STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement, made as of the 13th day of February, 2006 (this
“Agreement”), by and between Cambrex Bio Science Walkersville, Inc., a Delaware
corporation (“CBSW”) and Ortec International, Inc., a Delaware corporation
(“Client”) (each of CBSW and Client a “Party” and, collectively, the “Parties”).

 

WHEREAS, pursuant to the Cell Therapy Manufacturing Agreement (as amended, the
“Manufacturing Agreement”) dated October 29, 2003, the Parties have agreed that
CBSW shall manufacture Product for Client under the terms and conditions set
forth therein; and

 

WHEREAS, the Parties wish to provide in this Agreement for certain additional
manufacturing services beyond those set forth in the Manufacturing Agreement,
but otherwise in accordance with the terms and conditions of the Manufacturing
Agreement.

 

NOW, THEREFORE, the Parties hereto hereby agree as follows.

 

1.         (a) Unless otherwise indicated, the terms used herein shall have the
same meaning as such term is used in the Manufacturing Agreement.

 

(b) The Manufacturing Agreement shall remain unchanged and in full force and
effect.

 

2.         CBSW shall continue to reserve for Client’s use a Production Suite
for the period commencing on January 1, 2006 and ending on June 30, 2006 (the
“Services Period”), unless such period shall be extended by written agreement of
the Parties. During the Service Period, CBSW shall produce Product in accordance
with the manufacturing terms of the Manufacturing Agreement and as provided in a
Production Plan agreed to by the Parties. All Product shall upon completed
manufacture be the property of Client and shall be delivered in accordance with
Client’s written directions.

 

3.         (a) The charge for the Production Suite shall be One Hundred Thirty
Two Thousand, Six Hundred and Twelve Dollars ($132,612) per month (each, a
“Monthly Fee”), which shall be payable in accordance with Section 4 below.

 

(b) In addition to the Monthly Fees described in subsection (a) above, Client
will pay for all non-suite fees described in Attachment 3(b) hereto, in cash,
within 30 days after receipt of an invoice therefor.

4.         (a) As payment of each Monthly Fee, Client will issue and deliver to
CBSW certificate(s) for 736,733 shares of Client common stock within five (5)
working days after the end of each calendar month during the Services Period
(all such shares issued under this Agreement, the “Shares” or “Registrable

 

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Securities”). Upon each issuance and delivery of the certificate(s) for the
Shares, all such Shares shall be duly authorized and validly issued and
represent fully paid shares of Client’s Common Stock.

 

(b) Simultaneously with the execution of this Agreement, Client is issuing to
CBSW a warrant authorizing CBSW to purchase 1,105,100 shares of Client Common
Stock at an exercise price of $0.75 per share. Such Common Stock warrant
(“Warrant”) is attached hereto as Attachment 4(b).

 

(c)             CBSW may not sell or otherwise transfer any Shares until
September 1, 2006, after which date CBSW may only sell up to 1,105,100 Shares in
any given calendar month.

 

5.  Client shall provide CBSW, within five working days of receipt, (a) a copy
of all interim clinical trial results concerning the Product, and (b) a copy of
all correspondence to and from the FDA.

6.  The Client hereby represents and warrants to CBSW as of the date hereof as
follows:

(a) The Client is a corporation duly organized, validly existing under, and by
virtue of, the laws of the State of Delaware and is in good standing under such
laws. The Client has all requisite corporate power and authority to own and
operate its properties and assets, and to carry on its business as presently
conducted and as proposed to be conducted. The Client is duly qualified and
authorized to transact business and is in good standing as a foreign corporation
in each jurisdiction in which the failure so to qualify or be in good standing
would have a material adverse effect on its business, properties, or financial
condition. The Client has furnished CBSW with copies of its Articles of
Incorporation and Bylaws, as may have been amended.

(b) The Client has all requisite legal and corporate power and authority to
execute and deliver this Agreement and the Warrant and to sell and issue the
Shares and Warrants hereunder, and to carry out and perform its obligations
under the terms of this Agreement, the Warrant and the transactions contemplated
hereby and thereby.

(c) The authorized and issued capital stock of the Client consists of 51,102,951
shares of Common Stock. All such issued and outstanding shares have been duly
authorized and validly issued, are fully paid and nonassessable and have been
issued in compliance with the registration or qualification provisions of the
Securities Act of 1933, as amended (the “Securities Act”) and any relevant state
securities laws or pursuant to valid exemption therefrom.

(d) All shares of Common Stock issued under this Agreement and the Warrant shall
have the rights, preferences, privileges and restrictions set forth in the
Articles of Incorporation.

