COMMON STOCK PURCHASE

AGREEMENT

 

Dated as of October ____, 2005

 

by and among

 

ORTEC INTERNATIONAL, INC.

 

and

 

THE PURCHASERS LISTED ON EXHIBIT A

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TABLE OF CONTENTS

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            ARTICLE I                     Purchase and Sale of Common Stock and
Warrants 1               Section 1.1   Purchase and Sale of Common Stock and
Warrants. 1               Section 1.2   Purchase Price and Closing 2            
ARTICLE II                     Representations and Warranties 2  
            Section 2.1   Representations and Warranties of the Company 2  
            Section 2.2   Representations and Warranties of the Purchasers 12  
          ARTICLE III                     Covenants     15               Section
3.1   Securities Compliance 15               Section 3.2   Registration and
Listing 15               Section 3.3   Inspection Rights 15  
            Section 3.4   Compliance with Laws 16               Section 3.5  
Keeping of Records and Books of Account 16               Section 3.6   Reporting
Requirements 16               Section 3.7   Other Agreements 16  
            Section 3.8   Use of Proceeds 16               Section 3.9  
Reporting Status 16               Section 3.10   Disclosure of Transaction 17  
            Section 3.11   Disclosure of Material Information 17  
            Section 3.12   Pledge of Securities 17             ARTICLE IV      
              Conditions     17               Section 4.1   Conditions Precedent
to the Obligation of the Company to Close and to Sell the Securities 17  
            Section 4.2   Conditions Precedent to the Obligation of the
Purchasers to Close and to Purchase the Securities 18             ARTICLE V    
                Certificate Legend 20               Section 5.1   Legend 20    
        ARTICLE VI                     Indemnification     21  
            Section 6.1   General Indemnity 21               Section 6.2  
Indemnification Procedure 21             ARTICLE VII        
            Miscellaneous     22               Section 7.1   Fees and Expenses
22  

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            Section 7.2   Specific Performance; Consent to Jurisdiction; Venue.
22               Section 7.3   Entire Agreement; Amendment 23  
            Section 7.4   Notices 23               Section 7.5   Waivers 24  
            Section 7.6   Headings 24               Section 7.7   Successors and
Assigns 24               Section 7.8   No Third Party Beneficiaries 24  
            Section 7.9   Governing Law 24               Section 7.10   Survival
25               Section 7.11   Counterparts 25               Section 7.12  
Publicity 25               Section 7.13   Severability 25               Section
7.14   Further Assurances 25  

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COMMON STOCK PURCHASE AGREEMENT

                This COMMON STOCK PURCHASE AGREEMENT this (“Agreement”), dated
as of October ____, 2005 by and between Ortec International, Inc., a Delaware
corporation (the “Company”), and the purchasers listed on Exhibit A hereto (each
a “Purchaser” and collectively, the “Purchasers”), for the purchase and sale of
shares of the Company’s common stock, par value $.001 per share (the “Common
Stock”) by the Purchasers.

                The parties hereto agree as follows:

ARTICLE I

Purchase and Sale of Common Stock and Warrants

Section 1.1       Purchase and Sale of Common Stock and Warrants.

                                (a)           Upon the following terms and
conditions, the Company shall issue and sell to the Purchasers, and the
Purchasers shall purchase from the Company, shares of Common Stock (the
“Shares”) at a price per share of $.25 (the “Per Share Purchase Price”). The
minimum purchase price hereunder shall be no less than $6,000,000 (the “Minimum
Purchase Price”). The aggregate purchase price sold hereunder shall be the sum
of the Minimum Purchase Price and the aggregate purchase price of any Shares
sold in excess of the Minimum Purchase Price (the “Purchase Price”). The Minimum
Purchase Price includes conversion of $3,486,000 of promissory notes recently
issued by the Company for loans made to it in May through September of 2005
which will have converted into shares of Common Stock and warrants to purchase
shares of Common Stock pursuant to the terms of such notes as more fully
described on Schedule 1.1(a) attached hereto. The Company and the Purchasers are
executing and delivering this Agreement in accordance with and in reliance upon
the exemption from securities registration afforded by Section 4(2) of the U.S.
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (the “Securities Act”), including Regulation D (“Regulation D”),
and/or upon such other exemption from the registration requirements of the
Securities Act as may be available with respect to any or all of the investments
to be made hereunder.

                                (b)           In the event that a Purchaser
would own in excess of 9.99% of the Common Stock outstanding on the Closing Date
(as defined below), such Purchaser shall purchase shares of the Company’s Series
D Convertible Preferred Stock (the “Series D Preferred Stock”) set forth
opposite its name on Exhibit A hereto. This Agreement, including, without
limitation, the representations and warranties contained herein, shall apply to
the purchase of the Series D Preferred Stock and, accordingly, any reference in
this Agreement to “Shares” shall also be deemed to include such shares of the
Series D Preferred Stock and any shares of Common Stock issuable upon conversion
of such Series D Preferred Stock. The Series D Preferred Stock pays no dividends
and shall convert into Common Stock when such Purchaser’s beneficial ownership
percentage falls below 9.99%.

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                                (c)           Upon the following terms and
conditions, the Purchasers shall be issued Series F Warrants, in substantially
the form attached hereto as Exhibit B (the “Warrants”), to purchase the number
of shares of Common Stock set forth opposite such Purchaser’s name on Exhibit A
hereto. The Warrants shall be exercisable immediately upon issuance, shall have
a term of seven (7) years and shall have an exercise price per share equal to
the Warrant Price (as defined in the Warrants). Any shares of Common Stock
issuable upon exercise of the Warrants (and such shares when issued) are herein
referred to as the “Warrant Shares”. The Shares, the Warrants and the Warrant
Shares are sometimes collectively referred to herein as the “Securities”.

                                (d)           For a period of forty-five (45)
days following the Closing Date (as defined below), each of the Purchasers shall
have the right to purchase additional Shares equal to [________] percent
(_____%) of such Purchaser’s initial investment in the Shares on the Closing
Date on the same terms and conditions as set forth in this Agreement (the
“Additional Investment Right”).

                                Section 1.2       Purchase Price and Closing.
 Subject to the terms and conditions hereof, the Company agrees to issue and
sell to the Purchasers and, in consideration of and in express reliance upon the
representations, warranties, covenants, terms and conditions of this Agreement,
the Purchasers, severally but not jointly, agree to purchase the number of
Shares and Warrants, in each case, set forth opposite their respective names on
Exhibit A. The Shares and Warrants shall be sold and funded in separate closings
(each, a “Closing”). The initial Closing under this Agreement (the “Initial
Closing”) shall take place on or about October ___, 2005 (the “Initial Closing
Date”) for the sale of Shares in an amount equal to at least the Minimum
Purchase Price. Subsequent Closings (each, a “Subsequent Closing”) under this
Agreement shall take place no later than the date immediately preceding the
sixtieth (60th) business day following the Initial Closing Date (each, a
“Subsequent Closing Date”). The Initial Closing Date and each Subsequent Closing
Date are sometimes referred to in this Agreement as the “Closing Date”. Each
Closing under this Agreement shall take place at the offices of Kramer Levin
Naftalis & Frankel LLP, 1177 Avenue of the Americas, New York, New York 10036 or
at such other place as the Purchasers and the Company may agree upon; provided,
that all of the conditions set forth in Article IV hereof and applicable to each
Closing shall have been fulfilled or waived in accordance herewith. At each
Closing, the Company shall deliver or cause to be delivered to each Purchaser
(i) a certificate registered in the name of the Purchaser representing the
number of Shares that such Purchaser is purchasing pursuant to the terms hereof,
(ii) a Warrant to purchase such number of shares of Common Stock as is set forth
opposite the name of such Purchaser on Exhibit A and (iii) any other deliveries
as required by Article IV. At each Closing, each Purchaser shall deliver its
Purchase Price by wire transfer to an account designated by the Company.

ARTICLE II

Representations and Warranties

                                Section 2.1       Representations and Warranties
of the Company. The Company hereby represents and warrants to the Purchasers as
follows, as of the date hereof and the Closing

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Date, except as set forth on the Schedule of Exceptions attached hereto with
each numbered Schedule corresponding to the section number herein:

                                (a)           Organization, Good Standing and
Power.  The Company is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware and has the requisite
corporate power to own, lease and operate its properties and assets and to
conduct its business as it is now being conducted. The Company does not have any
subsidiaries or own securities of any kind in any other entity except as set
forth in Section 2.1(g) hereto. The Company and its subsidiary is qualified to
do business as a foreign corporation and is in good standing in every
jurisdiction in which the nature of the business conducted or property owned by
it makes such qualification necessary except for any jurisdiction(s) (alone or
in the aggregate) in which the failure to be so qualified will not have a
Material Adverse Effect. For the purposes of this Agreement, “Material Adverse
Effect” means any effect on the business, operations, properties, assets,
prospects or condition (financial or otherwise) of the Company that is material
and adverse to the Company and its subsidiary, taken as a whole, and any
condition, circumstance or situation that would prohibit the Company from
entering into and performing any of its obligations hereunder and under the
other Transaction Documents (as defined below).

                                (b)           Authorization; Enforcement.  The
Company has the requisite corporate power and authority to enter into and
perform this Agreement, the Warrants and that certain Registration Rights
Agreement by and among the Company and the Purchasers, dated as of the date
hereof, substantially in the form of Exhibit C attached hereto (the
“Registration Rights Agreement” and, together with this Agreement and the
Warrants, the “Transaction Documents”) and to issue and sell the Securities in
accordance with the terms hereof. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by it of the
transactions contemplated thereby have been duly and validly authorized by all
necessary corporate action and no further consent or authorization of the
Company, its Board of Directors or stockholders is required. When executed and
delivered by the Company, each of the Transaction Documents shall constitute a
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, reorganization, moratorium, liquidation, conservatorship,
receivership or similar laws relating to, or affecting generally the enforcement
of, creditor’s rights and remedies or by other equitable principles of general
application.

                                (c)           Capitalization.  The authorized
capital stock of the Company as of the date of this Agreement consists of
200,000,000 shares of Common Stock, of which 26,498,749 were issued and
26,496,749 were outstanding as of July 27, 2005, and 1,000,000 shares of
preferred stock, of which 3,557.39 were issued and outstanding as of July 27,
2005. All of the outstanding shares of the Common Stock and any other
outstanding security of the Company have been duly and validly authorized.
Except as set forth in this Agreement, Schedule II of the Registration Rights
Agreement and as set forth in the Commission Documents, no shares of Common
Stock or any other security of the Company are entitled to preemptive rights or
registration rights and there are no outstanding options, warrants, scrip,
rights to subscribe to, call or commitments of any character whatsoever relating
to, or securities or rights convertible into, any shares of capital stock of the
Company except for options to purchase 1,000 shares of Common Stock granted
pursuant to the Company’s Employee Stock Option Plans and warrants to purchase
50,000 shares of Common Stock (half of which warrants are exercisable at $0.50
per share and the other

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half at $1.00 per share). Furthermore, except as set forth in this Agreement,
securities and agreements referred to in the immediately preceding sentence and
as set forth in the Commission Documents, there are no contracts, commitments,
understandings, or arrangements by which the Company is or may become bound to
issue additional shares of the capital stock of the Company or options,
securities or rights convertible into shares of capital stock of the Company.
Except for customary transfer restrictions contained in agreements entered into
by the Company in order to sell restricted securities or as provided in the
Commission Documents, the Company is not a party to or bound by any agreement or
understanding granting registration or anti-dilution rights to any person with
respect to any of its equity or debt securities except for its outstanding
Series D Convertible Preferred Stock and its outstanding Series B, C and E
Warrants, the shares of Common Stock referred to in items numbered 2, 3, 4, 5, 6
and 7, and some of the shares referred to in item numbered 1, on Schedule II to
the Registration Rights Agreement. The Company is not a party to, and it has no
knowledge of, any agreement or understanding restricting the voting or transfer
of any shares of the capital stock of the Company.

