Document:

STOCK PURCHASE AGREEMENT

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

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

 

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

 

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

 

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

 

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

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

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

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

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

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

 

 

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

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

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

	
            7.
 	
            CBSW represents and warrants to the Client as follows:
 

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

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

 

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

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

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

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

 

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

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

 

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

 
 

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

 

 

 

 

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

 

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

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

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

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

 

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

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

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

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

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

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

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

 

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

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

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

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

 

 

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

	
            The Client:
 	
            Ortec International, Inc.,  
 

 

 

	
            By:
 	
            /s/ Ron Lipstein
 

 

	
            Name:  Ron Lipstein
 	
             

	
            Title:  Chief Executive Officer
 

 

 

	
            Address:
 

 

3960 Broadway

New York, NY 10032

 

 

	
            CBSW:
 	
            Cambrex Bio Science Walkersville, Inc.,
 

 

 

By: /s/ Shawn P. Cavanagh

Name:  Shawn P. Cavanagh

Title:  Senior Vice President

 

Address:

8830 Biggs Ford Road,

Walkersville, MD, 21793COMMON STOCK WARRANT

ORTEC INTERNATIONAL, INC.    

 

NEITHER THIS WARRANT NOR THE SHARES OF STOCK ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). NO SALE, TRANSFER OR OTHER DISPOSITION OF THIS WARRANT OR SAID SHARES MAY BE EFFECTED WITHOUT (i) AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, (ii) AN OPINION OF COUNSEL SATISFACTORY IN FORM AND SUBSTANCE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT OR (iii) RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION TO THE EFFECT THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED. THE WARRANT EVIDENCED HEREBY IS NON- TRANSFERABLE.

 

Right to Purchase 1,105,100

Shares of Common Stock 

 

Ortec International, Inc., a Delaware corporation (the "Company") hereby certifies that, for value received, Cambrex Bio Science Walkersville, Inc., a Delaware corporation ("CBSW" or a “Holder”), is entitled, on the terms set forth below, to purchase from the Company at any time during the period commencing on July 1, 2006 (the "Exercisability Date") and ending on the three (3) year anniversary thereof, One Million One Hundred Five Thousand and One Hundred (1,105,100) fully paid and nonassessable shares of the common stock, par value $0.001 per share (the "Warrant Shares"), of the Company, at a price of $0.75 per share, subject to adjustments as
provided below (the "Purchase Price").  As used herein, the term "Stock" shall mean the Company's presently authorized common stock or any stock into or for which such common stock may hereafter be converted or exchanged prior to or concurrent with the exercise of this Warrant. 

 

	
            1.
 	
            Exercise of Warrant.
 

 

	
             
 	
            (a)
 	
            Exercisability of the Warrant. This Warrant will become exercisable on the Exercisability Date. 
 

 

 

	
             
 	
            (b)
 	
            Full Exercise. This Warrant may be exercised by the Holder at any time during the period commencing on the Exercisability Date and ending upon its expiration for the full number of Warrant Shares by surrendering this Warrant and the Notice of Exercise attached hereto as Exhibit A properly endorsed to the Company's principal office, accompanied by payment in cash, by check or by wire transfer in an amount equal to the product of the Purchase Price and the number of Warrant Shares indicated on the face of this Warrant. 
 

 

 

 

 

	
             
 	
            (c)
 	
            Taxes. The Company will not be required to pay any tax imposed in connection with any transfer involved in the issuance of a Warrant or a certificate for shares of Stock in any name other than that of the original holder hereof, and in such case, the Company will not be required to issue or deliver any stock certificate or warrant until such tax is paid. 
 

 

 

	
            2.
 	
            Representations and Covenants of the Holder.
 

This Warrant has been issued by the Company in reliance upon the following representations and covenants of the Holder: 

 

	
             
 	
            (a)
 	
            Investment Purpose. The Stock issuable upon exercise of the Holder's rights contained herein will be acquired for investment and not with a view to the sale or distribution of any part thereof, and the holder has no present intention of selling or engaging in any public distribution of the same except pursuant to a registration or exemption. 
 

 

 

	
             
 	
            (b)
 	
            Private Issue. The Holder understands (i) that the Stock issuable upon exercise of this Warrant is not registered under the Act or qualified under applicable state securities laws on the ground that the issuance contemplated by this Warrant will be exempt from the registration and qualifications requirements thereof, and (ii) that the Company's reliance on such exemption is predicated on the representations set forth in this Section 2. 
 

 

 

	
             
 	
            (c)
 	
            Disposition of Holder's Rights. This Warrant and all rights hereunder are non-transferable. 
 