 

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(e) The Client has reserved a sufficient number of shares of its Common Stock
for issuance pursuant to this Agreement and the Warrant, and any other stock
purchase agreement heretofore or concurrently herewith executed by the Client or
pursuant to the exercise of options to be granted under employment agreements of
the Client.

(f) All corporate action on the part of the Client, its officers, directors and
stockholders necessary for the authorization, execution, delivery and
performance of this Agreement and the Warrant, the authorization, sale, issuance
(or reservation for issuance) and delivery of the Common Stock and the
performance of all of the Client’s obligations hereunder and under the Warrant
have been taken or will be taken prior to delivery of the Common Stock to CBSW.
This Agreement and the Warrant constitute valid and legally binding obligations
of the Client, enforceable in accordance with their respective terms, except (i)
as limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies and (iii) to the
extent that any provisions contained in the Warrant may be limited by applicable
laws or principles of public policy.

(g) The shares of Common Stock issued under this Agreement and the Warrant, when
issued, sold and delivered in compliance with the provisions of this Agreement,
will be duly and validly issued, fully paid and nonassessable and issued in
compliance with applicable federal and state securities laws, and will be free
and clear of any liens or encumbrances; provided, however, that such shares may
be subject to restrictions on transfer under state and/or federal securities
laws.

7.

CBSW represents and warrants to the Client as follows:

(a) CBSW will be acquiring the Shares for investment for its own account, not as
a nominee or agent, and not with the view to, or for resale in connection with,
any distribution thereof. CBSW understands that the Shares have not been, and
will not be when issued, registered under the Securities Act by reason of a
specific exemption from the registration provisions of the Securities Act, the
availability of which depends upon, among other things, the bona fide nature of
the investment intent and the accuracy of the representations as expressed
herein.

(b) CBSW acknowledges that the Shares must be held indefinitely unless
subsequently registered under the Securities Act or unless an exemption from
such registration is available. CBSW is aware of the provisions of Rule 144
promulgated under the Securities Act which permit limited resale of shares
purchased in a private placement subject to the satisfaction of certain
conditions, which may include, among other things, the existence of a public
market for the shares, the availability of certain current public information
about the Client, the

 

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resale occurring not less than one year after a party has purchased and paid for
the security to be sold, the sale being effected through a “broker’s
transaction” or in transactions directly with a “market maker” and the number of
shares being sold during any three-month period not exceeding specified
limitations.

(c) CBSW has not incurred, and will not incur, directly or indirectly, any
liability for brokerage or finders’ fees or agents’ commissions or any similar
charges in connection with this Agreement or any transaction contemplated
hereby.

(d) It is understood that each certificate representing the Shares shall bear
the following legend:

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT, AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT OR AN OPINION OF
COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED
(UNLESS SUCH TRANSFER IS TO AN AFFILIATE OF THE HOLDER HEREOF, IN WHICH CASE NO
SUCH OPINION SHALL BE REQUIRED).”

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS
ON TRANSFER AS SET FORTH IN AN AGREEMENT ENTERED INTO BY THE HOLDER OF THESE
SHARES AND THE COMPANY. A COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL
OFFICE OF THE COMPANY.”

8.  With a view to making available the benefits of certain rules and
regulations of the Commission that may at any time permit the sale of any Shares
to the public without registration, for so long as CBSW owns any Registrable
Securities, the Client agrees to:

 

 

(a)

Make and keep adequate, current public information available, as those terms are
understood and defined in Rule 144, at all times;

   

 

(b)

File with the Securities and Exchange Commission (the “Commission”) in a timely
manner all reports and other documents required of the Client under the
Securities Exchange Act of 1934, as amended; and

 

 

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(c)

So long as CBSW owns any Registrable Securities, furnish to CBSW forthwith upon
request a written statement by the Client as to its compliance with the
reporting requirements of Rule 144, a copy of the most recent annual or
quarterly report of the Client, and such other reports and documents of the
Client as CBSW may reasonably request in availing itself of any rule or
regulation of the Commission allowing CBSW to sell any such securities without
registration; provided, that the Client shall not be required to provide, under
this paragraph, any reports or documents which are publicly available on the
Commission’s EDGAR system.

