.29% of the Issuer’s common stock

Sole power to dispose or direct the disposition:

John F. White	0 shares, representing 0% of the Issuer’s common stock
James F. Rice	0 shares, representing 0% of the Issuer’s common stock
Kenneth L. Wolfe	0 shares, representing 0% of the Issuer’s common stock
Foster L. Aborn	0 shares, representing 0% of the Issuer’s common stock
Kairos Partners III Limited Partnership	0 shares, representing 0% of the Issuer’s common stock

Shared power to dispose or direct the disposition:

John F. White	953,057 shares, representing 5.29% of the Issuer’s common stock
James F. Rice	953,057 shares, representing 5.29% of the Issuer’s common stock
Kenneth L. Wolfe	953,057 shares, representing 5.29% of the Issuer’s common stock
Foster L. Aborn	953,057 shares, representing 5.29% of the Issuer’s common stock
Kairos Partners III Limited Partnership	953,057 shares, representing 5.29% of the Issuer’s common stock

(c) The following is a description of all transactions in shares of common stock of the Issuer by the Reporting Persons indentified in Item 1 of this Schedule 13D effected since December 1, 2009, the date of the last filing of the Schedule 13D Statement.

Entity	Transaction	Date	Shares	Price/Share	Net Proceeds
Kairos II**	Open market sale	12/4/2009	6,600	$2.79	$18,414.84
Kairos II**	Open market sale	12/7/2009	127,000	$2.72	$345,431.02
Kairos II**	Open market sale	12/11/2010	863	$2.83	$2,443.68

** Each of John F. White, James F. Rice, Kenneth L. Wolfe and Foster L. Aborn sold their shares of common stock through their ownership of Kairos Partners II Limited Partnership.

(d) N/A

(e) N/A

Item 7.

Material to Be Filed as Exhibits

Exhibit A	--	Amended and Restated Joint Filing Agreement, dated as of February 11, 2008, is by and among John F. White, James F. Rice, Kenneth L. Wolfe, Foster L. Aborn and Kairos Partners III Limited Partnership (incorporated by reference from the Schedule 13G/A filed on February 12, 2008)
Exhibit B	--	Letter to the Chairman of the Board of Directors dated November 24, 2009 (incorporated by reference from the Schedule 13D filed on November 24, 2009)
Exhibit C	--	Letter to the Chairman of the Board of Directors dated February 4, 2010 (filed herewith)

CUSIP NO. 688582105

Schedule 13D

Page of 4 of 5 Pages

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Statement is true, complete and correct.

Date: February 4, 2010

JOHN F. WHITE

/s/ John F. White

John F. White

JAMES F. RICE

/s/ James F. Rice

James F. Rice

KENNETH L. WOLFE

/s/ Kenneth L. Wolfe

Kenneth L. Wolfe

FOSTER L. ABORN

/s/ Foster L. Aborn

Foster L. Aborn

KAIROS PARTNERS III LIMITED PARTNERSHIP

By: KAIROS III LLC, its General Partner

By: KAIROS MASTER GP LLC, its Sole Member

By: /s/ John F. White

John F. White

Voting Member

CUSIP NO. 688582105

Schedule 13D

Page of 5 of 5 Pages

EXHIBIT C

KAIROS PARTNERS

February 4, 2010

Mr. Kenneth P. Fallon, III

Chairman of the Board

Osteotech, Inc.

51 James Way

Eatontown, NJ 07724

Dear Ken,

Kairos Partners remains a significant shareholder of Osteotech, Inc. (the “Company”), currently owning more than 5% of its outstanding securities.

Please confirm whether the Board of Directors of the Company has considered the suggestion that Kairos Partners made in its letter to you dated November 24, 2009 with respect to hiring a strategic advisor.

Also, the Board recently adopted a Stockholder Rights Plan. We are uncertain as to why the Board decided to adopt such a plan at this time, how this plan would “provide equal and fair treatment for all stockholders” and under what circumstances it would be implemented.

We would like to know if the Board has taken this action as a result of Kairos Partners suggestion to hire a strategic advisor. Does the Company intend to ask for shareholder approval of the Stockholders Rights Plan at the Company’s next Annual Meeting?

Would a representative of the Company be made available to us to answer these questions?

We look forward to receiving responses to these questions as soon as possible.

Sincerely,

/s/ John F. White

John F. White

Managing Member

cc: Osteotech, Inc. Board of Directors