                                (d)           Issuance of Securities.  The
Shares and the Warrants to be issued at the Closing have been duly authorized by
all necessary corporate action and, when paid for and issued in accordance with
the terms hereof and the Warrants, respectively, the Shares and the Warrant
Shares will be validly issued, fully paid and nonassessable and free and clear
of all liens, encumbrances and rights of refusal of any kind and the holders
shall be entitled to all rights accorded to a holder of Common Stock.

                                (e)           No Conflicts.  The execution,
delivery and performance of the Transaction Documents by the Company and the
consummation by the Company of the transactions contemplated hereby and thereby
do not and will not (i) violate any provision of the Company’s Certificate of
Incorporation (the “Certificate”) or Bylaws (the “Bylaws”), each as amended to
date, or its subsidiary’s comparable charter documents, (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, mortgage, deed of
trust, indenture, note, bond, license, lease agreement, instrument or obligation
to which the Company or its subsidiary is a party or by which the Company or its
subsidiary’s respective properties or assets are bound, or (iii) result in a
violation of any federal, state, local or foreign statute, rule, regulation,
order, judgment or decree (including federal and state securities laws and
regulations) applicable to the Company or its subsidiary or by which any
property or asset of the Company or its subsidiary are bound or affected,
except, in all cases, other than violations pursuant to clauses (i) or (iii)
(with respect to federal and state securities laws) above, for such conflicts,
defaults, terminations, amendments, acceleration, cancellations and violations
as would not, individually or in the aggregate, have a Material Adverse Effect.
The business of the Company and its subsidiary is not being conducted in
violation of any laws, ordinances or regulations of any governmental entity,
except for possible violations, which singularly or in the aggregate do not and
will not have a Material Adverse Effect. Neither the Company nor its subsidiary
is required under federal, state, foreign or local law, rule or regulation to
obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency in order for it to execute,
deliver or perform any of its obligations under the Transaction Documents or
issue and sell the Securities in accordance with the terms hereof (other than
any filings, consents and approvals which may be required to be made by the

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Company under applicable state and federal securities laws, rules or regulations
or any registration provisions provided in the Registration Rights Agreement).

                                (f)            Commission Documents, Financial
Statements.  The Common Stock of the Company is registered pursuant to Section
12(b) or 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), and the Company has timely filed all reports, schedules, forms,
statements and other documents required to be filed by it with the Securities
and Exchange Commission (the “Commission”) pursuant to the registration and
reporting requirements of the Exchange Act and the Securities Act (all of the
foregoing including filings incorporated by reference therein being referred to
herein as the “Commission Documents”). The Commission Documents include the Form
10-QSB for the fiscal quarter ended March 31, 2005 (the “Form 10-Q”), the Form
10-KSB for the fiscal year ended December 31, 2004 (the “Form 10-K”), the
Company’s registration statement on Form S-2 which became effective May 19,
2005, and the Company’s Current Reports on Form 8-K including, but not limited
to, those filed on April 29, 2005, June 3, 2005, July 1, 2005, July 14, 2005 and
July 15, 2005, all of which Commission Documents at the time of their respective
filings complied in all material respects with the requirements of the Exchange
Act and of the Securities Act and the rules and regulations of the Commission
promulgated thereunder and other federal, state and local laws, rules and
regulations applicable to such documents, and did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. As of their
respective dates, the financial statements of the Company included in the
Commission Documents complied as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the Commission or other applicable rules and regulations with respect thereto.
Such financial statements have been prepared in accordance with generally
accepted accounting principles (“GAAP”) applied on a consistent basis during the
periods involved (except (i) as may be otherwise indicated in such financial
statements or the Notes thereto or (ii) in the case of unaudited interim
statements, to the extent they may not include footnotes or may be condensed or
summary statements), and fairly present in all material respects the financial
position of the Company and its subsidiary as of the dates thereof and the
results of operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments).

                                (g)           Subsidiaries.  The only subsidiary
of the Company is Orcel, LLC, which was formed under the laws of Delaware. The
Company owns all of the outstanding membership interests of Orcel LLC. All of
the outstanding membership interests of its subsidiary have been duly authorized
and validly issued, and are fully paid and nonassessable. There are no
outstanding preemptive, conversion or other rights, options, warrants or
agreements granted or issued by or binding upon its subsidiary for the purchase
or acquisition of any membership interests of its subsidiary or any other
securities convertible into, exchangeable for or evidencing the rights to
subscribe for any such membership interests. Neither the Company nor its
subsidiary is subject to any obligation (contingent or otherwise) to repurchase
or otherwise acquire or retire any membership interests of its subsidiary or any
convertible securities, rights, warrants or options of the type described in the
preceding sentence.

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                                (h)           No Material Adverse Change.  Since
May 19, 2005, the Company has not experienced or suffered any Material Adverse
Effect, except for the use of its cash in the regular course of its development
stage activities, without offsetting income.

                                (i)            No Undisclosed Liabilities. 
Except as disclosed in the Commission Documents, since May 19, 2005, neither the
Company nor its subsidiary has incurred any liabilities, obligations, claims or
losses (whether liquidated or unliquidated, secured or unsecured, absolute,
accrued, contingent or otherwise) other than those incurred in the ordinary
course of the Company’s or its subsidiary’s respective businesses and which,
individually or in the aggregate, are not reasonably likely to have a Material
Adverse Effect, except for the Company’s use of its cash since May 19, 2005 in
the regular course of its development stage activities, without offsetting
income.

                                (j)            No Undisclosed Events or
Circumstances.  Since May 19, 2005 except as disclosed in the Commission
Documents, no event or circumstance has occurred or exists with respect to the
Company or its subsidiary or their respective businesses, properties, prospects,
operations or financial condition, which, under applicable law, rule or
regulation, requires public disclosure or announcement by the Company but which
has not been so publicly announced or disclosed.

                                (k)           Indebtedness.  The Company’s
financial statements and other information in the Commission Documents set forth
as of the date hereof all outstanding secured and unsecured Indebtedness of the
Company and its subsidiary, or for which the Company or its subsidiary have
commitments, except for the Company’s use of its cash since May 19, 2005 in the
regular course of its development stage activities, without offsetting income.

                                (l)            Title to Assets.  Each of the
Company and its subsidiary has good and marketable title to all of its real and
personal property reflected in the Commission Documents, free and clear of any
mortgages, pledges, charges, liens, security interests or other encumbrances,
except for those, individually or in the aggregate, that do not cause a Material
Adverse Effect. All said leases of the Company and its subsidiary are valid and
subsisting and in full force and effect.

                                (m)          Actions Pending.  There is no
action, suit, claim, investigation, arbitration, alternate dispute resolution
proceeding or other proceeding pending or, to the knowledge of the Company,
threatened against the Company or its subsidiary which questions the validity of
this Agreement or any of the other Transaction Documents or any of the
transactions contemplated hereby or thereby or any action taken or to be taken
pursuant hereto or thereto. Except as set forth in the Commission Documents,
there is no action, suit, claim, investigation, arbitration, alternate dispute
resolution proceeding or other proceeding pending or, to the knowledge of the
Company, threatened, against or involving the Company, its subsidiary or any of
their respective properties or assets, which individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect. There are no
outstanding orders, judgments, injunctions, awards or decrees of any court,
arbitrator or governmental or regulatory body against the Company or its
subsidiary or any officers or directors of the Company or its subsidiary in
their capacities as such, which individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.

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                                (n)           Compliance with Law.  The business
of the Company and its subsidiary has been and is presently being conducted in
accordance with all applicable federal, state and local governmental laws,
rules, regulations and ordinances, except as set forth in the
Commission Documents or such that, individually or in the aggregate, the
noncompliance therewith could not reasonably be expected to have a Material
Adverse Effect. The Company and its subsidiary have all franchises, permits,
licenses, consents and other governmental or regulatory authorizations and
approvals necessary for the conduct of its business as now being conducted by it
unless the failure to possess such franchises, permits, licenses, consents and
other governmental or regulatory authorizations and approvals, individually or
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.

                                (o)           Taxes.  Except as set forth in the
Commission Documents, the Company and its subsidiary have accurately prepared
and filed all federal, state and other tax returns required by law to be filed
by it, has paid or made provisions for the payment of all taxes shown to be due
and all additional assessments, and adequate provisions have been and are
reflected in the financial statements of the Company and its subsidiary for all
current taxes and other charges to which the Company or its subsidiary is
subject and which are not currently due and payable. None of the federal income
tax returns of the Company or its subsidiary have been audited by the Internal
Revenue Service. The Company has no knowledge of any additional assessments,
adjustments or contingent tax liability (whether federal or state) of any nature
whatsoever, whether pending or threatened against the Company or its subsidiary
for any period, nor of any basis for any such assessment, adjustment or
contingency.

                                (p)           Certain Fees.  Other than a cash
placement agent fee equal to 10% of the cash proceeds raised pursuant to this
Agreement and placement agent warrants to purchase 10% of the number of Shares
sold pursuant to this Agreement as more fully described in the placement agency
agreement attached hereto as Schedule 2.1(p), the Company has not employed any
broker or finder or incurred any liability for any brokerage or investment
banking fees, commissions, finders’ structuring fees, financial advisory fees or
other similar fees in connection with the Transaction Documents.

                                (q)           Disclosure.  To the best of the
Company’s knowledge, neither this Agreement nor any other documents, schedules,
certificates or instruments furnished to the Purchasers by or on behalf of the
Company or its subsidiary in connection with the transactions contemplated by
this Agreement contain any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements made herein or
therein, in the light of the circumstances under which they were made herein or
therein, not misleading.

                                (r)            Operation of Business.  Except
for a security interest in its United States patents and trademarks given by the
Company and its subsidiary to Paul Royalty Fund L.P., all as described in the
Commission Documents, the Company and its subsidiary own or possess the rights
to all patents, trademarks, domain names (whether or not registered) and any
patentable improvements or copyrightable derivative works thereof, websites and
intellectual property rights relating thereto, service marks, trade names,
copyrights, licenses and authorizations which are necessary for the conduct of
its business as now conducted without any conflict with the rights of others.

