EMPLOYEE CONFIDENTIAL INFORMATION,

                                       AND

                     INVENTION AND NON-COMPETITION AGREEMENT

     This Agreement, is made and entered into on the 1ST day of November 2000 by
and between Mark H. Burroughs,  hereinafter  "Employee",  and Osteotech,  Inc. a
Delaware corporation, with its principal place of business located at Eatontown,
New Jersey including any and all current and future  subsidiary and/or affiliate
companies hereinafter "Corporation".

     WHEREAS,  Employee desires to establish an employment  relationship and may
receive certain benefits including stock options to be issued to Employee; and

     WHEREAS, by reason of employment by Corporation,  Employee will receive the
value and advantage of confidential information and special training and skills,
and the expert  knowledge and experience of the contacts with other  Corporation
employees; and

     WHEREAS,  the granting of stock options  represents a distinct advantage to
Employee and was conditioned upon Employee entering into this Agreement.

     NOW  THEREFORE,  in  exchange  for good  and  valuable  consideration,  the
sufficiency and receipt of which is hereby acknowledge, it is agreed as follows:

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     1. Covenant Not to Compete

     (a)  Employee  will  not,  from and  after  the  date  hereof  through  the
Employee's  employment  and for  twenty-four  (24) months  after the  Employee's
termination for any reason  whatsoever  including but not limited to involuntary
termination (with or without cause) and/or voluntary  termination,  (i) directly
or  indirectly  engage in,  represent  in any way,  or be  connected  with,  any
business or activity which markets,  sells or is developing products or services
which compete with the products or services marketed, sold or being developed by
the Corporation at the time of such termination (such business or activity being
hereinafter sometimes called a "Competing Business"),  within any state in which
the Corporation  transacts  business or sells its products or services,  whether
such  engagement  by the  Employee  shall be as an  officer,  principal,  agent,
director, owner, employee, partner,  affiliate,  consultant or other participant
in any  Competing  Business,  (ii) assist  others in  engaging in any  Competing
Business in any manner  described in the  foregoing  clause (i), or (iii) induce
other  employees of the  Corporation  to  terminate  their  employment  with the
Corporation or engage in any Competing Business.

     (b) The Employee  understands  that the  foregoing  restrictions  may limit
his/her  ability to earn a livelihood in a business  competitive to the business
of the Corporation,  but he/she  nevertheless  believes that he/she has received
and will receive sufficient  consideration and other benefits in connection with
the  Corporation's  issuance of certain stock options to the Employee as well as
other benefits to clearly justify such  restrictions  which, in any event (given
his/her  education,  skills and  ability),  the Employee  does not believe would
prevent him/her from earning a living.

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     2. Protection of Information

     Employee hereby  covenants with  Corporation  that,  throughout the term of
his/her  employment  by  Corporation,  Employee  will serve  Corporation's  best
interests  loyally  and  diligently.  Throughout  the  course of  employment  by
Corporation  and  thereafter,  Employee  will not disclose to any person,  firm,
corporation or entity (except when  authorized by  Corporation)  any information
relating to Corporation's  business,  including without limitation,  information
relating to trade secrets, business methods,  products,  processes,  procedures,
development or experimental projects,  suppliers, customer lists or the needs of
customers  or  prospective  customers,  clients,  etc.,  and  will  not use such
information  for his/her  own  purpose or for the  purpose of any person,  firm,
corporation or entity, except the Corporation.

     3. Corporation Right to Inventions.

     The Employee shall  promptly  disclose,  grant and assign  ownership to the
Corporation for its sole use and benefit any and all  inventions,  improvements,
technical information and suggestions relating in any way to the business of the
Corporation  (whether  patentable  or not),  which he/she may develop,  acquire,
conceive or reduce to practice while employed by the Corporation (whether or not
during usual  working  hours),  together with all patent  applications,  letters
patent,  copyrights and reissues  thereof that may at any time be granted for or
upon any such  invention,  improvement or technical  information.  In connection
therewith:

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     (i)  The  Employee  shall  without  charge,  but  at  the  expense  of  the
Corporation,   promptly  at  all  times  hereafter   execute  and  deliver  such
applications,   assignments,  descriptions  and  other  instruments  as  may  be
necessary or proper in the opinion of the  Corporation to vest title to any such
inventions,  improvements,  technical information, patent applications, patents,
copyrights or reissues thereof in the Corporation and to enable it to obtain and
maintain the entire right and title thereto throughout the world; and

     (ii) The Employee shall render to the Corporation at its expense (including
a reasonable payment for the time involved in case he is not then in its employ)
all such  assistance as it may require in the  prosecution of  applications  for
said patents,  copyrights or reissues thereof,  in the prosecution or defense of
interferences which may be declared involving any said applications,  patents or
copyrights  and in any  litigation  in which  the  Corporation  may be  involved
relating to any such patents, inventions, improvements or technical information.

