**AMENDED
      AND RESTATED**


**CERTIFICATE
      OF INCORPORATION**


**OF**


**ORTEC
      INTERNATIONAL, INC.**









Adopted
      in Accordance with the Provisions of


Section
      242 and 245 of the General Corporation Law


of
      the
      State of Delaware







The
      undersigned, being the secretary of Ortec International, Inc., a corporation
      existing under the laws of the State of Delaware (the "Corporation") does hereby
      certify that (i) the Certificate of Incorporation of the Corporation under
      the
      name "Ortec International, Inc." was filed with the Secretary of State of the
      State of Delaware on March 12, 1991 (ii) the Agreement of Merger merging The
      Skin Group, Ltd. with and into the Corporation was filed with the Secretary
      of
      the State of Delaware on July 27, 1992, (iii) a Certificate of Amendment to
      the
      Certificate of Incorporation of the Corporation was filed with the Secretary
      of
      the State of Delaware on September 4, 1998 and (iv) the Certificate of
      Incorporation of the Corporation is hereby amended and restated as follows
      (as
      so amended and restated, this "Certificate of Incorporation"):





FIRST :  The
      name
      of the corporation (hereinafter called the "Corporation") is





Ortec
      International Inc.,





SECOND :  The
      address, including street, number, city, and county, of the registered office
      of
      the Corporation in the State of Delaware is 2711 Centerville Road, Suite 400,
      City of Wilmington, County of New Castle, Delaware 19808; and the name of the
      registered agent of the Corporation in the State of Delaware is Corporation
      Service Company.





THIRD :  The
      purpose of the Corporation is to engage in any lawful act or activity for which
      corporations may be organized under the General Corporation Law of the State
      of
      Delaware (the "DGCL").





FOURTH :  1. Authorized
      Capital Stock .
      The
      total number of shares of capital stock that the Corporation is authorized
      to
      issue is 36,000,000, consisting of 35,000,000 shares of common stock, par value
      $.001 per share (" Common
      Stock "),
      and
      1,000,000 shares of preferred stock, par value $.001 per share (" Preferred
      Stock ").





2. Preferred
      Stock .
      The
      Board of Directors of the Corporation is hereby authorized to provide for the
      issuance of shares of Preferred Stock in one or more series, to increase or
      decrease the number of shares of Preferred Stock designated for any such series,
      and to fix the designation, relative powers, preferences, and rights and
      qualifications, limitations, or restrictions of all shares of such series.
      The
      authority of the Board of Directors with respect to each such series will
      include, without limiting the generality or effect of the foregoing, the
      determination of any or all of the following:





(a)
      the
      voting powers, if any, and whether such voting powers are full or limited in
      such series;





(b)
      the
      redemption provisions, if any, applicable to such series, including the
      redemption price or prices to be paid;









(c)
      whether dividends, if any, will be cumulative or noncumulative, the dividend
      rate, if any, of such series, and the dates and preferences of dividends, if
      any, on such series;





(d)
      the
      rights of such series upon the voluntary or involuntary dissolution of, or
      upon
      any distribution of the assets of, the Corporation;





(e)
      the
      provisions, if any, pursuant to which the shares of such series are convertible
      into, or exchangeable for, shares of any other class or classes or of any other
      series of the same or any other class or classes of stock, or any other
      security, of the Corporation or any other corporation or other entity, and
      the
      price or prices or the rates of exchange applicable thereto;





(f)
      the
      right, if any, to subscribe for or to purchase any securities of the Corporation
      or any other corporation or other entity; and





(g)
      the
      provisions, if any, of a sinking fund applicable to such series;





all
      as
      may be determined from time to time by the Board of Directors and stated in
      the
      resolution or resolutions providing for the issuance of such Preferred Stock
      (collectively, a " Preferred
      Stock Designation ").




3. Common
      Stock .
      Except
      as may otherwise be provided in a Preferred Stock Designation, the holders
      of
      Common Stock will be entitled to one vote on each matter submitted to a vote
      at
      a meeting of stockholders for each share of Common Stock held of record by
      such
      holder as of the record date for such meeting.





FIFTH :  The
      Corporation is to have perpetual existence.





SIXTH :  Whenever
      a compromise or arrangement is proposed between the Corporation and its
      creditors or any class of them and/or between the Corporation and its
      stockholders or any class of them, any court of equitable jurisdiction within
      the State of Delaware may, on the application in a summary way of the
      Corporation or of any creditor or stockholder thereof or on the application
      of
      any receiver or receivers appointed for the Corporation under the provisions
      of
      Section 291 of the DGCL or on the application of trustees in dissolution or
      of
      any receiver or receivers appointed for the corporation under the provisions
      of
      Section 279 of the DGCL order a meeting of the creditors or class of creditors,
      and/or of the stockholders or class of stockholders of the Corporation, as
      the
      case may be, to be summoned in such manner as the said court directs. If a
      majority in number representing three-fourths in value of the creditors or
      class
      of creditors, and/or of the stockholders or class of stockholders of the
      Corporation, as the case may be, agree to any compromise or arrangement and
      to
      any reorganization of the Corporation as consequence of such compromise or
      arrangement, the said compromise or arrangement and the said reorganization
      shall, if sanctioned by the court to which the said application has been made,
      be binding on all the creditors or class of creditors, and/or on all the
      stockholders or class of stockholders, of the Corporation, as the case may
      be,
      and also on the Corporation.





SEVENTH :  For
      the
      management of the business and the conduct of the affairs of the Corporation,
      and in further definition, limitation and regulation of the powers of the
      Corporation and of its directors and of its stockholders or any class thereof,
      as the case may be, it is further provided:





1.
      The
      management of the business and the conduct of the affairs of the Corporation
      shall be vested in its Board of Directors. The number of directors which shall
      constitute the whole Board of Directors shall be fixed by, or in the manner
      provided in, the By-Laws. The phrase "whole Board" and the phrase "total number
      of directors" shall be deemed to have the same meaning, to wit, the total number
      of directors which the Corporation would have if there were no vacancies. No
      election of directors need be by written ballot.









2.
      The
      power to adopt, amend, or repeal the By-Laws of the Corporation may be exercised
      by the Board of Directors of the Corporation; provided, however, that any
      provision for the classification of directors of the Corporation for staggered
      terms pursuant to the provisions of subsection (d) of Section 141 of the DGCL
      shall be set forth in a By-Law adopted by the stockholders entitled to vote
      of
      the Corporation unless provisions for such classification shall be set forth
      in
      this Certificate of Incorporation.





EIGHTH :  The
      personal liability of the directors of the Corporation is hereby eliminated
      to
      the fullest extent permitted by paragraph (7) of subsection (b) of Section
      102
      of the DGCL. Any repeal or modification of this Article Eighth will not
      adversely affect any right or protection of a director of the Corporation
      existing immediately prior to such repeal or modification.





NINTH :  The
      Corporation will, to the fullest extent permitted or required by Section 145
      of
      the DGCL, as from time to time amended and supplemented, indemnify any and
      all
      persons whom it will have power to indemnify under said section from and against
      any and all of the expenses, liabilities or other matters referred to in or
      covered by said section, and the indemnification provided for herein will not
      be
      deemed exclusive of any other rights to which those indemnified may be entitled
      under any bylaw, agreement, vote of the stockholders or disinterested directors
      or otherwise, both as to action in his official capacity and as to action in
      another capacity while holding such office, and will continue as to a person
      who
      has ceased to be a director, officer, employee or agent and will inure to the
      benefit of the heirs, executors and administrators of such person. Any repeal
      or
      modification of this Article Ninth will not adversely affect any right or
      protection existing hereunder immediately prior to such repeal or
      modification.





TENTH :  From
      time
      to time any of the provisions of this Certificate of Incorporation may be
      amended, altered or repealed, and other provisions authorized by the laws of
      the
      State of Delaware at the time in force may be added or inserted in the manner
      and at the time prescribed by said laws, and all rights at any time conferred
      upon the stockholders of the corporation by this Certificate of Incorporation
      are granted subject to the provisions of this Article Tenth.




Signed
      on
      September 6, 2001


/s/
                  Ron LipsteinRon
                  LipsteinSecretary









**CERTIFICATE
      OF AMENDMENT OF CERTIFICATE OF INCORPORATION**


**OF**


**ORTEC
      INTERNATIONAL, INC.**





It
      is
      hereby certified that:





1.  The
      name
      of the Corporation (hereinafter called the "Corporation") is Ortec
      International, Inc.





2.  The
      certificate of incorporation of the Corporation as previously amended and
      restated is hereby amended by striking out Article FOURTH thereof and by
      substituting in lieu of said Article the following new Article FOURTH and by
      adding a new Article ELEVENTH.




FOURTH :  1. Authorized
      Capital Stock .
      The
      total number of shares of capital
      stock that the Corporation is authorized to issue is 201,000,000, consisting
      of
      200,000,000 shares of common stock, par value $.001 per share (" Common
      Stock "),
      and
      1,000,000 shares of preferred stock, par value $.001 per share (" Preferred
      Stock ").





2. Preferred
      Stock .
      The
      Board of Directors of the Corporation is hereby authorized to provide for the
      issuance of shares of Preferred Stock in one or more series, to increase or
      decrease the number of shares of Preferred Stock designated for any such series,
      and to fix the designation, relative powers, preferences, and rights and
      qualifications, limitations, or restrictions of all shares of such series. The
      authority of the Board of Directors with respect to each such series will
      include, without limiting the generality or effect of the foregoing, the
      determination of any or all of the following:





(a)
                the voting powers, if any, and whether such voting powers are full
                or
                limited in such series;





(b)
                the redemption provisions, if any, applicable to such series, including
                the redemption price or prices to be
                paid;





(c)
                whether dividends, if any, will be cumulative or noncumulative, the
                dividend rate, if any, of such series, and the dates and preferences
                of
                dividends, if any, on such series;





(d)
                the rights of such series upon the voluntary or involuntary dissolution
                of, or upon any distribution of the assets of, the
                Corporation;





(e)
                the provisions, if any, pursuant to which the shares of such series
                are
                convertible into, or exchangeable for, shares of any other class
                or
                classes or of any other series of the same or any other class or
                classes
                of stock, or any other security, of the Corporation or any other
                corporation or other entity, and the price or prices or the rates
                of
                exchange applicable thereto;





(f)
                the right, if any, to subscribe for or to purchase any securities
                of the
                Corporation or any other corporation or other entity;
                and





(g)
                the provisions, if any, of a sinking fund applicable to such
                series;





all
                as may be determined from time to time by the Board of Directors
                and
                stated in the resolution or resolutions providing for the issuance
                of such
                Preferred Stock (collectively, a "Preferred
                Stock Designation").









3. Common
      Stock .
      Except
      as may otherwise be provided in a Preferred Stock Designation, the holders
      of
      Common Stock will be entitled to one vote on each matter submitted to a vote
      at
      a meeting of stockholders for each share of Common Stock held of record by
      such
      holder as of the record date for such meeting.





ELEVENTH :
      The
      Board of Directors of the Corporation is hereby authorized in its discretion
      at
      any time prior to December 31, 2003, to amend the certificate of incorporation
      of the Corporation to effect a reverse stock split of the Corporation's
      outstanding shares of common stock at a ratio within the range from one share
      for each two shares outstanding to one share for each ten shares outstanding,
      without further approval or authorization of its stockholders.




3.  The
      amendment of the certificate of incorporation herein certified has been duly
      adopted in accordance with the provisions of Section 242 of the General
      Corporation Law of the State of Delaware.




Signed
      on
      February 11, 2003


/s/    
                  Ron LipsteinName:
                  Ron LipsteinTitle:  
                  Secretary









**CERTIFICATE
      OF AMENDMENT OF CERTIFICATE OF INCORPORATION**


**OF**


**ORTEC
      INTERNATIONAL, INC** .




It
      is
      hereby certified that:





1.  The
      name
      of the Corporation (hereinafter called the "Corporation") is Ortec
      International, Inc.





2.  The
      certificate of incorporation of the Corporation as previously amended and
      restated is hereby further amended, by action of the Board of Directors as
      permitted by the provisions of Article ELEVENTH, by adding a new Article
      TWELFTH.





TWELFTH :
      There
      shall be a reverse stock split of the Corporation's outstanding shares of common
      stock effective at 5 P.M. on June 24, 2003, Eastern Daylight Savings Time,
      at a
      ratio of one share for each ten shares previously outstanding and that if as
      a
      result of such reverse stock split any holder of shares of common stock is
      entitled to receive a fraction of a share of common stock, such shareholder
      shall receive one whole share of common stock instead of such fractional
      share.





3.  The
      amendment of the certificate of incorporation herein certified has been duly
      adopted in accordance with the provisions of Section 242 of the General
      Corporation Law of the State of Delaware.




Signed
      on
      June 4, 2003


/s/ 
                  Ron LipsteinName:   
                  Ron LipsteinTitle:     
                  Secretary









**CERTIFICATE
      OF AMENDMENT OF CERTIFICATE OF INCORPORATION**





**OF**





**ORTEC
      INTERNATIONAL, INC** .




It
      is
      hereby certified that:





1.  The
      name
      of the Corporation (hereinafter called the “Corporation”) is Ortec
      International, Inc.





2.  The
      certificate of incorporation of the Corporation as previously amended and
      restated is hereby further amended, by action of the stockholders of the
      Corporation, by adding a new Article THIRTEENTH:





THIRTEENTH:
      The Board of Directors of the Corporation is hereby authorized in its discretion
      at any time prior to September 30, 2006, to amend the certificate of
      incorporation of the Corporation to effect a reverse stock split of the
      Corporation's outstanding shares of common stock at a ratio within the range
      from one share for each five shares outstanding to one share for each fifteen
      shares outstanding, without further approval or authorization of its
      stockholders.





3.  The
      amendment of the certificate of incorporation herein certified has been duly
      adopted in accordance with the provisions of Section 242 of the General
      Corporation Law of the State of Delaware.




Signed
      on
      June 6, 2006




/s/ 
                  Ron LipsteinName:   
                  Ron LipsteinTitle:     
                  Secretary





**CERTIFICATE
      OF AMENDMENT OF CERTIFICATE OF INCORPORATION**





**OF**





**ORTEC
      INTERNATIONAL, INC.**




It
      is
      hereby certified that:





1.  The
      name
      of the Corporation (hereinafter called the “Corporation”) is Ortec
      International, Inc.





2.  The
      certificate of incorporation of the Corporation as previously amended and
      restated is hereby further amended, by action of the Board of Directors as
      permitted by the provisions of Article THIRTEENTH, by adding a new Article
      FOURTEENTH:





FOURTEENTH:
      There shall be a reverse stock split of the Corporation’s outstanding shares of
      common stock effective 5 P.M. on July 24, 2006, Eastern daylight Savings Time,
      at a ratio of one share for each fifteen shares previously outstanding and
      that
      if as a result of such reverse stock split any holder of shares of common stock
      is entitled to receive a fraction of a share of common stock, such shareholder
      shall receive one whole share of common stock instead of such fractional
      share.





3.  The
      amendment of the certificate of incorporation herein certified has been duly
      adopted in accordance with the provisions of Section 242 of the General
      Corporation Law of the State of Delaware.




Signed
      on
      July 5, 2006




/s/ 
                Ron LipsteinName:   
                Ron LipsteinTitle:     
                Secretary









**CERTIFICATE
      OF AMENDMENT OF CERTIFICATE OF INCORPORATION**




**OF**




**ORTEC
      INTERNATIONAL INC.**




It
      is
      hereby certified that:




1.  The
      name
      of the Corporation (hereinafter called the “Corporation”) is Ortec International
      Inc.




2.  The
      certificate of incorporation of the Corporation as previously amended and
      restated is hereby amended as follows:




(a)
            by
                striking out Article FIRST thereof and by substituting the new Article
                FIRST hereafter set forth and




(b)
            by
                striking out Paragraph numbered 1 of Article FOURTH and by substituting
                the new Paragraph 1 of Article FOURTH hereafter set forth. Paragraphs
                numbered 2 and 3 of Article FOURTH are not
                changed.




FIRST :  The
      name
      of the corporation (hereinafter called the “Corporation”) is Forticell
      Bioscience, Inc.




FOURTH :  1. Authorized
      Capital Stock .
      The
      total number of shares of capital stock that the Corporation is authorized
      to
      issue is 301,000,000, consisting of 300,000,000 shares of common stock, par
      value $.001 per share (“ Common
      Stock ”),
      and
      1,000,000 shares of preferred stock, par value $.001 per share (“ Preferred
      Stock ”).




3.  The
      amendment of the certificate of incorporation herein certified has been duly
      adopted in accordance with the provisions of Section 242 of the General
      Corporation Law of the State of Delaware.




Signed
      on
      December 20, 2007




/s/
                Alan W. SchoenbartName:
                Alan W. SchoenbartTitle:
                Secretary










**CERTIFICATE
      OF DESIGNATION OF THE RELATIVE RIGHTS AND**


**PREFERENCES**


**OF
      THE**


**SERIES
      D-1 CONVERTIBLE PREFERRED STOCK**


**OF**


**ORTEC
      INTERNATIONAL, INC.**




The
      undersigned, the Chief Executive Officer of Ortec International, Inc., a
      Delaware corporation (the "Company"), in accordance with the provisions of
      the
      Delaware General Corporation Law, does hereby certify that, pursuant to the
      authority conferred upon the Board of Directors by the Certificate of
      Incorporation of the Company, the following resolution creating a series of
      Series D-1 Convertible Preferred Stock, was duly adopted on August 24,
      2006:





RESOLVED,
      that pursuant to the authority expressly granted to and vested in the Board
      of
      Directors of the Company by provisions of the Certificate of Incorporation
      of
      the Company (the "Certificate of Incorporation"), there hereby is created out
      of
      the shares of Preferred Stock, par value $.001 per share, of the Company
      authorized in Article Fourth of the Certificate of Incorporation (the "Preferred
      Stock"), a series of Preferred Stock of the Company, to be named "Series D-1
      Convertible Preferred Stock," consisting of twenty thousand (20,000) shares,
      which series shall have the following designations, powers, preferences and
      relative and other special rights and the following qualifications, limitations
      and restrictions:





1.  Designation
      and Rank .
      The
      designation of such series of the Preferred Stock shall be the Series D-1
      Convertible Preferred Stock, par value $.001 per share (the "Series D-1
      Preferred Stock"). The maximum number of shares of Series D-1 Preferred Stock
      shall be twenty thousand (20,000) Shares. The Series D-1 Preferred Stock shall
      rank prior to the common stock, par value $.001 per share (the "Common Stock")
      for purposes of liquidation preference, and to all other classes and series
      of
      equity securities of the Company that by their terms do not rank senior to
      the
      Series D-1 Preferred Stock ("Junior Stock"). Specifically, the Series D-1
      Preferred Stock shall be subordinate to and rank junior to all other classes
      of
      Preferred Stock of the Company, whether or not outstanding as of the date
      hereof, which by their terms do not rank junior to the Series D-1 Preferred
      Stock. The Series D-1 Preferred Stock shall be subordinate to and rank junior
      to
      all indebtedness of the Company now or hereafter outstanding.





2.  Dividends .
      Whenever the Board of Directors declares a dividend on the Common Stock each
      holder of record of a share of Series D-1 Preferred Stock, or any fraction
      of a
      share of Series D-1 Preferred Stock, on the date set by the Board of Directors
      to determine the owners of the Common Stock of record entitled to receive such
      dividend (the "Record Date") shall be entitled to receive, out of any assets
      at
      the time legally available therefore, an amount equal to such dividend declared
      on one share of Common Stock multiplied by the number of shares of Common Stock
      into which such share, or such fraction of a share, of Series D-1 Preferred
      Stock could be converted on the Record Date.





3.  Voting
      Rights .





(a)  Class
      Voting Rights .
      The
      Series D-1 Preferred Stock shall have the following class voting rights. So
      long
      as any shares of the Series D-1 Preferred Stock remain outstanding, the Company
      shall not, without the affirmative vote or consent of the holders of at least
      three-fourths (3/4) of the shares of the Series D-1 Preferred Stock outstanding
      at the time, given in person or by proxy, either in writing or at a meeting,
      in
      which the holders of the Series D-1 Preferred Stock vote separately as a class:
      (i) amend, alter or repeal the provisions of the Series D-1 Preferred Stock
      so
      as to adversely affect any right, preference, privilege or voting power of
      the
      Series D-1 Preferred Stock; or (ii) effect any distribution with respect to
      Junior Stock except that the Company may effect a distribution on the Common
      stock if the Company makes a like kind distribution on each share, or fraction
      of a share, of Series D-1 Preferred Stock in an amount equal to the distribution
      on one share of Common Stock multiplied by the number of shares of Common Stock
      into which such one share, or such fraction of a share, of Series D-1 Preferred
      Stock can be converted at the time of such distribution.










(b)  General
      Voting Rights .
      Except
      with respect to transactions upon which the Series D-1 Preferred Stock shall
      be
      entitled to vote separately as a class pursuant to Section 3(a) above, the
      Series D-1 Preferred Stock shall have no voting rights. The Common Stock into
      which the Series D-1 Preferred Stock is convertible shall, upon issuance, have
      all of the same voting rights as other issued and outstanding Common Stock
      of
      the Company.





4.  Liquidation
      Preference .





(a) In
      the
      event of the liquidation, dissolution or winding up of the affairs of the
      Company, whether voluntary or involuntary, after payment or provision for
      payment of the debts and other liabilities of the Company, the holders of shares
      of the Series D-1 Preferred Stock then outstanding shall be entitled to receive,
      out of the assets of the Company, whether such assets are capital or surplus
      of
      any nature, an amount equal to the greater of:





(i)  ten
      ($10.00) per share of Series D-1 Preferred Stock, or





(ii)  an
      amount
      per share of Series D-1 Preferred Stock calculated by taking the total amount
      available for distribution to holders of all of the Company’s outstanding Common
      Stock before deduction of any preference payments for the Series D-1 Preferred
      Stock, divided by the total of (x) all of the then outstanding shares of the
      Company’s Common stock, plus (y) all of the shares of the Company’s Common Stock
      into which all of the outstanding shares of the Series D-1 Preferred Stock
      can
      then be converted.





(the
      "Liquidation Preference Amount") before any payment shall be made or any assets
      distributed to the holders of the Common Stock or any other Junior Stock. If
      the
      assets of the Company are sufficient to pay in part, but are not sufficient
      to
      pay in full, the Liquidation Preference Amount payable to the holders of
      outstanding shares of the Series D-1 Preferred Stock and any series of preferred
      stock or any other class of stock on a parity, as to rights on liquidation,
      dissolution or winding up, with the Series D-1 Preferred Stock, then all of
      said
      assets available to pay a part of the Liquidation Preference Amount to the
      holders of the outstanding shares of Series D-1 Preferred Stock and the other
      classes of stock on a parity as to rights on liquidation, dissolution or winding
      up, will be distributed among the holders of the Series D-1 Preferred Stock
      and
      the other classes of stock on a parity with the Series D-1 Preferred Stock,
      if
      any, ratably in accordance with the respective amounts that would be payable
      on
      such shares if all amounts payable thereon were paid in full. The liquidation
      payment with respect to each outstanding fractional share of Series D-1
      Preferred Stock shall be equal to a ratably proportionate amount of the
      liquidation payment with respect to each outstanding share of Series D-1
      Preferred Stock. All payments for which this Section 4(a) provides shall be
      in
      cash, property (valued at its fair market value as determined by an independent
      appraiser reasonably acceptable to the holders of a majority of the Series
      D-1
      Preferred Stock), or a combination thereof; provided , however ,
      that no
      cash shall be paid to holders of Junior Stock unless each holder of the
      outstanding shares of Series D-1 Preferred Stock has been paid in cash the
      full
      Liquidation Preference Amount to which such holder is entitled as provided
      herein. After payment of the full Liquidation Preference Amount to which each
      holder is entitled, such holders of shares of Series D-1 Preferred Stock will
      not be entitled to any further participation as such in any distribution of
      the
      assets of the Company.





(b) A
      consolidation or merger of the Company with or into any other corporation or
      corporations, or a sale of all or substantially all of the assets of the
      Company, or the effectuation by the Company of a transaction or series of
      transactions in which more than 50% of the voting shares of the Company is
      disposed of or conveyed, shall not be deemed to be a liquidation, dissolution,
      or winding up within the meaning of this Section 4. In the event of the merger
      or consolidation of the Company with or into another corporation, the Series
      D-1
      Preferred Stock shall maintain its relative powers, designations and preferences
      provided for herein and no merger shall result inconsistent
      therewith.









(c)  Written
      notice of any voluntary or involuntary liquidation, dissolution or winding
      up of
      the affairs of the Company, stating a payment date and the place where the
      distributable amounts shall be payable, shall be given by mail, postage prepaid,
      no less than forty-five (45) days prior to the payment date stated therein,
      to
      the holders of record of the Series D-1 Preferred Stock at their respective
      addresses as the same shall appear on the books of the Company.





5.  Conversion .
      The
      holder of Series D-1 Preferred Stock shall have the following conversion rights
      (the "Conversion Rights"):





(a) Right
      to Convert .
      At any
      time on or after the Issuance Date, the holder of any such shares of Series
      D-1
      Preferred Stock may, at such holder's option, subject to the limitations set
      forth in Section 7 herein, elect to convert (a "Voluntary Conversion") all
      or
      any portion of the shares of Series D-1 Preferred Stock held by such person
      into
      a number of fully paid and nonassessable shares of Common Stock equal to the
      quotient of (i) the Liquidation Preference Amount of the shares of Series D-1
      Preferred Stock being converted divided by (ii) the Conversion Price (as defined
      in Section 5(d) below) then in effect as of the date of the delivery by such
      holder of its notice of election to convert. The Company shall keep written
      records of the conversion of the shares of Series D-1 Preferred Stock converted
      by each holder. A holder shall be required to deliver the original certificates
      representing the shares of Series D-1 Preferred Stock upon any conversion of
      the
      Series D-1 Preferred Stock as provided in Section 5(b) below.





(b) Mechanics
      of Voluntary Conversion .
      The
      Voluntary Conversion of Series D-1 Preferred Stock shall be conducted in the
      following manner:





(i)  Holder's
      Delivery Requirements .
      To
      convert Series D-1 Preferred Stock into full shares of Common Stock on any
      date
      (the "Voluntary Conversion Date"), the holder thereof shall (A) transmit by
      facsimile (or otherwise deliver), for receipt on or prior to 5:00 p.m., New
      York
      time on such date, a copy of a fully executed notice of conversion in the form
      attached hereto as Exhibit
      I (the
      "Conversion Notice"), to the Company, and (B) with respect to the conversion
      of
      shares of Series D-1 Preferred Stock held by any holder, such holder shall
      surrender to a common carrier for delivery to the Company as soon as practicable
      following such Conversion Date, but in no event later than six (6) business
      days
      after such date, the original certificates representing the shares of Series
      D-1
      Preferred Stock being converted (or an indemnification undertaking with respect
      to such shares in the case of their loss, theft or destruction) (the "Preferred
      Stock Certificates").





(ii)  Company's
      Response .
      Upon
      receipt by the Company of a facsimile copy of a Conversion Notice, the Company
      shall immediately send, via facsimile, a confirmation of receipt of such
      Conversion Notice to such holder and the Company or its designated transfer
      agent (the "Transfer Agent"), as applicable, shall, within three (3) business
      days following the date of receipt by the Company of the certificate
      representing the shares of Series D-1 Preferred Stock being converted, (x)
      issue
      and deliver to the Depository Trust Company (“ DTC ”)
      account on the holder’s behalf via the Deposit Withdrawal Agent Commission
      System (“ DWAC ”)
      as
      specified in the Conversion Notice, registered in the name of the holder or
      its
      designee, for the number of shares of Common Stock to which the holder shall
      be
      entitled, and (y) if the certificate so surrendered represents more shares
      of
      Series D-1 Preferred Stock than those being converted, issue and deliver to
      the
      holder a new certificate for such number of shares of Series D-1 Preferred
      Stock
      represented by the surrendered certificate which were not
      converted.





(iii)  Dispute
      Resolution .
      In the
      case of a dispute as to the arithmetic calculation of the number of shares
      of
      Common Stock to be issued upon conversion, the Company shall promptly issue
      to
      the holder the number of shares of Common Stock that is not disputed and shall
      submit the arithmetic calculations to the holder via facsimile as soon as
      possible, but in no event later than two (2) business days after receipt of
      such
      holder's Conversion Notice. If such holder and the Company are unable to agree
      upon the arithmetic calculation of the number of shares of Common Stock to
      be
      issued upon such conversion within one (1) business day of such disputed
      arithmetic calculation being submitted to the holder, then the Company shall
      within one (1) business day submit via facsimile the disputed arithmetic
      calculation of the number of shares of Common Stock to be issued upon such
      conversion to the Company’s **** independent,
      outside accountant. The Company shall cause the accountant to perform the
      calculations and notify the Company and the holder of the results no later
      than
      seventy-two (72) hours from the time it receives the disputed calculations.
      Such
      accountant's calculation shall be binding upon all parties absent manifest
      error. The reasonable expenses of such accountant in making such determination
      shall be paid by the Company, in the event the holder's calculation was correct,
      or by the holder, in the event the Company's calculation was correct, or equally
      by the Company and the holder in the event that neither the Company's or the
      holder's calculation was correct. The period of time in which the Company is
      required to effect conversions or redemptions under this Certificate of
      Designation shall be tolled with respect to the subject conversion or redemption
      pending resolution of any dispute by the Company made in good faith and in
      accordance with this Section 5(b)(iii).









(iv)  Record
      Holder .
      The
      person or persons entitled to receive the shares of Common Stock issuable upon
      a
      conversion of the Series D-1 Preferred Stock shall be treated for all purposes
      as the record holder or holders of such shares of Common Stock on the Conversion
      Date.





(c) Mandatory
      Conversion .





(i)  Upon
      the
      Company's written request a holder of Series D-1 Preferred Stock shall advise
      the Company in writing the number of shares of Common Stock that are
      beneficially owned ("Beneficially Owned", as defined in Section 13(d) of the
      Securities and Exchange Act of 1934 and the rules promulgated thereunder) by
      such holder. If the shares of Common Stock Beneficially Owned by such holder
      amount to less than 9.99% of the Shares of Common Stock outstanding at such
      time, the Company may, at its option, compel such holder, by written notice
      to
      such holder (the "Mandatory Conversion Notice"), to convert such portion of
      the
      Series D-1 Preferred Stock owned by him into so many shares of Common Stock
      so
      that the total number of shares of Common Stock Beneficially Owned by such
      holder after such conversion shall equal up to 9.99%, but not more, of the
      shares of Common Stock outstanding after such conversion.





(ii)  As
      used
      herein, a "Mandatory Conversion Date" shall be the date when the Mandatory
      Conversion Notice shall be deemed delivered pursuant to Section 5(i). The
      Mandatory Conversion Date and the Voluntary Conversion Date collectively are
      referred to in this Certificate of Designation as the "Conversion
      Date."





(iii)  Each
      share of Series D-1 Preferred Stock required to be converted pursuant to the
      Mandatory Conversion Notice shall on the Mandatory Conversion Date,
      automatically and without any action on the part of the holder thereof, convert
      into a number of fully paid and nonassessable shares of Common Stock equal
      to
      the quotient of (i) the Liquidation Preference Amount of such Series D-1
      Preferred Stock divided by (ii) the Conversion Price in effect on the Mandatory
      Conversion Date; provided , however ,
      that
      the Company shall not be obligated to issue the shares of Common Stock issuable
      upon conversion of any shares of Series D-1 Preferred Stock unless the Preferred
      Stock certificates representing such shares of Series D-1 Preferred Stock are
      either delivered to the Company or the holder notifies the Company that such
      Preferred Stock certificates have been lost, stolen, or destroyed, and executes
      an agreement satisfactory to the Company to indemnify the Company from any
      loss
      incurred by it in connection therewith. Upon the occurrence of the automatic
      conversion of any Series D-1 Preferred Stock pursuant to this Section 5, the
      holders of the Series D-1 Preferred Stock shall surrender the Preferred Stock
      certificates representing the Series D-1 Preferred Stock for which the Mandatory
      Conversion Date has occurred to the Company and the Company shall deliver the
      shares of Common Stock issuable upon such conversion (in the same manner set
      forth in Section 5(b)(ii)) to the holder within three (3) business days of
      the
      holder's delivery of the applicable Preferred Stock certificates. If the
      certificates of Series D-1 Preferred Stock so surrendered represent more shares
      of Series D-1 Preferred Stock than those being converted, the Company shall
      issue to the holder a new certificate for such number of Series D-1 Preferred
      Stock represented by the surrendered certificates which were not
      converted.





(d) Conversion
      Price .
      The
      term "Conversion Price" shall mean $.0375, subject to adjustment under Section
      5(e) hereof.









(e) Adjustments
      of Conversion Price .