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                                (s)           Environmental Compliance.  The
Company and its subsidiary have obtained all material approvals, authorization,
certificates, consents, licenses, orders and permits or other similar
authorizations of all governmental authorities, or from any other person, that
are required under any Environmental Laws. “Environmental Laws” shall mean all
applicable laws relating to the protection of the environment including, without
limitation, all requirements pertaining to reporting, licensing, permitting,
controlling, investigating or remediating emissions, discharges, releases or
threatened releases of hazardous substances, chemical substances, pollutants,
contaminants or toxic substances, materials or wastes, whether solid, liquid or
gaseous in nature, into the air, surface water, groundwater or land, or relating
to the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of hazardous substances, chemical substances, pollutants,
contaminants or toxic substances, material or wastes, whether solid, liquid or
gaseous in nature. The Company has all necessary governmental approvals required
under all Environmental Laws and used in its business or in the business of its
subsidiary, except for such instances as would not individually or in the
aggregate have a Material Adverse Effect. The Company and its subsidiary are
also in compliance with all other limitations, restrictions, conditions,
standards, requirements, schedules and timetables required or imposed under all
Environmental Laws. Except for such instances as would not individually or in
the aggregate have a Material Adverse Effect, there are no past or present
events, conditions, circumstances, incidents, actions or omissions relating to
or in any way affecting the Company or its subsidiary that violate or would be
reasonably likely to violate any Environmental Law after the Closing or that
would be reasonably likely to give rise to any Environmental Liability, or
otherwise form the basis of any claim, action, demand, suit, proceeding,
hearing, study or investigation (i) under any Environmental Law, or (ii) based
on or related to the manufacture, processing, distribution, use, treatment,
storage (including, without limitation, underground storage tanks), disposal,
transport or handling, or the emission, discharge, release or threatened release
of any hazardous substance. “Environmental Liabilities” means all liabilities of
a person (whether such liabilities are owed by such person to governmental
authorities, third parties or otherwise) whether currently in existence or
arising hereafter which arise under or relate to any Environmental Law.

                                (t)            Books and Records; Internal
Accounting Controls.  The records and documents of the Company and its
subsidiary accurately reflect in all material respects the information relating
to the business of the Company and its subsidiary, the location and collection
of their assets, and the nature of all transactions giving rise to the
obligations or accounts receivable of the Company or its subsidiary. The Company
and its subsidiary maintain a system of internal accounting controls sufficient,
in the judgment of the Company’s board of directors, to provide reasonable
assurance that (i) transactions are executed in accordance with management’s
general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management’s general or
specific authorization and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
actions are taken with respect to any differences.

                                (u)           Material Agreements.  Except for
the Transaction Documents (with respect to clause (i) only), or as disclosed in
the Commission Documents, or as would not be reasonably likely to have a
Material Adverse Effect, (i) the Company and its subsidiary have

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performed all obligations required to be performed by them to date under any
written or oral contract, instrument, agreement, commitment, obligation, plan or
arrangement, filed or required to be filed with the Commission (the “Material
Agreements”) except for past due amounts owed by the Company to (x) Cambrex Bio
Science Walkersville, Inc. (“Cambrex”) pursuant to the terms of the Cell Therapy
Manufacturing Agreement between the Company and Cambrex and (y) the Trustees of
Columbia University (“Columbia”) pursuant to the lease for the Company’s offices
in New York City, (ii) neither the Company nor its subsidiary has received any
notice of default under any Material Agreement and, (iii) to the best of the
Company’s knowledge, neither the Company nor its subsidiary is in default under
any Material Agreement now in effect except for the past due amounts owed by the
Company to Cambrex and Columbia.

                                (v)           Transactions with Affiliates. 
Except as set forth in the Commission Documents, there are no loans, leases,
agreements, contracts, royalty agreements, management contracts or arrangements
or other continuing transactions between (a) the Company, its subsidiary or any
of their respective customers or suppliers on the one hand, and (b) on the other
hand, any officer, employee, consultant or director of the Company, or any
member of the immediate family of such officer, employee, consultant, or
director or any corporation or other entity controlled by such officer,
employee, consultant, or director, or a member of the immediate family of such
officer, employee, consultant, or director which, in each case, is required to
be disclosed in the Commission Documents or in the Company’s most recently filed
definitive proxy statement on Schedule 14A, that is not so disclosed in the
Commission Documents or in such proxy statement.

                                (w)          Securities Act of 1933.  Based in
material part upon the representations herein of the Purchasers, the Company has
complied and will comply with all applicable federal and state securities laws
in connection with the offer, issuance and sale of the Securities hereunder.
Neither the Company nor anyone acting on its behalf, directly or indirectly, has
or will sell, offer to sell or solicit offers to buy any of the Securities or
similar securities to, or solicit offers with respect thereto from, or enter
into any negotiations relating thereto with, any person, or has taken or will
take any action so as to bring the issuance and sale of any of the Securities
under the registration provisions of the Securities Act and applicable state
securities laws, and neither the Company nor any of its affiliates, nor any
person acting on its or their behalf, has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D under
the Securities Act) in connection with the offer or sale of any of the
Securities.

                                (x)            Governmental Approvals.  Except
for filing of any notice prior or subsequent to the Closing that may be required
under applicable state and/or federal securities laws (which, if required, will
be filed on a timely basis), no authorization, consent, approval, license,
exemption of, filing or registration with any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, is or
will be necessary for, or in connection with, the execution or delivery of the
Securities, or for the performance by the Company of its obligations under the
Transaction Documents.

                                (y)           Employees.  Neither the Company
nor its subsidiary has any collective bargaining arrangements or agreements
covering any of its employees. Neither the Company nor its subsidiary has any
employment contract, agreement regarding proprietary information, non-

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competition agreement, non-solicitation agreement, confidentiality agreement, or
any other similar contract or restrictive covenant, relating to the right of any
officer, employee or consultant to be employed or engaged by the Company or such
subsidiary required to be disclosed in the Commission Documents that is not so
disclosed. Since May 19, 2005, except for Steven Peltier, no officer, consultant
or key employee of the Company or any subsidiary whose termination, either
individually or in the aggregate, would be reasonably likely to have a Material
Adverse Effect, has terminated or, to the knowledge of the Company, has any
present intention of terminating his or her employment or engagement with the
Company or its subsidiary.

                                (z)            Absence of Certain Developments. 
Except as contemplated by this Agreement, or as disclosed in the Commission
Documents, or pursuant to outstanding warrants or options of the Company having
been exercised, or outstanding convertible securities having been converted
since May 19, 2005, neither the Company nor its subsidiary has:

                                                (i)            issued any stock,
bonds or other corporate securities or any rights, options or warrants with
respect thereto, except an option to purchase 1,000 shares of Common Stock
granted pursuant to the Company’s Stock Option Plans and warrants to purchase
50,000 shares of Common Stock, half of which warrants are exercisable at $0.50
per share and the other half at $1.00 per share;

                                                (ii)           borrowed any
amount or incurred or become subject to any liabilities (absolute or contingent)
except current liabilities incurred in the ordinary course of business;

                                                (iii)          discharged or
satisfied any lien or encumbrance or paid any obligation or liability (absolute
or contingent), other than current liabilities paid in the ordinary course of
business;

                                                (iv)          declared or made
any payment or distribution of cash or other property to stockholders with
respect to its stock, or purchased or redeemed, or made any agreements so to
purchase or redeem, any shares of its capital stock, in each case in excess of
$50,000 individually or $100,000 in the aggregate;

                                                (v)           sold, assigned or
transferred any other tangible assets, or canceled any debts or claims, in each
case in excess of $250,000, except in the ordinary course of business;

                                                (vi)          sold, assigned or
transferred any patent rights, trademarks, trade names, copyrights, trade
secrets or other intangible assets or intellectual property rights in excess of
$250,000, or disclosed any proprietary confidential information to any person
except to customers in the ordinary course of business or to the Purchasers or
their representatives, or in connection with a sales agency agreement between
the Company and Cambrex Bio Science Walkersville, Inc. (the “Cambrex Sales
Agreement”);

                                                (vii)         suffered any
material losses or waived any rights of material value, except in the ordinary
course of business, or suffered the loss of any material amount of prospective
business;

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                                                (viii)        made any changes
in employee compensation except in the ordinary course of business and
consistent with past practices;

                                                (ix)           made capital
expenditures or commitments therefor that aggregate in excess of $500,000;

                                                (x)            entered into any
material transaction, whether or not in the ordinary course of business, except
the Cambrex Sales Agreement;

                                                (xi)           made charitable
contributions or pledges in excess of $25,000;

                                                (xii)          suffered any
material damage, destruction or casualty loss, whether or not covered by
insurance;

                                                (xiii)         experienced any
material problems with labor or management in connection with the terms and
conditions of their employment; or

                                                (xiv)         entered into an
agreement, written or otherwise, to take any of the foregoing actions, except
the Cambrex Sales Agreement.

                                (aa)         Public Utility Holding Company Act
and Investment Company Act Status.  The Company is not a “holding company” or a
“public utility company” as such terms are defined in the Public Utility Holding
Company Act of 1935, as amended. The Company is not, and as a result of and
immediately upon the Closing will not be, an “investment company” or a company
“controlled” by an “investment company,” within the meaning of the Investment
Company Act of 1940, as amended.

                                (bb)         ERISA.  No liability to the Pension
Benefit Guaranty Corporation has been incurred with respect to any Plan by the
Company or its subsidiary which is or would be materially adverse to the Company
and its subsidiary. The execution and delivery of this Agreement and the
issuance and sale of the Shares and the Warrants will not involve any
transaction which is subject to the prohibitions of Section 406 of ERISA or in
connection with which a tax could be imposed pursuant to Section 4975 of the
Internal Revenue Code of 1986, as amended, provided that, if any of the
Purchasers, or any person or entity that owns a beneficial interest in any of
the Purchasers, is an “employee pension benefit plan” (within the meaning of
Section 3(2) of ERISA) with respect to which the Company is a “party in
interest” (within the meaning of Section 3(14) of ERISA), the requirements of
Sections 407(d)(5) and 408(e) of ERISA, if applicable, are met. As used in this
Section 2.1(cc), the term “Plan” shall mean an “employee pension benefit plan”
(as defined in Section 3 of ERISA) which is or has been established or
maintained, or to which contributions are or have been made, by the Company or
its subsidiary or by any trade or business, whether or not incorporated, which,
together with the Company or its subsidiary, is under common control, as
described in Section 414(b) or (c) of the Code.

                                (cc)         Independent Nature of Purchasers.
 The Company acknowledges that the obligations of each Purchaser under the
Transaction Documents are several and not joint with the obligations of any
other Purchaser, and no Purchaser shall be responsible in any way for the

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performance of the obligations of any other Purchaser under the Transaction
Documents. The decision of each Purchaser to purchase Securities pursuant to
this Agreement has been made by such Purchaser independently of any other
purchase and independently of any information, materials, statements or opinions
as to the business, affairs, operations, assets, properties, liabilities,
results of operations, condition (financial or otherwise) or prospects of the
Company or of its subsidiary which may have made or given by any other Purchaser
or by any agent or employee of any other Purchaser, and no Purchaser or any of
its agents or employees shall have any liability to any Purchaser (or any other
person) relating to or arising from any such information, materials, statements
or opinions. The Company further acknowledges that nothing contained herein, or
in any Transaction Document, and no action taken by any Purchaser pursuant
hereto or thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated by the
Transaction Documents. Each Purchaser shall be entitled to independently protect
and enforce its rights, including without limitation, the rights arising out of
this Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose. For reasons of administrative convenience only, the
Transaction Documents have been prepared by counsel for one of the Purchasers.
Such counsel does not represent all of the Purchasers but only such Purchaser
and the other Purchasers may retain their own individual counsel with respect to
the transactions contemplated hereby. The Company has elected to provide all
Purchasers with the same terms and Transaction Documents for the convenience of
the Company and not because it was required or requested to do so by the
Purchasers. The Company acknowledges that such procedure with respect to the
Transaction Documents in no way creates a presumption that the Purchasers are in
any way acting in concert or as a group with respect to the Transaction
Documents or the transactions contemplated hereby or thereby.