 

 

The Stock issuable upon exercise of this Warrant is non-transferable, except in accordance with the terms of this provision. Notwithstanding the foregoing, the restrictions imposed upon the transferability of shares of the Stock shall terminate as to any particular share of Stock when (1) the transfer of such security shall have been effectively registered under the Act and transferred by the Holder thereof in accordance with such registration, or (2) such security shall have been sold without registration in compliance with Rule 144 under the Act or (3) a letter shall have been issued to the Holder at its request by the staff of the Securities and Exchange Commission or a ruling shall have been issued to the Holder at its request by such Commission stating that no action shall be recommended by such staff or taken by such Commission, as the case may be, if such security
is transferred without registration under the Act in accordance with the conditions set forth in such letter or ruling and such letter or ruling specifies that no subsequent restrictions on transfer are required. Whenever the Stock issuable upon exercise of this Warrant may be sold pursuant to Rule 144(k), the restrictions imposed herein shall 

 

terminate, the Holder or holder of a share of Stock issued upon exercise of this Warrant as to which such restrictions have terminated shall be entitled to receive from the Company, without expense to such holder, one or more new certificates for the Warrant or for such shares of Stock not bearing any restrictive legend. 

 

	
             
 	
            (d)
 	
            Financial Risk. The Holder has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its investment, and has the ability to bear the economic risks of its investment. 
 

 

 

	
             
 	
            (e)
 	
            Risk of No Registration. The Holder understands that if a registration statement covering the transfer of the Stock under the Act is not in effect when it desires to sell the Stock issuable upon exercise of this Warrant, it may be required to hold such securities for an indefinite period. The Holder also understands that any sale of Stock issuable upon exercise of this Warrant which might be made by it in reliance upon Rule 144 under the Act may be made only in accordance with the terms and conditions of that Rule. 
 

 

 

	
            3.
 	
            Delivery of Stock Certificates on Exercise. Promptly after the exercise of this Warrant and the payment of the Purchase Price pursuant to Section 1 (b), the Company will issue to the Holder or upon the order of the Holder hereof, a certificate or certificates for the number of whole shares of Stock to which the Holder is entitled; provided, however, that (i) the Holder shall have furnished to the Company at the time of such exercise a signed Investment Representation Statement substantially in the form attached hereto as Exhibit B and (ii) the Company will place on each certificate the following legend: 
 

 

 

“THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THESE SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER THE ACT. 

 

Furthermore, the Company will place on each certificate any legend required by any applicable state blue sky law. 

 

	
            4.
 	
            Adjustment for Dividends in Other Stock or Property; Reclassifications. The Purchase Price and the number and type of Warrant Shares and/or other property issuable upon exercise of this Warrant shall be appropriately and proportionately adjusted to reflect any stock dividend, stock split, combination of shares, reclassification, recapitalization, any corporate reorganization or other similar event affecting the number or character of outstanding Warrant Shares, 
 

 

 

so that the number and type of securities and/or other property issuable upon exercise of this Warrant shall be equal to that which would have been issuable with respect to the number of Warrant Shares subject hereto at the time of such event, had such Warrant Shares then been outstanding. 

 

	
            5.
 	
            Certificate as to Adjustments. In each case of an adjustment in the Purchase Price or in the shares of Stock or other stock, securities or property receivable on the exercise of the Warrant, the Company, at its expense, will compute such adjustment in accordance with the terms of the Warrant and prepare a certificate setting forth such adjustment and showing in detail the facts upon which the adjustment is based. The Company will mail a copy of each such certificate to the Holder of the Warrant outstanding at that time. 
 

 

 

	
            6.
 	
            Notices of Record Date. In case (i) the Company takes a record of the holders of its Stock (or other stock or securities at the time receivable upon the exercise of the Warrant) for the purpose of entitling them to receive any dividend or other distribution, or any right to subscribe for any purchase any shares of stock of any class or any other securities; or (ii) of any capital reorganization of the Company, any reclassification of the common stock of the Company, any consolidation or merger of the Company with or into another corporation, including, without limitation, any Merger or Consolidation, or any conveyance of all or substantially all of the assets of the Company to another corporation; or (iii) of any
voluntary dissolution" liquidation or winding-up on the Company; then, in each such case: The Company will mail or cause to be mailed to each Holder of a Warrant at the time outstanding a notice specifying, as the case may be, (a) the date on which a record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, or (b) the date on which such reorganization, reclassification, consolidation, merger, conveyance, dissolution, liquidation or winding-up is to take place, and time, if any is to be fixed as of which the holders of record of Stock (or such other stock or securities at the time receivable upon the exercise of the Warrant) will be entitled to exchange their shares of Stock (or such other stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, conveyance, dissolution, liquidation or winding-up, and in the case
of a reorganization, consolidation, merger or conveyance, the fair market value of such securities or other property as determined by the Board of Directors of the Company. Such notice shall be mailed at least ten (10) days prior to the date specified therein; provided, however, that in the event of a Merger or Consolidation the Company shall use its best efforts to provide such notice in accordance with Section 11 below at least twenty- one (21) days prior to the closing date of such Merger or Consolidation and, in any event, shall provide such notice in accordance with Section 11 below at least fifteen (15) days prior to such closing date.
 