(i)  Adjustments
      for Stock Splits and Combinations .
      If the
      Company shall at any time or from time to time after the Issuance Date, effect
      a
      stock split of the outstanding Common Stock, the Conversion Price shall be
      proportionately decreased. If the Company shall at any time or from time to
      time
      after the Issuance Date, combine the outstanding shares of Common Stock, the
      Conversion Price shall be proportionately increased. Any adjustments under
      this
      Section 5(e)(i) shall be effective at the close of business on the date the
      stock split or combination occurs.





(ii)  Adjustments
      for Certain Dividends and Distributions .
      If the
      Company shall at any time or from time to time after the Issuance Date, make
      or
      issue or set a record date for the determination of holders of Common Stock
      entitled to receive a dividend or other distribution payable in shares of Common
      Stock, then, and in each event, the Conversion Price shall be decreased as
      of
      the time of such issuance or, in the event such record date shall have been
      fixed, as of the close of business on such record date, by multiplying, as
      applicable, the Conversion Price then in effect by a fraction:





(1)  the
      numerator of which shall be the total number of shares of Common Stock issued
      and outstanding immediately prior to the time of such issuance or the close
      of
      business on such record date; and





(2)  the
      denominator of which shall be the total number of shares of Common Stock issued
      and outstanding immediately prior to the time of such issuance or the close
      of
      business on such record date plus the number of shares of Common Stock issuable
      in payment of such dividend or distribution.





(iii)  Adjustment
      for Other Dividends and Distributions .
      If the
      Company shall at any time or from time to time after the Issuance Date, make
      or
      issue or set a record date for the determination of holders of Common Stock
      entitled to receive a dividend or other distribution payable in securities
      of
      the Company other than shares of Common Stock, then, and in each event, an
      appropriate revision to the applicable Conversion Price shall be made and
      provision shall be made (by adjustments of the Conversion Price or otherwise)
      so
      that the holders of Series D-1 Preferred Stock shall receive upon conversions
      thereof, in addition to the number of shares of Common Stock receivable thereon,
      the number of securities of the Company which they would have received had
      their
      Series D-1 Preferred Stock been converted into Common Stock on the date of
      such
      event and had thereafter, during the period from the date of such event to
      and
      including the Conversion Date, retained such securities (together with any
      distributions payable thereon during such period), giving application to all
      adjustments called for during such period under this Section 5(e)(iii) with
      respect to the rights of the holders of the Series D-1 Preferred
      Stock.





(iv)  Adjustments
      for Reclassification, Exchange or Substitution .
      If the
      Common Stock issuable upon conversion of the Series D-1 Preferred Stock at
      any
      time or from time to time after the Issuance Date shall be changed to the same
      or different number of shares of any class or classes of stock, whether by
      reclassification, exchange, substitution or otherwise (other than by way of
      a
      stock split or combination of shares or stock dividends provided for in Sections
      5(e)(i), (ii) and (iii), or a reorganization, merger, consolidation, or sale
      of
      assets provided for in Section 5(e)(v)), then, and in each event, an appropriate
      revision to the Conversion Price shall be made and provisions shall be made
      so
      that the holder of each share of Series D-1 Preferred Stock shall have the
      right
      thereafter to convert such share of Series D-1 Preferred Stock into the kind
      and
      amount of shares of stock and other securities receivable upon reclassification,
      exchange, substitution or other change, by holders of the number of shares
      of
      Common Stock into which such share of Series D-1 Preferred Stock might have
      been
      converted immediately prior to such reclassification, exchange, substitution
      or
      other change, all subject to further adjustment as provided herein.









(v)  Adjustments
      for Reorganization, Merger, Consolidation or Sales of  Assets .
      If at
      any time or from time to time after the Issuance Date there shall be a capital
      reorganization of the Company (other than by way of a stock split or combination
      of shares or stock dividends or distributions provided for in Section 5(e)(i),
      (ii) and (iii), or a reclassification, exchange or substitution of shares
      provided for in Section 5(e)(iv)), or a merger or consolidation of the Company
      with or into another corporation, or the sale of all or substantially all of
      the
      Company's properties or assets to any other person (an "Organic Change"), then
      as a part of such Organic Change an appropriate revision to the Conversion
      Price
      shall be made and provision shall be made so that the holder of each share
      of
      Series D-1 Preferred Stock shall have the right thereafter to convert such
      share
      of Series D-1 Preferred Stock into the kind and amount of shares of stock and
      other securities or property of the Company or any successor corporation
      resulting from the Organic Change which the holder of such share of Series
      D-1
      Preferred Stock would have received if such share of Series D-1 Preferred Stock
      had been converted prior to such Organic Change.





(vi)  Record
      Date .
      In case
      the Company shall take record of the holders of its Common Stock or any other
      Preferred Stock for the purpose of entitling them to subscribe for or purchase
      Common Stock or Convertible Securities, then the date of the issue or sale
      of
      the shares of Common Stock shall be deemed to be such record date.





(f) No
      Impairment .
      The
      Company shall not, by amendment of its Certificate of Incorporation or through
      any reorganization, transfer of assets, consolidation, merger, dissolution,
      issue or sale of securities or any other voluntary action, avoid or seek to
      avoid the observance or performance of any of the terms to be observed or
      performed hereunder by the Company, but will at all times in good faith, assist
      in the carrying out of all the provisions of this Section 5 and in the taking
      of
      all such action as may be necessary or appropriate in order to protect the
      Conversion Rights of the holders of the Series D-1 Preferred Stock against
      impairment. In the event a holder shall elect to convert any shares of Series
      D-1 Preferred Stock as provided herein, the Company cannot refuse conversion
      based on any claim that such holder or any one associated or affiliated with
      such holder has been engaged in any violation of law, unless, an injunction
      from
      a court, on notice, restraining and/or adjoining conversion of all or of said
      shares of Series D-1 Preferred Stock shall have been issued and the Company
      posts a surety bond for the benefit of such holder in an amount equal to 130%
      of
      the Liquidation Preference Amount of the Series D-1 Preferred Stock such holder
      has elected to convert, which bond shall remain in effect until the completion
      of arbitration/litigation of the dispute and the proceeds of which shall be
      payable to such holder in the event it obtains judgment.





(g) Certificates
      as to Adjustments .
      Upon
      occurrence of each adjustment or readjustment of the Conversion Price or number
      of shares of Common Stock issuable upon conversion of the Series D-1 Preferred
      Stock pursuant to this Section 5, the Company at its expense shall promptly
      compute such adjustment or readjustment in accordance with the terms hereof
      and
      furnish to each holder of such Series D-1 Preferred Stock a certificate setting
      forth such adjustment and readjustment, showing in detail the facts upon which
      such adjustment or readjustment is based. The Company shall, upon written
      request of the holder of such affected Series D-1 Preferred Stock, at any time,
      furnish or cause to be furnished to such holder a like certificate setting
      forth
      such adjustments and readjustments, the Conversion Price in effect at the time,
      and the number of shares of Common Stock and the amount, if any, of other
      securities or property which at the time would be received upon the conversion
      of a share of such Series D-1 Preferred Stock. Notwithstanding the foregoing,
      the Company shall not be obligated to deliver a certificate unless such
      certificate would reflect an increase or decrease of at least one percent of
      such adjusted amount.





(h) Issue
      Taxes .
      The
      Company shall pay any and all issue and other taxes, excluding federal, state
      or
      local income taxes, that may be payable in respect of any issue or delivery
      of
      shares of Common Stock on conversion of shares of Series D-1 Preferred Stock
      pursuant thereto; provided , however ,
      that
      the Company shall not be obligated to pay any transfer taxes resulting from
      any
      transfer requested by any holder in connection with any such
      conversion.










(i) Notices .
      All
      notices and other communications hereunder shall be in writing and shall be
      deemed given if delivered personally or by facsimile or three (3) business
      days
      following (x) being mailed by certified or registered mail, postage prepaid,
      return-receipt requested, or (y) delivered to an express mail delivery service
      such as Federal Express, with written receipt by the addressee required, in
      either case addressed to the holder of record at its address appearing on the
      books of the Company. The Company will give written notice to each holder of
      Series D-1 Preferred Stock at least twenty (20) days prior to the date on which
      the Company closes its books or takes a record (I) with respect to any dividend
      or distribution upon the Common Stock, (II) with respect to any pro rata
      subscription offer to holders of Common Stock or (III) for determining rights
      to
      vote with respect to any Organic Change, dissolution, liquidation or winding-up
      and in no event shall such notice be provided to such holder prior to such
      information being made known to the public. The Company will also give written
      notice to each holder of Series D-1 Preferred Stock at least twenty (20) days
      prior to the date on which any Organic Change, dissolution, liquidation or
      winding-up will take place and in no event shall such notice be provided to
      such
      holder prior to such information being made known to the public.





(j) Fractional
      Shares .
      No
      fractional shares of Common Stock shall be issued upon conversion of the Series
      D-1 Preferred Stock. In lieu of any fractional shares to which the holder would
      otherwise be entitled, the Company shall pay cash equal to the product of such
      fraction multiplied by the average of the Closing Bid Prices of the Common
      Stock
      for the five (5) consecutive trading immediately preceding the Voluntary
      Conversion Date or Mandatory Conversion Date, as applicable.





(k) Reservation
      of Common Stock .
      The
      Company shall, so long as any shares of Series D-1 Preferred Stock are
      outstanding, reserve and keep available out of its authorized and unissued
      Common Stock, solely for the purpose of effecting the conversion of the Series
      D-1 Preferred Stock, such number of shares of Common Stock as shall from time
      to
      time be sufficient to effect the conversion of all of the Series D-1 Preferred
      Stock then outstanding.





(l) Retirement
      of Series D-1 Preferred Stock .
      Conversion of Series D-1 Preferred Stock shall be deemed to have been effected
      on the applicable Voluntary Conversion Date or Mandatory Conversion Date. The
      Company shall keep written records of the conversion of the shares of Series
      D-1
      Preferred Stock converted by each holder. A holder shall be required to deliver
      the original certificates representing the shares of Series D-1 Preferred Stock
      upon any conversion of the Series D-1 Preferred Stock represented by such
      certificates.





(m) Regulatory
      Compliance .
      If any
      shares of Common Stock to be reserved for the purpose of conversion of Series
      D-1 Preferred Stock require registration or listing with or approval of any
      governmental authority, stock exchange or other regulatory body under any
      federal or state law or regulation or otherwise before such shares may be
      validly issued or delivered upon conversion, the Company shall, at its sole
      cost
      and expense, in good faith and as expeditiously as possible, endeavor to secure
      such registration, listing or approval, as the case may be.





6.  No
      Preemptive or Redemption Rights .
      Except
      as provided in Section 5 hereof no holder of the Series D-1 Preferred Stock
      shall be entitled to rights to subscribe for, purchase or receive any part
      of
      any new or additional shares of any class, whether now or hereinafter
      authorized, or of bonds or debentures, or other evidences of indebtedness
      convertible into or exchangeable for shares of any class, but all such new
      or
      additional shares of any class, or any bond, debentures or other evidences
      of
      indebtedness convertible into or exchangeable for shares, may be issued and
      disposed of by the Board of Directors on such terms and for such consideration
      (to the extent permitted by law), and to such person or persons as the Board
      of
      Directors in their absolute discretion may deem advisable. Except as provided
      in
      Section 5 neither the Company nor the holder has the right to have the Company
      redeem the Series D-1 Preferred Stock.





7.  Conversion
      Restriction .
      Notwithstanding anything to the contrary set forth in Section 5 of this
      Certificate of Designation, at no time may a holder of shares of Series D-1
      Preferred Stock convert shares of the Series D-1 Preferred Stock if the number
      of shares of Common Stock to be issued pursuant to such conversion would exceed,
      when aggregated with all other shares of Common Stock owned by such holder
      at
      such time, the number of shares of Common Stock which would result in such
      holder owning more than 9.99% of all of the Common Stock outstanding at such
      time; provided , however ,
      that
      upon a holder of Series D-1 Preferred Stock providing the Company with sixty-one
      (61) days notice (pursuant to Section 5(i) hereof) (the "Waiver Notice") that
      such holder would like to waive Section 7(a) of this Certificate of Designation
      with regard to any or all shares of Common Stock issuable upon conversion of
      Series D-1 Preferred Stock, this Section 7(a) shall be of no force or effect
      with regard to those shares of Series D-1 Preferred Stock referenced in the
      Waiver Notice.











8.  Inability
      to Fully Convert .





(a)  Holder's
      Option if Company Cannot Fully Convert .
      If,
      upon the Company's receipt of a Conversion Notice, or on the Mandatory
      Conversion Date, the Company cannot issue shares of Common Stock for any reason,
      including, without limitation, because the Company (x) does not have a
      sufficient number of shares of Common Stock authorized and available or (y)
      is
      otherwise prohibited by applicable law or by the rules or regulations of any
      stock exchange, interdealer quotation system or other self-regulatory
      organization with jurisdiction over the Company or its securities, from issuing
      all of the Common Stock which is to be issued to a holder of Series D-1
      Preferred Stock pursuant to a Conversion Notice or a Mandatory Conversion
      Notice, then the Company shall issue as many shares of Common Stock as it is
      able to issue in accordance with such holder's Conversion Notice or a Mandatory
      Conversion Notice and with respect to the unconverted Series D-1 Preferred
      Stock
      (the "Unconverted Preferred Stock") the holder, solely at such holder's option,
      can elect, at any time after receipt of notice from the Company that there
      is
      Unconverted Preferred Stock, to void the holder's Conversion Notice or the
      Mandatory Conversion Notice as to the number of shares of Common Stock the
      Company is unable to issue and retain or have returned, as the case may be,
      the
      certificates for the shares of the Unconverted Preferred Stock.





In
      the
      event a Holder shall elect to convert any shares of Series D-1 Preferred Stock
      as provided herein, the Company cannot refuse conversion based on any claim
      that
      such Holder or any one associated or affiliated with such Holder has been
      engaged in any violation of law, violation of an agreement to which such Holder
      is a party or for any reason whatsoever, unless, an injunction from a court,
      on
      notice, restraining and or enjoining conversion of all or any of said shares
      of
      Series D-1 Preferred Stock shall have issued.





(b) Mechanics
      of Fulfilling Holder's Election .
      The
      Company shall immediately send via facsimile to a holder of Series D-1 Preferred
      Stock, upon receipt of a facsimile copy of a Conversion Notice from such holder
      which cannot be fully satisfied as described in Section 8(a) above, a notice
      of
      the Company's inability to fully satisfy such holder's Conversion Notice (the
      "Inability to Fully Convert Notice"). Such Inability to Fully Convert Notice
      shall indicate (i) the reason why the Company is unable to fully satisfy such
      holder's Conversion Notice and (ii) the number of shares of Series D-1 Preferred
      Stock which cannot be converted.





(c) Pro-rata
      Conversion .
      In the
      event the Company within a period of ten days receives Voluntary Conversion
      Notices from more than one holder of Series D-1 Preferred Stock and the Company
      can convert some, but not all, of the Series D-1 Preferred Stock required to
      be
      converted as a result of such Voluntary Conversion Notices, the Company shall
      convert from each holder of Series D-1 Preferred Stock electing to have Series
      D-1 Preferred Stock converted within such ten day period, an amount equal to
      the
      number of shares of Series B Preferred Stock such holder elected to have
      converted in such ten day period multiplied by a fraction, the numerator of
      which shall be the number of shares of Series B Preferred Stock such holder
      elected to have converted in such ten day period and the denominator of which
      shall be the total number of shares of Series B Preferred Stock all holders
      elected to have converted in such ten day period. The Company shall not convert
      any Series B Preferred Stock pursuant to a Mandatory Conversion Notice until
      it
      shall have converted all Series B Preferred Stock pursuant to any Voluntary
      Conversion Notice.





9.  Vote
      to Change the Terms of or Issue Preferred Stock .
      The
      affirmative vote at a meeting duly called for such purpose, or the written
      consent without a meeting, of the holders of not less than three-fourths (3/4)
      of the then outstanding shares of Series D-1 Preferred Stock, shall be required
      for any change to this Certificate of Designation or the Company's Certificate
      of Incorporation which would amend, alter, change or repeal any of the powers,
      designations, preferences and rights of the Series D-1 Preferred
      Stock.





10.  Lost
      or Stolen Certificates .
      Upon
      receipt by the Company of evidence satisfactory to the Company of the loss,
      theft, destruction or mutilation of any Preferred Stock Certificates
      representing the shares of Series D-1 Preferred Stock, and, in the case of
      loss,
      theft or destruction, of any indemnification undertaking by the holder to the
      Company and, in the case of mutilation, upon surrender and cancellation of
      the
      Preferred Stock Certificate(s), the Company shall execute and deliver new
      preferred stock certificate(s) of like tenor and date.










11.  Remedies,
      Characterizations, Other Obligations, Breaches and Injunctive  Relief .
      The
      remedies provided in this Certificate of Designation shall be cumulative and
      in
      addition to all other remedies available under this Certificate of Designation,
      at law or in equity (including a decree of specific performance and/or other
      injunctive relief), no remedy contained herein shall be deemed a waiver of
      compliance with the provisions giving rise to such remedy and nothing herein
      shall limit a holder's right to pursue actual damages for any failure by the
      Company to comply with the terms of this Certificate of Designation. Amounts
      set
      forth or provided for herein with respect to conversion and the like (and the
      computation thereof) shall be the amounts to be received by the holder thereof
      and shall not, except as expressly provided herein, be subject to any other
      obligation of the Company (or the performance thereof). The Company acknowledges
      that a breach by it of its obligations hereunder will cause irreparable harm
      to
      the holders of the Series D-1 Preferred Stock and that the remedy at law for
      any
      such breach may be inadequate. The Company therefore agrees that, in the event
      of any such breach or threatened breach, the holders of the Series D-1 Preferred
      Stock shall be entitled, in addition to all other available remedies, to an
      injunction restraining any breach, without the necessity of showing economic
      loss and without any bond or other security being required.





12.  Specific
      Shall Not Limit General; Construction .
      No
      specific provision contained in this Certificate of Designation shall limit
      or
      modify any more general provision contained herein. This Certificate of
      Designation shall be deemed to be jointly drafted by the Company and all holders
      of the Series D-1 Preferred Stock and shall not be construed against any person
      as the drafter hereof.





13.  Failure
      or Indulgence Not Waiver .
      No
      failure or delay on the part of a holder of Series D-1 Preferred Stock in the
      exercise of any power, right or privilege hereunder shall operate as a waiver
      thereof, nor shall any single or partial exercise of any such power, right
      or
      privilege preclude other or further exercise thereof or of any other right,
      power or privilege.





IN
      WITNESS WHEREOF, the undersigned has executed and subscribed this Amended
      Certificate and does affirm the foregoing as true this 28 th day of
      August, 2006.




ORTEC
                  INTERNATIONAL, INC.By:
              /s/
                  Ron LipsteinName:  
                  Ron LipsteinTitle:    
                  Chief Executive Officer












ORTEC
      INTERNATIONAL, INC.


CONVERSION
      NOTICE





Reference
      is made to the Certificate of Designation of the Relative Rights and Preferences
      of the Series D-1 Preferred Stock of Ortec International, Inc. (the "Certificate
      of Designation"). In accordance with and pursuant to the Certificate of
      Designation, the undersigned hereby elects to convert the number of shares
      of
      Series D-1 Preferred Stock, par value $.001 per share (the "Preferred Shares"),
      of Ortec International, Inc., a Delaware corporation (the "Company"), indicated
      below into shares of Common Stock, par value $.001 per share (the "Common
      Stock"), of the Company, by tendering the stock certificate(s) representing
      the
      share(s) of Preferred Shares specified below as of the date specified
      below.




Date
                    of Conversion:
                ______________________________________Number
                    of Preferred Shares to be converted:
                ________________Stock
                    certificate no(s). of Preferred Shares to be converted:
                _______
 
 The
        Common Stock has been sold: YES ____ NO____
 
 Please
        confirm the following information:
 Conversion
                    Price:
                ______________________________________Number
                    of shares of Common Stockto be issued:
                ______________________________________
 
 Number
        of
        shares of Common Stock beneficially owned or deemed beneficially owned by
        the
        Holder on the Date of Conversion determined in accordance with Section 16
        of the Securities
        Exchange Act of 1934, as amended: _________________________
 
 Please
        issue the Common Stock into which the Preferred Shares are being converted
        and,
        if applicable, any check drawn on an account of the Company in the following
        name and to the following address:
 Issue
                    to:
                ____________________________________________________________________________Facsimile
                    Number:
                ______________________________________Authorization:
                ______________________________________By:
                _________________________________Title:
                _________________________________Dated:
  PRICES
          ATTACHED
 
 
  **CERTIFICATE
          OF DESIGNATION OF THE RELATIVE RIGHTS AND PREFERENCES**
 **OF
          THE**
 **SERIES
          D-2 CONVERTIBLE PREFERRED STOCK**
 **OF**
 **ORTEC
          INTERNATIONAL, INC.**
 
 The
          undersigned, the Chief Executive Officer of Ortec International, Inc.,
          a
          Delaware corporation (the “Company”), in accordance with the provisions of the
          Delaware General Corporation Law, does hereby certify that, pursuant to
          the
          authority conferred upon the Board of Directors by the Certificate of
          Incorporation of the Company, the following resolution creating a series
          of
          Series D-2 Convertible Preferred Stock, was duly adopted on June 10,
          2007:
 
 RESOLVED,
          that pursuant to the authority expressly granted to and vested in the Board
          of
          Directors of the Company by provisions of the Certificate of Incorporation
          of
          the Company (the “Certificate of Incorporation”), there hereby is created out of
          the shares of Preferred Stock, par value $.001 per share, of the Company
          authorized in Article IV of the Certificate of Incorporation (the “Preferred
          Stock”), a series of Preferred Stock of the Company, to be named “Series D-2
          Convertible Preferred Stock,” consisting of Twenty Thousand (20,000) shares,
          which series shall have the following designations, powers, preferences
          and
          relative and other special rights and the following qualifications, limitations
          and restrictions:
 
 1.  Designation
          and Rank .
          The
          designation of such series of the Preferred Stock shall be the Series D-2
          Convertible Preferred Stock, par value $.001 per share (the “Series D-2
          Preferred Stock”). The maximum number of shares of Series D-2 Preferred Stock
          shall be Twenty Thousand (20,000) shares. The Series D-2 Preferred Stock
          shall
          rank prior to the common stock, par value $.001 per share (the “Common Stock”)
          for purposes of liquidation preference, and to all other classes and series
          of
          equity securities of the Company that by their terms do not rank senior
          to the
          Series D-2 Preferred Stock (“Junior Stock”). Specifically, the Series D-2
          Preferred Stock shall be subordinate to and rank junior to the Series A
          Preferred Stock, Series A-1 Preferred Stock and Series A-2 Preferred Stock
          and
          all other classes of Preferred Stock of the Company, whether or not outstanding
          as of the date hereof, which by their terms do not rank junior to the Series
          D-2
          Preferred Stock. The Series D-2 Preferred Stock shall be subordinate to
          and rank
          junior to all indebtedness of the Company now or hereafter outstanding.
          The
          Series D-2 Preferred Stock shall be issued only pursuant to the exercise
          of
          Series M Warrants of the Company issued on or about June 18, 2007.
 
 2.  Dividends .
          Whenever the Board of Directors declares a dividend on the Common Stock
          each
          holder of record of a share of Series D-2 Preferred Stock, or any fraction
          of a
          share of Series D-2 Preferred Stock, on the date set by the Board of Directors
          to determine the owners of the Common Stock of record entitled to receive
          such
          dividend (the “Record Date”) shall be entitled to receive, out of any assets at
          the time legally available therefore, an amount equal to such dividend
          declared
          on one share of Common Stock multiplied by the number of shares of Common
          Stock
          into which such share, or such fraction of a share, of Series D-2 Preferred
          Stock could be converted on the Record Date.
 
 3.  Voting
          Rights .
 
 (a)  Class
          Voting Rights .
          The
          Series D-2 Preferred Stock shall have the following class voting rights.
          So long
          as any shares of the Series D-2 Preferred Stock remain outstanding, the
          Company
          shall not, without the affirmative vote or consent of the holders of at
          least
          three-fourths (3/4) of the shares of the Series D-2 Preferred Stock outstanding
          at the time, given in person or by proxy, either in writing or at a meeting,
          in
          which the holders of the Series D-2 Preferred Stock vote separately as
          a class:
          (i) amend, alter or repeal the provisions of the Series D-2 Preferred Stock
          so
          as to adversely affect any right, preference, privilege or voting power
          of the
          Series D-2 Preferred Stock; or (ii) effect any distribution with respect
          to
          Junior Stock except that the Company may effect a distribution on the Common
          stock if the Company makes a like kind distribution on each share, or fraction
          of a share, of Series D-2 Preferred Stock in an amount equal to the distribution
          on one share of Common Stock multiplied by the number of shares of Common
          Stock
          into which such one share, or such fraction of a share, of Series D-2 Preferred
          Stock can be converted at the time of such distribution.
 
 
  (b)  General
          Voting Rights .
          Except
          with respect to transactions upon which the Series D-2 Preferred Stock
          shall be
          entitled to vote separately as a class pursuant to Section 3(a) above,
          the
          Series D-2 Preferred Stock shall have no voting rights. The Common Stock
          into
          which the Series D-2 Preferred Stock is convertible shall, upon issuance,
          have
          all of the same voting rights as other issued and outstanding Common Stock
          of
          the Company.
  4.  Liquidation
          Preference .
 
 (a)  In
          the
          event of the liquidation, dissolution or winding up of the affairs of the
          Company, whether voluntary or involuntary, after payment or provision for
          payment of the debts and other liabilities of the Company, the holders
          of shares
          of the Series D-2 Preferred Stock then outstanding shall be entitled to
          receive,
          out of the assets of the Company, whether such assets are capital or surplus
          of
          any nature, an amount equal an amount per share of Series D-2 Preferred
          Stock
          calculated by taking the total amount available for distribution to holders
          of
          all the Company’s outstanding Common Stock before deduction of any preference
          payments for the Series D-2 Preferred Stock, divided by the total of (x)
          all of
          the then outstanding shares of the Company’s Common Stock, plus (y) all of the
          shares of the Company’s Common Stock into which all of the outstanding shares of
          the Series D-2 Preferred Stock can be converted (the “Liquidation Preference
          Amount”) before any payment shall be made or any assets distributed to the
          holders of the Common Stock or any other Junior Stock. If the assets of
          the
          Company are sufficient to pay in part, but are not sufficient to pay in
          full,
          the Liquidation Preference Amount payable to the holders of outstanding
          shares
          of the Series D-2 Preferred Stock and any series of preferred stock or
          any other
          class of stock on a parity, as to rights on liquidation, dissolution or
          winding
          up, with the Series D-2 Preferred Stock, then all of said assets available
          to
          pay a part of the Liquidation Preference Amount to the holders of the
          outstanding shares of Series D-2 Preferred Stock and the other classes
          of stock
          on a parity as to rights on liquidation, dissolution or winding up, will
          be
          distributed among the holders of the Series D-2 Preferred Stock and the
          other
          classes of stock on a parity with the Series D-2 Preferred Stock, if any,
          ratably in accordance with the respective amounts that would be payable
          on such
          shares if all amounts payable thereon were paid in full. The liquidation
          payment
          with respect to each outstanding fractional share of Series D-2 Preferred
          Stock
          shall be equal to a ratably proportionate amount of the liquidation payment
          with
          respect to each outstanding share of Series D-2 Preferred Stock. All payments
          for which this Section 4(a) provides shall be in cash, property (valued
          at its
          fair market value as determined by an independent appraiser reasonably
          acceptable to the holders of a majority of the Series D-2 Preferred Stock),
          or a
          combination thereof; provided , however ,
          that no
          cash shall be paid to holders of Junior Stock unless each holder of the
          outstanding shares of Series D-2 Preferred Stock has been paid in cash
          the full
          Liquidation Preference Amount to which such holder is entitled as provided
          herein. After payment of the full Liquidation Preference Amount to which
          each
          holder is entitled, such holders of shares of Series D-2 Preferred Stock
          will
          not be entitled to any further participation as such in any distribution
          of the
          assets of the Company.
 
 (b)  A
          consolidation or merger of the Company with or into any other corporation
          or
          corporations, or a sale of all or substantially all of the assets of the
          Company, or the effectuation by the Company of a transaction or series
          of
          transactions in which more than 50% of the voting shares of the Company
          is
          disposed of or conveyed, or other acquisition type transaction shall be,
          at the
          election of a majority of the holders of the Series D-2 Preferred Stock,
          deemed
          to be a liquidation, dissolution, or winding up within the meaning of this
          Section 4. In the event of the merger or consolidation of the Company with
          or
          into another corporation that is not treated as a liquidation pursuant
          to this
          Section 4(b), the Series D-2 Preferred Stock shall maintain its relative
          powers,
          designations and preferences provided for herein and no merger shall result
          inconsistent therewith.
 
 (c)  Written
          notice of any voluntary or involuntary liquidation, dissolution or winding
          up of
          the affairs of the Company, stating a payment date and the place where
          the
          distributable amounts shall be payable, shall be given by mail, postage
          prepaid,
          no less than forty-five (45) days prior to the payment date stated therein,
          to
          the holders of record of the Series D-2 Preferred Stock at their respective
          addresses as the same shall appear on the books of the Company.
 
 
  5.  Conversion .
          The
          holder of Series D-2 Preferred Stock shall have the following conversion
          rights
          (the “Conversion Rights”):
 
 (a)  Right
          to Convert .
          At any
          time on or after the Issuance Date, the holder of any such shares of Series
          D-2
          Preferred Stock may, at such holder’s option, subject to the limitations set
          forth in Section 7 herein, elect to convert (a “Voluntary Conversion”) all or
          any portion of the shares of Series D-2 Preferred Stock held by such person
          into
          a number of fully paid and nonassessable shares of Common Stock at a conversion
          rate of One Thousand (1,000) shares of Common Stock for each share of Preferred
          Stock (subject to adjustments set forth in Section 7(e) herein, the “Conversion
          Rate”) . The Company shall keep written records of the conversion of the shares
          of Series D-2 Preferred Stock converted by each holder. A holder shall
          be
          required to deliver the original certificates representing the shares of
          Series
          D-2 Preferred Stock upon any conversion of the Series D-2 Preferred Stock
          as
          provided in Section 5(b) below.
 
 (b)  Mechanics
          of Voluntary Conversion .
          The
          Voluntary Conversion of Series D-2 Preferred Stock shall be conducted in
          the
          following manner:
 
 (i)  Holder’s
          Delivery Requirements .
          To
          convert Series D-2 Preferred Stock into full shares of Common Stock on
          any date
          (the “Voluntary Conversion Date”), the holder thereof shall (A) transmit by
          facsimile (or otherwise deliver), for receipt on or prior to 5:00 p.m.,
          New York
          time on such date, a copy of a fully executed notice of conversion in the
          form
          attached hereto as Exhibit
          I (the
“Conversion Notice”), to the Company, and (B) with respect to the conversion of
          shares of Series D-2 Preferred Stock held by any holder, such holder shall
          surrender to a common carrier for delivery to the Company as soon as practicable
          following such Conversion Date, but in no event later than six (6) business
          days
          after such date, the original certificates representing the shares of Series
          D-2
          Preferred Stock being converted (or an indemnification undertaking with
          respect
          to such shares in the case of their loss, theft or destruction) (the “Preferred
          Stock Certificates”).
 
 (ii)  Company’s
          Response .
          Upon
          receipt by the Company of a facsimile copy of a Conversion Notice, the
          Company
          shall immediately send, via facsimile, a confirmation of receipt of such
          Conversion Notice to such holder and the Company or its designated transfer
          agent (the “Transfer Agent”), as applicable, shall, within three (3) business
          days following the date of receipt by the Company of the certificate
          representing the shares of Series D-2 Preferred Stock being converted,
          (x) issue
          and deliver to the Depository Trust Company (“ DTC ”)
          account on the holder’s behalf via the Deposit Withdrawal Agent Commission
          System (“ DWAC ”)
          as
          specified in the Conversion Notice, registered in the name of the holder
          or its
          designee, for the number of shares of Common Stock to which the holder
          shall be
          entitled, and (y) if the certificate so surrendered represents more shares
          of
          Series D-2 Preferred Stock than those being converted, issue and deliver
          to the
          holder a new certificate for such number of shares of Series D-2 Preferred
          Stock
          represented by the surrendered certificate which were not
          converted.
 
 (iii)  Intentionally
          Omitted .
 
 (iv)  Record
          Holder .
          The
          person or persons entitled to receive the shares of Common Stock issuable
          upon a
          conversion of the Series D-2 Preferred Stock shall be treated for all purposes
          as the record holder or holders of such shares of Common Stock on the Conversion
          Date.
 