                                (dd)         No Integrated Offering.  Neither
the Company, nor any of its affiliates, nor any person acting on its or their
behalf, has directly or indirectly made any offers or sales of any security or
solicited any offers to buy any security under circumstances that would cause
the offering of the Securities pursuant to this Agreement to be integrated with
prior offerings by the Company for purposes of the Securities Act which would
prevent the Company from selling the Securities pursuant to Regulation D and
Rule 506 thereof under the Securities Act, or any applicable exchange-related
stockholder approval provisions, nor will the Company or any of its affiliates
or its subsidiary take any action or steps that would cause the offering of the
Securities to be integrated with other offerings. The Company does not have any
registration statement pending before the Commission or currently under the
Commission’s review.

                                (ee)         Sarbanes-Oxley Act.  The Company is
in compliance with the applicable provisions of the Sarbanes-Oxley Act of 2002
(the “Sarbanes-Oxley Act”), and the rules and regulations promulgated
thereunder, that are effective and intends to comply with other applicable
provisions of the Sarbanes-Oxley Act, and the rules and regulations promulgated
thereunder, upon the effectiveness of such provisions.

                                Section 2.2       Representations and Warranties
of the Purchasers.  Each of the Purchasers hereby represents and warrants to the
Company with respect solely to itself and not with respect to any other
Purchaser as follows as of the date hereof and as of the Closing Date:

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                                (a)           Organization and Standing of the
Purchasers.  If the Purchaser is an entity, such Purchaser is a corporation,
limited liability company or partnership duly incorporated or organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization.

                                (b)           Authorization and Power.  Each
Purchaser has the requisite power and authority to enter into and perform the
Transaction Documents and to purchase the Securities being sold to it hereunder.
The execution, delivery and performance of the Transaction Documents by each
Purchaser and the consummation by it of the transactions contemplated hereby
have been duly authorized by all necessary corporate or partnership action, and
no further consent or authorization of such Purchaser or its Board of Directors,
stockholders, or partners, as the case may be, is required. When executed and
delivered by the Purchasers, the other Transaction Documents shall constitute
valid and binding obligations of each Purchaser enforceable against such
Purchaser in accordance with their terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation, conservatorship, receivership or similar laws relating to, or
affecting generally the enforcement of, creditor’s rights and remedies or by
other equitable principles of general application.

                                (c)           No Conflict.  The execution,
delivery and performance of the Transaction Documents by the Purchaser and the
consummation by the Purchaser of the transactions contemplated thereby and
hereby do not and will not (i) violate any provision of the Purchaser’s charter
or organizational documents, (ii) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, mortgage, deed of trust, indenture, note, bond,
license, lease agreement, instrument or obligation to which the Purchaser is a
party or by which the Purchaser’s respective properties or assets are bound, or
(iii) result in a violation of any federal, state, local or foreign statute,
rule, regulation, order, judgment or decree (including federal and state
securities laws and regulations) applicable to the Purchaser or by which any
property or asset of the Purchaser are bound or affected, except, in all cases,
other than violations pursuant to clauses (i) or (iii) (with respect to federal
and state securities laws) above, for such conflicts, defaults, terminations,
amendments, acceleration, cancellations and violations as would not,
individually or in the aggregate, materially and adversely affect the
Purchaser’s ability to perform its obligations under the Transaction Documents.

                                (d)           Acquisition for Investment.  Each
Purchaser is purchasing the Shares and Warrants solely for its own account for
the purpose of investment and not with a view to or for sale in connection with
distribution. Each Purchaser does not have a present intention to sell any of
the Shares or Warrants, nor a present arrangement (whether or not legally
binding) or intention to effect any distribution of any of the Shares or
Warrants to or through any person or entity; provided, however, that by making
the representations herein, such Purchaser does not agree to hold the Shares or
the Warrants for any minimum or other specific term and reserves the right to
dispose of the Shares or the Warrants at any time in accordance with Federal and
state securities laws applicable to such disposition. Each Purchaser
acknowledges that it (i) has such knowledge and experience in financial and
business matters such that Purchaser is capable of evaluating the merits and
risks of Purchaser’s investment in the Company, (ii) is able to bear the
financial risks associated with an investment in the Securities and (iii) has
been given full access

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to such records of the Company and its subsidiary and to the officers of the
Company and its subsidiary as it has deemed necessary or appropriate to conduct
its due diligence investigation.

                                (e)           Rule 144.  Each Purchaser
understands that the Securities must be held indefinitely unless such Shares are
registered under the Securities Act or an exemption from registration is
available. Each Purchaser acknowledges that such person is familiar with Rule
144 of the rules and regulations of the Commission, as amended, promulgated
pursuant to the Securities Act (“Rule 144”), and that such Purchaser has been
advised that Rule 144 permits resales only under certain circumstances. Each
Purchaser understands that to the extent that Rule 144 is not available, such
Purchaser will be unable to sell any Securities without either registration
under the Securities Act or the existence of another exemption from such
registration requirement.

                                (f)            General.  Each Purchaser
understands that the Securities are being offered and sold in reliance on a
transactional exemption from the registration requirements of federal and state
securities laws and the Company is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgments and understandings of
such Purchaser set forth herein in order to determine the applicability of such
exemptions and the suitability of such Purchaser to acquire the Securities. Each
Purchaser understands that no United States federal or state agency or any
government or governmental agency has passed upon or made any recommendation or
endorsement of the Securities.

                                (g)           No General Solicitation.  Each
Purchaser acknowledges that the Securities were not offered to such Purchaser by
means of any form of general or public solicitation or general advertising, or
publicly disseminated advertisements or sales literature, including (i) any
advertisement, article, notice or other communication published in any
newspaper, magazine, or similar media, or broadcast over television or radio, or
(ii) any seminar or meeting to which such Purchaser was invited by any of the
foregoing means of communications.

                                (h)           Accredited Investor.  Each
Purchaser is an “accredited investor” (as defined in Rule 501 of Regulation D),
and such Purchaser has such experience in business and financial matters that it
is capable of evaluating the merits and risks of an investment in the
Securities. Such Purchaser is not required to be registered as a broker-dealer
under Section 15 of the Exchange Act and such Purchaser is not a broker-dealer.
Each Purchaser acknowledges that an investment in the Securities is speculative
and involves a high degree of risk. Each Purchaser has completed or caused to be
completed the Investor Questionnaire Certification attached hereto as Exhibit D
certifying as to its status as an “accredited investor” and understands that the
Company is relying upon the truth and accuracy of the Purchaser set forth
therein to determine the suitability of such Purchaser to acquire the
Securities.

                                (i)            Certain Fees.  The Purchasers
have not employed any broker or finder or incurred any liability for any
brokerage or investment banking fees, commissions, finders’ structuring fees,
financial advisory fees or other similar fees in connection with the Transaction
Documents.

                                (j)            Independent Investment.  Except
as may be disclosed in any filings with the Commission by any Purchaser under
Section 13 and/or Section 16 of the Exchange Act, no

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Purchaser has agreed to act with any other Purchaser for the purpose of
acquiring, holding, voting or disposing of the Securities purchased hereunder
for purposes of Section 13(d) under the Exchange Act, and each Purchaser is
acting independently with respect to its investment in the Securities.

                                (k)           No Shorting.  No Purchaser has
engaged in any short sales of the Common Stock or instructed any third parties
to engage in any short sales of the Common Stock on its behalf prior to the
Closing Date. Each Purchaser covenants and agrees that it will not be in a net
short position with respect to the shares of Common Stock.

                                (l)            Information Provided.  Each
Purchaser acknowledges that it has reviewed, or been provided with the
opportunity to review, the Commission Documents and has had a reasonable
opportunity to ask questions of and receive answers from persons acting on
behalf of the Company concerning the transactions to be consummated hereby and
if such opportunity was taken, all such questions have been answered to the full
satisfaction of such Purchaser. Each Purchaser and its advisors, if any, have
had the opportunity to request, receive and consider all information relating to
the business, properties, operations, condition (financial or other), results of
operations or prospects of the Company and information relating to the offer and
sale of the Securities deemed relevant by them.

ARTICLE III

Covenants

                The Company covenants with each Purchaser as follows, which
covenants are for the benefit of each Purchaser and their respective permitted
assignees.

                                Section 3.1       Securities Compliance.  The
Company shall notify the Commission in accordance with its rules and
regulations, of the transactions contemplated by any of the Transaction
Documents and shall take all other necessary action and proceedings as may be
required and permitted by applicable law, rule and regulation, for the legal and
valid issuance of the Securities to the Purchasers, or their respective
subsequent holders.

                                Section 3.2       Registration and Listing.  The
Company shall use its reasonable best efforts to cause its Common Stock to
continue to be registered under Sections 12(b) or 12(g) of the Exchange Act, to
comply in all respects with its reporting and filing obligations under the
Exchange Act, to comply with all requirements related to any registration
statement filed pursuant to this Agreement, and to not take any action or file
any document (whether or not permitted by the Securities Act or the rules
promulgated thereunder) to terminate or suspend such registration or to
terminate or suspend its reporting and filing obligations under the Exchange Act
or Securities Act, except as permitted herein. The Company shall use its
reasonable best efforts to continue the listing or trading of its Common Stock
on the OTC Bulletin Board or any successor market.

                                Section 3.3       Inspection Rights.  The
Company shall permit, during normal business hours and upon reasonable request
and reasonable notice, each Purchaser or any employees, agents or
representatives thereof, so long as such Purchaser shall be obligated

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hereunder to purchase the Shares or shall beneficially own any Shares or Warrant
Shares, for purposes reasonably related to such Purchaser’s interests as a
stockholder to examine and make reasonable copies of and extracts from the
records and books of account of, and visit and inspect the properties, assets,
operations and business of the Company and its subsidiary, and to discuss the
affairs, finances and accounts of the Company and its subsidiary with any of its
officers, consultants, directors, and key employees.

                                Section 3.4       Compliance with Laws.  The
Company shall comply, and cause its subsidiary to comply, with all applicable
laws, rules, regulations and orders, noncompliance with which would be
reasonably likely to have a Material Adverse Effect.

                                Section 3.5       Keeping of Records and Books
of Account.  The Company shall keep adequate records and books of account, in
which complete entries will be made in accordance with GAAP consistently
applied, reflecting all financial transactions of the Company and its subsidiary
on a consolidated basis, and in which, for each fiscal year, all proper reserves
for depreciation, depletion, obsolescence, amortization, taxes, bad debts and
other purposes in connection with its business shall be made.

                                Section 3.6       Reporting Requirements.  If
the Commission shall cease making the Company’s periodic reports available via
the Internet without charge, then the Company shall furnish the following to
each Purchaser so long as such Purchaser shall be obligated hereunder to
purchase the Securities or shall beneficially own Shares or Warrant Shares:

                                (a)           Quarterly Reports filed with the
Commission on Form 10-Q or 10-QSB as soon as available, and in any event within
forty-five (45) days after the end of each of the first three fiscal quarters of
the Company;

                                (b)           Annual Reports filed with the
Commission on Form 10-K or 10KSB as soon as available, and in any event within
ninety (90) days after the end of each fiscal year of the Company; and

                                (c)           Copies of all notices, information
and proxy statements in connection with any meetings, that are, in each case,
provided to holders of shares of Common Stock, contemporaneously with the
delivery of such notices or information to such holders of Common Stock.

                                Section 3.7       Other Agreements.  The Company
shall not enter into any agreement in which the terms of such agreement would
restrict or impair the right or ability to perform of the Company or its
subsidiary under any Transaction Document.

                                Section 3.8       Use of Proceeds.  The proceeds
from the sale of the Shares will be used by the Company for working capital and
general corporate purposes.