     4. No Right to Employment.

     Nothing  contained  herein is intended to entitle the Employee to any right
or claim to be retained as an employee of the  Corporation or limit the right of
the Corporation to terminate or modify the employment of the Employee.

     5. Remedies; Survival.

     (a) The Employee  acknowledges  and understands that the provisions of this
Agreement  are of a  special  and  unique  nature,  the loss of which  cannot be
accurately  compensated  for in damages by an action at law, and that the breach
or  threatened  breach  of the  provisions  of this  Agreement  would  cause the
Corporation  irreparable  harm. In the event of a breach or threatened breach by
the  Employee of the  provisions  in Section 1, 2 or 3 hereof,  the  Corporation
shall be entitled to but not limited to injunctive  relief  restraining  it from
such breach.  Nothing herein  contained  shall be construed as  prohibiting  the
Corporation from pursuing any other additional or alternative remedies available
for any breach or threatened breach of this Agreement, including but not limited
to monetary damages.

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     (b)  Notwithstanding  anything contained in this Agreement to the contrary,
the  provisions  of  Sections 1, 2 and 3 and this  Section 5, shall  survive the
expiration or other  termination of this Agreement or employment of the Employee
by the  Corporation  until,  by  their  terms,  such  provisions  are no  longer
operative.

     6. Other Agreements: Prohibition Against Use of Trade Secrets of Others,.

     Employee   represents  and  warrants  to  the  Corporate  that  except  for
agreements set forth in Exhibit A attached hereto,  he/she is not a party to any
agreement or other arrangement with any other corporation, partnership or entity
relating to non-competition  with such entity or to non-disclose of confidential
and  proprietary  information of such entity or to other matters  similar to the
matters set forth in this Agreement.

     Employee  represents,  warrants and agrees that he/she can and will perform
his/her  duties  for  the  Corporation  without  the  unauthorized  use  of  any
confidential and/or proprietary information of others.

     7. General Provisions.

     (a) This Agreement and any or all terms hereof may not be changed,  waived,
discharged,  or terminated  orally,  but only by way of an instrument in writing
signed by the Chief Executive  Officer of the Corporation which employs Employee
or such officer's designee.

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     (b) This  Agreement  shall be governed by and construed in accordance  with
the laws of the State of New Jersey or any other jurisdiction.

     (c) It is the desire and intent of the parties  hereto that the  provisions
of this Agreement shall be enforced to the fullest extent  permissible under the
laws and public policies  applied in each  jurisdiction in which  enforcement is
sought.  Accordingly,  to  the  extent  that a  restriction  contained  in  this
Agreement is more  restrictive  than  permitted by the laws of any  jurisdiction
where this Agreement may be subject to review and  interpretation,  the terms of
such  restriction,  for the purpose only of the operation of such restriction in
such jurisdiction,  shall be the maximum restriction allowed by the laws of such
jurisdiction  and  such  restriction  shall  be  deemed  to  have  been  revised
accordingly herein.

     Employee  further  consents  to personal  jurisdiction  in the State of New
Jersey for the purposes of enforcing  this Agreement and further agrees that the
State of New Jersey is and shall be a convenient forum.

     (d) If any  portion  of this  Agreement  shall be found  to be  invalid  or
contrary  to public  policy,  the same may be modified or stricken by a Court of
competent  jurisdiction,  to the extent  necessary to allow the Court to enforce
such  provision in a manner which is as consistent  with the original  intent of
the  provision as possible.  The  striking or  modification  by the Court of any
provision shall not have the effect of invalidating the Agreement as a whole.

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     (e) This  Agreement  shall be  binding  upon the  parties  hereto and their
respective heirs, personal representatives, successors and assigns.

     (f) This Agreement  constitutes the entire and exclusive  agreement between
Employee  and  Corporation   pertaining  to  the  subject  matter  thereof,  and
supersedes and replaces any and all earlier confidential information,  invention
and   non-competition   agreements   between   Corporation   and   Employee  and
representations and understandings of the parties with respect thereto,  without
extinguishing  whatsoever  rights  heretofore  acquired by Corporation under any
previous agreements.

     IN WITNESS WHEREOF, the Agreement has been executed as aforesaid.

                              OSTEOTECH, INC.




                              By:  /s/ RICHARD  W. BAUER
                                       Richard  W. Bauer
                                       Chief Executive Officer


                              By:  /s/ MARK H. BURROUGHS
                                       Mark H. Burroughs




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