 (v)  Company's
          Failure to Timely Convert .
          If
          within three (3) business days of the Company's receipt of the Conversion
          Notice
          (the "Share Delivery Period") the Company shall fail to issue and deliver
          to a
          holder the number of shares of Common Stock to which such holder is entitled
          upon such holder's conversion of the Series D-2 Preferred Stock (a "Conversion
          Failure"), in addition to all other available remedies which such holder
          may
          pursue hereunder, the Company shall pay additional damages to such holder
          on
          each business day after such third (3 rd )
          business day that such conversion is not timely effected in an amount equal
          0.5%
          of the product of (A) the sum of the number of shares of Common Stock not
          issued
          to the holder on a timely basis pursuant to Section 5(b)(ii) and to which
          such
          holder is entitled and (B) the closing bid price of the Common Stock on
          the last
          possible date which the Company could have issued such Common Stock to
          such
          holder without violating Section 5(b)(ii). If the Company fails to pay
          the
          additional damages set forth in this Section 5(b)(v) within five (5) business
          days of the date incurred, then such payment shall bear interest at the
          rate of
          2% per month (pro rated for partial months) until such payments are
          made.
 
 
  (c)  Mandatory
          Conversion .
 
 (i)  Upon
          the
          Company’s written request a holder of Series D-2 Preferred Stock shall advise
          the Company in writing the number of shares of Common Stock that are
          beneficially owned (“Beneficially Owned”, as defined in Section 13(d) of the
          Securities and Exchange Act of 1934 and the rules promulgated thereunder)
          by
          such holder. If the shares of Common Stock Beneficially Owned by such holder
          amount to less than 9.999% of the Shares of Common Stock outstanding at
          such
          time, the Company may, at its option, compel such holder, by written notice
          to
          such holder (the “Mandatory Conversion Notice”), to convert such portion of the
          Series D-2 Preferred Stock owned by him into so many shares of Common Stock
          so
          that the total number of shares of Common Stock Beneficially Owned by such
          holder after such conversion shall equal up to 9.999%, but not more, of
          the
          shares of Common Stock outstanding after such conversion. A Mandatory Conversion
          Date shall not occur more than once every 30 days.
 
 (ii)  As
          used
          herein, a “Mandatory Conversion Date” shall be the date when the Mandatory
          Conversion Notice shall be deemed delivered pursuant to Section 5(i). The
          Mandatory Conversion Date and the Voluntary Conversion Date collectively
          are
          referred to in this Certificate of Designation as the “Conversion
          Date.”
 
 (iii)  Each
          share of Series D-2 Preferred Stock required to be converted pursuant to
          the
          Mandatory Conversion Notice shall on the Mandatory Conversion Date,
          automatically and without any action on the part of the holder thereof,
          convert
          into a number of fully paid and nonassessable shares of Common Stock based
          on
          the Conversion Rate in effect on the Mandatory Conversion Date; provided , however ,
          that
          the Company shall not be obligated to issue the shares of Common Stock
          issuable
          upon conversion of any shares of Series D-2 Preferred Stock unless the
          Preferred
          Stock certificates representing such shares of Series D-2 Preferred Stock
          are
          either delivered to the Company or the holder notifies the Company that
          such
          Preferred Stock certificates have been lost, stolen, or destroyed, and
          executes
          an agreement satisfactory to the Company to indemnify the Company from
          any loss
          incurred by it in connection therewith. Upon the occurrence of the automatic
          conversion of the Series D-2 Preferred Stock pursuant to this Section 5,
          the
          holders of the Series D-2 Preferred Stock shall surrender the Preferred
          Stock
          certificates representing the Series D-2 Preferred Stock for which the
          Mandatory
          Conversion Date has occurred to the Company and the Company shall deliver
          the
          shares of Common Stock issuable upon such conversion (in the same manner
          set
          forth in Section 5(b)(ii)) to the holder within three (3) business days
          of the
          holder’s delivery of the applicable Preferred Stock certificates. If the
          certificates of Series D-2 Preferred Stock so surrendered represent more
          shares
          of Series D-2 Preferred Stock than those being converted, the Company shall
          issue to the holder a new certificate for such number of Series D-2 Preferred
          Stock represented by the surrendered certificates which were not
          converted.
 
 (d)  Intentionally
          Omitted .
 
 (e)  Adjustments
          of Conversion Rate .
 
 (i)  Adjustments
          for Stock Splits and Combinations .
          If the
          Company shall at any time or from time to time after the Issuance Date,
          effect a
          stock split of the outstanding Common Stock, the Conversion Rate shall
          be
          proportionately increased. If the Company shall at any time or from time
          to time
          after the Issuance Date, combine the outstanding shares of Common Stock,
          the
          Conversion Rate shall be proportionately decreased. Any adjustments under
          this
          Section 5(e)(i) shall be effective at the close of business on the date
          the
          stock split or combination occurs.
 
 
  (ii)  Adjustments
          for Certain Dividends and Distributions .
          If the
          Company shall at any time or from time to time after the Issuance Date,
          make or
          issue or set a record date for the determination of holders of Common Stock
          entitled to receive a dividend or other distribution payable in shares
          of Common
          Stock, then, and in each event, the Conversion Rate shall be increased
          as of the
          time of such issuance or, in the event such record date shall have been
          fixed,
          as of the close of business on such record date, by multiplying, as applicable,
          the Conversion Rate then in effect by a fraction:
 
 (1)  the
          numerator of which shall be the total number of shares of Common Stock
          issued
          and outstanding immediately after such issuance on the close of business
          on such
          record date; and
 
 (2)  the
          denominator of which shall be the total number of shares of Common Stock
          issued
          and outstanding immediately prior to the time of such issuance on the close
          of
          business on such record date.
 
 (iii)  Adjustment
          for Other Dividends and Distributions .
          If the
          Company shall at any time or from time to time after the Issuance Date,
          make or
          issue or set a record date for the determination of holders of Common Stock
          entitled to receive a dividend or other distribution payable in securities
          of
          the Company other than shares of Common Stock, then, and in each event,
          an
          appropriate revision to the applicable Conversion Rate shall be made and
          provision shall be made (by adjustments of the Conversion Rate or otherwise)
          so
          that the holders of Series D-2 Preferred Stock shall receive upon conversions
          thereof, in addition to the number of shares of Common Stock receivable
          thereon,
          the number of securities of the Company which they would have received
          had their
          Series D-2 Preferred Stock been converted into Common Stock on the date
          of such
          event and had thereafter, during the period from the date of such event
          to and
          including the Conversion Date, retained such securities (together with
          any
          distributions payable thereon during such period), giving application to
          all
          adjustments called for during such period under this Section 5(e)(iii)
          with
          respect to the rights of the holders of the Series D-2 Preferred
          Stock.
 
 (iv)  Adjustments
          for Reclassification, Exchange or Substitution .
          If the
          Common Stock issuable upon conversion of the Series D-2 Preferred Stock
          at any
          time or from time to time after the Issuance Date shall be changed to the
          same
          or different number of shares of any class or classes of stock, whether
          by
          reclassification, exchange, substitution or otherwise (other than by way
          of a
          stock split or combination of shares or stock dividends provided for in
          Sections
          5(e)(i), (ii) and (iii), or a reorganization, merger, consolidation, or
          sale of
          assets provided for in Section 5(e)(v)), then, and in each event, an appropriate
          revision to the Conversion Rate shall be made and provisions shall be made
          so
          that the holder of each share of Series D-2 Preferred Stock shall have
          the right
          thereafter to convert such share of Series D-2 Preferred Stock into the
          kind and
          amount of shares of stock and other securities receivable upon reclassification,
          exchange, substitution or other change, by holders of the number of shares
          of
          Common Stock into which such share of Series D-2 Preferred Stock might
          have been
          converted immediately prior to such reclassification, exchange, substitution
          or
          other change, all subject to further adjustment as provided herein.
 
 (v)  Adjustments
          for Reorganization, Merger, Consolidation or Sales of  Assets .
          If at
          any time or from time to time after the Issuance Date there shall be a
          capital
          reorganization of the Company (other than by way of a stock split or combination
          of shares or stock dividends or distributions provided for in Section 5(e)(i),
          (ii) and (iii), or a reclassification, exchange or substitution of shares
          provided for in Section 5(e)(iv)), or a merger or consolidation of the
          Company
          with or into another corporation, or the sale of all or substantially all
          of the
          Company’s properties or assets to any other person (an “Organic Change”), then
          as a part of such Organic Change an appropriate revision to the Conversion
          Rate
          shall be made and provision shall be made so that the holder of each share
          of
          Series D-2 Preferred Stock shall have the right thereafter to convert such
          share
          of Series D-2 Preferred Stock into the kind and amount of shares of stock
          and
          other securities or property of the Company or any successor corporation
          resulting from the Organic Change which the holder of such share of Series
          D-2
          Preferred Stock would have received if such share of Series D-2 Preferred
          Stock
          had been converted prior to such Organic Change.
 
 (vi)  Record
          Date .
          In case
          the Company shall take record of the holders of its Common Stock or any
          other
          Preferred Stock for the purpose of entitling them to subscribe for or purchase
          Common Stock or Convertible Securities, then the date of the issue or sale
          of
          the shares of Common Stock shall be deemed to be such record date.
 
 
  (f)  No
          Impairment .
          The
          Company shall not, by amendment of its Certificate of Incorporation or
          through
          any reorganization, transfer of assets, consolidation, merger, dissolution,
          issue or sale of securities or any other voluntary action, avoid or seek
          to
          avoid the observance or performance of any of the terms to be observed
          or
          performed hereunder by the Company, but will at all times in good faith,
          assist
          in the carrying out of all the provisions of this Section 5 and in the
          taking of
          all such action as may be necessary or appropriate in order to protect
          the
          Conversion Rights of the holders of the Series D-2 Preferred Stock against
          impairment. In the event a holder shall elect to convert any shares of
          Series
          D-2 Preferred Stock as provided herein, the Company cannot refuse conversion
          based on any claim that such holder or any one associated or affiliated
          with
          such holder has been engaged in any violation of law, unless, an injunction
          from
          a court, on notice, restraining and/or adjoining conversion of all or of
          said
          shares of Series D-2 Preferred Stock shall have been issued.
 
 (g)  Certificates
          as to Adjustments .
          Upon
          occurrence of each adjustment or readjustment of the Conversion Rate or
          number
          of shares of Common Stock issuable upon conversion of the Series D-2 Preferred
          Stock pursuant to this Section 5, the Company at its expense shall promptly
          compute such adjustment or readjustment in accordance with the terms hereof
          and
          furnish to each holder of such Series D-2 Preferred Stock a certificate
          setting
          forth such adjustment and readjustment, showing in detail the facts upon
          which
          such adjustment or readjustment is based. The Company shall, upon written
          request of the holder of such affected Series D-2 Preferred Stock, at any
          time,
          furnish or cause to be furnished to such holder a like certificate setting
          forth
          such adjustments and readjustments, the Conversion Rate in effect at the
          time,
          and the number of shares of Common Stock and the amount, if any, of other
          securities or property which at the time would be received upon the conversion
          of a share of such Series D-2 Preferred Stock. Notwithstanding the foregoing,
          the Company shall not be obligated to deliver a certificate unless such
          certificate would reflect an increase or decrease of at least one percent
          of
          such adjusted amount.
 
 (h)  Issue
          Taxes .
          The
          Company shall pay any and all issue and other taxes, excluding federal,
          state or
          local income taxes, that may be payable in respect of any issue or delivery
          of
          shares of Common Stock on conversion of shares of Series D-2 Preferred
          Stock
          pursuant hereto; provided , however ,
          that
          the Company shall not be obligated to pay any transfer taxes resulting
          from any
          transfer requested by any holder in connection with any such
          conversion.
 
 (i)  Notices .
          All
          notices and other communications hereunder shall be in writing and shall
          be
          deemed given if delivered personally or by facsimile or three (3) business
          days
          following (x) being mailed by certified or registered mail, postage prepaid,
          return-receipt requested, or (y) delivered to an express mail delivery
          service
          such as Federal Express, with written receipt by the addressee required,
          in
          either case addressed to the holder of record at its address appearing
          on the
          books of the Company. The Company will give written notice to each holder
          of
          Series D-2 Preferred Stock at least twenty (20) days prior to the date
          on which
          the Company closes its books or takes a record (I) with respect to any
          dividend
          or distribution upon the Common Stock, (II) with respect to any pro rata
          subscription offer to holders of Common Stock or (III) for determining
          rights to
          vote with respect to any Organic Change, dissolution, liquidation or winding-up
          and in no event shall such notice be provided to such holder prior to such
          information being made known to the public. The Company will also give
          written
          notice to each holder of Series D-2 Preferred Stock at least twenty (20)
          days
          prior to the date on which any Organic Change, dissolution, liquidation
          or
          winding-up will take place and in no event shall such notice be provided
          to such
          holder prior to such information being made known to the public.
 
 (j)  Fractional
          Shares .
          No
          fractional shares of Common Stock shall be issued upon conversion of the
          Series
          D-2 Preferred Stock. In lieu of any fractional shares to which the holder
          would
          otherwise be entitled, the Company, at its option, shall pay cash equal
          to the
          product of such fraction multiplied by the average of the closing bid prices
          of
          the Common Stock for the five (5) consecutive trading immediately preceding
          the
          Voluntary Conversion Date or Mandatory Conversion Date, as applicable,
          or (ii)
          issue one whole share of Common Stock to the holder.
 
 
  (k)  Reservation
          of Common Stock .
          The
          Company shall, so long as any shares of Series D-2 Preferred Stock are
          outstanding, reserve and keep available out of its authorized and unissued
          Common Stock, solely for the purpose of effecting the conversion of the
          Series
          D-2 Preferred Stock, such number of shares of Common Stock as shall from
          time to
          time be sufficient to effect the conversion of all of the Series D-2 Preferred
          Stock then outstanding (without giving effect to the limitations set forth
          in
          Section 7 hereof).
 
 (l)  Retirement
          of Series D-2 Preferred Stock .
          Conversion of Series D-2 Preferred Stock shall be deemed to have been effected
          on the applicable Voluntary Conversion Date or Mandatory Conversion Date.
          The
          Company shall keep written records of the conversion of the shares of Series
          D-2
          Preferred Stock converted by each holder. A holder shall be required to
          deliver
          the original certificates representing the shares of Series D-2 Preferred
          Stock
          upon any conversion of the Series D-2 Preferred Stock represented by such
          certificates.
 
 (m)  Regulatory
          Compliance .
          If any
          shares of Common Stock to be reserved for the purpose of conversion of
          Series
          D-2 Preferred Stock require registration or listing with or approval of
          any
          governmental authority, stock exchange or other regulatory body under any
          federal or state law or regulation or otherwise before such shares may
          be
          validly issued or delivered upon conversion, the Company shall, at its
          sole cost
          and expense, in good faith and as expeditiously as possible, endeavor to
          secure
          such registration, listing or approval, as the case may be.
 
 6.  No
          Preemptive or Redemption Rights .
          Except
          as provided in Section 5 hereof no holder of the Series D-2 Preferred Stock
          shall be entitled to rights to subscribe for, purchase or receive any part
          of
          any new or additional shares of any class, whether now or hereafter authorized,
          or of bonds or debentures, or other evidences of indebtedness convertible
          into
          or exchangeable for shares of any class, but all such new or additional
          shares
          of any class, or any bond, debentures or other evidences of indebtedness
          convertible into or exchangeable for shares, may be issued and disposed
          of by
          the Board of Directors on such terms and for such consideration (to the
          extent
          permitted by law), and to such person or persons as the Board of Directors
          in
          their absolute discretion may deem advisable. Except as provided in Section
          5
          neither the Company nor the holder has the right to have the Company redeem
          the
          Series D-2 Preferred Stock.
 
 7.  Conversion
          Restriction .
          Notwithstanding anything to the contrary set forth in Section 5 of this
          Certificate of Designation, at no time may a holder of shares of Series
          D-2
          Preferred Stock convert shares of the Series D-2 Preferred Stock if the
          number
          of shares of Common Stock to be issued pursuant to such conversion would
          exceed,
          when aggregated with all other shares of Common Stock owned by such holder
          at
          such time, the number of shares of Common Stock which would result in such
          holder beneficially owning (as determined in accordance with Section 13(d)
          of the Securities Exchange Act of 1934, as amended, and the rules thereunder)
          more than 9.99% of all of the Common Stock outstanding at such time; provided , however ,
          that
          upon a holder of Series D-2 Preferred Stock providing the Company with
          sixty-one
          (61) days notice (pursuant to Section 5(i) hereof) (the “Waiver Notice”) that
          such holder would like to waive Section 7(a) of this Certificate of Designation
          with regard to any or all shares of Common Stock issuable upon conversion
          of
          Series D-2 Preferred Stock, this Section 7(a) shall be of no force or effect
          with regard to those shares of Series D-2 Preferred Stock referenced in
          the
          Waiver Notice.
  8.  Inability
          to Fully Convert .
 
 (a)  Holder’s
          Option if Company Cannot Fully Convert .
          If,
          upon the Company’s receipt of a Conversion Notice, or on the Mandatory
          Conversion Date, the Company cannot issue shares of Common Stock for any
          reason,
          including, without limitation, because the Company (x) does not have a
          sufficient number of shares of Common Stock authorized and available or
          (y) is
          otherwise prohibited by applicable law or by the rules or regulations of
          any
          stock exchange, interdealer quotation system or other self-regulatory
          organization with jurisdiction over the Company or its securities, from
          issuing
          all of the Common Stock which is to be issued to a holder of Series D-2
          Preferred Stock pursuant to a Conversion Notice or a Mandatory Conversion
          Notice, then the Company shall issue as many shares of Common Stock as
          it is
          able to issue in accordance with such holder’s Conversion Notice or a Mandatory
          Conversion Notice and with respect to the unconverted Series D-2 Preferred
          Stock
          (the “Unconverted Preferred Stock”) the holder, solely at such holder’s option,
          can elect, at any time after receipt of notice from the Company that there
          is
          Unconverted Preferred Stock, to void the holder’s Conversion Notice or the
          Mandatory Conversion Notice as to the number of shares of Common Stock
          the
          Company is unable to issue and retain or have returned, as the case may
          be, the
          certificates for the shares of the Unconverted Preferred Stock.
 
 
  In
          the
          event a Holder shall elect to convert any shares of Series D-2 Preferred
          Stock
          as provided herein, the Company cannot refuse conversion based on any claim
          that
          such Holder or any one associated or affiliated with such Holder has been
          engaged in any violation of law, violation of an agreement to which such
          Holder
          is a party or for any reason whatsoever, unless, an injunction from a court,
          on
          notice, restraining and or enjoining conversion of all or any of said shares
          of
          Series D-2 Preferred Stock shall have issued.
 
 (b)  Mechanics
          of Fulfilling Holder’s Election .
          The
          Company shall immediately send via facsimile to a holder of Series D-2
          Preferred
          Stock, upon receipt of a facsimile copy of a Conversion Notice from such
          holder
          which cannot be fully satisfied as described in Section 8(a) above, a notice
          of
          the Company’s inability to fully satisfy such holder’s Conversion Notice (the
“Inability to Fully Convert Notice”). Such Inability to Fully Convert Notice
          shall indicate (i) the reason why the Company is unable to fully satisfy
          such
          holder’s Conversion Notice and (ii) the number of shares of Series D-2 Preferred
          Stock which cannot be converted.
 
 (c)  Pro-rata
          Conversion .
          In the
          event the Company within a period of ten days receives Voluntary Conversion
          Notices from more than one holder of Series D-2 Preferred Stock and the
          Company
          can convert some, but not all, of the Series D-2 Preferred Stock required
          to be
          converted as a result of such Voluntary Conversion Notices, the Company
          shall
          convert from each holder of Series D-2 Preferred Stock electing to have
          Series
          D-2 Preferred Stock converted within such ten day period, an amount equal
          to the
          number of shares of Series D-2 Preferred Stock the Company can convert
          in such
          ten day period multiplied by a fraction, the numerator of which shall be
          the
          number of shares of Series D-2 Preferred Stock such holder elected to have
          converted in such ten day period and the denominator of which shall be
          the total
          number of shares of Series D-2 Preferred Stock all holders elected to have
          converted in such ten day period. The Company shall not convert any Series
          D-2
          Preferred Stock pursuant to a Mandatory Conversion Notice until it shall
          have
          converted all Series D-2 Preferred Stock pursuant to any Voluntary Conversion
          Notice.
 
 9.  Vote
          to Change the Terms of or Issue Preferred Stock .
          The
          affirmative vote at a meeting duly called for such purpose, or the written
          consent without a meeting, of the holders of not less than three-fourths
          (3/4)
          of the then outstanding shares of Series D-2 Preferred Stock, shall be
          required
          for any change to this Certificate of Designation or the Company’s Certificate
          of Incorporation which would amend, alter, change or repeal any of the
          powers,
          designations, preferences and rights of the Series D-2 Preferred
          Stock.
 
 10.  Lost
          or Stolen Certificates .
          Upon
          receipt by the Company of evidence satisfactory to the Company of the loss,
          theft, destruction or mutilation of any Preferred Stock Certificates
          representing the shares of Series D-2 Preferred Stock, and, in the case
          of loss,
          theft or destruction, of any indemnification undertaking by the holder
          to the
          Company and, in the case of mutilation, upon surrender and cancellation
          of the
          Preferred Stock Certificate(s), the Company shall execute and deliver new
          preferred stock certificate(s) of like tenor and date.
 
 11.  Remedies,
          Characterizations, Other Obligations, Breaches and Injunctive  Relief .
          The
          remedies provided in this Certificate of Designation shall be cumulative
          and in
          addition to all other remedies available under this Certificate of Designation,
          at law or in equity (including a decree of specific performance and/or
          other
          injunctive relief), no remedy contained herein shall be deemed a waiver
          of
          compliance with the provisions giving rise to such remedy and nothing herein
          shall limit a holder’s right to pursue actual damages for any failure by the
          Company to comply with the terms of this Certificate of Designation. Amounts
          set
          forth or provided for herein with respect to conversion and the like (and
          the
          computation thereof) shall be the amounts to be received by the holder
          thereof
          and shall not, except as expressly provided herein, be subject to any other
          obligation of the Company (or the performance thereof). The Company acknowledges
          that a breach by it of its obligations hereunder will cause irreparable
          harm to
          the holders of the Series D-2 Preferred Stock and that the remedy at law
          for any
          such breach may be inadequate. The Company therefore agrees that, in the
          event
          of any such breach or threatened breach, the holders of the Series D-2
          Preferred
          Stock shall be entitled, in addition to all other available remedies, to
          an
          injunction restraining any breach, without the necessity of showing economic
          loss and without any bond or other security being required.
 
 
  12.  Specific
          Shall Not Limit General; Construction .
          No
          specific provision contained in this Certificate of Designation shall limit
          or
          modify any more general provision contained herein. This Certificate of
          Designation shall be deemed to be jointly drafted by the Company and all
          initial
          purchasers of the Series A Convertible Preferred Stock and Series M Warrants
          of
          the Company which is exercisable into Series D-2 Preferred Stock and shall
          not
          be construed against any person as the drafter hereof.
 
 13.  Failure
          or Indulgence Not Waiver .
          No
          failure or delay on the part of a holder of Series D-2 Preferred Stock
          in the
          exercise of any power, right or privilege hereunder shall operate as a
          waiver
          thereof, nor shall any single or partial exercise of any such power, right
          or
          privilege preclude other or further exercise thereof or of any other right,
          power or privilege.
 
 IN
          WITNESS WHEREOF, the undersigned has executed and subscribed this Amended
          Certificate and does affirm the foregoing as true this 14 th day of
          June, 2007.
  ORTEC
                      INTERNATIONAL, INC.By:
                  /s/
                      Ron LipsteinName:
                  Ron
                      LipsteinTitle:
                  Chief
                      Executive Officer
  ORTEC
          INTERNATIONAL, INC.
 CONVERSION
          NOTICE
 
 Reference
          is made to the Certificate of Designation of the Relative Rights and Preferences
          of the Series D-2 Preferred Stock of Ortec International, Inc. (the “Certificate
          of Designation”). In accordance with and pursuant to the Certificate of
          Designation, the undersigned hereby elects to convert the number of shares
          of
          Series D-2 Preferred Stock, par value $.001 per share (the “Preferred Shares”),
          of Ortec International, Inc., a Delaware corporation (the “Company”), indicated
          below into shares of Common Stock, par value $.001 per share (the “Common
          Stock”), of the Company, by tendering the stock certificate(s) representing the
          share(s) of Preferred Shares specified below as of the date specified
          below.
 Date
                          of Conversion:
                      ______________________________________Number
                          of Preferred Shares to be converted:
                      ________________Stock
                          certificate no(s). of Preferred Shares to be converted:
                      _______
 
 The
              Common Stock have been sold: YES ____  NO____
 
 Please
              confirm the following information:
 Conversion
                          Rate:
                      ______________________________________Number
                          of shares of Common Stockto be issued:
                      ______________________________________
 
 Number
              of
              shares of Common Stock beneficially owned or deemed beneficially owned by
              the
              Holder on the Date of Conversion determined in accordance with Section
              16 of the Securities
              Exchange Act of 1934, as amended: _________________________
 
 Please
              issue the Common Stock into which the Preferred Shares are being converted
              and,
              if applicable, any check drawn on an account of the Company in the
              following
              name and to the following address:
 Issue
                          to:
                      ____________________________________________________________________________Facsimile
                          Number:
                      ______________________________________Authorization:
                      ______________________________________By:
                      _________________________________Title:
                      _________________________________Dated:




**CERTIFICATE
      OF DESIGNATION OF THE RELATIVE RIGHTS AND PREFERENCES**


**OF
      THE**


**SERIES
      A CONVERTIBLE PREFERRED STOCK**


**OF**


**ORTEC
      INTERNATIONAL, INC.**





The
      undersigned, the Chief Executive Officer of Ortec International, Inc., a
      Delaware corporation (the “Company”), in accordance with the provisions of the
      Delaware General Corporation Law, does hereby certify that, pursuant to the
      authority conferred upon the Board of Directors by the Certificate of
      Incorporation of the Company, the following resolution creating a series of
      Series A Convertible Preferred Stock, was duly adopted on June 10,
      2007:





RESOLVED,
      that pursuant to the authority expressly granted to and vested in the Board
      of
      Directors of the Company by provisions of the Certificate of Incorporation
      of
      the Company (the “Certificate of Incorporation”), there hereby is created out of
      the shares of Preferred Stock, par value $.001 per share, of the Company
      authorized in Article IV of the Certificate of Incorporation (the “Preferred
      Stock”), a series of Preferred Stock of the Company, to be named “Series A
      Convertible Preferred Stock,” consisting of two thousand (2,000) shares, which
      series shall have the following designations, powers, preferences and relative
      and other special rights and the following qualifications, limitations and
      restrictions:





1.  Designation
      and Rank .





(a) Designation .
      The
      designation of such series of the Preferred Stock shall be the Series A
      Convertible Preferred Stock, par value $.001 per share (the “Series A Preferred
      Stock”). The maximum number of shares of Series A Preferred Stock shall be two
      thousand (2,000) Shares.





(b) Rank .
      The
      Series A Preferred Stock shall rank prior to the common stock, par value $.001
      per share (the “Common Stock”), and to all other classes and series of equity
      securities of the Company which by its terms does not rank senior to or pari
      passu with the Series A Preferred Stock (“Junior Stock”). The Series A Preferred
      Stock shall be subordinate to and rank junior to all indebtedness of the Company
      now or hereafter outstanding. The Series A Preferred Stock shall rank on a
      pari
      passu basis to the Series A-1 Convertible Preferred Stock, par value $.001
      per
      share (the “Series A-1 Preferred Stock”) and the Series A-2 Convertible
      Preferred Stock, par value $.001 per share (the “Series A-2 Preferred Stock” and
      together with the Series A-1 Preferred Stock, the “Pari Passu Preferred
      Stock”).





2.  Dividends .
      The
      holders of record of shares of Series A Preferred Stock shall not be entitled
      to
      receive dividends.





3.  Voting
      Rights .





(a) Class
      Voting Rights .
      The
      Series A Preferred Stock shall have the following class voting rights (in
      addition to the voting rights set forth in Section 3(b) hereof). Subject to
      Section 10 hereof, so long as any shares of the Series A Preferred Stock remain
      outstanding, the Company shall not, without the affirmative vote or consent
      of
      the holders of at least seventy percent (70%) of the shares of the Series A
      Preferred Stock outstanding at the time, given in person or by proxy, either
      in
      writing or at a meeting, in which the holders of the Series A Preferred Stock
      vote separately as a class: (i) amend, alter or repeal the provisions of the
      Series A Preferred Stock, whether by merger, consolidation or otherwise, so
      as
      to adversely affect any right, preference, privilege or voting power of the
      Series A Preferred Stock; provided , however ,
      that
      any creation and issuance of another series of Junior Stock and, to the extent
      approved in accordance with Section 3.16 of the Series A Convertible Preferred
      Stock Purchase Agreement among the Company and the purchasers listed therein
      (the “Purchase Agreement”), pari passu stock and senior stock shall not be
      deemed to adversely affect such rights, preferences, privileges or voting
      powers; (ii) repurchase, redeem or pay dividends in cash or in kind on shares
      of
      the Company's Junior Stock and pari passu stock and senior stock; (iii) amend
      the Certificate of Incorporation or By-Laws of the Company so as to affect
      materially and adversely any right, preference, privilege or voting power of
      the
      Series A Preferred Stock; provided , however ,
      that
      any creation and issuance of another series of Junior Stock and, to the extent
      approved in accordance with Section 3.16 of the Purchase Agreement, pari passu
      stock and senior stock shall not be deemed to materially and adversely affect
      such rights, preferences, privileges or voting powers; (iv) effect any
      distribution with respect to Junior Stock and Pari Passu Preferred Stock; or
      (v)
      reclassify the Company’s outstanding securities.










(b) General
      Voting Rights .
      Except
      with respect to transactions upon which the Series A Preferred Stock shall
      be
      entitled to vote separately as a class pursuant to Section 3(a) above and except
      as otherwise required by Delaware law, the Series A Preferred Stock shall have
      no voting rights. The Common Stock into which the Series A Preferred Stock
      is
      convertible shall, upon issuance, have all of the same voting rights as other
      issued and outstanding Common Stock of the Company.





4.  Liquidation
      Preference .





(a) In
      the
      event of the liquidation, dissolution or winding up of the affairs of the
      Company, whether voluntary or involuntary, the holders of shares of the Series
      A
      Preferred Stock then outstanding shall be entitled to receive, out of the assets
      of the Company whether such assets are capital or surplus of any nature, an
      amount equal to $10,000 per share (the “Liquidation Preference Amount”) of the
      Series A Preferred Stock, on a pro rata and pari passu basis with the Pari
      Passu
      Preferred Stock, before any payment shall be made or any assets distributed
      to
      the holders of the Common Stock or any other Junior Stock. If the assets of
      the
      Company are not sufficient to pay in full the Liquidation Preference Amount
      payable to the holders of outstanding shares of the Series A Preferred Stock
      and
      any series of preferred stock or any other class of stock on a parity,
      including, without limitation, the Pari Passu Preferred Stock, as to rights
      on
      liquidation, dissolution or winding up, with the Series A Preferred Stock,
      then
      all of said assets will be distributed among the holders of the Series A
      Preferred Stock, the Pari Passu Preferred Stock and the other classes of stock
      on a parity with the Series A Preferred Stock, if any, ratably in accordance
      with the respective amounts that would be payable on such shares if all amounts
      payable thereon were paid in full. The liquidation payment with respect to
      each
      outstanding fractional share of Series A Preferred Stock shall be equal to
      a
      ratably proportionate amount of the liquidation payment with respect to each
      outstanding share of Series A Preferred Stock. All payments for which this
      Section 4(a) provides shall be in cash, property (valued at its fair market
      value as determined by an independent appraiser reasonably acceptable to the
      holders of a majority of the Series A Preferred Stock) or a combination thereof; provided , however ,
      that no
      cash shall be paid to holders of Junior Stock unless each holder of the
      outstanding shares of Series A Preferred Stock has been paid in cash the full
      Liquidation Preference Amount to which such holder is entitled as provided
      herein. After payment of the full Liquidation Preference Amount to which each
      holder is entitled, such holders of shares of Series A Preferred Stock will
      not
      be entitled to any further participation as such in any distribution of the
      assets of the Company.