                                Section 3.9       Reporting Status.  So long as
a Purchaser beneficially owns any of the Securities, the Company shall timely
file all reports required to be filed with the Commission pursuant to the
Exchange Act, and the Company shall not terminate its status as an issuer
required to file reports under the Exchange Act even if the Exchange Act or the
rules and regulations thereunder would permit such termination.

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                                Section 3.10       Disclosure of Transaction. 
The Company shall issue a press release describing the material terms of the
transactions contemplated hereby (the “Press Release”) as soon as practicable
after the Closing; provided, however, that if Closing occurs after 4:00 P.M.
Eastern Time on any Trading Day but in no event later than one hour after the
Closing, the Company shall issue the Press Release no later than 9:00 A.M.
Eastern Time on the first Trading Day following the Closing Date. The Company
shall also file with the Commission a Current Report on Form 8-K (the “Form
8-K”) describing the material terms of the transactions contemplated hereby (and
attaching as exhibits thereto this Agreement, the Registration Rights Agreement
and the form of Warrant) as soon as practicable following the Closing Date but
in no event more than two (2) Trading Days following the Closing Date, which
Press Release and Form 8-K shall be subject to prior review and comment by the
Purchasers. “Trading Day” means any day during which the OTC Bulletin Board (or
other principal exchange on which the Common Stock is traded) shall be open for
trading.

                                Section 3.11       Disclosure of Material
Information.  The Company covenants and agrees that neither it nor any other
person acting on its behalf has provided or will provide any Purchaser or its
agents or counsel with any information that the Company believes constitutes
material non-public information, unless prior thereto such Purchaser shall have
executed a written agreement regarding the confidentiality and use of such
information. The Company understands and confirms that each Purchaser shall be
relying on the foregoing representations in effecting transactions in securities
of the Company.

                                Section 3.12        Pledge of Securities.  The
Company acknowledges and agrees that the Securities may be pledged by a
Purchaser in connection with a bona fide margin agreement or other loan or
financing arrangement that is secured by the Common Stock. The pledge of Common
Stock shall not be deemed to be a transfer, sale or assignment of the Common
Stock hereunder, and no Purchaser effecting a pledge of Common Stock shall be
required to provide the Company with any notice thereof or otherwise make any
delivery to the Company pursuant to this Agreement or any other Transaction
Document; provided that a Purchaser and its pledgee shall be required to comply
with the provisions of Article V hereof in order to effect a sale, transfer or
assignment of Common Stock to such pledgee. At the Purchasers’ expense, the
Company hereby agrees to execute and deliver such documentation as a pledgee of
the Common Stock may reasonably request in connection with a pledge of the
Common Stock to such pledgee by a Purchaser, subject to applicable federal
securities laws.

ARTICLE IV

Conditions

                                Section 4.1       Conditions Precedent to the
Obligation of the Company to Close and to Sell the Securities.  The obligation
hereunder of the Company to close and issue and sell the Securities to the
Purchasers at each Closing Date is subject to the satisfaction or waiver, at or
before each Closing of the conditions set forth below. These conditions are for
the Company’s sole benefit and may be waived by the Company at any time in its
sole discretion.

                                (a)           Accuracy of the Purchasers’
Representations and Warranties.  The representations and warranties of each
Purchaser shall be true and correct in all material respects

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as of the date when made and as of the Closing Date as though made at that time,
except for representations and warranties that are expressly made as of a
particular date, which shall be true and correct in all material respects as of
such date.

                                (b)           Performance by the Purchasers.
 Each Purchaser shall have performed, satisfied and complied in all material
respects with all covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Purchasers at or
prior to the Closing Date.

                                (c)           No Injunction.  No statute, rule,
regulation, executive order, decree, ruling or injunction shall have been
enacted, entered, promulgated or endorsed by any court or governmental authority
of competent jurisdiction which prohibits the consummation of any of the
transactions contemplated by this Agreement.

                                (d)           Delivery of Purchase Price.  The
Purchase Price for the Shares shall have been delivered to the Company on the
Closing Date.

                                (e)           Delivery of Transaction Documents.
 The Transaction Documents shall have been duly executed and delivered by the
Purchasers to the Company.

                                Section 4.2       Conditions Precedent to the
Obligation of the Purchasers to Close and to Purchase the Securities.  The
obligation hereunder of each Purchaser (x) to acquire and pay for the Securities
is subject to the satisfaction or waiver, at or before each Closing, of each of
the conditions set forth below, and (y) to exercise the Additional Investment
Right and to acquire and pay for the Shares issuable upon exercise of the
Additional Investment Right is subject to the satisfaction or waiver, at the
closing of the exercise of the Additional Investment Right, of each of the
conditions set forth below. These conditions are for each Purchaser’s sole
benefit and may be waived by such Purchaser at any time in its sole discretion.

                                (a)           Accuracy of the Company’s
Representations and Warranties.  Each of the representations and warranties of
the Company in this Agreement and the Registration Rights Agreement shall be
true and correct in all material respects as of each Closing Date, except for
representations and warranties that speak as of a particular date, which shall
be true and correct in all material respects as of such date.

                                (b)           Performance by the Company.  The
Company shall have performed, satisfied and complied in all material respects
with all covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by the Company at or prior to each Closing
Date.

                                (c)           No Suspension, Etc.  Trading in
the Common Stock shall not have been suspended by the Commission or the OTC
Bulletin Board (except for any suspension of trading of limited duration agreed
to by the Company, which suspension shall be terminated prior to the Closing),
and, at any time prior to each Closing Date, trading in securities generally as
reported by Bloomberg Financial Markets (“Bloomberg”) shall not have been
suspended or limited, or minimum prices shall not have been established on
securities whose trades are reported by Bloomberg, or on the New York Stock
Exchange, nor shall a banking moratorium have been declared either by the United
States or New York State authorities.

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                                (d)           No Injunction.  No statute, rule,
regulation, executive order, decree, ruling or injunction shall have been
enacted, entered, promulgated or endorsed by any court or governmental authority
of competent jurisdiction which prohibits the consummation of any of the
transactions contemplated by this Agreement.

                                (e)           No Proceedings or Litigation.  No
action, suit or proceeding before any arbitrator or any governmental authority
shall have been commenced, and no investigation by any governmental authority
shall have been threatened, against the Company or its subsidiary, or any of the
officers, directors or affiliates of the Company or its subsidiary seeking to
restrain, prevent or change the transactions contemplated by this Agreement, or
seeking damages in connection with such transactions.

                                (f)            Opinion of Counsel.  The
Purchasers shall have received an opinion of counsel to the Company, dated the
date of each Closing, substantially in the form of Exhibit E hereto, with such
exceptions and limitations as shall be reasonably acceptable to counsel to the
Purchasers.

                                (g)           Shares and Warrants.  At or prior
to each Closing, the Company shall have delivered to the Purchasers certificates
representing the Shares (in such denominations as each Purchaser may request)
and the Warrants, in each case, being acquired by the Purchasers at such
Closing.

                                (h)           Secretary’s  Certificate.  The
Company shall have delivered to the Purchasers a secretary’s certificate, dated
as of each Closing Date, as to (i) the resolutions adopted by the Board of
Directors approving the transactions contemplated hereby, (ii) the Certificate,
(iii) the Bylaws, each as in effect at such Closing, and (iv) the authority and
incumbency of the officers of the Company executing the Transaction Documents
and any other documents required to be executed or delivered in connection
therewith.

                                (i)            Officer’s  Certificate.  On each
Closing Date, the Company shall have delivered to the Purchasers a certificate
signed by an executive officer on behalf of the Company, dated as of such
Closing Date, confirming the accuracy of the Company’s representations,
warranties and covenants as of such Closing Date and confirming the compliance
by the Company with the conditions precedent set forth in paragraphs (a)-(e) of
this Section 4.2 as of such Closing Date (provided that, with respect to the
matters in paragraphs (d) and (e) of this Section 4.2, such confirmation shall
be based on the knowledge of the executive officer after due inquiry).

                                (j)            Registration Rights Agreement.
 As of each Closing Date, the Company shall have duly executed and delivered the
Registration Rights Agreement in the form of Exhibit C attached hereto.

                                (k)           Material Adverse Effect.  No
Material Adverse Effect shall have occurred at or before each Closing Date.

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ARTICLE V

Certificate Legend

                                Section 5.1       Legend.  Each certificate
representing the Securities shall be stamped or otherwise imprinted with a
legend substantially in the following form (in addition to any legend required
by applicable state securities or “blue sky” laws):

  THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE “SECURITIES”) HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”) OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
STATE SECURITIES LAWS OR ORTEC INTERNATIONAL, INC. SHALL HAVE RECEIVED AN
OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES
ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED.  

                The Company agrees to reissue certificates representing any of
the Shares and the Warrant Shares, without the legend set forth above if at such
time, prior to making any transfer of any such Shares or Warrant Shares, such
holder thereof shall give written notice to the Company describing the manner
and terms of such transfer and removal as the Company may reasonably request.
Such proposed transfer and removal will not be effected until: (a) either (i)
the Company has received an opinion of counsel reasonably satisfactory to the
Company, to the effect that the registration of the Shares or Warrant Shares
under the Securities Act is not required in connection with such proposed
transfer, (ii) a registration statement under the Securities Act covering such
proposed disposition has been filed by the Company with the Commission and has
become effective under the Securities Act, (iii) the Company has received other
evidence reasonably satisfactory to the Company that such registration and
qualification under the Securities Act and state securities laws are not
required, or (iv) the holder provides the Company with reasonable assurances
that such security can be sold pursuant to Rule 144 under the Securities Act;
and (b) either (i) the Company has received an opinion of counsel reasonably
satisfactory to the Company, to the effect that registration or qualification
under the securities or “blue sky” laws of any state is not required in
connection with such proposed disposition, or (ii) compliance with applicable
state securities or “blue sky” laws has been effected or a valid exemption
exists with respect thereto. The Company will respond to any such notice from a
holder within five (5) business days. In the case of any proposed transfer under
this Section 5.1, the Company will use reasonable efforts to comply with any
such applicable state securities or “blue sky” laws, but shall in no event be
required, (x) to qualify to do business in any state where it is not then
qualified or (y) to take any action that would subject it to tax or to the
general service of process in any state where it is not then subject. The
restrictions on transfer contained in this Section 5.1 shall be in addition to,
and not by way of limitation of, any other restrictions on transfer contained in
any other section of this Agreement. Whenever a certificate representing the
Shares or Warrant Shares is required to be issued to a Purchaser without a
legend, in lieu of delivering physical certificates representing the Shares or
Warrant Shares,

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provided the Company’s transfer agent is participating in the Depository Trust
Company (“DTC”) Fast Automated Securities Transfer program, the Company shall
use its best efforts to cause its transfer agent to electronically transmit the
Shares or Warrant Shares to a Purchaser by crediting the account of such
Purchaser’s Prime Broker with DTC through its Deposit Withdrawal Agent
Commission (“DWAC”) system (to the extent not inconsistent with any provisions
of this Agreement).