 

 

 

 

	
            7.
 	
            Reservation of Stock Issuable on Exercise of Warrant. The Company will at all times reserve and keep available, solely for issuance and delivery upon the exercise of this Warrant, all such shares of Stock and other stock, or such other stock, securities and property as from time to time are receivable upon the exercise of the Warrant. 
 

 

 

	
            8.
 	
            Replacement of Warrant. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and (in the case of loss, theft or destruction) upon delivery of an indemnity agreement in such reasonable amount as the Company may determine, or (in the case of mutilation) upon surrender and cancellation thereof, the Company at its expense, will issue a replacement warrant in substantially identical form to this Warrant. 
 

 

 

	
            9.
 	
            Registration.  (a)  If CBSW exercises this Warrant and purchases Warrant Shares hereunder (“Registrable Securities”), the Company shall use its best efforts to notify CBSW in writing at least 20 days before filing any registration statement under the Act for purposes of effecting an underwritten public offering by the Company of securities of the Company (excluding registration statements relating to any employee benefit plan or a corporate merger, acquisition or reorganization) and will afford CBSW an opportunity to include in such registration statement all or any part of the Registrable Securities then held by CBSW.  CBSW desiring to include in any such registration statement all or any part of the Registrable Securities held by CBSW shall, within
10 days after receipt of the above-described notice from the Company, so notify the Company in writing, and in such notice shall inform the Company of the number of Registrable Securities CBSW wishes to include in such registration statement.  If CBSW decides not to include all of its Registrable Securities in any such registration statement filed by the Company, CBSW shall nevertheless continue to have the right to include any Registrable Securities in any subsequent registration statement or registration statements as may be filed by the Company with respect to offerings of its securities, all upon the terms and conditions set forth herein.  CBSW’s rights to include any Registrable Securities in any offering under this section are subject in all events to the ability of the managing underwriter for such offering to exclude some or all of the Registrable Securities requested to be registered on the basis of a good faith determination that inclusion of such securities might
adversely affect the success of the offering or otherwise adversely affect the Company; provided, however, that no Registrable Securities shall be excluded from any such offering if any securities of the Company other than Registrable Securities are included in such offering for resale by any person other than the Company.  Any such exclusion shall be pro rata among all holders who have requested to sell Registrable Securities in such registration.
 

 

 

 

 

	
            (b)  
 	
            If a registration statement under which the Company gives notice under this section is for an underwritten offering, then the Company shall so advise CBSW.  In such event, the right of CBSW’s Registrable Securities to be included in a registration pursuant to this Section shall be conditioned upon CBSW participation in such underwriting and the inclusion of CBSW’s Registrable Securities in the underwriting to the extent provided herein.  CBSW proposing to distribute their Registrable Securities through such underwriting shall enter into an underwriting agreement in customary form with the managing underwriter or underwriters selected for such underwriting and shall furnish such information and documents as the Company or the managing underwriter or underwriters may reasonably request.  Notwithstanding any
other provision of this Agreement, if the managing underwriter determine(s) in good faith that marketing factors require a limitation of the number of shares to be underwritten, then the managing underwriter(s) may exclude Registrable Securities from the registration and the underwriting, pro rata among all Holders who have requested to sell Registrable Securities in such registration; provided, however, that no Registrable Securities shall be excluded from any such offering if any securities of the Company other than Registrable Securities are included in such offering for resale by any person other than the Company.  If any Holder disapproves of the terms of any such underwriting, such Holder may elect to withdraw such Holder’s Registrable Securities therefrom by written notice to the Company and the underwriter.  Any Registrable Securities excluded or withdrawn from such underwriting
shall be excluded and withdrawn from the registration.
 

 

 

	
            11.
 	