(b) A
      consolidation or merger of the Company with or into any other corporation or
      corporations, or a sale of all or substantially all of the assets of the
      Company, or the effectuation by the Company of a transaction or series of
      transactions in which more than fifty percent (50%) of the voting shares of
      the
      Company is disposed of or conveyed, or other acquisition type transaction,
      or
      upon the payment by the Company of interest, dividends or other distributions
      to
      the holders of securities or financial instruments (including Indebtedness)
      ranking senior to or pari passu with the Series A Preferred Stock exceeding
      $10
      million in the aggregate, shall be, at the election of a majority of the holders
      of the Series A Preferred Stock, deemed to be a liquidation, dissolution, or
      winding up within the meaning of this Section 4. The grant of an exclusive
      license for all or substantially all of the Company's intellectual property
      assets covered by the Cambrex license shall also be deemed to be a liquidation,
      dissolution, or winding up within the meaning of this Section 4 in the event
      that either (i) the holders of the Series A Preferred Stock, and all affiliates
      of such holders, together own directly or indirectly ten percent (10%) or more
      of the outstanding equity of the licensee, or (ii) seventy percent (70%) of
      the
      Company's Series A Preferred Stock and Series A-1 Preferred Stock voting
      together as a class so elect. In the event of the merger or consolidation of
      the
      Company with or into another corporation that is not treated as a liquidation
      pursuant to this Section 4(b), the Series A Preferred Stock shall maintain
      its
      relative powers, designations and preferences provided for herein and no merger
      shall result inconsistent therewith.










(c) Written
      notice of any voluntary or involuntary liquidation, dissolution or winding
      up of
      the affairs of the Company, stating a payment date and the place where the
      distributable amounts shall be payable, shall be given by mail, postage prepaid,
      no less than forty-five (45) days prior to the payment date stated therein,
      to
      the holders of record of the Series A Preferred Stock at their respective
      addresses as the same shall appear on the books of the Company.





5.  Conversion .
      The
      holder of Series A Preferred Stock shall have the following conversion rights
      (the “Conversion Rights”):





(a) Right
      to Convert .
      At any
      time on or after the Issuance Date, the holder of any such shares of Series
      A
      Preferred Stock may, at such holder’s option, subject to the limitations set
      forth in Section 7 herein, elect to convert (a “Voluntary Conversion”) all or
      any portion of the shares of Series A Preferred Stock held by such person into
      a
      number of fully paid and nonassessable shares of Common Stock equal to the
      quotient of (i) the Liquidation Preference Amount of the shares of Series A
      Preferred Stock being converted thereon divided by (ii) the Conversion Price
      (as
      defined in Section 5(d) below) then in effect as of the date of the delivery
      by
      such holder of its notice of election to convert. The Company shall keep written
      records of the conversion of the shares of Series A Preferred Stock converted
      by
      each holder. A holder shall be required to deliver the original certificates
      representing the shares of Series A Preferred Stock upon complete conversion
      of
      the Series A Preferred Stock.





(b) Mechanics
      of Voluntary Conversion .
      The
      Voluntary Conversion of Series A Preferred Stock shall be conducted in the
      following manner:





(i)  Holder’s
      Delivery Requirements .
      To
      convert Series A Preferred Stock into full shares of Common Stock on any date
      (the “Voluntary Conversion Date”), the holder thereof shall (A) transmit by
      facsimile (or otherwise deliver), for receipt on or prior to 5:00 p.m., New
      York
      time on such date, a copy of a fully executed notice of conversion in the form
      attached hereto as Exhibit
      I (the
“Conversion Notice”), to the Company, and (B) with respect to the final
      conversion of shares of Series A Preferred Stock held by any holder, such holder
      shall surrender to a common carrier for delivery to the Company as soon as
      practicable following such Conversion Date but in no event later than six (6)
      business days after such date the original certificates representing the shares
      of Series A Preferred Stock being converted (or an indemnification undertaking
      with respect to such shares in the case of their loss, theft or destruction)
      (the “Preferred Stock Certificates”).





(ii)  Company’s
      Response .
      Upon
      receipt by the Company of a facsimile copy of a Conversion Notice, the Company
      shall immediately send, via facsimile, a confirmation of receipt of such
      Conversion Notice to such holder and the Company or its designated transfer
      agent (the “Transfer Agent”), as applicable, shall, within three (3) business
      days following the date of receipt by the Company of the executed Conversion
      Notice, issue and deliver to the Depository Trust Company (“ DTC ”)
      account on the holder’s behalf via the Deposit Withdrawal Agent Commission
      System (“ DWAC ”)
      as
      specified in the Conversion Notice, registered in the name of the holder or
      its
      designee, for the number of shares of Common Stock to which the holder shall
      be
      entitled.





(iii)  Dispute
      Resolution .
      In the
      case of a dispute as to the arithmetic calculation of the number of shares
      of
      Common Stock to be issued upon conversion, the Company shall promptly issue
      to
      the holder the number of shares of Common Stock that is not disputed and shall
      submit the arithmetic calculations to the holder via facsimile as soon as
      possible, but in no event later than two (2) business days after receipt of
      such
      holder’s Conversion Notice. If such holder and the Company are unable to agree
      upon the arithmetic calculation of the number of shares of Common Stock to
      be
      issued upon such conversion within one (1) business day of such disputed
      arithmetic calculation being submitted to the holder, then the Company shall
      within one (1) business day submit via facsimile the disputed arithmetic
      calculation of the number of shares of Common Stock to be issued upon such
      conversion to the Company’s **** independent,
      outside accountant. The Company shall cause the accountant to perform the
      calculations and notify the Company and the holder of the results no later
      than
      seventy-two (72) hours from the time it receives the disputed calculations.
      Such
      accountant’s calculation shall be binding upon all parties absent manifest
      error. The reasonable expenses of such accountant in making such determination
      shall be paid by the Company, in the event the holder’s calculation was correct,
      or by the holder, in the event the Company’s calculation was correct, or equally
      by the Company and the holder in the event that neither the Company’s or the
      holder’s calculation was correct. The period of time in which the Company is
      required to effect conversions or redemptions under this Certificate of
      Designation shall be tolled with respect to the subject conversion or redemption
      pending resolution of any dispute by the Company made in good faith and in
      accordance with this Section 5(b)(iii).










(iv)  Record
      Holder .
      The
      person or persons entitled to receive the shares of Common Stock issuable upon
      a
      conversion of the Series A Preferred Stock shall be treated for all purposes
      as
      the record holder or holders of such shares of Common Stock on the Conversion
      Date.





(v)  Company’s
      Failure to Timely Convert .
      If
      within three (3) business days of the Company’s receipt of the Conversion Notice
      (the “Share Delivery Period”) the Company shall fail to issue and deliver to a
      holder the number of shares of Common Stock to which such holder is entitled
      upon such holder’s conversion of the Series A Preferred Stock (a “Conversion
      Failure”), in addition to all other available remedies which such holder may
      pursue hereunder and under the Purchase Agreement (including indemnification
      pursuant to Section 6 thereof), the Company shall pay additional damages to
      such
      holder on each business day after such third (3 rd )
      business day that such conversion is not timely effected in an amount equal
      0.5%
      of the product of (A) the sum of the number of shares of Common Stock not issued
      to the holder on a timely basis pursuant to Section 5(b)(ii) and to which such
      holder is entitled and (B) the Closing Bid Price (as defined in Section 5(d)(ii)
      hereof) of the Common Stock on the last possible date which the Company could
      have issued such Common Stock to such holder without violating Section 5(b)(ii).
      If the Company fails to pay the additional damages set forth in this Section
      5(b)(v) within five (5) business days of the date incurred, then such payment
      shall bear interest at the rate of 2% per month (pro rated for partial months)
      until such payments are made.





(c) Mandatory
      Conversion .





(i)  All
      or a
      portion of the shares of Series A Preferred Stock outstanding on the Mandatory
      Conversion Date shall, depending on the Closing Bid Price on such Mandatory
      Conversion Date, automatically and without any action on the part of the holder
      thereof, convert into a number of fully paid and nonassessable shares of Common
      Stock equal to the quotient of (i) the Liquidation Preference Amount of the
      shares of Series A Preferred Stock outstanding on the Mandatory Conversion
      Date
      divided by (ii) the Conversion Price in effect on the Mandatory Conversion
      Date.
      If the Closing Bid Price of the Common Stock on the Mandatory Conversion Date
      is
      equal to or greater than $1.50 but less than $2.00, one-third (1/3) of the
      shares of Series A Preferred Stock outstanding shall automatically convert
      into
      shares of Common Stock in accordance with this Section 5(c)(i). If the Closing
      Bid Price of the Common Stock on the Mandatory Conversion Date is equal to
      or
      greater than $2.00 but less than $3.00, two-thirds (2/3) of the original shares
      of Series A Preferred Stock outstanding shall automatically convert into shares
      of Common Stock in accordance with this Section 5(c)(i). If the Closing Bid
      Price of the Common Stock on the Mandatory Conversion date is greater than
      $3.00, all of the shares of Series A Preferred Stock outstanding shall
      automatically convert into shares of Common Stock in accordance with this
      Section 5(c)(i).





(ii)  As
      used
      herein, a “Mandatory Conversion Date” shall be the date which is at least one
      (1) day after the Effectiveness Date (as defined in the Registration Rights
      Agreement), provided ,
      that
      the Closing Bid Price of the Common Stock exceeds $1.50 for a period of ten
      (10)
      consecutive trading days; and provided further
      that the Registration Statement (as defined in the Registration Rights
      Agreement) is effective with respect to all shares of Common Stock issuable
      upon
      such Mandatory Conversion or the shares of Common Stock into which the Series
      A
      Preferred Stock can be converted may be offered for sale to the public pursuant
      to Rule 144(k) (“Rule 144(k)”) under the Securities Act of 1933, as amended.
      Notwithstanding the foregoing, no Mandatory Conversion shall be effected if,
      on
      the Mandatory Conversion Date, the conversion of such share of Preferred Stock
      would violate Section 7. The Mandatory Conversion Date and the Voluntary
      Conversion Date collectively are referred to in this Certificate of Designation
      as the “Conversion Date.”










(iii)  On
      the
      Mandatory Conversion Date, the outstanding shares of Series A Preferred Stock
      shall be converted automatically without any further action by the holders
      of
      such shares and whether or not the Preferred Stock Certificates are surrendered
      to the Company or its transfer agent; provided , however ,
      that
      the Company shall not be obligated to issue the shares of Common Stock issuable
      upon conversion of any shares of Series A Preferred Stock unless the Preferred
      Stock Certificates evidencing such shares of Series A Preferred Stock are either
      delivered to the Company or the holder notifies the Company that such Preferred
      Stock Certificates have been lost, stolen, or destroyed, and executes an
      agreement satisfactory to the Company to indemnify the Company from any loss
      incurred by it in connection therewith. Upon the occurrence of the automatic
      conversion of the Series A Preferred Stock pursuant to this Section 5, the
      holders of the Series A Preferred Stock shall surrender the Preferred Stock
      Certificates representing the Series A Preferred Stock for which the Mandatory
      Conversion Date has occurred to the Company and the Company shall deliver the
      shares of Common Stock issuable upon such conversion (in the same manner set
      forth in Section 5(b)(ii)) to the holder within three (3) business days of
      the
      holder’s delivery of the applicable Preferred Stock Certificates.





(d) Conversion
      Price .





(i)  The
      term
“Conversion Price” shall mean $0.50 per share, subject to adjustment under
      Section 5(e) hereof. Notwithstanding any adjustment hereunder, at no time shall
      the Conversion Price be greater than $0.50 per share other than pursuant to
      the
      second sentence of Section 5(e)(i) in connection with a reverse stock split
      effected by the Company.





(ii)  The
      term
“Closing Bid Price” shall mean, for any security as of any date, the last
      closing bid price of such security on the OTC Bulletin Board for such security
      as reported by Bloomberg, or, if no closing bid price is reported for such
      security by Bloomberg, the last closing trade price of such security as reported
      by Bloomberg, or, if no last closing trade price is reported for such security
      by Bloomberg, the average of the bid prices of any market makers for such
      security as reported in the “pink sheets” by the National Quotation Bureau, Inc.
      If the Closing Bid Price cannot be calculated for such security on such date
      on
      any of the foregoing bases, the Closing Bid Price of such security on such
      date
      shall be the fair market value as mutually determined by the Company and the
      holders of a majority of the outstanding shares of Series A Preferred
      Stock.





(iii)  The
      term
“Release Event” means, with respect to a holder’s shares of Series A Preferred
      Stock, the date on which the Company files a Form 8-K with the Commission
      disclosing the Company’s receipt of written notice from the U.S. Food and Drug
      Administration regarding the granting the Company the right to commercialize
      and
      market (i.e., formal approval of the Company’s Pre-Market Application for) its
      OrCel product for the treatment of venous leg ulcers.





(e) Adjustments
      of Conversion Price .





(i)  Adjustments
      for Stock Splits and Combinations .
      If the
      Company shall at any time or from time to time after the Issuance Date, effect
      a
      stock split of the outstanding Common Stock, the Conversion Price shall be
      proportionately decreased. If the Company shall at any time or from time to
      time
      after the Issuance Date, combine the outstanding shares of Common Stock, the
      Conversion Price shall be proportionately increased. Any adjustments under
      this
      Section 5(e)(i) shall be effective at the close of business on the date the
      stock split or combination occurs.





(ii)  Adjustments
      for Certain Dividends and Distributions .
      If the
      Company shall at any time or from time to time after the Issuance Date, make
      or
      issue or set a record date for the determination of holders of Common Stock
      entitled to receive a dividend or other distribution payable in shares of Common
      Stock, then, and in each event, the Conversion Price shall be decreased as
      of
      the time of such issuance or, in the event such record date shall have been
      fixed, as of the close of business on such record date, by multiplying, as
      applicable, the Conversion Price then in effect by a fraction:





(1)  the
      numerator of which shall be the total number of shares of Common Stock issued
      and outstanding immediately prior to the time of such issuance or the close
      of
      business on such record date; and










(2)  the
      denominator of which shall be the total number of shares of Common Stock issued
      and outstanding immediately prior to the time of such issuance or the close
      of
      business on such record date plus the number of shares of Common Stock issuable
      in payment of such dividend or distribution.





(iii)  Adjustment
      for Other Dividends and Distributions .
      If the
      Company shall at any time or from time to time after the Issuance Date, make
      or
      issue or set a record date for the determination of holders of Common Stock
      entitled to receive a dividend or other distribution payable in securities
      of
      the Company other than shares of Common Stock, then, and in each event, an
      appropriate revision to the applicable Conversion Price shall be made and
      provision shall be made (by adjustments of the Conversion Price or otherwise)
      so
      that the holders of Series A Preferred Stock shall receive upon conversions
      thereof, in addition to the number of shares of Common Stock receivable thereon,
      the number of securities of the Company which they would have received had
      their
      Series A Preferred Stock been converted into Common Stock immediately prior
      to
      such event and had thereafter, during the period from the date of such event
      to
      and including the Conversion Date, retained such securities (together with
      any
      distributions payable thereon during such period), giving application to all
      adjustments called for during such period under this Section 5(e)(iii) with
      respect to the rights of the holders of the Series A Preferred
      Stock.





(iv)  Adjustments
      for Reclassification, Exchange or Substitution .
      If the
      Common Stock issuable upon conversion of the Series A Preferred Stock at any
      time or from time to time after the Issuance Date shall be changed to the same
      or different number of shares of any class or classes of stock, whether by
      reclassification, exchange, substitution or otherwise (other than by way of
      a
      stock split or combination of shares or stock dividends provided for in Sections
      5(e)(i), (ii) and (iii), or a reorganization, merger, consolidation, or sale
      of
      assets provided for in Section 5(e)(v)), then, and in each event, an appropriate
      revision to the Conversion Price shall be made and provisions shall be made
      (by
      adjustments of the Conversion Price or otherwise) so that the holder of each
      share of Series A Preferred Stock shall have the right thereafter to convert
      such share of Series A Preferred Stock into the kind and amount of shares of
      stock and other securities receivable upon reclassification, exchange,
      substitution or other change, by holders of the number of shares of Common
      Stock
      into which such share of Series A Preferred Stock might have been converted
      immediately prior to such reclassification, exchange, substitution or other
      change, all subject to further adjustment as provided herein.





(v)  Adjustments
      for Reorganization, Merger, Consolidation or Sales of  Assets .
      If at
      any time or from time to time after the Issuance Date there shall be a capital
      reorganization of the Company (other than by way of a stock split or combination
      of shares or stock dividends or distributions provided for in Section 5(e)(i),
      (ii) and (iii), or a reclassification, exchange or substitution of shares
      provided for in Section 5(e)(iv)), or a merger or consolidation of the Company
      with or into another corporation, or the sale of all or substantially all of
      the
      Company’s properties or assets to any other person that is not deemed a
      liquidation pursuant to Section 4(b) (an “Organic Change”), then as a part of
      such Organic Change an appropriate revision to the Conversion Price shall be
      made and provision shall be made (by adjustments of the Conversion Price or
      otherwise) so that the holder of each share of Series A Preferred Stock shall
      have the right thereafter to convert such share of Series A Preferred Stock
      into
      the kind and amount of shares of stock and other securities or property of
      the
      Company or any successor corporation resulting from the Organic Change as the
      holder would have received as a result of the Organic Change and if the holder
      had converted its Series A Preferred Stock into the Company’s Common Stock
      prior to the Organic Change. In any such case, appropriate adjustment shall
      be
      made in the application of the provisions of this Section 5(e)(v) with respect
      to the rights of the holders of the Series A Preferred Stock after the Organic
      Change to the end that the provisions of this Section 5(e)(v) (including any
      adjustment in the Conversion Price then in effect and the number of shares
      of
      stock or other securities deliverable upon conversion of the Series A Preferred
      Stock) shall be applied after that event in as nearly an equivalent manner
      as
      may be practicable.





(vi)  Adjustments
      for Issuance of Additional Shares of Common Stock .








(A)  In
      the
      event the Company, shall, at any time, from time to time, prior to a Release
      Event, issue or sell any additional shares of Common Stock (otherwise than
      as
      provided in the foregoing subsections (i) through (v) of this Section 5(e)
      or
      upon exercise or conversion of Common Stock Equivalents (hereafter defined)
      granted or issued prior to the Issuance Date) (the “Additional Shares of Common
      Stock”), at a price per share less than the Conversion Price, or without
      consideration, the Conversion Price then in effect upon each such issuance
      shall
      be adjusted to a price equal to the consideration per share paid for such
      Additional Shares of Common Stock. Upon
      and
      after a Release Event, the price shall be adjusted to the price (rounded to
      the
      nearest cent) determined by multiplying the Conversion Price by a
      fraction:





(1)  the
      numerator of which shall be equal to the sum of (A) the number of shares of
      Common Stock outstanding immediately prior to the issuance of such Additional
      Shares of Common Stock plus (B) the
      number of shares of Common Stock (rounded to the nearest whole share) which
      the
      aggregate consideration for the total number of such Additional Shares of Common
      Stock so issued would purchase at a price per share equal to the Conversion
      Price then in effect, and





(2)  the
      denominator of which shall be equal to the number of shares of Common Stock
      outstanding immediately after the issuance of such Additional Shares of Common
      Stock.





No
      adjustment of the number of shares of Common Stock shall be made under paragraph
      (A) of Section 5(e)(vi) upon the issuance of any Additional Shares of Common
      Stock which are issued pursuant to the exercise of any warrants or other
      subscription or purchase rights or pursuant to the exercise of any conversion
      or
      exchange rights in any Common Stock Equivalents (as defined below), if any
      such
      adjustment shall previously have been made upon the issuance of such warrants
      or
      other rights or upon the issuance of such Common Stock Equivalents (or upon
      the
      issuance of any warrant or other rights therefor) pursuant to Section
      5(e)(vii).





(vii)  Issuance
      of Common Stock Equivalents .
      If the
      Company, at any time after the Issuance Date and prior to a Release Event,
      shall
      issue any securities convertible into or exchangeable for, directly or
      indirectly, Common Stock (“Convertible Securities”), other than (x) the
      Series A  Preferred
      Stock or warrants issued to the holders of the Series A Preferred Stock pursuant
      to the Purchase Agreement as in effect on the date hereof, or (y) the
      Series A-1 Preferred Stock and the Series A-2 Preferred Stock pursuant to
      the Exchange Agreement as in effect on the date hereof, or any rights or
      warrants or options to purchase any such Common Stock or Convertible Securities,
      shall be issued or sold (collectively, the “Common Stock Equivalents”) and the
      aggregate of the price per share for which Additional Shares of Common Stock
      may
      be issuable thereafter pursuant to such Common Stock Equivalent, plus the
      consideration received by the Company for issuance of such Common Stock
      Equivalent, divided by the number of shares of Common Stock issuable pursuant
      to
      such Common Stock Equivalent (the “Aggregate Per Common Share Price”), shall be
      less than the Conversion Price, or if, after any such issuance of Common Stock
      Equivalents, the price per share for which Additional Shares of Common Stock
      may
      be issuable thereafter is amended or adjusted, and such price as so amended
      shall make the Aggregate Per Common Share Price be less than Conversion Price
      in
      effect at the time of such amendment, then the Conversion Price then in effect
      shall upon each such issuance be adjusted to a price equal to the consideration
      per share paid for such Additional Shares of Common Stock. Upon and after a
      Release Event, the price shall be adjusted to the price (rounded to the nearest
      cent) determined by multiplying the Conversion Price by a fraction:





(1)  the
      numerator of which shall be equal to the sum of (A) the number of shares of
      Common Stock outstanding immediately prior to the issuance of such Common Stock
      Equivalents plus (B) the
      number of shares of Common Stock (rounded to the nearest whole share) which
      the
      Aggregate Per Common Share Price multiplied by the number of shares of Common
      Stock issuable upon the exercise or conversion of all such Common Stock
      Equivalents, would purchase at a price per share equal to the Conversion Price
      then in effect, and





(2)  the
      denominator of which shall be equal to the number of shares of Common Stock
      that
      would be outstanding assuming the exercise or conversion of all such Common
      Stock Equivalents.





No
      adjustment of the Conversion Price shall be made under this subsection (vii)
      upon the issuance of any Convertible Security which is issued pursuant to the
      exercise of any warrants or other subscription or purchase rights therefor,
      if
      any adjustment shall previously have been made to the exercise price of such
      warrants then in effect upon the issuance of such warrants or other rights
      pursuant to this subsection (vii).









(viii)  Consideration
      for Stock .
      In case
      any shares of Common Stock or Convertible Securities other than the Series
      A
      Preferred Stock, or any rights or warrants or options to purchase any such
      Common Stock or Convertible Securities, shall be issued or sold in connection
      with any merger or consolidation in which the Company is the surviving
      corporation (other than any consolidation or merger in which the previously
      outstanding shares of Common Stock of the Company shall be changed to or
      exchanged for the stock or other securities of another corporation), the amount
      of consideration therefor shall be deemed to be the fair value, as determined
      reasonably and in good faith by the Board of Directors of the Company, of such
      portion of the assets and business of the nonsurviving corporation as such
      Board
      may determine to be attributable to such shares of Common Stock, Convertible
      Securities, rights or warrants or options, as the case may be.





(ix)  Record
      Date .
      In case
      the Company shall take record of the holders of its Common Stock or any other
      Preferred Stock for the purpose of entitling them to subscribe for or purchase
      Common Stock or Convertible Securities, then the date of the issue or sale
      of
      the shares of Common Stock shall be deemed to be such record date.





(x)  Certain
      Issues Excepted .
      Anything herein to the contrary notwithstanding, the Company shall not be
      required to make any adjustment of the Conversion Price of shares of Common
      Stock issuable upon conversion of the Series A Preferred Stock upon (i) the
      Company’s issuance of Additional Shares of Common Stock and/or Common Stock
      Equivalents in connection with strategic license agreements so long as such
      issuances are not for the purpose of raising capital, (ii) when approved by
      the
      Company’s Board of Directors or by a committee of the Board of Directors the
      majority of whom are independent directors, the Company’s (A) issuance of
      Additional Shares of Common Stock to the Company’s officers, directors,
      employees and consultants and to suppliers of goods and/or services to the
      Company, whether pursuant to the 2006 Stock Award and Incentive Plan, any other
      plan hereafter adopted, or otherwise, so long as such issuances under this
      subsection (ii) which would cause the provisions of Section 5(e) hereof to
      be
      applied in the aggregate do not exceed ten percent (10%) of the issued and
      outstanding shares of Common Stock as of the Issuance Date, and (B) grant of
      stock options or warrants to purchase shares of Common Stock, whether the grants
      of such options or warrants are made under the Company’s Employee Stock Option
      Plan or its 2006 Stock Award and Incentive Plan, as they now exist, an employee
      or director stock option plan and a stock award and incentive plan hereafter
      adopted or otherwise, so long as such issuances under this subsection (ii)
      which
      would cause the provisions of Section 5(e) hereof to be applied in the aggregate
      do not exceed ten percent (10%) of the issued and outstanding shares of Common
      Stock as of the Issuance Date, (iii) securities issued upon the exercise,
      conversion or exchange of any Common Stock Equivalents outstanding on the
      Issuance Date at the conversion price in effect on the Issuance Date, as may
      be
      adjusted by the anti-dilution provisions thereof as in effect on the date
      hereof, (iv) issuance of Series A Preferred Stock or warrants issued by the
      Company pursuant to the Purchase Agreement, or Common Stock issued upon
      conversion or exercise thereof, (v) issuance of Series A-1 Convertible
      Preferred Stock, Series A-2 Convertible Preferred Stock, Series D-2 Convertible
      Preferred Stock or Common Stock issued upon conversion thereof at the conversion
      price in effect on the Issuance Date, as such conversion price may be adjusted
      pursuant to Section 5 hereof, or (vi) any warrants issued to Burnham Hill
      Partners, a division of Pali Capital Inc. or any other person or entity for
      services in connection with the transactions contemplated by the Purchase
      Agreement and the shares of Common Stock issued upon exercise thereof at the
      conversion price in effect on the Issuance Date, as may be adjusted by the
      anti-dilution provisions thereof as in effect on the date hereof, or (vii)
      warrants issued to Ron Lipstein and Steven Katz in connection with the
      agreements terminating their employment with the Company at the conversion
      price
      in effect on the Issuance Date or as may be adjusted by the anti-dilution
      provision thereof as in effect on the Issuance Date.





(f) No
      Impairment .
      The
      Company shall not, by amendment of its Certificate of Incorporation or through
      any reorganization, transfer of assets, consolidation, merger, dissolution,
      issue or sale of securities or any other voluntary action, avoid or seek to
      avoid the observance or performance of any of the terms to be observed or
      performed hereunder by the Company, but will at all times in good faith, assist
      in the carrying out of all the provisions of this Section 5 and in the taking
      of
      all such action as may be necessary or appropriate in order to protect the
      Conversion Rights of the holders of the Series A Preferred Stock against
      impairment. In the event a holder shall elect to convert any shares of Series
      A
      Preferred Stock as provided herein, the Company cannot refuse conversion based
      on any claim that such holder or any one associated or affiliated with such
      holder has been engaged in any violation of law, unless, an injunction from
      a
      court, on notice, restraining and/or enjoining conversion of all or of said
      shares of Series A Preferred Stock shall have been issued and the Company posts
      a surety bond for the benefit of such holder in an amount equal to 130% of
      the
      Liquidation Preference Amount of the Series A Preferred Stock such holder has
      elected to convert, which bond shall remain in effect until the completion
      of
      arbitration/litigation of the dispute and the proceeds of which shall be payable
      to such holder in the event it obtains judgment.










(g) Certificates
      as to Adjustments .
      Upon
      occurrence of each adjustment or readjustment of the Conversion Price or number
      of shares of Common Stock issuable upon conversion of the Series A Preferred
      Stock pursuant to this Section 5, the Company at its expense shall promptly
      compute such adjustment or readjustment in accordance with the terms hereof
      and
      furnish to each holder of such Series A Preferred Stock a certificate setting
      forth such adjustment and readjustment, showing in detail the facts upon which
      such adjustment or readjustment is based. The Company shall, upon written
      request of the holder of such affected Series A Preferred Stock, at any time,
      furnish or cause to be furnished to such holder a like certificate setting
      forth
      such adjustments and readjustments, the Conversion Price in effect at the time,
      and the number of shares of Common Stock and the amount, if any, of other
      securities or property which at the time would be received upon the conversion
      of a share of such Series A Preferred Stock. Notwithstanding the foregoing,
      the
      Company shall not be obligated to deliver a certificate unless such certificate
      would reflect an increase or decrease of at least one percent of such adjusted
      amount.





(h) Issue
      Taxes .
      The
      Company shall pay any and all issue and other taxes, excluding federal, state
      or
      local income taxes, that may be payable in respect of any issue or delivery
      of
      shares of Common Stock on conversion of shares of Series A Preferred Stock
      pursuant thereto; provided , however ,
      that
      the Company shall not be obligated to pay any transfer taxes resulting from
      any
      transfer requested by any holder in connection with any such
      conversion.





(i) Notices .
      All
      notices and other communications hereunder shall be in writing and shall be
      deemed given if delivered personally or by facsimile or three (3) business
      days
      following being mailed by certified or registered mail, postage prepaid,
      return-receipt requested, addressed to the holder of record at its address
      appearing on the books of the Company. The Company will give written notice
      to
      each holder of Series A Preferred Stock at least twenty (20) days prior to
      the
      date on which the Company closes its books or takes a record (I) with respect
      to
      any dividend or distribution upon the Common Stock, (II) with respect to any
      pro
      rata subscription offer to holders of Common Stock or (III) for determining
      rights to vote with respect to any Organic Change, dissolution, liquidation
      or
      winding-up and in no event shall such notice be provided to such holder prior
      to
      such information being made known to the public. The Company will also give
      written notice to each holder of Series A Preferred Stock at least twenty (20)
      days prior to the date on which any Organic Change, dissolution, liquidation
      or
      winding-up will take place and in no event shall such notice be provided to
      such
      holder prior to such information being made known to the public.





(j) Fractional
      Shares .
      No
      fractional shares of Common Stock shall be issued upon conversion of the Series
      A Preferred Stock. In lieu of any fractional shares to which the holder would
      otherwise be entitled, the Company shall at its option either (i) pay cash
      equal
      to the product of such fraction multiplied by the average of the Closing Bid
      Prices of the Common Stock for the five (5) consecutive trading days immediately
      preceding the Voluntary Conversion Date or Mandatory Conversion Date, as
      applicable, or (ii) in lieu of issuing such fractional shares issue one
      additional whole share to the holder.





(k) Reservation
      of Common Stock .
      The
      Company shall, so long as any shares of Series A Preferred Stock are
      outstanding, reserve and keep available out of its authorized and unissued
      Common Stock, solely for the purpose of effecting the conversion of the Series
      A
      Preferred Stock, such number of shares of Common Stock as shall from time to
      time be sufficient to effect the conversion of all of the Series A Preferred
      Stock then outstanding; provided that the
      number of shares of Common Stock so reserved shall at no time be less than
      120%
      of the number of shares of Common Stock for which the shares of Series A
      Preferred Stock are at any time convertible (without regard to limitations
      on
      conversion set forth in Section 7). The initial number of shares of Common
      Stock
      reserved for conversions of the Series A Preferred Stock and each increase
      in
      the number of shares so reserved shall be allocated pro rata among the holders
      of the Series A Preferred Stock based on the number of shares of Series A
      Preferred Stock held by each holder at the time of issuance of the Series A
      Preferred Stock or increase in the number of reserved shares, as the case may
      be. In the event a holder shall sell or otherwise transfer any of such holder’s
      shares of Series A Preferred Stock, each transferee shall be allocated a pro
      rata portion of the number of reserved shares of Common Stock reserved for
      such
      transferor. Any shares of Common Stock reserved and which remain allocated
      to
      any person or entity which does not hold any shares of Series A Preferred Stock
      shall be allocated to the remaining holders of Series A Preferred Stock, pro
      rata based on the number of shares of Series A Preferred Stock then held by
      such
      holder.










(l) Retirement
      of Series A Preferred Stock .
      Conversion of Series A Preferred Stock shall be deemed to have been effected
      on
      the applicable Voluntary Conversion Date or Mandatory Conversion Date. The
      Company shall keep written records of the conversion of the shares of Series
      A
      Preferred Stock converted by each holder. A holder shall be required to deliver
      the original certificates representing the shares of Series A Preferred Stock
      upon complete conversion of the Series A Preferred Stock.





(m) Regulatory
      Compliance .
      If any
      shares of Common Stock to be reserved for the purpose of conversion of Series
      A
      Preferred Stock require registration or listing with or approval of any
      governmental authority, stock exchange or other regulatory body under any
      federal or state law or regulation or otherwise before such shares may be
      validly issued or delivered upon conversion, the Company shall, at its sole
      cost
      and expense, in good faith and as expeditiously as possible, endeavor to secure
      such registration, listing or approval, as the case may be.





6.  No
      Preemptive Rights .
      Except
      as provided in Section 5 hereof and in the Purchase Agreement, no holder of
      the
      Series A Preferred Stock shall be entitled to rights to subscribe for, purchase
      or receive any part of any new or additional shares of any class, whether now
      or
      hereinafter authorized, or of bonds or debentures, or other evidences of
      indebtedness convertible into or exchangeable for shares of any class, but
      all
      such new or additional shares of any class, or any bond, debentures or other
      evidences of indebtedness convertible into or exchangeable for shares, may
      be
      issued and disposed of by the Board of Directors on such terms and for such
      consideration (to the extent permitted by law), and to such person or persons
      as
      the Board of Directors in their absolute discretion may deem
      advisable.





