EMPLOYEE CONFIDENTIAL INFORMATION, AND INVENTION AND NON-COMPETITION AGREEMENT

                       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