            Notices. Any notices, demand, offer, request or other communication required or permitted to be given by either the Company or a Holder (collectively, a "Notice") pursuant to the terms of this Agreement, if delivered to the Holder, shall be sent to the following address: 
 

 

 

If to CBSW:

	
            Cambrex Bio
 	
            Science Walkersville, Inc.
 
	
            8830 Biggs Ford Road
 	
             

	
            Walkersville, MD  21893
 	
             

	
            Attention:  Vice President
 	
             

					

 

Fax No. 301-845-6099

 

	
            With a copy to:
 	
             

	
             
	
            Cambrex Corporation
 	
             

	
             
	
            One Meadowlands Plaza
 	
             

	
             
	
            East Rutherford, NJ  07073
 	
             

	
             
	
            Attention:  Corporate Secretary
 
						

 

Fax No.  201-804-9851

 

 

 

	
            If to Company:
 	
             

	
             
	
            Ortec International, Inc.
 	
             

	
             
	
            3960 Broadway
 	
             

	
             
	
            New York, NY  10032
 	
             

	
             
	
            Attention:  Chief Executive Officer
 
						

 

	
            Fax:  212-740-2570
 

 

or at such other addressed provided to the Company or such other address as a party may request by notifying the other in writing. 

 

Any notice shall be delivered in writing. Any such Notice shall be deemed effectively given the earlier of (i) when received, (ii) when delivered personally, (iii) one (1) business day after being delivered by facsimile (with receipt of appropriate confirmation), (iv) one (1) business day after being deposited with an overnight courier service and (v) four (4) days after being deposited in the U.S. mail, First Class with postage prepaid. 

 

	
            12.
 	
            Change; Waiver. Neither this warrant nor any term hereof may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought. 
 

 

 

	
            13.
 	
            No Fractional Shares or Script. No fractional shares or script representing fractional shares shall be issued upon the exercise of this Warrant, but in lieu of such fractional shares the Company shall make cash payment therefore upon the basis of the Purchase Price then in effect. 
 

 

 

	
            14.
 	
            No Rights as Stockholder. This Warrant does not entitle the Holder to any voting rights or other rights as a stockholder of the Company prior to the exercise of this Warrant. 
 

 

 

	
            15.
 	
            Headings. The headings in this Warrant are for purposes of reference only and shall not be deemed to constitute a part hereof. 
 

 

 

16.            Counterparts. This Warrant may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument. 

 

17.            Governing Law. This Warrant is delivered in the State of Delaware and shall be construed in accordance with and governed by the laws of such state.

 

	
            18.
 	
            Confidentiality; No Public Disclosure. The terms and conditions of this Warrant are confidential. Neither party shall make any public disclosure concerning the terms and conditions of this Warrant without the prior written 
 

 

 

consent of the other party, except as required by the rules and regulations of the securities and Exchange Commission, the Nasdaq National Market or any other applicable stock exchanges.

 

	
            Dated:
 	
            February 13, 2006 ____________
 

 

ORTEC INTERNATIONAL, INC.

 

 

	
            /s/ Alan W Schoenbart___
 

Signature of Authorized Signatory 

 

Alan W. Schoenbart, CFO 

 

	
            Agreed and
 	
            CAMBREX BIO SCIENCE WALKERSVILLE, INC.
 
	
            Accepted:
 	
             

			

 

 

	
            /s/ Shawn P. Cavanagh
 

Signature of Authorized Signatory 

 

 

	
            Shawn P. Cavanagh, S.V. P. & G.M.
 

Print Name and Title 

 

 

 

 

EXHIBIT A

 

NOTICE OF EXERCISE

 

TO: ORTEC INTERNATIONAL, INC.

 

1. The undersigned hereby elects to purchase __________ shares of Common Stock of Ortec International, Inc. pursuant to the terms of the attached Warrant. 

 

 

	
            2.
 	
            Exercise (Please initial the blank):
 

 

 

	
             
 	
            •
 	
            The undersigned elects to exercise the attached Warrant by means of a cash payment, and tenders herewith payment in full for the purchase price of the shares being purchased, together with all applicable transfer taxes, if any. Please issue a certificate, or certificates representing said shares of stock, in the name of the undersigned or in such other name as are specified below 
 

 

	
            _________________
 

 

(Name) 

	
            __
 

 

	
            _
 

 

(Address) 

 

	
            3.
 	
            The undersigned represents that the aforesaid shares of stock are being acquired for the account of the undersigned for investment and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares.
 

 

 

	
            _
 

Name of Warrantholder 

 

	
            _
 

Signature of Authorized Signatory 

 

	
            _
 

Print Name and Title

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