7.  Conversion
      Restriction .
      Notwithstanding anything to the contrary set forth in Section 5 of this
      Certificate of Designation, at no time may a holder of shares of Series A
      Preferred Stock convert shares of the Series A Preferred Stock if the number
      of
      shares of Common Stock to be issued pursuant to such conversion would exceed,
      when aggregated with all other shares of Common Stock owned by such holder
      at
      such time, the number of shares of Common Stock which would result in such
      holder beneficially owning (as determined in accordance with Section 13(d)
      of
      the Securities Exchange Act of 1934, as amended, and the rules thereunder)
      in
      excess of 9.99% of all of the Common Stock outstanding at such time; provided , however ,
      that
      upon a holder of Series A Preferred Stock providing the Company with sixty-one
      (61) days notice (pursuant to Section 5(i) hereof) (the “Waiver Notice”) that
      such holder would like to waive Section 7 of this Certificate of Designation
      with regard to any or all shares of Common Stock issuable upon conversion of
      Series A Preferred Stock, this Section 7 shall be of no force or effect with
      regard to those shares of Series A Preferred Stock referenced in the Waiver
      Notice.





8.  Most
      Favored Nations Exchange Right .
      If the
      Company enters into any equity or equity linked financing (“ Subsequent
      Financing ”)
      on
      terms more favorable than the terms governing the Series A Preferred Stock,
      then
      the holders of the Series A Preferred Stock together the holders of the
      Company’s Series A-1 Preferred Stock in their sole discretion may exchange their
      Series A Preferred Stock and Series A-1 Preferred Stock, as the case may be,
      valued at their Liquidation Preference Amount, for the securities issued or
      to
      be issued in the Subsequent Financing to the extent a Release Event has not
      occurred.











9.  Inability
      to Fully Convert .





(a) Holder’s
      Option if Company Cannot Fully Convert .
      If,
      upon the Company’s receipt of a Conversion Notice, the Company cannot issue
      shares of Common Stock registered for resale to the extent required under the
      Registration Statement for any reason, including, without limitation, because
      the Company (x) does not have a sufficient number of shares of Common Stock
      authorized and available, (y) is otherwise prohibited by applicable law or
      by
      the rules or regulations of any stock exchange, interdealer quotation system
      or
      other self-regulatory organization with jurisdiction over the Company or its
      securities from issuing all of the Common Stock which is to be issued to a
      holder of Series A Preferred Stock pursuant to a Conversion Notice or (z) fails
      to have a sufficient number of shares of Common Stock registered for resale
      required under the Registration Statement, then the Company shall issue as
      many
      shares of Common Stock as it is able to issue in accordance with such holder’s
      Conversion Notice and pursuant to Section 5(b)(ii) above and, with respect
      to
      the unconverted Series A Preferred Stock, the holder, solely at such holder’s
      option, can elect, in addition to other remedies available to such holder,
      within five (5) business days after receipt of notice from the Company thereof
      to:





(i)  require
      the Company to redeem from such holder those Series A Preferred Stock for which
      the Company is unable to issue Common Stock in accordance with such holder’s
      Conversion Notice (“Mandatory Redemption”) at a price per share equal to the
      100% of the Liquidation Preference Amount as of such Conversion Date (the
“Mandatory Redemption Price”).





(ii)  if
      the
      Company’s inability to fully convert Series A Preferred Stock is pursuant to
      Section 9(a)(z) above, require the Company to issue restricted shares of Common
      Stock in accordance with such holder’s Conversion Notice and pursuant to Section
      5(b)(ii) above.





(iii)  void
      its
      Conversion Notice and retain or have returned, as the case may be, the shares
      of
      Series A Preferred Stock that were to be converted pursuant to such holder’s
      Conversion Notice (provided that a holder’s voiding its Conversion Notice shall
      not effect the Company’s obligations to make any payments which have accrued
      prior to the date of such notice).





In
      the
      event a Holder shall elect to convert any shares of Series A Preferred Stock
      as
      provided herein, the Company cannot refuse conversion based on any claim that
      such Holder or any one associated or affiliated with such Holder has been
      engaged in any violation of law, violation of an agreement to which such Holder
      is a party or for any reason whatsoever, unless, an injunction from a court,
      on
      notice, restraining and or enjoining conversion of all or of said shares of
      Series A Preferred Stock shall have issued and the Company posts a surety bond
      for the benefit of such Holder in an amount equal to 130% of the amount of
      shares of Series A Preferred Stock the Holder has elected to convert, which
      bond
      shall remain in effect until the completion of arbitration/litigation of the
      dispute and the proceeds of which shall be payable to such Holder in the event
      it obtains judgment.





(b) Mechanics
      of Fulfilling Holder’s Election .
      The
      Company shall immediately send via facsimile to a holder of Series A Preferred
      Stock, upon receipt of a facsimile copy of a Conversion Notice from such holder
      which cannot be fully satisfied as described in Section 9(a) above, a notice
      of
      the Company’s inability to fully satisfy such holder’s Conversion Notice (the
“Inability to Fully Convert Notice”). Such Inability to Fully Convert Notice
      shall indicate (i) the reason why the Company is unable to fully satisfy such
      holder’s Conversion Notice, (ii) the number of Series A Preferred Stock which
      cannot be converted and (iii) the applicable Mandatory Redemption Price. Such
      holder shall notify the Company of its election pursuant to Section 9(a) above
      by delivering written notice via facsimile to the Company (“Notice in Response
      to Inability to Convert”).










(c) Payment
      of Redemption Price .
      If such
      holder shall elect to have its shares redeemed pursuant to Section 9(a)(i)
      above, the Company shall pay the Mandatory Redemption Price to such holder
      within thirty (30) days of the Company’s receipt of the holder’s Notice in
      Response to Inability to Convert, provided that
      prior to the Company’s receipt of the holder’s Notice in Response to Inability
      to Convert the Company has not delivered a notice to such holder stating, to
      the
      satisfaction of the holder, that the event or condition resulting in the
      Mandatory Redemption has been cured and all Conversion Shares issuable to such
      holder can and will be delivered to the holder in accordance with the terms
      of
      Section 2(g). If the Company shall fail to pay the applicable Mandatory
      Redemption Price to such holder on a timely basis as described in this Section
      9(c) (other than pursuant to a dispute as to the determination of the arithmetic
      calculation of the Redemption Price), in addition to any remedy such holder
      of
      Series A Preferred Stock may have under this Certificate of Designation and
      the
      Purchase Agreement, such unpaid amount shall bear interest at the rate of 2.0%
      per month (prorated for partial months) until paid in full. Until the full
      Mandatory Redemption Price is paid in full to such holder, such holder may
      (i)
      void the Mandatory Redemption with respect to those Series A Preferred Stock
      for
      which the full Mandatory Redemption Price has not been paid, (ii) receive back
      such Series A Preferred Stock, and (iii) require that the Conversion Price
      of
      such returned Series A Preferred Stock be adjusted to the lesser of (A) the
      Conversion Price and (B) the lowest Closing Bid Price during the period
      beginning on the Conversion Date and ending on the date the holder voided the
      Mandatory Redemption.





(d) Pro-rata
      Conversion and Redemption .
      In the
      event the Company receives a Conversion Notice from more than one holder of
      Series A Preferred Stock on the same day and the Company can convert and redeem
      some, but not all, of the Series A Preferred Stock pursuant to this Section
      9,
      the Company shall convert and redeem from each holder of Series A Preferred
      Stock electing to have Series A Preferred Stock converted and redeemed at such
      time an amount equal to such holder’s pro-rata amount (based on the number
      shares of Series A Preferred Stock held by such holder relative to the number
      shares of Series A Preferred Stock outstanding) of all shares of Series A
      Preferred Stock being converted and redeemed at such time.





10.  Vote
      to Change the Terms of or Issue Preferred Stock .
      The
      affirmative vote at a meeting duly called for such purpose or the written
      consent without a meeting, of the holders of not less than a majority of the
      then outstanding shares of Series A Preferred Stock, shall be required (a)
      for
      any change to this Certificate of Designation or the Company’s Certificate of
      Incorporation which would amend, alter, change or repeal any of the powers,
      designations, preferences and rights of the Series A Preferred Stock or (b)
      for
      the issuance of shares of Series A Preferred Stock other than pursuant to the
      Purchase Agreement. Notwithstanding anything herein to the contrary, Section
      8,
      the first sentence of Section 5(e)(vi)(A) and the first sentence of Section
      5(e)(vii) hereof may only be waived with the written consent of the holders
      of
      not less than thirty percent (30%) of the then outstanding shares of Series
      A
      Preferred Stock and Series A-1 Preferred Stock voting together as one class; provided , that ,
      such
      waiver shall be effective for all shares of Series A Preferred Stock and Series
      A-1 Preferred Stock; provided , further ,
      that a
      separate class vote shall not be required from the holders of the Series A
      Preferred Stock to effect the waiver of Section 8, the first sentence of Section
      5(e)(vi)(A) and the first sentence of Section 5(e)(vii). No consideration shall
      be offered or paid to any holder of Series A Preferred Stock or Series A-1
      Preferred Stock to consent to a waiver of Section 8, the first sentence of
      Section 5(e)(vi)(A) or the first sentence of Section 5(e)(vii) hereof unless
      the
      same consideration is also offered to all of the holders of Series A Preferred
      Stock and Series A-1 Preferred Stock.





11.  Lost
      or Stolen Certificates .
      Upon
      receipt by the Company of evidence satisfactory to the Company of the loss,
      theft, destruction or mutilation of any Preferred Stock Certificates
      representing the shares of Series A Preferred Stock, and, in the case of loss,
      theft or destruction, of any indemnification undertaking by the holder to the
      Company and, in the case of mutilation, upon surrender and cancellation of
      the
      Preferred Stock Certificate(s), the Company shall execute and deliver new
      preferred stock certificate(s) of like tenor and date.





12.  Remedies,
      Characterizations, Other Obligations, Breaches and Injunctive  Relief .
      The
      remedies provided in this Certificate of Designation shall be cumulative and
      in
      addition to all other remedies available under this Certificate of Designation,
      at law or in equity (including a decree of specific performance and/or other
      injunctive relief), no remedy contained herein shall be deemed a waiver of
      compliance with the provisions giving rise to such remedy and nothing herein
      shall limit a holder’s right to pursue actual damages for any failure by the
      Company to comply with the terms of this Certificate of Designation. Amounts
      set
      forth or provided for herein with respect to payments, conversion and the like
      (and the computation thereof) shall be the amounts to be received by the holder
      thereof and shall not, except as expressly provided herein, be subject to any
      other obligation of the Company (or the performance thereof). The Company
      acknowledges that a breach by it of its obligations hereunder will cause
      irreparable harm to the holders of the Series A Preferred Stock and that the
      remedy at law for any such breach may be inadequate. The Company therefore
      agrees that, in the event of any such breach or threatened breach, the holders
      of the Series A Preferred Stock shall be entitled, in addition to all other
      available remedies, to an injunction restraining any breach, without the
      necessity of showing economic loss and without any bond or other security being
      required.










13.  Specific
      Shall Not Limit General; Construction .
      No
      specific provision contained in this Certificate of Designation shall limit
      or
      modify any more general provision contained herein. This Certificate of
      Designation shall be deemed to be jointly drafted by the Company and all initial
      purchasers of the Series A Preferred Stock and shall not be construed against
      any person as the drafter hereof.





14.  Failure
      or Indulgence Not Waiver .
      No
      failure or delay on the part of a holder of Series A Preferred Stock in the
      exercise of any power, right or privilege hereunder shall operate as a waiver
      thereof, nor shall any single or partial exercise of any such power, right
      or
      privilege preclude other or further exercise thereof or of any other right,
      power or privilege.





IN
      WITNESS WHEREOF, the undersigned has executed and subscribed this Amended
      Certificate and does affirm the foregoing as true this 14 th day of
      June, 2007.


ORTEC
                  INTERNATIONAL, INC.By:
              /s/
                  Ron LipsteinName:
              Ron
                  LpsteinTitle:
              Chief
                  Executive Officer





ORTEC
      INTERNATIONAL, INC.


CONVERSION
      NOTICE





Reference
      is made to the Certificate of Designation of the Relative Rights and Preferences
      of the Series A Preferred Stock of Ortec International, Inc. (the “Certificate
      of Designation”). In accordance with and pursuant to the Certificate of
      Designation, the undersigned hereby elects to convert the number of shares
      of
      Series A Preferred Stock, par value $.001 per share (the “Preferred Shares”), of
      Ortec International, Inc., a Delaware corporation (the “Company”), indicated
      below into shares of Common Stock, par value $.001 per share (the “Common
      Stock”), of the Company, by tendering the stock certificate(s) representing the
      share(s) of Preferred Shares specified below as of the date specified
      below.


Date
                  of Conversion:
              ______________________________________Number
                  of Preferred Shares to be converted:
              ________________Stock
                  certificate no(s). of Preferred Shares to be converted:
              _______





The
      Common Stock have been sold pursuant to the Registration Statement (as defined
      in the Registration Rights Agreement): YES ____  NO____





Please
      confirm the following information:


Conversion
                  Price:
              ______________________________________Number
                  of shares of Common Stockto be issued:
              ______________________________________





Number
      of
      shares of Common Stock beneficially owned or deemed beneficially owned by
      the
      Holder on the Date of Conversion determined in accordance with Section 16 of
      the Securities
      Exchange Act of 1934, as amended: _________________________





Please
      issue the Common Stock into which the Preferred Shares are being converted
      and,
      if applicable, any check drawn on an account of the Company in the following
      name and to the following address:


Issue
                  to:
              ____________________________________________________________________________Facsimile
                  Number:
              ______________________________________Authorization:
              ______________________________________By:
              _________________________________Title:
              _________________________________Dated:





PRICES
      ATTACHED





**CERTIFICATE
      OF AMENDMENT OF CERTIFICATE OF DESIGNATION**


**OF
      THE RELATIVE RIGHTS AND PREFERENCES OF THE SERIES A CONVERTIBLE
      PREFERREDSTOCK OF ORTEC INTERNATIONAL INC.**





It
      is
      hereby certified that:


1.
            The
                name of the Corporation (hereinafter called the “Corporation”) is Ortec
                International Inc.


2.
            The
                Certificate of Designation of the Relative Rights and Preferences
                of the
                Series A Convertible Preferred Stock of Ortec International Inc. is
                hereby amended by striking out Section 9 thereof and by substituting
                the new Section 9 hereafter set
                forth.





9.  Inability
      to Fully Convert .





(a)  Holder's
      Option if Company Cannot Fully Convert .
      If,
      upon the Company's receipt of a Conversion Notice, the Company cannot issue
      shares of Common Stock registered for resale to the extent required under the
      Registration Statement for any reason, including, without limitation, because
      the Company (x) does not have a sufficient number of shares of Common Stock
      authorized and available, (y) is otherwise prohibited by applicable law or
      by
      the rules or regulations of any stock exchange, interdealer quotation system
      or
      other self-regulatory organization with jurisdiction over the Company or its
      securities from issuing all of the Common Stock which is to be issued to a
      holder of Series A Preferred Stock pursuant to a Conversion Notice or
      (z) fails to have a sufficient number of shares of Common Stock registered
      for resale required under the Registration Statement, then the Company shall
      issue as many shares of Common Stock as it is able to issue in accordance with
      such holder's Conversion Notice and pursuant to Section 5(b)(ii) above and,
      with
      respect to the unconverted Series A Preferred Stock, the holder, solely at
      such holder's option, can elect, in addition to other remedies available to
      such
      holder, within five (5) business days after receipt of notice from the Company
      thereof to:





(i)  if
      the
      Company’s inability to convert Series A Preferred Stock is pursuant to
      Section 9(a)(x) above, require the Company to redeem from such holder those
      Series A Preferred Stock for which the Company is unable to issue Common Stock
      in accordance with such holder’s Conversion Notice (“Mandatory Redemption”) at a
      price per share equal to the 100% of the Liquidation Preference Amount as of
      such Conversion Date (the “Mandatory Redemption Price”);





(ii)  if
      the
      Company's inability to fully convert Series A Preferred Stock is pursuant
      to Section 9(a)(z) above, require the Company to issue restricted shares of
      Common Stock in accordance with such holder's Conversion Notice and pursuant
      to
      Section 5(b)(ii) above.





(iii)  void
      its
      Conversion Notice and retain or have returned, as the case may be, the shares
      of
      Series A Preferred Stock that were to be converted pursuant to such holder's
      Conversion Notice (provided that a holder's voiding its Conversion Notice shall
      not effect the Company's obligations to make any payments which have accrued
      prior to the date of such notice).





In
      the
      event a Holder shall elect to convert any shares of Series A Preferred Stock
      as
      provided herein, the Company cannot refuse conversion based on any claim that
      such Holder or any one associated or affiliated with such Holder has been
      engaged in any violation of law, violation of an agreement to which such Holder
      is a party or for any reason whatsoever, unless, an injunction from a court,
      on
      notice, restraining and or enjoining conversion of all or of said shares of
      Series A Preferred Stock shall have issued.









(b) Mechanics
      of Fulfilling Holder's Election .
      The
      Company shall immediately send via facsimile to a holder of Series A Preferred
      Stock, upon receipt of a facsimile copy of a Conversion Notice from such holder
      which cannot be fully satisfied as described in Section 9(a) above, a notice
      of
      the Company's inability to fully satisfy such holder's Conversion Notice (the
      "Inability to Fully Convert Notice"). Such Inability to Fully Convert Notice
      shall indicate (i) the reason why the Company is unable to fully satisfy such
      holder's Conversion Notice and (ii) the number of Series A Preferred Stock
      which
      cannot be converted. Such holder shall notify the Company of its election
      pursuant to Section 9(a) above by delivering written notice via facsimile to
      the
      Company ("Notice in Response to Inability to Convert").





(c) Payment
      of Redemption Price .
      If such
      holder shall elect to have its shares redeemed pursuant to Section 9(a)(i)
      above, the Company shall pay the Mandatory Redemption Price to such holder
      within thirty (30) days of the Company’s receipt of the holder’s Notice in
      Response to Inability to Convert, provided that
      prior to the Company’s receipt of the holder’s Notice in Response to Inability
      to Convert the Company has not delivered a notice to such holder stating, to
      the
      satisfaction of the holder, that the event or condition resulting in the
      Mandatory Redemption has been cured and all Conversion Shares issuable to such
      holder can and will be delivered to the holder in accordance with the terms
      of
      Section 2(g). If the Company shall fail to pay the applicable Mandatory
      Redemption Price to such holder on a timely basis as described in this Section
      9(c) (other than pursuant to a dispute as to the determination of the arithmetic
      calculation of the Redemption Price), in addition to any remedy such holder
      of
      Series A Preferred Stock may have under this Certificate of Designation and
      the
      Exchange Agreement, such unpaid amount shall bear interest at the rate of 2.0%
      per month (prorated for partial months) until paid in full. Until the full
      Mandatory Redemption Price is paid in full to such holder, such holder may
      (i)
      void the Mandatory Redemption with respect to those Series A Preferred Stock
      for
      which the full Mandatory Redemption Price has not been paid, (ii) receive back
      such Series A Preferred Stock, and (iii) require that the Conversion Price
      of
      such returned Series A Preferred Stock be adjusted to the lesser of (A) the
      Conversion Price and (B) the lowest Closing Bid Price during the period
      beginning on the Conversion Date and ending on the date the holder voided the
      Mandatory Redemption.





(d) Pro-rata
      Conversion and Redemption .
      In the
      event the Company receives a Conversion Notice from more than one holder of
      Series A Preferred Stock on the same day and the Company can convert and redeem
      some, but not all, of the Series A Preferred Stock pursuant to this Section
      9,
      the Company shall convert from each holder of Series A Preferred Stock electing
      to have Series A Preferred Stock converted at such time an amount equal to
      such
      holder's pro-rata amount (based on the number shares of Series A Preferred
      Stock
      held by such holder relative to the number shares of Series A Preferred Stock
      outstanding) of all shares of Series A Preferred Stock being converted and
      redeemed at such time.




3.  The
      amendment of the Certificate of Designation of the Relative Rights and
      Preferences of the Series A Convertible Preferred Stock of Ortec International
      Inc. herein certified has been duly adopted in accordance with the provisions
      of
      Section 242 of the General Corporation Law of the State of
      Delaware.




4.  The
      amendment of the Certificate of Designation of the Relative Rights and
      Preferences of the Series A Convertible Preferred Stock of Ortec
      International Inc. was made with the affirmative consent, in writing, by the
      holders of not less than 70% of the shares of such Series A Convertible
      Preferred Stock then outstanding, as required by the provisions of
      Section 3 of such Certificate of Designation.




Signed
      on
      December 20, 2007


/s/
                  Alan W. SchoenbartName:
                  Alan W. SchoenbartTitle:
                  Secretary









**CERTIFICATE
      OF DESIGNATION OF THE RELATIVE RIGHTS AND PREFERENCES**


**OF
      THE**


**SERIES
      A-1 CONVERTIBLE PREFERRED STOCK**


**OF**


**ORTEC
      INTERNATIONAL, INC.**





The
      undersigned, the Chief Executive Officer of Ortec International, Inc., a
      Delaware corporation (the "Company"), in accordance with the provisions of
      the
      Delaware General Corporation Law, does hereby certify that, pursuant to the
      authority conferred upon the Board of Directors by the Certificate of
      Incorporation of the Company, the following resolution creating a series of
      Series A-1 Convertible Preferred Stock, was duly adopted on June 10,
      2007:





RESOLVED,
      that pursuant to the authority expressly granted to and vested in the Board
      of
      Directors of the Company by provisions of the Certificate of Incorporation
      of
      the Company (the "Certificate of Incorporation"), there hereby is created out
      of
      the shares of Preferred Stock, par value $.001 per share, of the Company
      authorized in Article IV of the Certificate of Incorporation (the "Preferred
      Stock"), a series of Preferred Stock of the Company, to be named "Series A-1
      Convertible Preferred Stock," consisting of five hundred (500) shares, which
      series shall have the following designations, powers, preferences and relative
      and other special rights and the following qualifications, limitations and
      restrictions:





1.  Designation
      and Rank .





(a) Designation .
      The
      designation of such series of the Preferred Stock shall be the Series A-1
      Convertible Preferred Stock, par value $.001 per share (the "Series A-1
      Preferred Stock"). The maximum number of shares of Series A-1 Preferred Stock
      shall be five hundred (500) Shares.





(b) Rank .
      The
      Series A-1 Preferred Stock shall rank prior to the common stock, par value
      $.001
      per share (the "Common Stock"), and to all other classes and series of equity
      securities of the Company which by its terms does not rank senior to or pari
      passu with the Series A-1 Preferred Stock ("Junior Stock"). The Series A-1
      Preferred Stock shall be subordinate to and rank junior to all indebtedness
      of
      the Company now or hereafter outstanding. The Series A-1 Preferred Stock shall
      rank on a pari passu basis to the Series A Convertible Preferred Stock, par
      value $.001 per share (the “Series A Preferred Stock”) and the Series A-2
      Convertible Preferred Stock, par value $.001 per share (the “Series A-2
      Preferred Stock” and together with the Series A Preferred Stock, the “Pari Passu
      Preferred Stock”).





2.  Dividends .
      The
      holders of record of shares of Series A-1 Preferred Stock shall not be entitled
      to receive dividends.





3.  Voting
      Rights .





(a) Class
      Voting Rights .
      The
      Series A-1 Preferred Stock shall have the following class voting rights (in
      addition to the voting rights set forth in Section 3(b) hereof). Subject to
      Section 10 hereof, so long as any shares of the Series A-1 Preferred Stock
      remain outstanding, the Company shall not, without the affirmative vote or
      consent of the holders of at least seventy percent (70%) of the shares of the
      Series A-1 Preferred Stock outstanding at the time, given in person or by proxy,
      either in writing or at a meeting, in which the holders of the Series A-1
      Preferred Stock vote separately as a class: (i) amend, alter or repeal the
      provisions of the Series A-1 Preferred Stock, whether by merger, consolidation
      or otherwise, so as to adversely affect any right, preference, privilege or
      voting power of the Series A-1 Preferred Stock; provided , however ,
      that
      any creation and issuance of another series of Junior Stock and, to the extent
      approved in accordance with Section 7(q) of the Amended and Restated Exchange
      Agreement between the Company and Paul Royalty Fund, L.P. (the “Exchange
      Agreement”), pari passu stock and senior stock shall not be deemed to adversely
      affect such rights, preferences, privileges or voting powers; (ii) repurchase,
      redeem or pay dividends in cash or in kind on shares of the Company's Junior
      Stock and pari passu stock and senior stock; (iii) amend the Certificate of
      Incorporation or By-Laws of the Company so as to affect materially and adversely
      any right, preference, privilege or voting power of the Series A-1 Preferred
      Stock; provided , however ,
      that
      any creation and issuance of another series of Junior Stock and, to the extent
      approved in accordance with Section 7(q) of the Exchange Agreement, pari passu
      stock and senior stock shall not be deemed to materially and adversely affect
      such rights, preferences, privileges or voting powers; (iv) effect any
      distribution with respect to Junior Stock and Pari Passu Preferred Stock; or
      (v)
      reclassify the Company's outstanding securities.










(b) General
      Voting Rights .
      Except
      with respect to transactions upon which the Series A-1 Preferred Stock shall
      be
      entitled to vote separately as a class pursuant to Section 3(a) above and except
      as otherwise required by Delaware law, the Series A-1 Preferred Stock shall
      have
      no voting rights. The Common Stock into which the Series A-1 Preferred Stock
      is
      convertible shall, upon issuance, have all of the same voting rights as other
      issued and outstanding Common Stock of the Company.





4.  Liquidation
      Preference .





(a) In
      the
      event of the liquidation, dissolution or winding up of the affairs of the
      Company, whether voluntary or involuntary, the holders of shares of the Series
      A-1 Preferred Stock then outstanding shall be entitled to receive, out of the
      assets of the Company whether such assets are capital or surplus of any nature,
      an amount equal to $10,000 per share (the "Liquidation Preference Amount")
      of
      the Series A-1 Preferred Stock, on a pro rata and pari passu basis with the
      Pari
      Passu Preferred Stock, before any payment shall be made or any assets
      distributed to the holders of the Common Stock or any other Junior Stock. If
      the
      assets of the Company are not sufficient to pay in full the Liquidation
      Preference Amount payable to the holders of outstanding shares of the Series
      A-1
      Preferred Stock and any series of preferred stock or any other class of stock
      on
      a parity, including, without limitation, the Pari Passu Preferred Stock, as
      to
      rights on liquidation, dissolution or winding up, with the Series A-1 Preferred
      Stock, then all of said assets will be distributed among the holders of the
      Series A-1 Preferred Stock, the Pari Passu Preferred Stock and the other classes
      of stock on a parity with the Series A-1 Preferred Stock, if any, ratably in
      accordance with the respective amounts that would be payable on such shares
      if
      all amounts payable thereon were paid in full. The liquidation payment with
      respect to each outstanding fractional share of Series A-1 Preferred Stock
      shall
      be equal to a ratably proportionate amount of the liquidation payment with
      respect to each outstanding share of Series A-1 Preferred Stock. All payments
      for which this Section 4(a) provides shall be in cash, property (valued at
      its
      fair market value as determined by an independent appraiser reasonably
      acceptable to the holders of a majority of the Series A-1 Preferred Stock)
      or a
      combination thereof; provided , however ,
      that no
      cash shall be paid to holders of Junior Stock unless each holder of the
      outstanding shares of Series A-1 Preferred Stock has been paid in cash the
      full
      Liquidation Preference Amount to which such holder is entitled as provided
      herein. After payment of the full Liquidation Preference Amount to which each
      holder is entitled, such holders of shares of Series A-1 Preferred Stock will
      not be entitled to any further participation as such in any distribution of
      the
      assets of the Company.





(b) A
      consolidation or merger of the Company with or into any other corporation or
      corporations, or a sale of all or substantially all of the assets of the
      Company, or the effectuation by the Company of a transaction or series of
      transactions in which more than fifty percent (50%) of the voting shares of
      the
      Company is disposed of or conveyed, or other acquisition type transaction,
      or
      upon the payment by the Company of interest, dividends or other distributions
      to
      the holders of securities or financial instruments (including Indebtedness)
      ranking senior to or pari passu with the Series A-1 Preferred Stock exceeding
      $10 million in the aggregate, shall be, at the election of a majority of the
      holders of the Series A-1 Preferred Stock, deemed to be a liquidation,
      dissolution, or winding up within the meaning of this Section 4. The grant
      of an
      exclusive license for all or substantially all of the Company's intellectual
      property assets covered by the Cambrex license shall also be deemed to be a
      liquidation, dissolution, or winding up within the meaning of this Section
      4 in
      the event that either (i) the holders of the Series A Preferred Stock, and
      all
      affiliates of such holders, together own directly or indirectly ten percent
      (10%) or more of the outstanding equity of the licensee, or (ii) seventy percent
      (70%) of the Company's Series A Preferred Stock and Series A-1 Preferred Stock
      voting together as a class so elect. In the event of the merger or consolidation
      of the Company with or into another corporation that is not treated as a
      liquidation pursuant to this Section 4(b), the Series A-1 Preferred Stock shall
      maintain its relative powers, designations and preferences provided for herein
      and no merger shall result inconsistent therewith.










(c) Written
      notice of any voluntary or involuntary liquidation, dissolution or winding
      up of
      the affairs of the Company, stating a payment date and the place where the
      distributable amounts shall be payable, shall be given by mail, postage prepaid,
      no less than forty-five (45) days prior to the payment date stated therein,
      to
      the holders of record of the Series A-1 Preferred Stock at their respective
      addresses as the same shall appear on the books of the Company.





5.  Conversion .
      The
      holder of Series A-1 Preferred Stock shall have the following conversion rights
      (the "Conversion Rights"):





(a) Right
      to Convert .
      At any
      time on or after the Issuance Date, the holder of any such shares of Series
      A-1
      Preferred Stock may, at such holder's option, subject to the limitations set
      forth in Section 7 herein, elect to convert (a "Voluntary Conversion") all
      or
      any portion of the shares of Series A-1 Preferred Stock held by such person
      into
      a number of fully paid and nonassessable shares of Common Stock equal to the
      quotient of (i) the Liquidation Preference Amount of the shares of Series A-1
      Preferred Stock being converted thereon divided by (ii) the Conversion Price
      (as
      defined in Section 5(d) below) then in effect as of the date of the delivery
      by
      such holder of its notice of election to convert. The Company shall keep written
      records of the conversion of the shares of Series A-1 Preferred Stock converted
      by each holder. A holder shall be required to deliver the original certificates
      representing the shares of Series A-1 Preferred Stock upon complete conversion
      of the Series A-1 Preferred Stock.





(b) Mechanics
      of Voluntary Conversion .
      The
      Voluntary Conversion of Series A-1 Preferred Stock shall be conducted in the
      following manner:





(i)  Holder's
      Delivery Requirements .
      To
      convert Series A-1 Preferred Stock into full shares of Common Stock on any
      date
      (the "Voluntary Conversion Date"), the holder thereof shall (A) transmit by
      facsimile (or otherwise deliver), for receipt on or prior to 5:00 p.m., New
      York
      time on such date, a copy of a fully executed notice of conversion in the form
      attached hereto as Exhibit
      I (the
      "Conversion Notice"), to the Company, and (B) with respect to the final
      conversion of shares of Series A-1 Preferred Stock held by any holder, such
      holder shall surrender to a common carrier for delivery to the Company as soon
      as practicable following such Conversion Date but in no event later than six
      (6)
      business days after such date the original certificates representing the shares
      of Series A-1 Preferred Stock being converted (or an indemnification undertaking
      with respect to such shares in the case of their loss, theft or destruction)
      (the "Preferred Stock Certificates").





(ii)  Company's
      Response .
      Upon
      receipt by the Company of a facsimile copy of a Conversion Notice, the Company
      shall immediately send, via facsimile, a confirmation of receipt of such
      Conversion Notice to such holder and the Company or its designated transfer
      agent (the "Transfer Agent"), as applicable, shall, within three (3) business
      days following the date of receipt by the Company of the executed Conversion
      Notice, issue and deliver to the Depository Trust Company (“ DTC ”)
      account on the holder’s behalf via the Deposit Withdrawal Agent Commission
      System (“ DWAC ”)
      as
      specified in the Conversion Notice, registered in the name of the holder or
      its
      designee, for the number of shares of Common Stock to which the holder shall
      be
      entitled.