ARTICLE VI

Indemnification

                                Section 6.1       General Indemnity.  The
Company agrees to indemnify and hold harmless each Purchaser (and its respective
directors, officers, affiliates, agents, successors and assigns) from and
against any and all losses, liabilities, deficiencies, costs, damages and
expenses (including, without limitation, reasonable attorneys’ fees, charges and
disbursements) (“Losses”) incurred by each Purchaser as a result of any
inaccuracy in or breach of the representations, warranties or covenants made by
the Company herein. The Purchasers severally but not jointly agree to indemnify
and hold harmless the Company and its directors, officers, affiliates, agents,
successors and assigns from and against any and all Losses incurred by the
Company as result of any inaccuracy in or breach of the representations,
warranties or covenants made by the Purchasers herein. The maximum aggregate
liability of each Purchaser pursuant to its indemnification obligations under
this Article VI shall not exceed the portion of the Purchase Price paid by such
Purchaser hereunder.

                                Section 6.2       Indemnification Procedure.
 Any party entitled to indemnification under this Article VI (an “indemnified
party”) will give written notice to the indemnifying party of any matters giving
rise to a claim for indemnification; provided, that the failure of any party
entitled to indemnification hereunder to give notice as provided herein shall
not relieve the indemnifying party of its obligations under this Article VI
except to the extent that the indemnifying party is actually prejudiced by such
failure to give notice. In case any such action, proceeding or claim is brought
against an indemnified party in respect of which indemnification is sought
hereunder, the indemnifying party shall be entitled to participate in and,
unless in the reasonable judgment of the indemnifying party a conflict of
interest between it and the indemnified party exists with respect to such
action, proceeding or claim (in which case the indemnifying party shall be
responsible for the reasonable fees and expenses of one separate counsel for the
indemnified parties), to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. In the event that the indemnifying party
advises an indemnified party that it will not defend any action, proceeding or
claim for indemnification hereunder, or fails, within thirty (30) days of
receipt of any indemnification notice to notify, in writing, such person of its
election to defend, settle or compromise, at its sole cost and expense, any
action, proceeding or claim (or discontinues its defense at any time after it
commences such defense), then the indemnified party may, at its option, defend,
settle or otherwise compromise or pay such action or claim. In any event, unless
and until the indemnifying party elects in writing to assume and does so assume
the defense of any such claim, proceeding or action, the indemnified party’s
costs and expenses arising out of the defense, settlement or compromise of any
such action, claim or proceeding shall be losses subject to indemnification
hereunder. The indemnified party shall cooperate fully with the indemnifying
party in connection with any

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negotiation or defense of any such action or claim by the indemnifying party and
shall furnish to the indemnifying party all information reasonably available to
the indemnified party which relates to such action or claim. The indemnifying
party shall keep the indemnified party fully apprised at all times as to the
status of the defense or any settlement negotiations with respect thereto. If
the indemnifying party elects to defend any such action or claim, then the
indemnified party shall be entitled to participate in such defense with counsel
of its choice at its sole cost and expense. The indemnifying party shall not be
liable for any settlement of any action, claim or proceeding effected without
its prior written consent. Notwithstanding anything in this Article VI to the
contrary, the indemnifying party shall not, without the indemnified party’s
prior written consent, settle or compromise any claim or consent to entry of any
judgment in respect thereof which imposes any future obligation on the
indemnified party or which does not include, as an unconditional term thereof,
the giving by the claimant or the plaintiff to the indemnified party of a
release from all liability in respect of such claim. The indemnification
required by this Article VI shall be made by periodic payments of the amount
thereof during the course of investigation or defense, as and when bills are
received or expense, loss, damage or liability is incurred, so long as the
indemnified party irrevocably agrees to refund such moneys if it is ultimately
determined by a court of competent jurisdiction that such party was not entitled
to indemnification. The indemnity agreements contained herein shall be
in addition to (a) any cause of action or similar rights of the indemnified
party against the indemnifying party or others, and (b) any liabilities the
indemnifying party may be subject to pursuant to the law.

ARTICLE VII

Miscellaneous

                                Section 7.1       Fees and Expenses.  Each party
shall pay the fees and expenses of its advisors, counsel, accountants and other
experts, if any, and all other expenses, incurred by such party incident to the
negotiation, preparation, execution, delivery and performance of this Agreement,
provided that the Company shall pay all actual attorneys’ fees and expenses
(including disbursements and out-of-pocket expenses) incurred by the Purchasers
in connection with (i) the preparation, negotiation, execution and delivery of
this Agreement, the Warrants, the Registration Rights Agreement and the
transactions contemplated thereunder, which payment shall be made at Closing,
(ii) the filing and declaration of effectiveness by the Commission of the
Registration Statement (as defined in the Registration Rights Agreement) and
(iii) any amendments, modifications or waivers of this Agreement or any of the
other Transaction Documents. In addition, the Company shall pay all reasonable
fees and expenses incurred by the Purchasers in connection with the enforcement
of this Agreement or any of the other Transaction Documents, including, without
limitation, all reasonable attorneys’ fees and expenses.

                                Section 7.2       Specific Performance; Consent
to Jurisdiction; Venue.

                                (a)           The Company and the Purchasers
acknowledge and agree that irreparable damage would occur in the event that any
of the provisions of this Agreement or the other Transaction Documents were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent or cure breaches of the provisions of this Agreement or
the other

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Transaction Documents and to enforce specifically the terms and provisions
hereof or thereof, this being in addition to any other remedy to which any of
them may be entitled by law or equity.

                                (b)           The parties agree that venue for
any dispute arising under this Agreement will lie exclusively in the state or
federal courts located in New York County, New York, and the parties irrevocably
waive any right to raise forum non conveniens or any other argument that New
York is not the proper venue. The parties irrevocably consent to personal
jurisdiction in the state and federal courts of the state of New York. The
Company and each Purchaser consent to process being served in any such suit,
action or proceeding by mailing a copy thereof to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing in
this Section 7.2 shall affect or limit any right to serve process in any other
manner permitted by law. The Company and the Purchasers hereby agree that the
prevailing party in any suit, action or proceeding arising out of or relating to
the Securities, this Agreement or the Registration Rights Agreement, shall be
entitled to reimbursement for reasonable legal fees from the non-prevailing
party.

                                Section 7.3       Entire Agreement; Amendment.
 This Agreement and the Transaction Documents contain the entire understanding
and agreement of the parties with respect to the matters covered hereby and,
except as specifically set forth herein or in the other Transaction Documents,
neither the Company nor any Purchaser make any representation, warranty,
covenant or undertaking with respect to such matters, and they supersede all
prior understandings and agreements with respect to said subject matter, all of
which are merged herein. No provision of this Agreement may be waived or amended
other than by a written instrument signed by the Company and the Purchasers
holding at least a majority of all Shares then held by the Purchasers. Any
amendment or waiver effected in accordance with this Section 7.3 shall be
binding upon each Purchaser (and their permitted assigns) and the Company. No
consideration shall be offered or paid to any Purchaser to amend or consent to a
waiver or modification of any provision of any of the Transaction Documents
unless the same consideration is also offered to all of the Purchasers to the
Transaction Documents.

                                Section 7.4       Notices.  Any notice, demand,
request, waiver or other communication required or permitted to be given
hereunder shall be in writing and shall be effective (a) upon hand delivery by
telecopy or facsimile at the address or number designated below (if delivered on
a business day during normal business hours where such notice is to be
received), or the first business day following such delivery (if delivered other
than on a business day during normal business hours where such notice is to be
received) or (b) on the second business day following the date of mailing by
express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be:

If to the Company:   Ortec International, Inc.     3960 Broadway     New York,
NY 10032     Attention: Chief Financial Officer     Tel. No.: (212) 740-6999    
Fax No.:  (212) 740-2570

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with copies (which copies shall not constitute notice to the Company) to:  
Feder, Kaszovitz, Issacson, Weber, Skala & Bass     750 Lexington Avenue     New
York, New York 10022     Attention: Gabriel Kaszovitz, Esq.     Tel. No.:  (212)
888-8200     Fax No.:  (212) 888-7776      

If to any Purchaser:   At the address of such Purchaser set forth on Exhibit A
to this Agreement.         with copies to:                                     
  Kramer Levin Naftalis & Frankel LLP     1177 Avenue of the Americas     New
York, New York 10036     Attention: Christopher S. Auguste, Esq.     Tel No.:
(212) 715-9100     Fax No.: (212) 715-8000

                Any party hereto may from time to time change its address for
notices by giving written notice of such changed address to the other party
hereto.

                                Section 7.5       Waivers.  No waiver by either
party of any default with respect to any provision, condition or requirement of
this Agreement shall be deemed to be a continuing waiver in the future or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of any party to exercise any right hereunder in any manner
impair the exercise of any such right accruing to it thereafter.

                                Section 7.6       Headings.  The article,
section and subsection headings in this Agreement are for convenience only and
shall not constitute a part of this Agreement for any other purpose and shall
not be deemed to limit or affect any of the provisions hereof.

                                Section 7.7       Successors and Assigns.  This
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and assigns. After the Closing, the assignment by a party to
this Agreement of any rights hereunder shall not affect the obligations of such
party under this Agreement. Subject to Section 5.1 hereof, the Purchasers may
assign the Securities and its rights under this Agreement and the other
Transaction Documents and any other rights hereto and thereto without the
consent of the Company.

                                Section 7.8       No Third Party Beneficiaries. 
This Agreement is intended for the benefit of the parties hereto and their
respective permitted successors and assigns and is not for the benefit of, nor
may any provision hereof be enforced by, any other person.

                                Section 7.9       Governing Law.  This Agreement
shall be governed by and construed in accordance with the internal laws of the
State of New York, without giving effect to

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any of the conflicts of law principles which would result in the application of
the substantive law of another jurisdiction. This Agreement shall not be
interpreted or construed with any presumption against the party causing this
Agreement to be drafted.

                                Section 7.10       Survival.  The
representations and warranties of the Company and the Purchasers shall survive
the execution and delivery hereof and the Closing until the second anniversary
of the Closing Date, except the agreements and covenants set forth in Articles
I, III, V, VI and VII of this Agreement shall survive the execution and delivery
hereof and the Closing hereunder.

                                Section 7.11        Counterparts.  This
Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument and shall become effective
when counterparts have been signed by each party and delivered to the other
parties hereto, it being understood that all parties need not sign the same
counterpart.

                                Section 7.12       Publicity.  The Company
agrees that it will not disclose, and will not include in any public
announcement, the names of the Purchasers without the consent of the Purchasers,
which consent shall not be unreasonably withheld or delayed, or unless and until
such disclosure is required by law, rule or applicable regulation, and then only
to the extent of such requirement.

                                Section 7.13       Severability.  The provisions
of this Agreement are severable and, in the event that any court of competent
jurisdiction shall determine that any one or more of the provisions or part of
the provisions contained in this Agreement shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision or part of a provision of
this Agreement and this Agreement shall be reformed and construed as if such
invalid or illegal or unenforceable provision, or part of such provision, had
never been contained herein, so that such provisions would be valid, legal and
enforceable to the maximum extent possible.

                                Section 7.14       Further Assurances.  From and
after the date of this Agreement, upon the request of the Purchasers or the
Company, the Company and each Purchaser shall execute and deliver such
instruments, documents and other writings as may be reasonably necessary or
desirable to confirm and carry out and to effectuate fully the intent and
purposes of this Agreement, the Warrants and the Registration Rights Agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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                IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
date first above written.