 

9.  (a) Client shall prepare and file with the Commission a registration
statement under the Securities Act of 1933, as amended (the “Act”), on Form S-3
or other appropriate form (the “Registration Statement”), so as to permit a
public offering and resale of all of the Shares under the Act by CBSW. Client
will use its best efforts to cause the Registration Statement to be declared
effective under the Act as promptly as possible after the filing thereof, but in
any event prior to the August 31, 2006. Client will maintain the Registration
Statement and any post-effective amendment thereto filed under this Section 9
effective under the Act until the earliest of (i) the date that all of the
Shares have been sold pursuant to such Registration Statement, (ii) the date
CBSW receives an opinion of counsel to Client that the Shares may be sold under
the provisions of Rule 144, (iii) the date that all Shares have been otherwise
transferred to persons who may trade such shares without restriction under the
Act, and Client has delivered a new certificate or other evidence of ownership
for such securities not bearing a restrictive legend, or (iv) the date all
Shares may be sold at any time pursuant to Rule 144(k) or any similar provision
then in effect under the Act in the written opinion of counsel to Client,
addressed to Client’s transfer agent to such effect.

(b) Client, at its expense, shall furnish to CBSW with respect to the Shares
registered under the Registration Statement such reasonable number of copies of
the Registration Statement, prospectuses and preliminary prospectuses in
conformity with the requirements of the Act and such other documents as CBSW may
reasonably request, in order to facilitate the public sale or other disposition
of all or any of the Shares by CBSW.

(c) All fees, disbursements and out-of-pocket expenses and costs incurred by
Client in connection with the preparation and filing of the Registration
Statement under this Section 9 and in complying with applicable securities and
Blue Sky laws (including, without limitation, all attorneys' fees of Client)
shall be borne by Client. CBSW shall bear the cost of all fees and expenses of
CBSW’s counsel.

10.               This Agreement and the exhibits hereto constitute the entire
agreement between the Client and CBSW relative to the subject matter hereof. No
party shall be bound or liable to any other party in any manner by any
warranties, representations or covenants except as specifically set forth
herein. Subject to

 

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the exceptions specifically set forth in this Agreement, the terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective executors, administrators, heirs, successors and assigns of the
parties (including transferees of any securities). Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement, except as
expressly provided herein.

11.               This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts
entered into and wholly to be performed within the State of New York by New York
residents, without regard to its conflicts of law principles.

12.               This Agreement may be executed in two or more counterparts,
each of which shall be an original, but all of which together shall constitute
one and the same instrument.

13.               The headings of the Sections of this Agreement are for
convenience and shall not by themselves determine the interpretation of this
Agreement.

14.               Any notice required or permitted to be given to a party
pursuant to the provisions of this Agreement will be in writing and will be
deemed to be effective on the earliest of (i) the date of delivery by hand
delivery or facsimile, (ii) the business day after deposit with a
nationally-recognized courier or overnight service, including Express Mail, for
United States deliveries, (iii) the third business day after deposit with an
internationally recognized courier or overnight service for deliveries outside
the United States, or (iv) five (5) business days after deposit in the United
States mail by registered or certified mail for United States deliveries. All
notices not delivered personally or by facsimile will be sent with postage and
other charges prepaid and properly addressed to the party to be notified at the
address set forth below such party’s signature on this Agreement or at such
other address as such party may designate by ten (10) days advance written
notice to the other parties hereto. All notices for delivery outside the United
States will be sent by facsimile, or by nationally recognized courier or
overnight service. Any notice given hereunder to more than one person will be
deemed to have been given, for purposes of counting time periods hereunder, on
the date given to the last party required to be given such notice.

15.               Any provision of this Agreement may be amended by a written
instrument signed by the Client and by persons holding at least a majority of
the aggregate of the then outstanding shares of Common Stock which were acquired
pursuant to this Agreement and upon exercise of the Warrants issued pursuant to
Section 4(b) of this Agreement.

16.               The Client and CBSW will indemnify each other against all
liabilities incurred by the indemnifying party with respect to claims related to
investment banking or finders fees in connection with the transactions
contemplated by this

 

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Agreement, arising out of arrangements between the party asserting such claims
and the indemnifying party, and all costs and expenses (including reasonable
fees of counsel) of investigating and defending such claims.

17.               If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this
Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.

18.               The representations, warranties, covenants and agreements of
the parties contained herein shall survive the consummation of the purchase and
sale of the Shares contemplated in this Agreement, and each party recognizes
that the other is relying on such other party’s representations, warranties,
covenants and agreements.

19.               Each party will pay its own fees and expenses incurred in
connection with the transactions contemplated in this Agreement.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Stock Purchase
Agreement as of the day and year first above written.

The Client:

Ortec International, Inc.,  

 

 

By:

/s/ Ron Lipstein

 

Name: Ron Lipstein

 

Title: Chief Executive Officer

 

 

Address:

 

3960 Broadway

New York, NY 10032

 

 

CBSW:

Cambrex Bio Science Walkersville, Inc.,

 

 

By: /s/ Shawn P. Cavanagh

Name: Shawn P. Cavanagh

Title: Senior Vice President

 

Address:

8830 Biggs Ford Road,

Walkersville, MD, 21793