(iii)  Dispute
      Resolution .
      In the
      case of a dispute as to the arithmetic calculation of the number of shares
      of
      Common Stock to be issued upon conversion, the Company shall promptly issue
      to
      the holder the number of shares of Common Stock that is not disputed and shall
      submit the arithmetic calculations to the holder via facsimile as soon as
      possible, but in no event later than two (2) business days after receipt of
      such
      holder's Conversion Notice. If such holder and the Company are unable to agree
      upon the arithmetic calculation of the number of shares of Common Stock to
      be
      issued upon such conversion within one (1) business day of such disputed
      arithmetic calculation being submitted to the holder, then the Company shall
      within one (1) business day submit via facsimile the disputed arithmetic
      calculation of the number of shares of Common Stock to be issued upon such
      conversion to the Company’s **** independent,
      outside accountant. The Company shall cause the accountant to perform the
      calculations and notify the Company and the holder of the results no later
      than
      seventy-two (72) hours from the time it receives the disputed calculations.
      Such
      accountant's calculation shall be binding upon all parties absent manifest
      error. The reasonable expenses of such accountant in making such determination
      shall be paid by the Company, in the event the holder's calculation was correct,
      or by the holder, in the event the Company's calculation was correct, or equally
      by the Company and the holder in the event that neither the Company's or the
      holder's calculation was correct. The period of time in which the Company is
      required to effect conversions or redemptions under this Certificate of
      Designation shall be tolled with respect to the subject conversion or redemption
      pending resolution of any dispute by the Company made in good faith and in
      accordance with this Section 5(b)(iii).










(iv)  Record
      Holder .
      The
      person or persons entitled to receive the shares of Common Stock issuable upon
      a
      conversion of the Series A-1 Preferred Stock shall be treated for all purposes
      as the record holder or holders of such shares of Common Stock on the Conversion
      Date.





(v)  Company's
      Failure to Timely Convert .
      If
      within three (3) business days of the Company's receipt of the Conversion Notice
      (the "Share Delivery Period") the Company shall fail to issue and deliver to
      a
      holder the number of shares of Common Stock to which such holder is entitled
      upon such holder's conversion of the Series A-1 Preferred Stock (a "Conversion
      Failure"), in addition to all other available remedies which such holder may
      pursue hereunder and under the Amended and Restated Exchange Agreement among
      the
      Company and the initial holder of the Series A-1 Preferred Stock (the "Exchange
      Agreement") (including indemnification pursuant to Section 13 thereof), the
      Company shall pay additional damages to such holder on each business day after
      such third (3 rd )
      business day that such conversion is not timely effected in an amount equal
      0.5%
      of the product of (A) the sum of the number of shares of Common Stock not issued
      to the holder on a timely basis pursuant to Section 5(b)(ii) and to which such
      holder is entitled and (B) the Closing Bid Price (as defined in Section 5(d)(ii)
      hereof) of the Common Stock on the last possible date which the Company could
      have issued such Common Stock to such holder without violating Section 5(b)(ii).
      If the Company fails to pay the additional damages set forth in this Section
      5(b)(v) within five (5) business days of the date incurred, then such payment
      shall bear interest at the rate of 2% per month (pro rated for partial months)
      until such payments are made.





(c) Intentionally
      Omitted .





(d) Conversion
      Price .





(i)  The
      term
      "Conversion Price" shall mean $0.50 per share, subject to adjustment under
      Section 5(e) hereof. Notwithstanding any adjustment hereunder, at no time shall
      the Conversion Price be greater than $0.50 per share other than pursuant to
      the
      second sentence of Section 5(e)(i) in connection with a reverse stock split
      effected by the Company.





(ii)  The
      term
      "Closing Bid Price" shall mean, for any security as of any date, the last
      closing bid price of such security on the OTC Bulletin Board for such security
      as reported by Bloomberg, or, if no closing bid price is reported for such
      security by Bloomberg, the last closing trade price of such security as reported
      by Bloomberg, or, if no last closing trade price is reported for such security
      by Bloomberg, the average of the bid prices of any market makers for such
      security as reported in the "pink sheets" by the National Quotation Bureau,
      Inc.
      If the Closing Bid Price cannot be calculated for such security on such date
      on
      any of the foregoing bases, the Closing Bid Price of such security on such
      date
      shall be the fair market value as mutually determined by the Company and the
      holders of a majority of the outstanding shares of Series A-1 Preferred Stock.





(iii)  The
      term
“Release Event” means, with respect to a holder’s shares of Series A-1 Preferred
      Stock, the date on which the Company files a Form 8-K with the Commission
      disclosing the Company’s receipt of written notice from the U.S. Food and Drug
      Administration regarding the granting the Company the right to commercialize
      and
      market (i.e., formal approval of the Company’s Pre-Market Application for) its
      OrCel product for the treatment of venous leg ulcers.










(e) Adjustments
      of Conversion Price .





(i)  Adjustments
      for Stock Splits and Combinations .
      If the
      Company shall at any time or from time to time after the Issuance Date, effect
      a
      stock split of the outstanding Common Stock, the Conversion Price shall be
      proportionately decreased. If the Company shall at any time or from time to
      time
      after the Issuance Date, combine the outstanding shares of Common Stock, the
      Conversion Price shall be proportionately increased. Any adjustments under
      this
      Section 5(e)(i) shall be effective at the close of business on the date the
      stock split or combination occurs.





(ii)  Adjustments
      for Certain Dividends and Distributions .
      If the
      Company shall at any time or from time to time after the Issuance Date, make
      or
      issue or set a record date for the determination of holders of Common Stock
      entitled to receive a dividend or other distribution payable in shares of Common
      Stock, then, and in each event, the Conversion Price shall be decreased as
      of
      the time of such issuance or, in the event such record date shall have been
      fixed, as of the close of business on such record date, by multiplying, as
      applicable, the Conversion Price then in effect by a fraction:





(1)  the
      numerator of which shall be the total number of shares of Common Stock issued
      and outstanding immediately prior to the time of such issuance or the close
      of
      business on such record date; and





(2)  the
      denominator of which shall be the total number of shares of Common Stock issued
      and outstanding immediately prior to the time of such issuance or the close
      of
      business on such record date plus the number of shares of Common Stock issuable
      in payment of such dividend or distribution.





(iii)  Adjustment
      for Other Dividends and Distributions .
      If the
      Company shall at any time or from time to time after the Issuance Date, make
      or
      issue or set a record date for the determination of holders of Common Stock
      entitled to receive a dividend or other distribution payable in securities
      of
      the Company other than shares of Common Stock, then, and in each event, an
      appropriate revision to the applicable Conversion Price shall be made and
      provision shall be made (by adjustments of the Conversion Price or otherwise)
      so
      that the holders of Series A-1 Preferred Stock shall receive upon conversions
      thereof, in addition to the number of shares of Common Stock receivable thereon,
      the number of securities of the Company which they would have received had
      their
      Series A-1 Preferred Stock been converted into Common Stock immediately prior
      to
      such event and had thereafter, during the period from the date of such event
      to
      and including the Conversion Date, retained such securities (together with
      any
      distributions payable thereon during such period), giving application to all
      adjustments called for during such period under this Section 5(e)(iii) with
      respect to the rights of the holders of the Series A-1 Preferred
      Stock.





(iv)  Adjustments
      for Reclassification, Exchange or Substitution .
      If the
      Common Stock issuable upon conversion of the Series A-1 Preferred Stock at
      any
      time or from time to time after the Issuance Date shall be changed to the same
      or different number of shares of any class or classes of stock, whether by
      reclassification, exchange, substitution or otherwise (other than by way of
      a
      stock split or combination of shares or stock dividends provided for in Sections
      5(e)(i), (ii) and (iii), or a reorganization, merger, consolidation, or sale
      of
      assets provided for in Section 5(e)(v)), then, and in each event, an appropriate
      revision to the Conversion Price shall be made and provisions shall be made
      (by
      adjustments of the Conversion Price or otherwise) so that the holder of each
      share of Series A-1 Preferred Stock shall have the right thereafter to convert
      such share of Series A-1 Preferred Stock into the kind and amount of shares
      of
      stock and other securities receivable upon reclassification, exchange,
      substitution or other change, by holders of the number of shares of Common
      Stock
      into which such share of Series A-1 Preferred Stock might have been converted
      immediately prior to such reclassification, exchange, substitution or other
      change, all subject to further adjustment as provided herein.










(v)  Adjustments
      for Reorganization, Merger, Consolidation or Sales of  Assets .
      If at
      any time or from time to time after the Issuance Date there shall be a capital
      reorganization of the Company (other than by way of a stock split or combination
      of shares or stock dividends or distributions provided for in Section 5(e)(i),
      (ii) and (iii), or a reclassification, exchange or substitution of shares
      provided for in Section 5(e)(iv)), or a merger or consolidation of the Company
      with or into another corporation, or the sale of all or substantially all of
      the
      Company's properties or assets to any other person that is not deemed a
      liquidation pursuant to Section 4(b) (an "Organic Change"), then as a part
      of
      such Organic Change an appropriate revision to the Conversion Price shall be
      made and provision shall be made (by adjustments of the Conversion Price or
      otherwise) so that the holder of each share of Series A-1 Preferred Stock shall
      have the right thereafter to convert such share of Series A-1 Preferred Stock
      into the kind and amount of shares of stock and other securities or property
      of
      the Company or any successor corporation resulting from the Organic Change
      as
      the holder would have received as a result of the Organic Change and if the
      holder had converted its Series A-1 Preferred Stock into the Company’s Common
      Stock prior to the Organic Change. In any such case, appropriate adjustment
      shall be made in the application of the provisions of this Section 5(e)(v)
      with
      respect to the rights of the holders of the Series A-1 Preferred Stock after
      the
      Organic Change to the end that the provisions of this Section 5(e)(v) (including
      any adjustment in the Conversion Price then in effect and the number of shares
      of stock or other securities deliverable upon conversion of the Series A-1
      Preferred Stock) shall be applied after that event in as nearly an equivalent
      manner as may be practicable.





(vi)  Adjustments
      for Issuance of Additional Shares of Common Stock.





(A)  In
      the
      event the Company, shall, at any time, from time to time, prior to a Release
      Event, issue or sell any additional shares of Common Stock (otherwise than
      as
      provided in the foregoing subsections (i) through (v) of this Section 5(e)
      or
      upon exercise or conversion of Common Stock Equivalents (hereafter defined)
      granted or issued prior to the Issuance Date) (the “Additional Shares of Common
      Stock”), at a price per share less than the Conversion Price, or without
      consideration, the Conversion Price then in effect upon each such issuance
      shall
      be adjusted to a price equal to the consideration per share paid for such
      Additional Shares of Common Stock. Upon and after a Release Event, the price
      shall be adjusted to the price (rounded to the nearest cent) determined by
      multiplying the Conversion Price by a fraction:





(1)  the
      numerator of which shall be equal to the sum of (A) the number of shares of
      Common Stock outstanding immediately prior to the issuance of such Additional
      Shares of Common Stock plus (B) the
      number of shares of Common Stock (rounded to the nearest whole share) which
      the
      aggregate consideration for the total number of such Additional Shares of Common
      Stock so issued would purchase at a price per share equal to the Conversion
      Price then in effect, and





(2)  the
      denominator of which shall be equal to the number of shares of Common Stock
      outstanding immediately after the issuance of such Additional Shares of Common
      Stock.





No
      adjustment of the number of shares of Common Stock shall be made under paragraph
      (A) of Section 5(e)(vi) upon the issuance of any Additional Shares of Common
      Stock which are issued pursuant to the exercise of any warrants or other
      subscription or purchase rights or pursuant to the exercise of any conversion
      or
      exchange rights in any Common Stock Equivalents (as defined below), if any
      such
      adjustment shall previously have been made upon the issuance of such warrants
      or
      other rights or upon the issuance of such Common Stock Equivalents (or upon
      the
      issuance of any warrant or other rights therefor) pursuant to Section
      5(e)(vii).





(vii)  Issuance
      of Common Stock Equivalents .
      If the
      Company, at any time after the Issuance Date and prior to a Release Event,
      shall
      issue any securities convertible into or exchangeable for, directly or
      indirectly, Common Stock (“Convertible Securities”), other than (x) the
      Series A  Preferred
      Stock or warrants issued to the holders of the Series A Preferred Stock pursuant
      to the Series A Convertible Preferred Stock Purchase Agreement among the Company
      and the purchasers listed therein (the “Purchase Agreement”) as in effect on the
      date hereof, or (y) the Series A-1 Preferred Stock and the Series A-2
      Preferred Stock pursuant to the Exchange Agreement as in effect on the date
      hereof, or any rights or warrants or options to purchase any such Common Stock
      or Convertible Securities, shall be issued or sold (collectively, the "Common
      Stock Equivalents") and the aggregate of the price per share for which
      Additional Shares of Common Stock may be issuable thereafter pursuant to such
      Common Stock Equivalent, plus the consideration received by the Company for
      issuance of such Common Stock Equivalent, divided by the number of shares of
      Common Stock issuable pursuant to such Common Stock Equivalent (the "Aggregate
      Per Common Share Price"), shall be less than the Conversion Price, or if, after
      any such issuance of Common Stock Equivalents, the price per share for which
      Additional Shares of Common Stock may be issuable thereafter is amended or
      adjusted, and such price as so amended shall make the Aggregate Per Common
      Share
      Price be less than Conversion Price in effect at the time of such amendment,
      then the Conversion Price then in effect shall upon each such issuance be
      adjusted a price equal to the consideration per share paid for such Additional
      Shares of Common Stock. Upon and after a Release Event, the price shall be
      adjusted to the price (rounded to the nearest cent) determined by multiplying
      the Conversion Price by a fraction:










(1)  the
      numerator of which shall be equal to the sum of (A) the number of shares of
      Common Stock outstanding immediately prior to the issuance of such Common Stock
      Equivalents plus (B) the
      number of shares of Common Stock (rounded to the nearest whole share) which
      the
      Aggregate Per Common Share Price multiplied by the number of shares of Common
      Stock issuable upon the exercise or conversion of all such Common Stock
      Equivalents, would purchase at a price per share equal to the Conversion Price
      then in effect, and





(2)  the
      denominator of which shall be equal to the number of shares of Common Stock
      that
      would be outstanding assuming the exercise or conversion of all such Common
      Stock Equivalents.





No
      adjustment of the Conversion Price shall be made under this subsection (vii)
      upon the issuance of any Convertible Security which is issued pursuant to the
      exercise of any warrants or other subscription or purchase rights therefor,
      if
      any adjustment shall previously have been made to the exercise price of such
      warrants then in effect upon the issuance of such warrants or other rights
      pursuant to this subsection (vii).





(viii)  Consideration
      for Stock .
      In case
      any shares of Common Stock or Convertible Securities other than the Series
      A-1
      Preferred Stock, or any rights or warrants or options to purchase any such
      Common Stock or Convertible Securities, shall be issued or sold in connection
      with any merger or consolidation in which the Company is the surviving
      corporation (other than any consolidation or merger in which the previously
      outstanding shares of Common Stock of the Company shall be changed to or
      exchanged for the stock or other securities of another corporation), the amount
      of consideration therefor shall be deemed to be the fair value, as determined
      reasonably and in good faith by the Board of Directors of the Company, of such
      portion of the assets and business of the nonsurviving corporation as such
      Board
      may determine to be attributable to such shares of Common Stock, Convertible
      Securities, rights or warrants or options, as the case may be.





(ix)  Record
      Date .
      In case
      the Company shall take record of the holders of its Common Stock or any other
      Preferred Stock for the purpose of entitling them to subscribe for or purchase
      Common Stock or Convertible Securities, then the date of the issue or sale
      of
      the shares of Common Stock shall be deemed to be such record date.





(x)  Certain
      Issues Excepted .
      Anything herein to the contrary notwithstanding, the Company shall not be
      required to make any adjustment of the Conversion Price of shares of Common
      Stock issuable upon conversion of the Series A-1 Preferred Stock upon (i) the
      Company's issuance of Additional Shares of Common Stock and/or Common Stock
      Equivalents in connection with strategic license agreements so long as such
      issuances are not for the purpose of raising capital, (ii) when approved by
      the
      Company’s Board of Directors or by a committee of the Board of Directors the
      majority of whom are independent directors, the Company’s (A) issuance of
      Additional Shares of Common Stock to the Company's officers, directors,
      employees and consultants and to suppliers of goods and/or services to the
      Company, whether pursuant to the 2006 Stock Award and Incentive Plan, any other
      plan hereafter adopted, or otherwise, so long as such issuances under this
      subsection (ii) which would cause the provisions of Section 5(e) hereof to
      be
      applied in the aggregate do not exceed ten percent (10%) of the issued and
      outstanding shares of Common Stock as of the Issuance Date, and (B) grant of
      stock options or warrants to purchase shares of Common Stock, whether the grants
      of such options or warrants are made under the Company's Employee Stock Option
      Plan or its 2006 Stock Award and Incentive Plan, as
      they
      now exist ,
      an
      employee or director stock option plan and a stock award and incentive plan
      hereafter adopted or otherwise, so long as such issuances under this subsection
      (ii) which would cause the provisions of Section 5(e) hereof to be applied
      in
      the aggregate do not exceed ten percent (10%) of the issued and outstanding
      shares of Common Stock as of the Issuance Date, (iii) securities issued upon
      the
      exercise, conversion or exchange of any Common Stock Equivalents outstanding
      on
      the Issuance Date at the conversion price in effect on the Issuance Date, as
      may
      be adjusted by the anti-dilution provisions thereof as in effect on the date
      hereof, (iv) issuance of Series A Preferred Stock or warrants issued by the
      Company pursuant to the Purchase Agreement, or Common Stock issued upon
      conversion or exercise thereof, (v) issuance of Series A-1 Convertible Preferred
      Stock, Series A-2 Convertible Preferred Stock, Series D-2 Convertible Preferred
      Stock or Common Stock issued upon conversion thereof at the conversion price
      in
      effect on the Issuance Date, as such conversion price may be adjusted pursuant
      to Section 5 hereof, (vii) any warrants issued to Burnham Hill Partners, a
      division of Pali Capital Inc. or any other person or entity for services in
      connection with the transactions contemplated by the Purchase Agreement and
      the
      shares of Common Stock issued upon exercise thereof at the conversion price
      in
      effect on the Issuance Date, as may be adjusted by the anti-dilution provisions
      thereof as in effect on the date hereof, or (vii) warrants issued to Ron
      Lipstein and Steven Katz in connection with the agreements terminating their
      employment with the Company at the conversion price in effect on the Issuance
      Date or as may be adjusted by the anti-dilution provision thereof as in effect
      on the Issuance Date.










(f) No
      Impairment .
      The
      Company shall not, by amendment of its Certificate of Incorporation or through
      any reorganization, transfer of assets, consolidation, merger, dissolution,
      issue or sale of securities or any other voluntary action, avoid or seek to
      avoid the observance or performance of any of the terms to be observed or
      performed hereunder by the Company, but will at all times in good faith, assist
      in the carrying out of all the provisions of this Section 5 and in the taking
      of
      all such action as may be necessary or appropriate in order to protect the
      Conversion Rights of the holders of the Series A-1 Preferred Stock against
      impairment. In the event a holder shall elect to convert any shares of Series
      A-1 Preferred Stock as provided herein, the Company cannot refuse conversion
      based on any claim that such holder or any one associated or affiliated with
      such holder has been engaged in any violation of law, unless, an injunction
      from
      a court, on notice, restraining and/or enjoining conversion of all or of said
      shares of Series A-1 Preferred Stock shall have been issued and the Company
      posts a surety bond for the benefit of such holder in an amount equal to 130%
      of
      the Liquidation Preference Amount of the Series A-1 Preferred Stock such holder
      has elected to convert, which bond shall remain in effect until the completion
      of arbitration/litigation of the dispute and the proceeds of which shall be
      payable to such holder in the event it obtains judgment.





(g) Certificates
      as to Adjustments .
      Upon
      occurrence of each adjustment or readjustment of the Conversion Price or number
      of shares of Common Stock issuable upon conversion of the Series A-1 Preferred
      Stock pursuant to this Section 5, the Company at its expense shall promptly
      compute such adjustment or readjustment in accordance with the terms hereof
      and
      furnish to each holder of such Series A-1 Preferred Stock a certificate setting
      forth such adjustment and readjustment, showing in detail the facts upon which
      such adjustment or readjustment is based. The Company shall, upon written
      request of the holder of such affected Series A-1 Preferred Stock, at any time,
      furnish or cause to be furnished to such holder a like certificate setting
      forth
      such adjustments and readjustments, the Conversion Price in effect at the time,
      and the number of shares of Common Stock and the amount, if any, of other
      securities or property which at the time would be received upon the conversion
      of a share of such Series A-1 Preferred Stock. Notwithstanding the foregoing,
      the Company shall not be obligated to deliver a certificate unless such
      certificate would reflect an increase or decrease of at least one percent of
      such adjusted amount.





(h) Issue
      Taxes .
      The
      Company shall pay any and all issue and other taxes, excluding federal, state
      or
      local income taxes, that may be payable in respect of any issue or delivery
      of
      shares of Common Stock on conversion of shares of Series A-1 Preferred Stock
      pursuant thereto; provided , however ,
      that
      the Company shall not be obligated to pay any transfer taxes resulting from
      any
      transfer requested by any holder in connection with any such
      conversion.





(i) Notices .
      All
      notices and other communications hereunder shall be in writing and shall be
      deemed given if delivered personally or by facsimile or three (3) business
      days
      following being mailed by certified or registered mail, postage prepaid,
      return-receipt requested, addressed to the holder of record at its address
      appearing on the books of the Company. The Company will give written notice
      to
      each holder of Series A-1 Preferred Stock at least twenty (20) days prior to
      the
      date on which the Company closes its books or takes a record (I) with respect
      to
      any dividend or distribution upon the Common Stock, (II) with respect to any
      pro
      rata subscription offer to holders of Common Stock or (III) for determining
      rights to vote with respect to any Organic Change, dissolution, liquidation
      or
      winding-up and in no event shall such notice be provided to such holder prior
      to
      such information being made known to the public. The Company will also give
      written notice to each holder of Series A-1 Preferred Stock at least twenty
      (20)
      days prior to the date on which any Organic Change, dissolution, liquidation
      or
      winding-up will take place and in no event shall such notice be provided to
      such
      holder prior to such information being made known to the public.










(j) Fractional
      Shares .
      No
      fractional shares of Common Stock shall be issued upon conversion of the Series
      A-1 Preferred Stock. In lieu of any fractional shares to which the holder would
      otherwise be entitled, the Company shall at its option either (i) pay cash
      equal
      to the product of such fraction multiplied by the average of the Closing Bid
      Prices of the Common Stock for the five (5) consecutive trading days immediately
      preceding the Voluntary Conversion Date, or (ii) in lieu of issuing such
      fractional shares issue one additional whole share to the holder.





(k) Reservation
      of Common Stock .
      The
      Company shall, so long as any shares of Series A-1 Preferred Stock are
      outstanding, reserve and keep available out of its authorized and unissued
      Common Stock, solely for the purpose of effecting the conversion of the Series
      A-1 Preferred Stock, such number of shares of Common Stock as shall from time
      to
      time be sufficient to effect the conversion of all of the Series A-1 Preferred
      Stock then outstanding; provided that the
      number of shares of Common Stock so reserved shall at no time be less than
      120%
      of the number of shares of Common Stock for which the shares of Series A-1
      Preferred Stock are at any time convertible (without regard to limitations
      on
      conversion set forth in Section 7). The initial number of shares of Common
      Stock
      reserved for conversions of the Series A-1 Preferred Stock and each increase
      in
      the number of shares so reserved shall be allocated pro rata among the holders
      of the Series A-1 Preferred Stock based on the number of shares of Series A-1
      Preferred Stock held by each holder at the time of issuance of the Series A-1
      Preferred Stock or increase in the number of reserved shares, as the case may
      be. In the event a holder shall sell or otherwise transfer any of such holder's
      shares of Series A-1 Preferred Stock, each transferee shall be allocated a
      pro
      rata portion of the number of reserved shares of Common Stock reserved for
      such
      transferor. Any shares of Common Stock reserved and which remain allocated
      to
      any person or entity which does not hold any shares of Series A-1 Preferred
      Stock shall be allocated to the remaining holders of Series A-1 Preferred Stock,
      pro rata based on the number of shares of Series A-1 Preferred Stock then held
      by such holder.





(l) Retirement
      of Series A-1 Preferred Stock .
      Conversion of Series A-1 Preferred Stock shall be deemed to have been effected
      on the applicable Voluntary Conversion Date. The Company shall keep written
      records of the conversion of the shares of Series A-1 Preferred Stock converted
      by each holder. A holder shall be required to deliver the original certificates
      representing the shares of Series A-1 Preferred Stock upon complete conversion
      of the Series A-1 Preferred Stock.





(m) Regulatory
      Compliance .
      If any
      shares of Common Stock to be reserved for the purpose of conversion of Series
      A-1 Preferred Stock require registration or listing with or approval of any
      governmental authority, stock exchange or other regulatory body under any
      federal or state law or regulation or otherwise before such shares may be
      validly issued or delivered upon conversion, the Company shall, at its sole
      cost
      and expense, in good faith and as expeditiously as possible, endeavor to secure
      such registration, listing or approval, as the case may be.





6.  No
      Preemptive Rights .
      Except
      as provided in Section 5 hereof and in the Exchange Agreement, no holder of
      the
      Series A-1 Preferred Stock shall be entitled to rights to subscribe for,
      purchase or receive any part of any new or additional shares of any class,
      whether now or hereinafter authorized, or of bonds or debentures, or other
      evidences of indebtedness convertible into or exchangeable for shares of any
      class, but all such new or additional shares of any class, or any bond,
      debentures or other evidences of indebtedness convertible into or exchangeable
      for shares, may be issued and disposed of by the Board of Directors on such
      terms and for such consideration (to the extent permitted by law), and to such
      person or persons as the Board of Directors in their absolute discretion may
      deem advisable.










7.  Conversion
      Restriction .
      Notwithstanding anything to the contrary set forth in Section 5 of this
      Certificate of Designation, at no time may a holder of shares of Series A-1
      Preferred Stock convert shares of the Series A-1 Preferred Stock if the number
      of shares of Common Stock to be issued pursuant to such conversion would exceed,
      when aggregated with all other shares of Common Stock owned by such holder
      at
      such time, the number of shares of Common Stock which would result in such
      holder beneficially owning (as determined in accordance with Section 13(d)
      of
      the Securities Exchange Act of 1934, as amended, and the rules thereunder)
      in
      excess of 9.99% of all of the Common Stock outstanding at such time; provided , however ,
      that
      upon a holder of Series A-1 Preferred Stock providing the Company with sixty-one
      (61) days notice (pursuant to Section 5(i) hereof) (the "Waiver Notice") that
      such holder would like to waive Section 7 of this Certificate of Designation
      with regard to any or all shares of Common Stock issuable upon conversion of
      Series A-1 Preferred Stock, this Section 7 shall be of no force or effect with
      regard to those shares of Series A-1 Preferred Stock referenced in the Waiver
      Notice.





8.  Most
      Favored Nations Exchange Right .
      If the
      Company enters into any equity or equity linked financing (“ Subsequent
      Financing ”)
      on
      terms more favorable than the terms governing the Series A-1 Preferred Stock,
      then the holders of the Series A-1 Preferred Stock together the holders of
      the
      Company’s Series A Preferred Stock in their sole discretion may exchange their
      Series A Preferred Stock and Series A-1 Preferred Stock, as the case may be,
      valued at their Liquidation Preference Amount, for the securities issued or
      to
      be issued in the Subsequent Financing to the extent a Release Event has not
      occurred.





9.  Inability
      to Fully Convert .





(a) Holder's
      Option if Company Cannot Fully Convert .
      If,
      upon the Company's receipt of a Conversion Notice, the Company cannot issue
      shares of Common Stock registered for resale to the extent required under the
      Registration Statement for any reason, including, without limitation, because
      the Company (x) does not have a sufficient number of shares of Common Stock
      authorized and available, (y) is otherwise prohibited by applicable law or
      by
      the rules or regulations of any stock exchange, interdealer quotation system
      or
      other self-regulatory organization with jurisdiction over the Company or its
      securities from issuing all of the Common Stock which is to be issued to a
      holder of Series A-1 Preferred Stock pursuant to a Conversion Notice or (z)
      fails to have a sufficient number of shares of Common Stock registered for
      resale required under the Registration Statement, then the Company shall issue
      as many shares of Common Stock as it is able to issue in accordance with such
      holder's Conversion Notice and pursuant to Section 5(b)(ii) above and, with
      respect to the unconverted Series A-1 Preferred Stock, the holder, solely at
      such holder's option, can elect, in addition to other remedies available to
      such
      holder, within five (5) business days after receipt of notice from the Company
      thereof to:





(i)  require
      the Company to redeem from such holder those Series A-1 Preferred Stock for
      which the Company is unable to issue Common Stock in accordance with such
      holder’s Conversion Notice (“Mandatory Redemption”) at a price per share equal
      to the 100% of the Liquidation Preference Amount as of such Conversion Date
      (the
“Mandatory Redemption Price”).





(ii)  if
      the
      Company's inability to fully convert Series A-1 Preferred Stock is pursuant
      to
      Section 9(a)(z) above, require the Company to issue restricted shares of Common
      Stock in accordance with such holder's Conversion Notice and pursuant to Section
      5(b)(ii) above.





(iii)  void
      its
      Conversion Notice and retain or have returned, as the case may be, the shares
      of
      Series A-1 Preferred Stock that were to be converted pursuant to such holder's
      Conversion Notice (provided that a holder's voiding its Conversion Notice shall
      not effect the Company's obligations to make any payments which have accrued
      prior to the date of such notice).





In
      the
      event a Holder shall elect to convert any shares of Series A-1 Preferred Stock
      as provided herein, the Company cannot refuse conversion based on any claim
      that
      such Holder or any one associated or affiliated with such Holder has been
      engaged in any violation of law, violation of an agreement to which such Holder
      is a party or for any reason whatsoever, unless, an injunction from a court,
      on
      notice, restraining and or enjoining conversion of all or of said shares of
      Series A-1 Preferred Stock shall have issued and the Company posts a surety
      bond
      for the benefit of such Holder in an amount equal to 130% of the amount of
      shares of Series A-1 Preferred Stock the Holder has elected to convert, which
      bond shall remain in effect until the completion of arbitration/litigation
      of
      the dispute and the proceeds of which shall be payable to such Holder in the
      event it obtains judgment.










(b) Mechanics
      of Fulfilling Holder's Election .
      The
      Company shall immediately send via facsimile to a holder of Series A-1 Preferred
      Stock, upon receipt of a facsimile copy of a Conversion Notice from such holder
      which cannot be fully satisfied as described in Section 9(a) above, a notice
      of
      the Company's inability to fully satisfy such holder's Conversion Notice (the
      "Inability to Fully Convert Notice"). Such Inability to Fully Convert Notice
      shall indicate (i) the reason why the Company is unable to fully satisfy such
      holder's Conversion Notice, (ii) the number of Series A-1 Preferred Stock which
      cannot be converted and (iii) the applicable Mandatory Redemption Price. Such
      holder shall notify the Company of its election pursuant to Section 9(a) above
      by delivering written notice via facsimile to the Company ("Notice in Response
      to Inability to Convert").





(c) Payment
      of Redemption Price .
      If such
      holder shall elect to have its shares redeemed pursuant to Section 9(a)(i)
      above, the Company shall pay the Mandatory Redemption Price to such holder
      within thirty (30) days of the Company’s receipt of the holder’s Notice in
      Response to Inability to Convert, provided that
      prior to the Company’s receipt of the holder’s Notice in Response to Inability
      to Convert the Company has not delivered a notice to such holder stating, to
      the
      satisfaction of the holder, that the event or condition resulting in the
      Mandatory Redemption has been cured and all Conversion Shares issuable to such
      holder can and will be delivered to the holder in accordance with the terms
      of
      Section 2(g). If the Company shall fail to pay the applicable Mandatory
      Redemption Price to such holder on a timely basis as described in this Section
      9(c) (other than pursuant to a dispute as to the determination of the arithmetic
      calculation of the Redemption Price), in addition to any remedy such holder
      of
      Series A Preferred Stock may have under this Certificate of Designation and
      the
      Exchange Agreement, such unpaid amount shall bear interest at the rate of 2.0%
      per month (prorated for partial months) until paid in full. Until the full
      Mandatory Redemption Price is paid in full to such holder, such holder may
      (i)
      void the Mandatory Redemption with respect to those Series A Preferred Stock
      for
      which the full Mandatory Redemption Price has not been paid, (ii) receive back
      such Series A Preferred Stock, and (iii) require that the Conversion Price
      of
      such returned Series A Preferred Stock be adjusted to the lesser of (A) the
      Conversion Price and (B) the lowest Closing Bid Price during the period
      beginning on the Conversion Date and ending on the date the holder voided the
      Mandatory Redemption.