  ORTEC INTERNATIONAL, INC.               By:
____________________________________________     Name: Alan W. Schoenbart    
Title:   Chief Financial Officer               PURCHASER:               By:
____________________________________________     Name:     Title:

 

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EXHIBIT A
LIST OF PURCHASERS

Names and Addresses Number of Shares  of Purchasers & Warrants Purchased

 

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EXHIBIT B
FORM OF WARRANT

 

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 EXHIBIT C
FORM OF REGISTRATION RIGHTS AGREEMENT

 

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EXHIBIT D
INVESTOR QUESTIONNAIRE CERTIFICATION

To: Ortec International

This Investor Certification (“Certification”) has been executed by the
undersigned in connection with the undersigned’s purchase of common stock and
common stock purchase warrants (the “Securities”) issued by Ortec International
(the “Company”). The Securities are being offered by the Company without
registration under the Securities Act of 1933, as amended (the “Act”), and the
securities laws of certain states, in reliance on the exemptions contained in
Section 4(2) of the Act and on Regulation D promulgated thereunder and in
reliance on similar exemptions under applicable state laws. The Company must
determine that the undersigned meets certain suitability requirements. The
purpose of this Certification is to assure the Company that each investor meets
the applicable suitability requirements and has reviewed the Company’s Risk
Factors as disclosed in the Company’s public filings with the Securities and
Exchange Commission. The information supplied by you will be used in determining
whether you meet such criteria, and reliance upon the private offering
exemptions from registration is based in part on the information herein
supplied.

The undersigned affirms that it has reviewed the most recent Form 10-KSB filed
by the Company on March 31, 2005, the subsequent quarterly reports filed on Form
10-QSB and any risk factors contained therein and the Company’s registration
statement on Form S-2 which became effective on May 19, 2005 filed by the
Company with the Securities Exchange Commission and has had a reasonable
opportunity to ask questions of and receive answers from the Company and/or
persons acting on behalf of the Company concerning the transactions to be
consummated hereby and if such opportunity was taken, all such questions have
been answered to the full satisfaction of the undersigned. The undersigned has
had the opportunity to request, receive and consider all public information
relating to the business, properties, operations, condition (financial or
other), results of operations or prospects of the Company.

This Certification does not constitute an offer to sell or a solicitation of an
offer to buy any security. Your answers will be kept strictly confidential.
However, by signing this Certification, you will be authorizing the Company to
provide a completed copy to such parties as the Company deems appropriate in
order to ensure that the offer and sale of the Securities will not result in a
violation of the Act or the securities laws of any state and that you otherwise
satisfy the suitability standards applicable to purchasers of the Securities.

A.            BACKGROUND INFORMATION

Name:  

Business Address:    (Number and Street)  

(City) (State) (Zip Code)

   Telephone Number:   Fax Number:  

 

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Social Security or Taxpayer Identification No.
_______________________________________________________

If an individual:

Age: __________               Citizenship: ____________

If a corporation, partnership, limited liability company, trust or other entity:

Type of entity:  

State of formation:     Date of formation:  

B.            STATUS AS ACCREDITED INVESTOR

The undersigned is an “accredited investor” as such term is defined in
Regulation D under the Act, as at the time of the sale of the Securities the
undersigned falls within one or more of the following categories (Please initial
one or more, as applicable): 1

____ (1) a bank as defined in Section 3(a)(2) of the Act, or a savings and loan
association or other institution as defined in Section 3(a)(5)(A) of the Act
whether acting in its individual or fiduciary capacity; a broker or dealer
registered pursuant to Section 15 of the Securities Exchange Act of 1934; an
insurance company as defined in Section 2(13) of the Act; an investment company
registered under the Investment Company Act of 1940 or a business development
company as defined in Section 2(a)(48) of that Act; a Small Business Investment
Company licensed by the U.S. Small Business Administration under Section 301(c)
or (d) of the Small Business Investment Act of 1958; a plan established and
maintained by a state, its political subdivisions, or any agency or
instrumentality of a state or its political subdivisions for the benefit of its
employees, if such plan has total assets in excess of $5,000,000; an employee
benefit plan within the meaning of the Employee Retirement Income Security Act
of 1974, if the investment decision is made by a plan fiduciary, as defined in
Section 3(21) of such Act, which is either a bank, savings and loan association,
insurance company, or registered investment adviser, or if the employee benefit
plan has total assets in excess of $5,000,000 or, if a self-directed plan, with
the investment decisions made solely by persons that are accredited investors;

____ (2) a private business development company as defined in Section 202(a)(22)
of the Investment Advisers Act of 1940;

____ (3) an organization described in Section 501(c)(3) of the Internal Revenue
Code of 1986, as amended, corporation, Massachusetts or similar business trust,
or partnership, not formed for the specific purpose of acquiring the Securities
offered, with total assets in excess of $5,000,000;

____ (4) a natural person whose individual net worth, or joint net worth with
that person’s spouse, at the time of such person’s purchase of the Securities
exceeds $1,000,000;

————————————
1 As used in this Agreement, the term “net worth” means the excess of total
assets over total liabilities. In computing net worth for the purpose of
subsection (4), the principal residence of the investor must be valued at cost,
including cost of improvements, or at recently appraised value by an
institutional lender making a secured loan, net of encumbrances. In determining
income, the investor should add to the investor’s adjusted gross income
any amounts attributable to tax exempt income received, losses claimed as a
limited partner in any limited partnership, contributions to an IRA or KEOGH
retirement plan, alimony payments, and any amount by which income from long-term
capital gains has been reduced in arriving at adjusted gross income

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____ (5) a natural person who had an individual income in excess of $200,000 in
each of the two most recent years or joint income with that person’s spouse in
excess of $300,000 in each of those years and has a reasonable expectation of
reaching the same income level in the current year;

____ (6) a trust, with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the Securities offered, whose purchase is directed
by a sophisticated person as described in Rule 506(b)(2)(ii) of Regulation D;
and

____ (7) an entity in which all of the equity owners are accredited investors
(as defined above).

IN WITNESS WHEREOF, the undersigned has executed this Certification, this ____
day of __________, 2005, and declares under oath that it is truthful and
correct.

                  _________________________________________________  
                Print Name                     By:
______________________________________________                     Signature    
                Title: ____________________________________________

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EXHIBIT E
FORM OF OPINION

FEDER, KASZOVITZ, ISAACSON, WEBER, SKALA, BASS & RHINE LLP
ATTORNEYS AT LAW

INTERNATIONAL PLAZA
750 LEXINGTON AVENUE
NEW YORK, N.Y. 10022-1200

Tel. (212) 888-8200
Fax. (212) 888-7776

                                                                                                                                                        
_____________ ____, 2005

                To the purchasers of Ortec International, Inc.’s common stock,
par value $.001 per share (the “Common Stock”) and Series F Warrants (the
“Warrants”) who purchased their securities on or about _____________ ___, 2005
pursuant to a Common Stock Purchase Agreement dated as of _____________ , 2005
entered into by and among Ortec International, Inc. (the “Company”) and the
purchasers who were parties thereto (the “Purchase Agreement”):

                This opinion is rendered to you pursuant to Section 4.2(f) of
the Purchase Agreement. Capitalized terms not otherwise defined in this opinion
shall have the meaning ascribed to them in the Purchase Agreement except that
for the purposes of this opinion “Shares” shall also include any shares of the
Company’s Series D Convertible Preferred Stock issuable pursuant to Section 1.1
of the Purchase Agreement and the phrase “Common Stock (or Shares) issuable upon
exercise of the Warrants” shall be also deemed to include shares of Common Stock
issuable upon conversion of the Series D Convertible Preferred Stock.

                We are the attorneys for the Company and have acted as its
counsel in connection with the consummation of the transactions contemplated by
the Purchase Agreement and the other Transaction Documents. We have examined
originals or copies of the Purchase Agreement and the other Transaction
Documents and the organizational documents of the Company and its wholly owned
subsidiary, Orcel, LLC (“Orcel”). In addition, we have examined such records,
documents, certificates of public officials and of the Company and Orcel, made
such inquiries of officials of the Company and Orcel, and considered such
questions of law as we have deemed necessary for the purpose of rendering the
opinions set forth herein.

                We have assumed the genuineness of all signatures (other than
those of officers of the Company and Orcel) and the authenticity of all items
submitted to us as originals and the conformity with originals of all items
submitted to us as copies. In making our examination of the Transaction
Documents, we have assumed that you each have authority to execute and deliver,
and to perform and observe the provisions of, the Transaction Documents, and
have duly

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authorized, executed and delivered the Transaction Documents to which each of
you is a party, and that the Transaction Documents to which each of you is a
party constitute the legal, valid and binding obligations of each of you
enforceable against each of you in accordance with their terms.

                Whenever our opinion herein with respect to the existence or
absence of facts is indicated to be based on our knowledge, or of which we are
aware, it is intended to signify that, in the course of our representation of
the Company and Orcel in connection with the matter described in the second
paragraph hereof, and numerous other matters, none among Gabriel Kaszovitz, Saul
Kaszovitz, Larry Miller or Irving Rothstein has acquired actual knowledge of the
existence or absence of such facts. Please be advised that the above named
persons are the only attorneys of this firm who have been currently actively
engaged in the representation of either the Company or Orcel in connection with
this or other matters. While we have not undertaken any independent
investigation to determine the existence or absence of such facts, and no
inference as to our knowledge of the existence or absence of such facts should
be drawn from the fact of our representation of the Company and Orcel, whenever
we refer to our knowledge with respect to the existence or absence of facts, it
is after due inquiry, and based upon Gabriel Kaszovitz’s extensive familiarity
with the Company’s and Orcel’s business.

                The opinions hereinafter expressed are subject to the following
further qualifications and exceptions: 

                (1)       The effect of bankruptcy, insolvency, reorganization,
arrangement, moratorium or other similar laws relating to or affecting the
rights of creditors generally, including, without limitation, laws relating to
fraudulent transfers or conveyances, preferences and equitable subordination.

                (2)           Limitations imposed by general principles of
equity upon the availability of equitable remedies or the enforcement of
provisions of the Transaction Documents, and the effect of judicial decisions
which have held that certain provisions are unenforceable where their
enforcement would violate the implied covenant of good faith and fair dealing,
or would be commercially unreasonable, or where a default under a provision of
any Transaction Document is not material.

                (3)           We express no opinion as to the effect on the
opinions expressed herein of (a) the compliance or non-compliance by any of you
with any law or regulation applicable to any of you, or (b) the legal or
regulatory status or the nature of each of your businesses.

                (4)           The effect of judicial decisions which may permit
the introduction of extrinsic evidence to supplement the terms of the
Transaction Documents or to aid in the interpretation of the Transaction
Documents.

                (5)           The enforceability of provisions of the
Transaction Documents providing for indemnification or contribution, to the
extent such indemnification or contribution is against public policy.

                (6)           The enforceability of provisions of the
Transaction Documents imposing or which

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are construed as effectively imposing a penalty.

                (7)           We express no opinion as to the enforceability of
provisions of the Transaction Documents which purport to establish evidentiary
standards or to make determinations conclusive or powers absolute.

                (8)           The enforceability of any provisions of the
Transaction Documents which purports to establish a particular court or courts
as the forum for the adjudication of any controversy relating to the Transaction
Documents.

                (9)           The circumstances under which rights of setoff may
be exercised.

                (10)         Our opinion is based upon current statutes, rules,
regulations, cases and official interpretative opinions.

                Based upon and subject to the foregoing, we are of the opinion
that:

                1.             The Company is a corporation duly incorporated
and validly existing under the laws of the state of Delaware and has the
requisite corporate power to own, lease and operate its properties and assets,
and to carry on its business as presently conducted. The company is duly
qualified as a foreign corporation to do business and is in good standing in
every jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary.