(d) Pro-rata
      Conversion and Redemption .
      In the
      event the Company receives a Conversion Notice from more than one holder of
      Series A-1 Preferred Stock on the same day and the Company can convert and
      redeem some, but not all, of the Series A-1 Preferred Stock pursuant to this
      Section 9, the Company shall convert and redeem from each holder of Series
      A-1
      Preferred Stock electing to have Series A-1 Preferred Stock converted and
      redeemed at such time an amount equal to such holder's pro-rata amount (based
      on
      the number shares of Series A-1 Preferred Stock held by such holder relative
      to
      the number shares of Series A-1 Preferred Stock outstanding) of all shares
      of
      Series A-1 Preferred Stock being converted and redeemed at such
      time.





10.  Vote
      to Change the Terms of or Issue Preferred Stock .
      The
      affirmative vote at a meeting duly called for such purpose or the written
      consent without a meeting, of the holders of not less than a majority of the
      then outstanding shares of Series A-1 Preferred Stock, shall be required (a)
      for
      any change to this Certificate of Designation or the Company’s Certificate of
      Incorporation which would amend, alter, change or repeal any of the powers,
      designations, preferences and rights of the Series A-1 Preferred Stock or (b)
      for the issuance of shares of Series A-1 Preferred Stock other than pursuant
      to
      the Exchange Agreement. Notwithstanding anything herein to the contrary, Section
      8, the first sentence of Section 5(e)(vi)(A) and the first sentence of Section
      5(e)(vii) hereof may only be waived with the written consent of the holders
      of
      not less than thirty percent (30%) of the then outstanding shares of Series
      A
      Preferred Stock and Series A-1 Preferred Stock voting together as one class; provided , that ,
      such
      waiver shall be effective for all shares of Series A Preferred Stock and Series
      A-1 Preferred Stock; provided , further ,
      that a
      separate class vote shall not be required from the holders of the Series A-1
      Preferred Stock to effect the waiver of Section 8, the first sentence of Section
      5(e)(vi)(A) and the first sentence of Section 5(e)(vii). No consideration shall
      be offered or paid to any holder of Series A Preferred Stock or Series A-1
      Preferred Stock to consent to a waiver of Section 8, the first sentence of
      Section 5(e)(vi)(A) or the first sentence of Section 5(e)(vii) hereof unless
      the
      same consideration is also offered to all of the holders of Series A Preferred
      Stock and Series A-1 Preferred Stock.










11.  Lost
      or Stolen Certificates .
      Upon
      receipt by the Company of evidence satisfactory to the Company of the loss,
      theft, destruction or mutilation of any Preferred Stock Certificates
      representing the shares of Series A-1 Preferred Stock, and, in the case of
      loss,
      theft or destruction, of any indemnification undertaking by the holder to the
      Company and, in the case of mutilation, upon surrender and cancellation of
      the
      Preferred Stock Certificate(s), the Company shall execute and deliver new
      preferred stock certificate(s) of like tenor and date.





12.  Remedies,
      Characterizations, Other Obligations, Breaches and Injunctive
      Relief .
      The
      remedies provided in this Certificate of Designation shall be cumulative and
      in
      addition to all other remedies available under this Certificate of Designation,
      at law or in equity (including a decree of specific performance and/or other
      injunctive relief), no remedy contained herein shall be deemed a waiver of
      compliance with the provisions giving rise to such remedy and nothing herein
      shall limit a holder's right to pursue actual damages for any failure by the
      Company to comply with the terms of this Certificate of Designation. Amounts
      set
      forth or provided for herein with respect to payments, conversion and the like
      (and the computation thereof) shall be the amounts to be received by the holder
      thereof and shall not, except as expressly provided herein, be subject to any
      other obligation of the Company (or the performance thereof). The Company
      acknowledges that a breach by it of its obligations hereunder will cause
      irreparable harm to the holders of the Series A-1 Preferred Stock and that
      the
      remedy at law for any such breach may be inadequate. The Company therefore
      agrees that, in the event of any such breach or threatened breach, the holders
      of the Series A-1 Preferred Stock shall be entitled, in addition to all other
      available remedies, to an injunction restraining any breach, without the
      necessity of showing economic loss and without any bond or other security being
      required.





13.  Specific
      Shall Not Limit General; Construction .
      No
      specific provision contained in this Certificate of Designation shall limit
      or
      modify any more general provision contained herein. This Certificate of
      Designation shall be deemed to be jointly drafted by the Company and all initial
      purchasers of the Series A-1 Preferred Stock and shall not be construed against
      any person as the drafter hereof.





14.  Failure
      or Indulgence Not Waiver .
      No
      failure or delay on the part of a holder of Series A-1 Preferred Stock in the
      exercise of any power, right or privilege hereunder shall operate as a waiver
      thereof, nor shall any single or partial exercise of any such power, right
      or
      privilege preclude other or further exercise thereof or of any other right,
      power or privilege.





IN
      WITNESS WHEREOF, the undersigned has executed and subscribed this Amended
      Certificate and does affirm the foregoing as true this 14 th day of
      June, 2007.


ORTEC
                  INTERNATIONAL, INC.By:
              /s/
                  Ron LipsteinName:
              Ron
                  LipsteinTitle:
              Chief
                  Executive Officer





ORTEC
      INTERNATIONAL, INC.


CONVERSION
      NOTICE





Reference
      is made to the Certificate of Designation of the Relative Rights and Preferences
      of the Series A-1 Preferred Stock of Ortec International, Inc. (the "Certificate
      of Designation"). In accordance with and pursuant to the Certificate of
      Designation, the undersigned hereby elects to convert the number of shares
      of
      Series A-1 Preferred Stock, par value $.001 per share (the "Preferred Shares"),
      of Ortec International, Inc., a Delaware corporation (the "Company"), indicated
      below into shares of Common Stock, par value $.001 per share (the "Common
      Stock"), of the Company, by tendering the stock certificate(s) representing
      the
      share(s) of Preferred Shares specified below as of the date specified
      below.


Date
                    of Conversion:
                ______________________________________Number
                    of Preferred Shares to be converted:
                ________________Stock
                    certificate no(s). of Preferred Shares to be converted:
                _______
 
 The
        Common Stock have been sold pursuant to the Registration Statement (as defined
        in the Registration Rights Agreement): YES ____  NO____
 
 Please
        confirm the following information:
 Conversion
                    Price:
                ______________________________________Number
                    of shares of Common Stockto be issued:
                ______________________________________
 
 Number
        of
        shares of Common Stock beneficially owned or deemed beneficially owned by
        the
        Holder on the Date of Conversion determined in accordance with Section 16
        of the Securities
        Exchange Act of 1934, as amended: _________________________
 
 Please
        issue the Common Stock into which the Preferred Shares are being converted
        and,
        if applicable, any check drawn on an account of the Company in the following
        name and to the following address:
 Issue
                    to:
                ____________________________________________________________________________Facsimile
                    Number:
                ______________________________________Authorization:
                ______________________________________By:
                _________________________________Title:
                _________________________________Dated:


PRICES
      ATTACHED





**CERTIFICATE
      OF AMENDMENT OF CERTIFICATE OF DESIGNATION**




**OF
      THE RELATIVE RIGHTS AND PREFERENCES OF THE SERIES A-1**




**CONVERTIBLE
      PREFERRED STOCK OF ORTEC INTERNATIONAL INC.**




It
      is
      hereby certified that:




1.  The
      name
      of the Corporation (hereinafter called the “Corporation”) is Ortec International
      Inc.




2.  The
      Certificate of Designation of the Relative Rights and Preferences of the
      Series A-1 Convertible Preferred Stock of Ortec International Inc. is
      hereby amended by striking out Section 9 thereof and by substituting the
      new Section 9 hereafter set forth.




9.  Inability
      to Fully Convert .





(a) Holder's
      Option if Company Cannot Fully Convert .
      If,
      upon the Company's receipt of a Conversion Notice, the Company cannot issue
      shares of Common Stock registered for resale to the extent required under the
      Registration Statement for any reason, including, without limitation, because
      the Company (x) does not have a sufficient number of shares of Common Stock
      authorized and available, (y) is otherwise prohibited by applicable law or
      by
      the rules or regulations of any stock exchange, interdealer quotation system
      or
      other self-regulatory organization with jurisdiction over the Company or its
      securities from issuing all of the Common Stock which is to be issued to a
      holder of Series A-1 Preferred Stock pursuant to a Conversion Notice or
      (z) fails to have a sufficient number of shares of Common Stock registered
      for resale required under the Registration Statement, then the Company shall
      issue as many shares of Common Stock as it is able to issue in accordance with
      such holder's Conversion Notice and pursuant to Section 5(b)(ii) above and,
      with
      respect to the unconverted Series A-1 Preferred Stock, the holder, solely
      at such holder's option, can elect, in addition to other remedies available
      to
      such holder, within five (5) business days after receipt of notice from the
      Company thereof to:


(i) if
      the
      Company’s inability to convert Series A-1 Preferred Stock is pursuant to
      Section 9(a)(x) above, require the Company to redeem from such holder those
      Series A-1 Preferred Stock for which the Company is unable to issue Common
      Stock
      in accordance with such holder’s Conversion Notice (“Mandatory Redemption”) at a
      price per share equal to the 100% of the Liquidation Preference Amount as of
      such Conversion Date (the “Mandatory Redemption Price”);


(ii)  if
      the
      Company's inability to fully convert Series A-1 Preferred Stock is pursuant
      to Section 9(a)(z) above, require the Company to issue restricted shares of
      Common Stock in accordance with such holder's Conversion Notice and pursuant
      to
      Section 5(b)(ii) above.


(iii) void
      its
      Conversion Notice and retain or have returned, as the case may be, the shares
      of
      Series A-1 Preferred Stock that were to be converted pursuant to such holder's
      Conversion Notice (provided that a holder's voiding its Conversion Notice shall
      not effect the Company's obligations to make any payments which have accrued
      prior to the date of such notice).





In
      the
      event a Holder shall elect to convert any shares of Series A-1 Preferred Stock
      as provided herein, the Company cannot refuse conversion based on any claim
      that
      such Holder or any one associated or affiliated with such Holder has been
      engaged in any violation of law, violation of an agreement to which such Holder
      is a party or for any reason whatsoever, unless, an injunction from a court,
      on
      notice, restraining and or enjoining conversion of all or of said shares of
      Series A-1 Preferred Stock shall have issued.









(b)
            Mechanics
                of Fulfilling Holder's Election.
                The Company shall immediately send via facsimile to a holder of Series
                A-1
                Preferred Stock, upon receipt of a facsimile copy of a Conversion
                Notice
                from such holder which cannot be fully satisfied as described in
                Section
                9(a) above, a notice of the Company's inability to fully satisfy
                such
                holder's Conversion Notice (the "Inability to Fully Convert Notice").
                Such
                Inability to Fully Convert Notice shall indicate (i) the reason why
                the
                Company is unable to fully satisfy such holder's Conversion Notice
                and
                (ii) the number of Series A-1 Preferred Stock which cannot be converted.
                Such holder shall notify the Company of its election pursuant to
                Section
                9(a) above by delivering written notice via facsimile to the Company
                ("Notice in Response to Inability to
                Convert").





(c)
            Payment
                of Redemption Price.
                If such holder shall elect to have its shares redeemed pursuant to
                Section
                9(a)(i) above, the Company shall pay the Mandatory Redemption Price
                to
                such holder within thirty (30) days of the Company’s receipt of the
                holder’s Notice in Response to Inability to Convert,providedthat prior to the Company’s receipt of the holder’s Notice in Response to
                Inability to Convert the Company has not delivered a notice to such
                holder
                stating, to the satisfaction of the holder, that the event or condition
                resulting in the Mandatory Redemption has been cured and all Conversion
                Shares issuable to such holder can and will be delivered to the holder
                in
                accordance with the terms of Section 2(g). If the Company shall fail
                to
                pay the applicable Mandatory Redemption Price to such holder on a
                timely
                basis as described in this Section 9(c) (other than pursuant to a
                dispute
                as to the determination of the arithmetic calculation of the Redemption
                Price), in addition to any remedy such holder of Series A-1 Preferred
                Stock may have under this Certificate of Designation and the Exchange
                Agreement, such unpaid amount shall bear interest at the rate of
                2.0% per
                month (prorated for partial months) until paid in full. Until the
                full
                Mandatory Redemption Price is paid in full to such holder, such holder
                may
                (i) void the Mandatory Redemption with respect to those Series A-1
                Preferred Stock for which the full Mandatory Redemption Price has not been
                paid, (ii) receive back such Series A-1 Preferred Stock, and (iii)
                require that the Conversion Price of such returned Series A-1 Preferred
                Stock be adjusted to the lesser of (A) the Conversion Price and (B)
                the
                lowest Closing Bid Price during the period beginning on the Conversion
                Date and ending on the date the holder voided the Mandatory
                Redemption.





(d)
            Pro-rata
                Conversion and Redemption.
                In the event the Company receives a Conversion Notice from more than
                one
                holder of Series A-1 Preferred Stock on the same day and the Company
                can
                convert and redeem some, but not all, of the Series A-1 Preferred
                Stock
                pursuant to this Section 9, the Company shall convert from each holder
                of
                Series A-1 Preferred Stock electing to have Series A-1 Preferred
                Stock
                converted at such time an amount equal to such holder's pro-rata
                amount
                (based on the number shares of Series A-1 Preferred Stock held by
                such
                holder relative to the number shares of Series A-1 Preferred Stock
                outstanding) of all shares of Series A-1 Preferred Stock being converted
                and redeemed at such time.





3.  The
      amendment of the Certificate of Designation of the Relative Rights and
      Preferences of the Series A-1 Convertible Preferred Stock of Ortec
      International Inc. herein certified has been duly adopted in accordance with
      the
      provisions of Section 242 of the General Corporation Law of the State of
      Delaware.




4.  The
      amendment of the Certificate of Designation of the Relative Rights and
      Preferences of the Series A-1 Convertible Preferred Stock of Ortec
      International Inc. was made with the affirmative consent, in writing, by the
      holders of not less than 70% of the shares of such Series A Convertible
      Preferred Stock then outstanding, as required by the provisions of
      Section 3 of such Certificate of Designation.




Signed
      on
      December 20, 2007





/s/
                Alan W. SchoenbartName:
                Alan W. SchoenbartTitle:
                Secretary









**CERTIFICATE
      OF DESIGNATION OF THE RELATIVE RIGHTS AND PREFERENCES**


**OF
      THE**


**SERIES
      A-2 CONVERTIBLE PREFERRED STOCK**


**OF**


**ORTEC
      INTERNATIONAL, INC.**





The
      undersigned, the Chief Executive Officer of Ortec International, Inc., a
      Delaware corporation (the "Company"), in accordance with the provisions of
      the
      Delaware General Corporation Law, does hereby certify that, pursuant to the
      authority conferred upon the Board of Directors by the Certificate of
      Incorporation of the Company, the following resolution creating a series of
      Series A-2 Convertible Preferred Stock, was duly adopted on June 10,
      2007:





RESOLVED,
      that pursuant to the authority expressly granted to and vested in the Board
      of
      Directors of the Company by provisions of the Certificate of Incorporation
      of
      the Company (the "Certificate of Incorporation"), there hereby is created out
      of
      the shares of Preferred Stock, par value $.001 per share, of the Company
      authorized in Article IV of the Certificate of Incorporation (the "Preferred
      Stock"), a series of Preferred Stock of the Company, to be named "Series A-2
      Convertible Preferred Stock," consisting of five hundred (500) shares, which
      series shall have the following designations, powers, preferences and relative
      and other special rights and the following qualifications, limitations and
      restrictions:





1.  Designation
      and Rank .





(a) Designation .
      The
      designation of such series of the Preferred Stock shall be the Series A-2
      Convertible Preferred Stock, par value $.001 per share (the "Series A-2
      Preferred Stock"). The maximum number of shares of Series A-2 Preferred Stock
      shall be five hundred (500) Shares.





(b) Rank .
      The
      Series A-2 Preferred Stock shall rank prior to the common stock, par value
      $.001
      per share (the "Common Stock"), and to all other classes and series of equity
      securities of the Company which by its terms does not rank senior to or pari
      passu with the Series A-2 Preferred Stock ("Junior Stock"). The Series A-2
      Preferred Stock shall be subordinate to and rank junior to all indebtedness
      of
      the Company now or hereafter outstanding. The Series A-2 Preferred Stock shall
      rank on a pari passu basis to the Series A Convertible Preferred Stock, par
      value $.001 per share (the “Series A Preferred Stock”) and the Series A-1
      Convertible Preferred Stock, par value $.001 per share (the “Series A-1
      Preferred Stock” and together with the Series A Preferred Stock, the “Pari Passu
      Preferred Stock”).





2.  Dividends .
      The
      holders of record of shares of Series A-2 Preferred Stock shall not be entitled
      to receive dividends.





3.  Voting
      Rights .





(a) Class
      Voting Rights .
      The
      Series A-2 Preferred Stock shall have the following class voting rights (in
      addition to the voting rights set forth in Section 3(b) hereof). So long as
      any
      shares of the Series A-2 Preferred Stock remain outstanding, the Company shall
      not, without the affirmative vote or consent of the holders of at least
      seventy-five percent (75%) of the shares of the Series A-2 Preferred Stock
      outstanding at the time, given in person or by proxy, either in writing or
      at a
      meeting, in which the holders of the Series A-2 Preferred Stock vote separately
      as a class: (i) amend, alter or repeal the provisions of the Series A-2
      Preferred Stock, whether by merger, consolidation or otherwise, so as to
      adversely affect any right, preference, privilege or voting power of the Series
      A-2 Preferred Stock; provided , however ,
      that
      any creation and issuance of another series of Junior Stock and, to the extent
      approved in accordance with Section 7(q) of the Amended and Restated Exchange
      Agreement between the Company and Paul Royalty Fund, L.P. (the “Exchange
      Agreement”), pari passu stock and senior stock shall not be deemed to adversely
      affect such rights, preferences, privileges or voting powers; (ii) repurchase,
      redeem or pay dividends in cash or in kind on shares of the Company's Junior
      Stock and pari passu stock and senior stock; (iii) amend the Certificate of
      Incorporation or By-Laws of the Company so as to affect materially and adversely
      any right, preference, privilege or voting power of the Series A-2 Preferred
      Stock; provided , however ,
      that
      any creation and issuance of another series of Junior Stock and, to the extent
      approved in accordance with Section 7(q) of the Exchange Agreement, pari passu
      stock and senior stock shall not be deemed to materially and adversely affect
      such rights, preferences, privileges or voting powers; (iv) effect any
      distribution with respect to Junior Stock and Pari Passu Preferred Stock; or
      (v)
      reclassify the Company's outstanding securities.









(b) General
      Voting Rights .
      Except
      with respect to transactions upon which the Series A-2 Preferred Stock shall
      be
      entitled to vote separately as a class pursuant to Section 3(a) above and except
      as otherwise required by Delaware law, the Series A-2 Preferred Stock shall
      have
      no voting rights. The Common Stock into which the Series A-2 Preferred Stock
      is
      convertible shall, upon issuance, have all of the same voting rights as other
      issued and outstanding Common Stock of the Company.





4.  Liquidation
      Preference .





(a) In
      the
      event of the liquidation, dissolution or winding up of the affairs of the
      Company, whether voluntary or involuntary, the holders of shares of the Series
      A-2 Preferred Stock then outstanding shall be entitled to receive, out of the
      assets of the Company whether such assets are capital or surplus of any nature,
      an amount equal to $10,000 per share (the "Liquidation Preference Amount")
      of
      the Series A-2 Preferred Stock, on a pro rata and pari passu basis with the
      Pari
      Passu Preferred Stock, before any payment shall be made or any assets
      distributed to the holders of the Common Stock or any other Junior Stock. If
      the
      assets of the Company are not sufficient to pay in full the Liquidation
      Preference Amount payable to the holders of outstanding shares of the Series
      A-2
      Preferred Stock and any series of preferred stock or any other class of stock
      on
      a parity, including, without limitation, the Pari Passu Preferred Stock, as
      to
      rights on liquidation, dissolution or winding up, with the Series A-2 Preferred
      Stock, then all of said assets will be distributed among the holders of the
      Series A-2 Preferred Stock, the Pari Passu Preferred Stock and the other classes
      of stock on a parity with the Series A-2 Preferred Stock, if any, ratably in
      accordance with the respective amounts that would be payable on such shares
      if
      all amounts payable thereon were paid in full. The liquidation payment with
      respect to each outstanding fractional share of Series A-2 Preferred Stock
      shall
      be equal to a ratably proportionate amount of the liquidation payment with
      respect to each outstanding share of Series A-2 Preferred Stock. All payments
      for which this Section 4(a) provides shall be in cash, property (valued at
      its
      fair market value as determined by an independent appraiser reasonably
      acceptable to the holders of a majority of the Series A-2 Preferred Stock)
      or a
      combination thereof; provided , however ,
      that no
      cash shall be paid to holders of Junior Stock unless each holder of the
      outstanding shares of Series A-2 Preferred Stock has been paid in cash the
      full
      Liquidation Preference Amount to which such holder is entitled as provided
      herein. After payment of the full Liquidation Preference Amount to which each
      holder is entitled, such holders of shares of Series A-2 Preferred Stock will
      not be entitled to any further participation as such in any distribution of
      the
      assets of the Company.





(b) A
      consolidation or merger of the Company with or into any other corporation or
      corporations, or a sale of all or substantially all of the assets of the
      Company, or the effectuation by the Company of a transaction or series of
      transactions in which more than fifty percent (50%) of the voting shares of
      the
      Company is disposed of or conveyed, or other acquisition type transaction,
      or
      upon the payment by the Company of interest, dividends or other distributions
      to
      the holders of securities or financial instruments (including Indebtedness)
      ranking senior to or pari passu with the Series A-2 Preferred Stock exceeding
      $10 million in the aggregate, shall be, at the election of a majority of the
      holders of the Series A-2 Preferred Stock, deemed to be a liquidation,
      dissolution, or winding up within the meaning of this Section 4. In the event
      of
      the merger or consolidation of the Company with or into another corporation
      that
      is not treated as a liquidation pursuant to this Section 4(b), the Series A-2
      Preferred Stock shall maintain its relative powers, designations and preferences
      provided for herein and no merger shall result inconsistent
      therewith.





(c) Written
      notice of any voluntary or involuntary liquidation, dissolution or winding
      up of
      the affairs of the Company, stating a payment date and the place where the
      distributable amounts shall be payable, shall be given by mail, postage prepaid,
      no less than forty-five (45) days prior to the payment date stated therein,
      to
      the holders of record of the Series A-2 Preferred Stock at their respective
      addresses as the same shall appear on the books of the Company.










5.  Conversion .
      The
      holder of Series A-2 Preferred Stock shall have the following conversion rights
      (the "Conversion Rights"):





(a) Right
      to Convert .
      At any
      time on or after the Issuance Date, the holder of any such shares of Series
      A-2
      Preferred Stock may, at such holder's option, subject to the limitations set
      forth in Section 7 herein, elect to convert (a "Voluntary Conversion") all
      or
      any portion of the shares of Series A-2 Preferred Stock held by such person
      into
      a number of fully paid and nonassessable shares of Common Stock equal to the
      quotient of (i) the Liquidation Preference Amount of the shares of Series A-2
      Preferred Stock being converted thereon divided by (ii) the Conversion Price
      (as
      defined in Section 5(d) below) then in effect as of the date of the delivery
      by
      such holder of its notice of election to convert. The Company shall keep written
      records of the conversion of the shares of Series A-2 Preferred Stock converted
      by each holder. A holder shall be required to deliver the original certificates
      representing the shares of Series A-2 Preferred Stock upon complete conversion
      of the Series A-2 Preferred Stock.





(b) Mechanics
      of Voluntary Conversion .
      The
      Voluntary Conversion of Series A-2 Preferred Stock shall be conducted in the
      following manner:





(i)  Holder's
      Delivery Requirements .
      To
      convert Series A-2 Preferred Stock into full shares of Common Stock on any
      date
      (the "Voluntary Conversion Date"), the holder thereof shall (A) transmit by
      facsimile (or otherwise deliver), for receipt on or prior to 5:00 p.m., New
      York
      time on such date, a copy of a fully executed notice of conversion in the form
      attached hereto as Exhibit
      I (the
      "Conversion Notice"), to the Company, and (B) with respect to the final
      conversion of shares of Series A-2 Preferred Stock held by any holder, such
      holder shall surrender to a common carrier for delivery to the Company as soon
      as practicable following such Conversion Date but in no event later than six
      (6)
      business days after such date the original certificates representing the shares
      of Series A-2 Preferred Stock being converted (or an indemnification undertaking
      with respect to such shares in the case of their loss, theft or destruction)
      (the "Preferred Stock Certificates").





(ii)  Company's
      Response .
      Upon
      receipt by the Company of a facsimile copy of a Conversion Notice, the Company
      shall immediately send, via facsimile, a confirmation of receipt of such
      Conversion Notice to such holder and the Company or its designated transfer
      agent (the "Transfer Agent"), as applicable, shall, within three (3) business
      days following the date of receipt by the Company of the executed Conversion
      Notice, issue and deliver to the Depository Trust Company (“ DTC ”)
      account on the holder’s behalf via the Deposit Withdrawal Agent Commission
      System (“ DWAC ”)
      as
      specified in the Conversion Notice, registered in the name of the holder or
      its
      designee, for the number of shares of Common Stock to which the holder shall
      be
      entitled.





(iii)  Dispute
      Resolution .
      In the
      case of a dispute as to the arithmetic calculation of the number of shares
      of
      Common Stock to be issued upon conversion, the Company shall promptly issue
      to
      the holder the number of shares of Common Stock that is not disputed and shall
      submit the arithmetic calculations to the holder via facsimile as soon as
      possible, but in no event later than two (2) business days after receipt of
      such
      holder's Conversion Notice. If such holder and the Company are unable to agree
      upon the arithmetic calculation of the number of shares of Common Stock to
      be
      issued upon such conversion within one (1) business day of such disputed
      arithmetic calculation being submitted to the holder, then the Company shall
      within one (1) business day submit via facsimile the disputed arithmetic
      calculation of the number of shares of Common Stock to be issued upon such
      conversion to the Company’s **** independent,
      outside accountant. The Company shall cause the accountant to perform the
      calculations and notify the Company and the holder of the results no later
      than
      seventy-two (72) hours from the time it receives the disputed calculations.
      Such
      accountant's calculation shall be binding upon all parties absent manifest
      error. The reasonable expenses of such accountant in making such determination
      shall be paid by the Company, in the event the holder's calculation was correct,
      or by the holder, in the event the Company's calculation was correct, or equally
      by the Company and the holder in the event that neither the Company's or the
      holder's calculation was correct. The period of time in which the Company is
      required to effect conversions or redemptions under this Certificate of
      Designation shall be tolled with respect to the subject conversion or redemption
      pending resolution of any dispute by the Company made in good faith and in
      accordance with this Section 5(b)(iii).










(iv)  Record
      Holder .
      The
      person or persons entitled to receive the shares of Common Stock issuable upon
      a
      conversion of the Series A-2 Preferred Stock shall be treated for all purposes
      as the record holder or holders of such shares of Common Stock on the Conversion
      Date.





(v)  Company's
      Failure to Timely Convert .
      If
      within three (3) business days of the Company's receipt of the Conversion Notice
      (the "Share Delivery Period") the Company shall fail to issue and deliver to
      a
      holder the number of shares of Common Stock to which such holder is entitled
      upon such holder's conversion of the Series A-2 Preferred Stock (a "Conversion
      Failure"), in addition to all other available remedies which such holder may
      pursue hereunder and under the Amended and Restated Exchange Agreement among
      the
      Company and the and the initial holder of the Series A-2 Preferred Stock (the
      "Exchange Agreement") between the Company and the initial holders of the Series
      A-2 Preferred Stock (including indemnification pursuant to Section 13 thereof),
      the Company shall pay additional damages to such holder on each business day
      after such third (3 rd )
      business day that such conversion is not timely effected in an amount equal
      0.5%
      of the product of (A) the sum of the number of shares of Common Stock not issued
      to the holder on a timely basis pursuant to Section 5(b)(ii) and to which such
      holder is entitled and (B) the Closing Bid Price (as defined in Section 5(d)(ii)
      hereof) of the Common Stock on the last possible date which the Company could
      have issued such Common Stock to such holder without violating Section 5(b)(ii).
      If the Company fails to pay the additional damages set forth in this Section
      5(b)(v) within five (5) business days of the date incurred, then such payment
      shall bear interest at the rate of 2% per month (pro rated for partial months)
      until such payments are made.





(c) Intentionally
      Omitted .





(d) Conversion
      Price .





(i)  The
      term
      "Conversion Price" shall mean $5.00 per share, subject to adjustment under
      Section 5(e) hereof. Notwithstanding any adjustment hereunder, at no time shall
      the Conversion Price be greater than $5.00 per share other than pursuant to
      the
      second sentence of Section 5(e)(i) in connection with a reverse stock split
      effected by the Company.





(ii)  The
      term
      "Closing Bid Price" shall mean, for any security as of any date, the last
      closing bid price of such security on the OTC Bulletin Board for such security
      as reported by Bloomberg, or, if no closing bid price is reported for such
      security by Bloomberg, the last closing trade price of such security as reported
      by Bloomberg, or, if no last closing trade price is reported for such security
      by Bloomberg, the average of the bid prices of any market makers for such
      security as reported in the "pink sheets" by the National Quotation Bureau,
      Inc.
      If the Closing Bid Price cannot be calculated for such security on such date
      on
      any of the foregoing bases, the Closing Bid Price of such security on such
      date
      shall be the fair market value as mutually determined by the Company and the
      holders of a majority of the outstanding shares of Series A-2 Preferred Stock.





(e) Adjustments
      of Conversion Price .





(i)  Adjustments
      for Stock Splits and Combinations .
      If the
      Company shall at any time or from time to time after the Issuance Date, effect
      a
      stock split of the outstanding Common Stock, the Conversion Price shall be
      proportionately decreased. If the Company shall at any time or from time to
      time
      after the Issuance Date, combine the outstanding shares of Common Stock, the
      Conversion Price shall be proportionately increased. Any adjustments under
      this
      Section 5(e)(i) shall be effective at the close of business on the date the
      stock split or combination occurs.





(ii)  Adjustments
      for Certain Dividends and Distributions .
      If the
      Company shall at any time or from time to time after the Issuance Date, make
      or
      issue or set a record date for the determination of holders of Common Stock
      entitled to receive a dividend or other distribution payable in shares of Common
      Stock, then, and in each event, the Conversion Price shall be decreased as
      of
      the time of such issuance or, in the event such record date shall have been
      fixed, as of the close of business on such record date, by multiplying, as
      applicable, the Conversion Price then in effect by a fraction:









(1)  the
      numerator of which shall be the total number of shares of Common Stock issued
      and outstanding immediately prior to the time of such issuance or the close
      of
      business on such record date; and





(2)  the
      denominator of which shall be the total number of shares of Common Stock issued
      and outstanding immediately prior to the time of such issuance or the close
      of
      business on such record date plus the number of shares of Common Stock issuable
      in payment of such dividend or distribution.





(iii)  Adjustment
      for Other Dividends and Distributions. If the Company shall at any time or
      from
      time to time after the Issuance Date, make or issue or set a record date for
      the
      determination of holders of Common Stock entitled to receive a dividend or
      other
      distribution payable in securities of the Company other than shares of Common
      Stock, then, and in each event, an appropriate revision to the applicable
      Conversion Price shall be made and provision shall be made (by adjustments
      of
      the Conversion Price or otherwise) so that the holders of Series A-2 Preferred
      Stock shall receive upon conversions thereof, in addition to the number of
      shares of Common Stock receivable thereon, the number of securities of the
      Company which they would have received had their Series A-2 Preferred Stock
      been
      converted into Common Stock on the date of such event and had thereafter, during
      the period from the date of such event to and including the Conversion Date,
      retained such securities (together with any distributions payable thereon during
      such period), giving application to all adjustments called for during such
      period under this Section 5(e)(iii) with respect to the rights of the holders
      of
      the Series A-2 Preferred Stock.





(iv)  Adjustments
      for Reclassification, Exchange or Substitution .
      If the
      Common Stock issuable upon conversion of the Series A-2 Preferred Stock at
      any
      time or from time to time after the Issuance Date shall be changed to the same
      or different number of shares of any class or classes of stock, whether by
      reclassification, exchange, substitution or otherwise (other than by way of
      a
      stock split or combination of shares or stock dividends provided for in Sections
      5(e)(i), (ii) and (iii), or a reorganization, merger, consolidation, or sale
      of
      assets provided for in Section 5(e)(v)), then, and in each event, an appropriate
      revision to the Conversion Price shall be made and provisions shall be made
      (by
      adjustments of the Conversion Price or otherwise) so that the holder of each
      share of Series A-2 Preferred Stock shall have the right thereafter to convert
      such share of Series A-2 Preferred Stock into the kind and amount of shares
      of
      stock and other securities receivable upon reclassification, exchange,
      substitution or other change, by holders of the number of shares of Common
      Stock
      into which such share of Series A-2 Preferred Stock might have been converted
      immediately prior to such reclassification, exchange, substitution or other
      change, all subject to further adjustment as provided herein.





(v)  Adjustments
      for Reorganization, Merger, Consolidation or Sales of  Assets .
      If at
      any time or from time to time after the Issuance Date there shall be a capital
      reorganization of the Company (other than by way of a stock split or combination
      of shares or stock dividends or distributions provided for in Section 5(e)(i),
      (ii) and (iii), or a reclassification, exchange or substitution of shares
      provided for in Section 5(e)(iv)), or a merger or consolidation of the Company
      with or into another corporation, or the sale of all or substantially all of
      the
      Company's properties or assets to any other person that is not deemed a
      liquidation pursuant to Section 5.14(b) (an "Organic Change"), then as a part
      of
      such Organic Change an appropriate revision to the Conversion Price shall be
      made and provision shall be made (by adjustments of the Conversion Price or
      otherwise) so that the holder of each share of Series A-2 Preferred Stock shall
      have the right thereafter to convert such share of Series A-2 Preferred Stock
      into the kind and amount of shares of stock and other securities or property
      of
      the Company or any successor corporation resulting from the Organic Change
      as
      the holder would have received as a result of the Organic Change and if the
      holder had converted its Series A-2 Preferred Stock into the Company’s Common
      Stock prior to the Organic Change. In any such case, appropriate adjustment
      shall be made in the application of the provisions of this Section 5(e)(v)
      with
      respect to the rights of the holders of the Series A-2 Preferred Stock after
      the
      Organic Change to the end that the provisions of this Section 5(e)(v) (including
      any adjustment in the Conversion Price then in effect and the number of shares
      of stock or other securities deliverable upon conversion of the Series A-2
      Preferred Stock) shall be applied after that event in as nearly an equivalent
      manner as may be practicable.










(vi)  Intentionally
      Omitted .





(vii)  Intentionally
      Omitted .





(viii)  Consideration
      for Stock .
      In case
      any shares of Common Stock or Convertible Securities other than the Series
      A-2
      Preferred Stock, or any rights or warrants or options to purchase any such
      Common Stock or Convertible Securities, shall be issued or sold in connection
      with any merger or consolidation in which the Company is the surviving
      corporation (other than any consolidation or merger in which the previously
      outstanding shares of Common Stock of the Company shall be changed to or
      exchanged for the stock or other securities of another corporation), the amount
      of consideration therefor shall be deemed to be the fair value, as determined
      reasonably and in good faith by the Board of Directors of the Company, of such
      portion of the assets and business of the nonsurviving corporation as such
      Board
      may determine to be attributable to such shares of Common Stock, Convertible
      Securities, rights or warrants or options, as the case may be.





(ix)  Record
      Date .
      In case
      the Company shall take record of the holders of its Common Stock or any other
      Preferred Stock for the purpose of entitling them to subscribe for or purchase
      Common Stock or Convertible Securities, then the date of the issue or sale
      of
      the shares of Common Stock shall be deemed to be such record date.





(x)  Certain
      Issues Excepted .
      Anything herein to the contrary notwithstanding, the Company shall not be
      required to make any adjustment of the Conversion Price of shares of Common
      Stock issuable upon conversion of the Series A Preferred Stock upon (i) the
      Company’s issuance of Additional Shares of Common Stock and/or Common Stock
      Equivalents in connection with strategic license agreements so long as such
      issuances are not for the purpose of raising capital, (ii) when approved by
      the
      Company’s Board of Directors or by a committee of the Board of Directors the
      majority of whom are independent directors, the Company’s (A) issuance of
      Additional Shares of Common Stock to the Company’s officers, directors,
      employees and consultants and to suppliers of goods and/or services to the
      Company, whether pursuant to the 2006 Stock Award and Incentive Plan, any other
      plan hereafter adopted, or otherwise, so long as such issuances under this
      subsection (ii) which would cause the provisions of Section 5(e) hereof to
      be
      applied in the aggregate do not exceed ten percent (10%) of the issued and
      outstanding shares of Common Stock as of the Issuance Date, and (B) grant of
      stock options or warrants to purchase shares of Common Stock, whether the grants
      of such options or warrants are made under the Company’s Employee Stock Option
      Plan or its 2006 Stock Award and Incentive Plan, as they now exist, an employee
      or director stock option plan and a stock award and incentive plan hereafter
      adopted or otherwise, so long as such issuances under this subsection (ii)
      which
      would cause the provisions of Section 5(e) hereof to be applied in the aggregate
      do not exceed ten percent (10%) of the issued and outstanding shares of Common
      Stock as of the Issuance Date, (iii) securities issued upon the exercise,
      conversion or exchange of any Common Stock Equivalents outstanding on the
      Issuance Date at the conversion price in effect on the Issuance Date as may
      be
      adjusted by the anti-dilution provisions thereof as in effect on the date
      hereof, (iv) issuance of Series A Preferred Stock or warrants issued by the
      Company pursuant to the Series A Convertible Preferred Stock Purchase Agreement
      among the Company and the purchasers listed therein (the “Purchase Agreement”),
      or Common Stock issued upon conversion or exercise thereof, as may be adjusted
      by the anti-dilution provisions thereof as in effect on the date hereof, (v)
      issuance of Series A-1 Convertible Preferred Stock, Series A-2 Convertible
      Preferred Stock, Series D-2 Convertible Preferred Stock or Common Stock issued
      upon conversion thereof at the conversion price in effect on the Issuance Date,
      as such conversion price may be adjusted pursuant to Section 5 hereof, (vi)
      any
      warrants issued to Burnham Hill Partners, a division of Pali Capital Inc. or
      any
      other person or entity for services in connection with the transactions
      contemplated by the Purchase Agreement and the shares of Common Stock issued
      upon exercise thereof at the conversion price in effect on the Issuance Date,
      as
      may be adjusted by the anti-dilution provisions thereof as in effect on the
      date
      hereof, or (vii) warrants issued to Ron Lipstein and Steven Katz in connection
      with the agreements terminating their employment with the Company at the
      conversion price in effect on the Issuance Date or as may be adjusted by the
      anti-dilution provision thereof as in effect on the Issuance Date.










(f) No
      Impairment .
      The
      Company shall not, by amendment of its Certificate of Incorporation or through
      any reorganization, transfer of assets, consolidation, merger, dissolution,
      issue or sale of securities or any other voluntary action, avoid or seek to
      avoid the observance or performance of any of the terms to be observed or
      performed hereunder by the Company, but will at all times in good faith, assist
      in the carrying out of all the provisions of this Section 5 and in the taking
      of
      all such action as may be necessary or appropriate in order to protect the
      Conversion Rights of the holders of the Series A-2 Preferred Stock as provided
      herein. In the event a holder shall elect to convert any shares of Series A-2
      Preferred Stock as provided herein, the Company cannot refuse conversion based
      on any claim that such holder or any one associated or affiliated with such
      holder has been engaged in any violation of law, unless, an injunction from
      a
      court, on notice, restraining and/or enjoining conversion of all or of said
      shares of Series A-2 Preferred Stock shall have been issued and the Company
      posts a surety bond for the benefit of such holder in an amount equal to 130%
      of
      the Liquidation Preference Amount of the Series A-2 Preferred Stock such holder
      has elected to convert, which bond shall remain in effect until the completion
      of arbitration/litigation of the dispute and the proceeds of which shall be
      payable to such holder in the event it obtains judgment.





(g) Certificates
      as to Adjustments .
      Upon
      occurrence of each adjustment or readjustment of the Conversion Price or number
      of shares of Common Stock issuable upon conversion of the Series A-2 Preferred
      Stock pursuant to this Section 5, the Company at its expense shall promptly
      compute such adjustment or readjustment in accordance with the terms hereof
      and
      furnish to each holder of such Series A-2 Preferred Stock a certificate setting
      forth such adjustment and readjustment, showing in detail the facts upon which
      such adjustment or readjustment is based. The Company shall, upon written
      request of the holder of such affected Series A-2 Preferred Stock, at any time,
      furnish or cause to be furnished to such holder a like certificate setting
      forth
      such adjustments and readjustments, the Conversion Price in effect at the time,
      and the number of shares of Common Stock and the amount, if any, of other
      securities or property which at the time would be received upon the conversion
      of a share of such Series A-2 Preferred Stock. Notwithstanding the foregoing,
      the Company shall not be obligated to deliver a certificate unless such
      certificate would reflect an increase or decrease of at least one percent of
      such adjusted amount.





(h) Issue
      Taxes .
      The
      Company shall pay any and all issue and other taxes, excluding federal, state
      or
      local income taxes, that may be payable in respect of any issue or delivery
      of
      shares of Common Stock on conversion of shares of Series A-2 Preferred Stock
      pursuant thereto; provided , however ,
      that
      the Company shall not be obligated to pay any transfer taxes resulting from
      any
      transfer requested by any holder in connection with any such
      conversion.





(i) Notices .
      All
      notices and other communications hereunder shall be in writing and shall be
      deemed given if delivered personally or by facsimile or three (3) business
      days
      following being mailed by certified or registered mail, postage prepaid,
      return-receipt requested, addressed to the holder of record at its address
      appearing on the books of the Company. The Company will give written notice
      to
      each holder of Series A-2 Preferred Stock at least twenty (20) days prior to
      the
      date on which the Company closes its books or takes a record (I) with respect
      to
      any dividend or distribution upon the Common Stock, (II) with respect to any
      pro
      rata subscription offer to holders of Common Stock or (III) for determining
      rights to vote with respect to any Organic Change, dissolution, liquidation
      or
      winding-up and in no event shall such notice be provided to such holder prior
      to
      such information being made known to the public. The Company will also give
      written notice to each holder of Series A-2 Preferred Stock at least twenty
      (20)
      days prior to the date on which any Organic Change, dissolution, liquidation
      or
      winding-up will take place and in no event shall such notice be provided to
      such
      holder prior to such information being made known to the public.





(j) Fractional
      Shares .
      No
      fractional shares of Common Stock shall be issued upon conversion of the Series
      A-2 Preferred Stock. In lieu of any fractional shares to which the holder would
      otherwise be entitled, the Company shall at its option either (i) pay cash
      equal
      to the product of such fraction multiplied by the average of the Closing Bid
      Prices of the Common Stock for the five (5) consecutive trading days immediately
      preceding the Voluntary Conversion Date, or (ii) in lieu of issuing such
      fractional shares issue one additional whole share to the holder.










(k) Reservation
      of Common Stock .
      The
      Company shall, so long as any shares of Series A-2 Preferred Stock are
      outstanding, reserve and keep available out of its authorized and unissued
      Common Stock, solely for the purpose of effecting the conversion of the Series
      A-2 Preferred Stock, such number of shares of Common Stock as shall from time
      to
      time be sufficient to effect the conversion of all of the Series A-2 Preferred
      Stock then outstanding; provided that the
      number of shares of Common Stock so reserved shall at no time be less than
      120%
      of the number of shares of Common Stock for which the shares of Series A-2
      Preferred Stock are at any time convertible(without regard to limitations on
      conversion set forth in Section 7). The initial number of shares of Common
      Stock
      reserved for conversions of the Series A-2 Preferred Stock and each increase
      in
      the number of shares so reserved shall be allocated pro rata among the holders
      of the Series A-2 Preferred Stock based on the number of shares of Series A-2
      Preferred Stock held by each holder at the time of issuance of the Series A-2
      Preferred Stock or increase in the number of reserved shares, as the case may
      be. In the event a holder shall sell or otherwise transfer any of such holder's
      shares of Series A-2 Preferred Stock, each transferee shall be allocated a
      pro
      rata portion of the number of reserved shares of Common Stock reserved for
      such
      transferor. Any shares of Common Stock reserved and which remain allocated
      to
      any person or entity which does not hold any shares of Series A-2 Preferred
      Stock shall be allocated to the remaining holders of Series A-2 Preferred Stock,
      pro rata based on the number of shares of Series A-2 Preferred Stock then held
      by such holder.





(l) Retirement
      of Series A-2 Preferred Stock .
      Conversion of Series A-2 Preferred Stock shall be deemed to have been effected
      on the applicable Voluntary Conversion Date. The Company shall keep written
      records of the conversion of the shares of Series A-2 Preferred Stock converted
      by each holder. A holder shall be required to deliver the original certificates
      representing the shares of Series A-2 Preferred Stock upon complete conversion
      of the Series A-2 Preferred Stock.





(m) Regulatory
      Compliance .
      If any
      shares of Common Stock to be reserved for the purpose of conversion of Series
      A-2 Preferred Stock require registration or listing with or approval of any
      governmental authority, stock exchange or other regulatory body under any
      federal or state law or regulation or otherwise before such shares may be
      validly issued or delivered upon conversion, the Company shall, at its sole
      cost
      and expense, in good faith and as expeditiously as possible, endeavor to secure
      such registration, listing or approval, as the case may be.





6.  No
      Preemptive Rights .
      Except
      as provided in Section 5 hereof, no holder of the Series A-2 Preferred Stock
      shall be entitled to rights to subscribe for, purchase or receive any part
      of
      any new or additional shares of any class, whether now or hereinafter
      authorized, or of bonds or debentures, or other evidences of indebtedness
      convertible into or exchangeable for shares of any class, but all such new
      or
      additional shares of any class, or any bond, debentures or other evidences
      of
      indebtedness convertible into or exchangeable for shares, may be issued and
      disposed of by the Board of Directors on such terms and for such consideration
      (to the extent permitted by law), and to such person or persons as the Board
      of
      Directors in their absolute discretion may deem advisable.





7.  Conversion
      Restriction .
      Notwithstanding anything to the contrary set forth in Section 5 of this
      Certificate of Designation, at no time may a holder of shares of Series A-2
      Preferred Stock convert shares of the Series A-2 Preferred Stock if the number
      of shares of Common Stock to be issued pursuant to such conversion would exceed,
      when aggregated with all other shares of Common Stock owned by such holder
      at
      such time, the number of shares of Common Stock which would result in such
      holder beneficially owning (as determined in accordance with Section 13(d)
      of
      the Securities Exchange Act of 1934, as amended, and the rules thereunder)
      in
      excess of 9.99% of all of the Common Stock outstanding at such time; provided , however ,
      that
      upon a holder of Series A-2 Preferred Stock providing the Company with sixty-one
      (61) days notice (pursuant to Section 5(i) hereof) (the "Waiver Notice") that
      such holder would like to waive Section 7 of this Certificate of Designation
      with regard to any or all shares of Common Stock issuable upon conversion of
      Series A-2 Preferred Stock, this Section 7 shall be of no force or effect with
      regard to those shares of Series A-2 Preferred Stock referenced in the Waiver
      Notice.










8.  Intentionally
      Omitted .




9.  Inability
      to Fully Convert .





(a) Holder's
      Option if Company Cannot Fully Convert .
      If,
      upon the Company's receipt of a Conversion Notice, the Company cannot issue
      shares of Common Stock registered for resale to the extent required under the
      Registration Statement for any reason, including, without limitation, because
      the Company (x) does not have a sufficient number of shares of Common Stock
      authorized and available, (y) is otherwise prohibited by applicable law or
      by
      the rules or regulations of any stock exchange, interdealer quotation system
      or
      other self-regulatory organization with jurisdiction over the Company or its
      securities from issuing all of the Common Stock which is to be issued to a
      holder of Series A-2 Preferred Stock pursuant to a Conversion Notice or (z)
      fails to have a sufficient number of shares of Common Stock registered for
      resale required under the Registration Statement, then the Company shall issue
      as many shares of Common Stock as it is able to issue in accordance with such
      holder's Conversion Notice and pursuant to Section 5(b)(ii) above and, with
      respect to the unconverted Series A-2 Preferred Stock, the holder, solely at
      such holder's option, can elect, in addition to other remedies available to
      such
      holder, within five (5) business days after receipt of notice from the Company
      thereof to:





(i)  require
      the Company to redeem from such holder those Series A-2 Preferred Stock for
      which the Company is unable to issue Common Stock in accordance with such
      holder’s Conversion Notice (“Mandatory Redemption”) at a price per share equal
      to the 100% of the Liquidation Preference Amount as of such Conversion Date
      (the
“Mandatory Redemption Price”);





(ii)  if
      the
      Company's inability to fully convert Series A-2 Preferred Stock is pursuant
      to
      Section 9(a)(z) above, require the Company to issue restricted shares of Common
      Stock in accordance with such holder's Conversion Notice and pursuant to Section
      5(b)(ii) above.





(iii)  void
      its
      Conversion Notice and retain or have returned, as the case may be, the shares
      of
      Series A-2 Preferred Stock that were to be converted pursuant to such holder's
      Conversion Notice (provided that a holder's voiding its Conversion Notice shall
      not effect the Company's obligations to make any payments which have accrued
      prior to the date of such notice).





In
      the
      event a Holder shall elect to convert any shares of Series A-2 Preferred Stock
      as provided herein, the Company cannot refuse conversion based on any claim
      that
      such Holder or any one associated or affiliated with such Holder has been
      engaged in any violation of law, violation of an agreement to which such Holder
      is a party or for any reason whatsoever, unless, an injunction from a court,
      on
      notice, restraining and or enjoining conversion of all or of said shares of
      Series A-2 Preferred Stock shall have issued and the Company posts a surety
      bond
      for the benefit of such Holder in an amount equal to 130% of the amount of
      shares of Series A-2 Preferred Stock the Holder has elected to convert, which
      bond shall remain in effect until the completion of arbitration/litigation
      of
      the dispute and the proceeds of which shall be payable to such Holder in the
      event it obtains judgment.





(b) Mechanics
      of Fulfilling Holder's Election .
      The
      Company shall immediately send via facsimile to a holder of Series A-2 Preferred
      Stock, upon receipt of a facsimile copy of a Conversion Notice from such holder
      which cannot be fully satisfied as described in Section 9(a) above, a notice
      of
      the Company's inability to fully satisfy such holder's Conversion Notice (the
      "Inability to Fully Convert Notice"). Such Inability to Fully Convert Notice
      shall indicate (i) the reason why the Company is unable to fully satisfy such
      holder's Conversion Notice, (ii) the number of Series A-2 Preferred Stock which
      cannot be converted, and (iii) the applicable Mandatory Redemption Price. Such
      holder shall notify the Company of its election pursuant to Section 9(a) above
      by delivering written notice via facsimile to the Company ("Notice in Response
      to Inability to Convert").










(c) Payment of Redemption Price .
      If such
      holder shall elect to have its shares redeemed pursuant to Section 9(a)(i)
      above, the Company shall pay the Mandatory Redemption Price to such holder
      within thirty (30) days of the Company’s receipt of the holder’s Notice in
      Response to Inability to Convert, provided that
      prior to the Company’s receipt of the holder’s Notice in Response to Inability
      to Convert the Company has not delivered a notice to such holder stating, to
      the
      satisfaction of the holder, that the event or condition resulting in the
      Mandatory Redemption has been cured and all Conversion Shares issuable to such
      holder can and will be delivered to the holder in accordance with the terms
      of
      Section 2(g). If the Company shall fail to pay the applicable Mandatory
      Redemption Price to such holder on a timely basis as described in this Section
      9(c) (other than pursuant to a dispute as to the determination of the arithmetic
      calculation of the Redemption Price), in addition to any remedy such holder
      of
      Series A Preferred Stock may have under this Certificate of Designation and
      the
      Exchange Agreement, such unpaid amount shall bear interest at the rate of 2.0%
      per month (prorated for partial months) until paid in full. Until the full
      Mandatory Redemption Price is paid in full to such holder, such holder may
      (i)
      void the Mandatory Redemption with respect to those Series A Preferred Stock
      for
      which the full Mandatory Redemption Price has not been paid, (ii) receive back
      such Series A Preferred Stock, and (iii) require that the Conversion Price
      of
      such returned Series A Preferred Stock be adjusted to the lesser of (A) the
      Conversion Price and (B) the lowest Closing Bid Price during the period
      beginning on the Conversion Date and ending on the date the holder voided the
      Mandatory Redemption.





(d) Pro-rata
      Conversion and Redemption .
      In the
      event the Company receives a Conversion Notice from more than one holder of
      Series A-2 Preferred Stock on the same day and the Company can convert and
      redeem some, but not all, of the Series A-2 Preferred Stock pursuant to this
      Section 9, the Company shall convert from each holder of Series A-2 Preferred
      Stock electing to have Series A-2 Preferred Stock converted at such time an
      amount equal to such holder's pro-rata amount (based on the number shares of
      Series A-2 Preferred Stock held by such holder relative to the number shares
      of
      Series A-2 Preferred Stock outstanding) of all shares of Series A-2 Preferred
      Stock being converted and redeemed at such time.





10.  Vote
      to Change the Terms of or Issue Preferred Stock .
      The
      affirmative vote at a meeting duly called for such purpose or the written
      consent without a meeting, of the holders of not less than a majority of the
      then outstanding shares of Series A-2 Preferred Stock, shall be required for
      any
      change to this Certificate of Designation or the Company's Certificate of
      Incorporation which would amend, alter, change or repeal any of the powers,
      designations, preferences and rights of the Series A-2 Preferred
      Stock.





11.  Lost
      or Stolen Certificates .
      Upon
      receipt by the Company of evidence satisfactory to the Company of the loss,
      theft, destruction or mutilation of any Preferred Stock Certificates
      representing the shares of Series A-2 Preferred Stock, and, in the case of
      loss,
      theft or destruction, of any indemnification undertaking by the holder to the
      Company and, in the case of mutilation, upon surrender and cancellation of
      the
      Preferred Stock Certificate(s), the Company shall execute and deliver new
      preferred stock certificate(s) of like tenor and date.





12.  Remedies,
      Characterizations, Other Obligations, Breaches and Injunctive
      Relief .
      The
      remedies provided in this Certificate of Designation shall be cumulative and
      in
      addition to all other remedies available under this Certificate of Designation,
      at law or in equity (including a decree of specific performance and/or other
      injunctive relief), no remedy contained herein shall be deemed a waiver of
      compliance with the provisions giving rise to such remedy and nothing herein
      shall limit a holder's right to pursue actual damages for any failure by the
      Company to comply with the terms of this Certificate of Designation. Amounts
      set
      forth or provided for herein with respect to payments, conversion and the like
      (and the computation thereof) shall be the amounts to be received by the holder
      thereof and shall not, except as expressly provided herein, be subject to any
      other obligation of the Company (or the performance thereof). The Company
      acknowledges that a breach by it of its obligations hereunder will cause
      irreparable harm to the holders of the Series A-2 Preferred Stock and that
      the
      remedy at law for any such breach may be inadequate. The Company therefore
      agrees that, in the event of any such breach or threatened breach, the holders
      of the Series A-2 Preferred Stock shall be entitled, in addition to all other
      available remedies, to an injunction restraining any breach, without the
      necessity of showing economic loss and without any bond or other security being
      required.





13.  Specific
      Shall Not Limit General; Construction .
      No
      specific provision contained in this Certificate of Designation shall limit
      or
      modify any more general provision contained herein. This Certificate of
      Designation shall be deemed to be jointly drafted by the Company and all initial
      purchasers of the Series A-2 Preferred Stock and shall not be construed against
      any person as the drafter hereof.










14.  Failure
      or Indulgence Not Waiver .
      No
      failure or delay on the part of a holder of Series A-2 Preferred Stock in the
      exercise of any power, right or privilege hereunder shall operate as a waiver
      thereof, nor shall any single or partial exercise of any such power, right
      or
      privilege preclude other or further exercise thereof or of any other right,
      power or privilege.





IN
      WITNESS WHEREOF, the undersigned has executed and subscribed this Amended
      Certificate and does affirm the foregoing as true this 14 th day of
      June, 2007.




ORTEC
                INTERNATIONAL, INC.By:
            /s/
                Ron LipsteinName:
            Ron
                LipsteinTitle:
            Chief
                Executive Officer









ORTEC
      INTERNATIONAL, INC.


CONVERSION
      NOTICE





Reference
      is made to the Certificate of Designation of the Relative Rights and Preferences
      of the Series A-2 Preferred Stock of Ortec International, Inc. (the "Certificate
      of Designation"). In accordance with and pursuant to the Certificate of
      Designation, the undersigned hereby elects to convert the number of shares
      of
      Series A-2 Preferred Stock, par value $.001 per share (the "Preferred Shares"),
      of Ortec International, Inc., a Delaware corporation (the "Company"), indicated
      below into shares of Common Stock, par value $.001 per share (the "Common
      Stock"), of the Company, by tendering the stock certificate(s) representing
      the
      share(s) of Preferred Shares specified below as of the date specified
      below.


Date
                      of Conversion:
                  ______________________________________Number
                      of Preferred Shares to be converted:
                  ________________Stock
                      certificate no(s). of Preferred Shares to be converted:
                  _______
 
 The
          Common Stock have been sold pursuant to the Registration Statement (as
          defined
          in the Registration Rights Agreement): YES ____  NO____
 
 Please
          confirm the following information:
 Conversion
                      Price:
                  ______________________________________Number
                      of shares of Common Stockto be issued:
                  ______________________________________
 
 Number
          of
          shares of Common Stock beneficially owned or deemed beneficially owned by
          the
          Holder on the Date of Conversion determined in accordance with Section
          16 of the Securities
          Exchange Act of 1934, as amended: _________________________
 
 Please
          issue the Common Stock into which the Preferred Shares are being converted
          and,
          if applicable, any check drawn on an account of the Company in the following
          name and to the following address:
 Issue
                      to:
                  ____________________________________________________________________________Facsimile
                      Number:
                  ______________________________________Authorization:
                  ______________________________________By:
                  _________________________________Title:
                  _________________________________Dated:
  PRICES
          ATTACHED








**CERTIFICATE
      OF AMENDMENT OF CERTIFICATE OF DESIGNATION**




**OF
      THE RELATIVE RIGHTS AND PREFERENCES OF THE SERIES A-2**




**CONVERTIBLE
      PREFERRED STOCK OF ORTEC INTERNATIONAL INC.**




It
      is
      hereby certified that:




1.  The
      name
      of the Corporation (hereinafter called the “Corporation”) is Ortec International
      Inc.




2.  The
      Certificate of Designation of the Relative Rights and Preferences of the
      Series A-2 Convertible Preferred Stock of Ortec International Inc. is
      hereby amended by striking out Section 9 thereof and by substituting the
      new Section 9 hereafter set forth.




9.  Inability
      to Fully Convert.





(a)
            Holder's
                Option if Company Cannot Fully Convert. If, upon the Company's receipt
                of
                a Conversion Notice, the Company cannot issue shares of Common Stock
                registered for resale to the extent required under the Registration
                Statement for any reason, including, without limitation, because
                the
                Company (x) does not have a sufficient number of shares of Common
                Stock
                authorized and available, (y) is otherwise prohibited by applicable
                law or
                by the rules or regulations of any stock exchange, interdealer quotation
                system or other self-regulatory organization with jurisdiction over
                the
                Company or its securities from issuing all of the Common Stock which
                is to
                be issued to a holder of Series A-2 Preferred Stock pursuant to a
                Conversion Notice or (z) fails to have a sufficient number of shares
                of Common Stock registered for resale required under the Registration
                Statement, then the Company shall issue as many shares of Common
                Stock as
                it is able to issue in accordance with such holder's Conversion Notice
                and
                pursuant to Section 5(b)(ii) above and, with respect to the unconverted
                Series A-2 Preferred Stock, the holder, solely at such holder's
                option, can elect, in addition to other remedies available to such
                holder,
                within five (5) business days after receipt of notice from the Company
                thereof to:





(i)  if
      the
      Company’s inability to convert Series A-2 Preferred Stock is pursuant to
      Section 9(a)(x) above, require the Company to redeem from such holder those
      Series A-2 Preferred Stock for which the Company is unable to issue Common
      Stock
      in accordance with such holder’s Conversion Notice (“Mandatory Redemption”) at a
      price per share equal to the 100% of the Liquidation Preference Amount as of
      such Conversion Date (the “Mandatory Redemption Price”);





(ii)  if
      the
      Company's inability to fully convert Series A-2 Preferred Stock is pursuant
      to Section 9(a)(z) above, require the Company to issue restricted shares of
      Common Stock in accordance with such holder's Conversion Notice and pursuant
      to
      Section 5(b)(ii) above.





(iii)  void
      its
      Conversion Notice and retain or have returned, as the case may be, the shares
      of
      Series A-2 Preferred Stock that were to be converted pursuant to such holder's
      Conversion Notice (provided that a holder's voiding its Conversion Notice shall
      not effect the Company's obligations to make any payments which have accrued
      prior to the date of such notice).










In
      the
      event a Holder shall elect to convert any shares of Series A-2 Preferred Stock
      as provided herein, the Company cannot refuse conversion based on any claim that
      such Holder or any one associated or affiliated with such Holder has been
      engaged in any violation of law, violation of an agreement to which such Holder
      is a party or for any reason whatsoever, unless, an injunction from a court,
      on
      notice, restraining and or enjoining conversion of all or of said shares of
      Series A-2 Preferred Stock shall have issued.





(b)  Mechanics
      of Fulfilling Holder's Election .
      The
      Company shall immediately send via facsimile to a holder of Series A-2 Preferred
      Stock, upon receipt of a facsimile copy of a Conversion Notice from such holder
      which cannot be fully satisfied as described in Section 9(a) above, a notice
      of
      the Company's inability to fully satisfy such holder's Conversion Notice (the
      "Inability to Fully Convert Notice"). Such Inability to Fully Convert Notice
      shall indicate (i) the reason why the Company is unable to fully satisfy such
      holder's Conversion Notice and (ii) the number of Series A-2 Preferred Stock
      which cannot be converted. Such holder shall notify the Company of its election
      pursuant to Section 9(a) above by delivering written notice via facsimile to
      the
      Company ("Notice in Response to Inability to Convert").





(c)  Payment
      of Redemption Price .
      If such
      holder shall elect to have its shares redeemed pursuant to Section 9(a)(i)
      above, the Company shall pay the Mandatory Redemption Price to such holder
      within thirty (30) days of the Company’s receipt of the holder’s Notice in
      Response to Inability to Convert, provided that
      prior to the Company’s receipt of the holder’s Notice in Response to Inability
      to Convert the Company has not delivered a notice to such holder stating, to
      the
      satisfaction of the holder, that the event or condition resulting in the
      Mandatory Redemption has been cured and all Conversion Shares issuable to such
      holder can and will be delivered to the holder in accordance with the terms
      of
      Section 2(g). If the Company shall fail to pay the applicable Mandatory
      Redemption Price to such holder on a timely basis as described in this Section
      9(c) (other than pursuant to a dispute as to the determination of the arithmetic
      calculation of the Redemption Price), in addition to any remedy such holder
      of
      Series A-2 Preferred Stock may have under this Certificate of Designation and
      the Exchange Agreement, such unpaid amount shall bear interest at the rate
      of
      2.0% per month (prorated for partial months) until paid in full. Until the
      full
      Mandatory Redemption Price is paid in full to such holder, such holder may
      (i)
      void the Mandatory Redemption with respect to those Series A-2 Preferred Stock
      for which the full Mandatory Redemption Price has not been paid, (ii) receive
      back such Series A-2 Preferred Stock, and (iii) require that the Conversion
      Price of such returned Series A-2 Preferred Stock be adjusted to the lesser
      of
      (A) the Conversion Price and (B) the lowest Closing Bid Price during the period
      beginning on the Conversion Date and ending on the date the holder voided the
      Mandatory Redemption.





(d)  Pro-rata
      Conversion and Redemption .
      In the
      event the Company receives a Conversion Notice from more than one holder of
      Series A-2 Preferred Stock on the same day and the Company can convert and
      redeem some, but not all, of the Series A-2 Preferred Stock pursuant to
      this Section 9, the Company shall convert from each holder of Series A-2
      Preferred Stock electing to have Series A-2 Preferred Stock converted at
      such time an amount equal to such holder's pro-rata amount (based on the number
      shares of Series A-2 Preferred Stock held by such holder relative to the number
      shares of Series A-2 Preferred Stock outstanding) of all shares of Series A-2
      Preferred Stock being converted and redeemed at such time.




3.  The
      amendment of the Certificate of Designation of the Relative Rights and
      Preferences of the Series A-2 Convertible Preferred Stock of Ortec
      International Inc. herein certified has been duly adopted in accordance with
      the
      provisions of Section 242 of the General Corporation Law of the State of
      Delaware.









4.  The
      amendment of the Certificate of Designation of the Relative Rights and
      Preferences of the Series A-2 Convertible Preferred Stock of Ortec
      International Inc. was made with the affirmative consent, in writing, by the
      holders of not less than 75% of the shares of such Series A Convertible
      Preferred Stock then outstanding, as required by the provisions of
      Section 3 of such Certificate of Designation.




Signed
      on
      December 20, 2007




/s/
                Alan W. SchoenbartName:
                Alan W. SchoenbartTitle:
                Secretary