                2.             The Company has the requisite corporate power and
authority to enter into and perform its obligations under the Transaction
Documents and to issue the Shares, the Warrants and (except as hereafter stated)
the Warrant Shares issuable upon exercise of the Warrants. The execution,
delivery and performance of each of the Transaction Documents by the Company and
the consummation by it of the transactions contemplated thereby have been duly
and validly authorized by all necessary corporate action and no further consent
or authorization of the Company or its Board of Directors or stockholders is
required. Each of the Transaction Documents have been duly executed and
delivered, and the Shares and the Warrants have been duly executed, issued and
delivered by the Company and each of the Transaction Documents constitutes a
legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its respective terms. The issuance of the Shares and
the Common Stock issuable upon exercise of the Warrants are not subject to any
preemptive rights under the Certificate of Incorporation or the Bylaws.

                3.             The Shares and the Warrants have been duly
authorized and, when delivered against payment in full as provided in the
Purchase Agreement, will be validly issued, fully paid and nonassessable. The
shares of Common Stock issuable upon exercise of the Warrants, have been duly
authorized and reserved for issuance, and, thereafter when delivered against
payment in full as provided in the Warrants, as applicable, will be validly
issued, fully paid and nonassessable.

                4.             The execution, delivery and performance of and
compliance with the terms of the Transaction Documents and the issuance of the
Shares and the Warrants and with respect to the

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issuance of the Common Stock, the Common Stock issuable upon exercise of the
Warrants, do not (i) violate any provision of the Certificate of Incorporation
or Bylaws, (ii) to our knowledge, after due inquiry, conflict with, require
consent, or constitute a default (or an event which with notice or lapse of time
or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any material agreement,
mortgage, deed of trust, indenture, note, bond, license, lease agreement,
instrument or obligation to which the Company is a party, (iii) to our
knowledge, after due inquiry, create or impose a lien, charge or encumbrance on
any property of the Company under any agreement or any commitment to which the
Company is a party or by which the Company is bound or by which any of its
respective properties or assets are bound, or (iv) result in a violation of any
federal, state, local or foreign statute, rule, regulation, order, or, to our
knowledge, after due inquiry, any judgment, injunction or decree (including
Federal and state securities laws and regulations), applicable to the Company or
by which any property or asset of the Company is bound or affected, except, in
all cases other than violations pursuant to clause (i) above, for such
conflicts, default, terminations, amendments, acceleration, cancellations and
violations as would not, individually or in the aggregate, have a Material
Adverse Effect.

                5.             No consent, approval or authorization of or
designation, declaration or filing with any governmental authority on the part
of the Company is required under Federal, state or local law, rule or regulation
in connection with the valid execution and delivery of the Transaction
Documents, or the offer, sale or issuance of the Shares and the Warrants, except
for filings required by federal or state securities laws. With respect to the
issuance of Common Stock upon exercise of the Warrants, no consent, approval or
authorization is required.

                6.             To our knowledge, there is no action, suit,
claim, investigation or proceeding pending or threatened against the Company
which questions the validity of any of the Transaction Documents or the
transactions contemplated thereby or any action taken or to be taken pursuant
thereto. Except as set forth in the Commission Documents, there is no action,
suit, investigation or proceeding pending, or to our knowledge, threatened,
against or involving the Company or any of its properties or assets and which,
if adversely determined, is reasonably likely to result in a Material Adverse
Effect, except for past due obligations owing by the Company to its vendors and
to others. To our knowledge, there are no outstanding orders, judgments,
injunctions, awards or decrees of any court, arbitrator or governmental or
regulatory body against the Company or any officers or directors of the Company
in their capacities as such.

                7.             Conditioned on the accuracy of each Purchaser’s
representations and warranties contained in the Purchase Agreement, the offer,
issuance and sale of the Shares and the Warrants are exempt from the
registration requirements of the Securities Act.

                8.             The Company is not, and as a result of and
immediately upon Closing will not be, an “investment company” or a company
“controlled” by an “investment company,” within the meaning of the Investment
Company Act of 1940, as amended.

                We are counsel admitted to practice in the State of New York.
This opinion is limited in all respects to the laws of the State of New York,
the General Corporate Law of the State of

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Delaware and federal laws of the United States of America, and we express no
opinion as to the laws of any other jurisdiction.

                This opinion is for the benefit of and may be relied upon, in
connection with the transactions contemplated by the Purchase Agreement, by the
Purchasers, their respective successors and assigns and their respective
counsel. Otherwise, this opinion may not be used, published, circulated or
relied upon by any other person for any purpose without our prior written
consent. This opinion is given as of the date hereof, and we assume no
obligation to advise you after the date hereof of facts or circumstances that
come to our attention or changes in laws or regulations that occur which could
affect the opinions contained herein.

  Very truly yours,               Feder Kaszovitz Isaacson Weber Skala Bass &
Rhine, LLP

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Schedule 1.1(a)
Terms of Notes

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Schedule 2.1(p)
Placement Agency Agreement

BURNHAM HILL PARTNERS
A DIVISION OF PALI CAPITAL INC.

570 LEXINGTON
AVENUE                                                                                                                              TEL
212-980-2200
NEW YORK, NEW YORK
10022                                                                                                                     FAX
212-980-9466

Mr. Ron
Lipstein                                                                                                                                                 September
23, 2005
Chief Executive Officer
Ortec International Inc.
3960 Broadway
New York, NY 10032

Gentlemen:

This letter Agreement (the “Agreement”) confirms the engagement of Burnham Hill
Partners (“BHP”), a division of Pali Capital, Inc., by Ortec International (the
“Company”) to act as its exclusive placement agent and in connection with the
private placement of convertible promissory notes, common stock, common stock
purchase warrants and Series D convertible preferred stock with an initial
closing that occurred May 27, 2005 and a final closing to be completed prior to
November 15, 2005 (the “Financing”).

As compensation related to the Financing, the Company shall pay to BHP a cash
fee equal to ten (10%) percent of the gross proceeds received by the Company in
the Financing, other than in connection with the convertible promissory notes
issued beginning May 27, 2005 for which BHP shall be paid an initial cash fee of
five (5%) percent and an additional five (5%) percent upon conversion of the
promissory notes into common stock or Series D Preferred Stock. At BHP’s sole
discretion, BHP may apply the remaining five (5%) percent cash fee owed upon
conversion of the promissory notes issued beginning May 27, 2005 as purchase
price for the common stock and common stock purchase warrants sold in the
Financing. Subject to a minimum of $5 million dollars of gross proceeds raised
under this Agreement, all Placement Agent Warrants issued in connection with the
Private Placement completed on January 5, 2005 shall have their exercise prices
adjusted to $.35 per share.

For a period of thirty-six (36) months from the Closing, BHP shall receive a
cash fee equal to six (6%) percent of the gross proceeds raised from future cash
exercises of currently outstanding investor common stock purchase warrants and
common stock purchase warrants issued in connection with the Financing.

In addition, BHP or their assigns shall be issued Placement Agent Warrants in an
amount equal to ten (10%) percent of the common shares (or common share
equivalents in connection with the Series D) issued in connection with the
Financing. For purposes of calculating the number of Placement Agent Warrants to
be issued, all common shares (inclusive of Series D) issued in connection with
and upon conversion of the promissory notes issued pursuant to this Agreement
shall be included. The Placement Agent Warrants shall be exercisable at $.30 per
share. The shares underlying the Placement Agent Warrants shall have standard
piggyback registration rights, a cashless exercise provision and shall be
non-redeemable.

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For a period of nine (9) months following the completion of the Financing, BHP
shall have the right to act as the Company’s exclusive placement agent in
connection with subsequent financing activity.

In connection with a strategic transaction, defined as merger, acquisition,
consolidation, sale or disposition of all or substantially all of the Company’s
assets, a licensing or similar transaction (a, “Strategic Transaction”), BHP
shall be paid a fee to be negotiated in good faith between the Company and BHP
based on industry standard fees for such transactions. BHP in its sole
discretion may apply all or a portion of the $250,000 Advisory Fee due under the
Advisory Agreement between the Company and BHP dated January 4, 2005, as
purchase price for the common stock and common stock purchase warrants sold in
the Financing.

The Company shall provide to BHP quarterly reimbursement of all documented
out-of-pocket expenses, which amount shall not exceed $2,000 without the prior
written approval of the Company.

Notice given pursuant to any of the provisions of this Agreement shall be given
in writing and shall be sent by recognized overnight courier or personally
delivered (a) if to the Company, to the Company’s office at 3960 Broadway, New
York, NY 10032. Attention: Ron Lipstein, Chief Executive Officer; and (b) if to
BHP, to its office at 570 Lexington Avenue, New York, NY 10022. Attention: Jason
Adelman, Managing Director.

No advice or opinion rendered by BHP, whether formal or informal, may be
disclosed, in whole or in part, or summarized, excerpted from or otherwise
referred to without our prior written consent unless required by law, government
regulations, or legally required in court proceedings. In addition, BHP may not
be otherwise referred to without its prior written consent. Since BHP will be
acting on behalf of the Company in connection with its engagement hereunder, the
Company has entered into a separate letter Agreement, dated the date hereof,
providing for the indemnification by the Company of BHP and certain related
persons and entities.

BHP is a division of Pali Capital Inc., a European American Investment Group
Company. The letter agreement shall remain in full force and effect as to BHP
and the Company in the event that BHP becomes an independent entity. In
connection with this engagement, BHP is acting as an independent contractor with
duties owing solely to the Company. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard to
conflicts of law principles thereof. This Agreement may not be amended or
modified except in writing signed by each of the parties hereto.

The Indemnification Agreement entered into between the Company and BHP on
January 4, 2005 shall govern this Agreement. The invalidity or unenforceability
of any provision of this letter Agreement shall not affect the validity or
enforceability of any other provisions of this Agreement or the indemnification
Agreement, which shall remain in full force and effect

We are delighted to accept this engagement and look forward to working with you
on this assignment. Please confirm that the foregoing is in accordance with your
understanding by signing and returning to us the enclosed duplicate of this
Agreement.

      Very truly yours,           Burnham Hill Partners          
By:_____________________________________________   Name:     Title:   Managing
Director    

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Accepted and Agreed to as of the date first written above:

Ortec International, Inc.

By:        __________________________________________

Name:   Alan W. Schoenbart
Title:     Chief Financial Officer

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Supplement No. 1
to the Common Stock Purchase Agreement dated as of October 12, 2005

                Reference is hereby made to the Common Stock Purchase Agreement
(the “Purchase Agreement”) dated as of October 12, 2005 by and among Ortec
International, Inc. (the ‘Company”) and the purchasers (the “Purchasers”) named
therein. Capitalized terms used and not otherwise defined herein shall have the
meanings set forth for such terms in the Purchase Agreement. This Supplement No.
1 to the Purchase Agreement hereby supplements the Purchase Agreement as
follows: 

                1.             Commencing on the date hereof and expiring on the
earlier of (a) six (6) months following the date hereof or (b) the announcement
by the Company of a transaction in which the Company issues at least 20,000,000
shares of Common Stock (a “Material Transaction”), the Company hereby agrees
that each Purchaser shall have the right to participate in any equity financing
of the Company in connection with or relating to a Material Transaction so that
such Purchaser can maintain its percentage ownership of Common Stock as of the
date immediately prior to the date of such equity financing.

                This Supplement No. 1 is for the benefit of the Purchasers and
accordingly is enforceable against the Company.

        ORTEC INTERNATIONAL, INC.               By:
_____________________________     Name:     Title:      

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