Exhibit 4.2
CLASS E WARRANT TO PURCHASE
SHARES OF COMMON STOCK
OF
ORTEC INTERNATIONAL, INC.
Expires ________, 2009
No.: W-E-___ Number of Shares: ___________
Date of Issuance: _____________, 2004
FOR VALUE RECEIVED, subject to the provisions hereinafter set forth, the
undersigned, Ortec International, Inc., a Delaware corporation (together with
its successors and assigns, the "Issuer"), hereby certifies that
_______________________________ or its registered assigns is entitled to
subscribe for and purchase, during the period specified in this Warrant, up to
____________________________________ (_____________) shares (subject to
adjustment as hereinafter provided) of the duly authorized, validly issued,
fully paid and non-assessable Common Stock of the Issuer, at an exercise price
per share equal to the Warrant Price then in effect, subject, however, to the
provisions and upon the terms and conditions hereinafter set forth. Capitalized
terms used in this Warrant and not otherwise defined herein shall have the
respective meanings specified in Section 9 hereof.
1. Term. The right to subscribe for and purchase shares of Warrant Stock
represented hereby shall commence on ______, 2004 and shall expire at 5:00 p.m.,
eastern time, on ______, 2009 (such period being the "Term").
2. Method of Exercise Payment; Issuance of New Warrant; Transfer and
Exchange.
(a) Time of Exercise. The purchase rights represented by this Warrant may
be exercised in whole or in part at any time and from time to time during the
Term commencing on ________________, 2004.
(b) Method of Exercise. The Holder hereof may exercise this Warrant, in
whole or in part, by the surrender of this Warrant (with the exercise form
attached hereto duly executed) at the principal office of the Issuer, and by the
payment to the Issuer of an amount of consideration therefor equal to the
Warrant Price in effect on the date of such exercise multiplied by the number of
shares of Warrant Stock with respect to which this Warrant is then being
exercised, payable at such Holder's election (i) by certified or official bank
check or by wire transfer to an account designated by the Issuer, (ii) by
"cashless exercise" in accordance with the provisions of subsection (c) of this
Section 2, but only when a registration statement under Securities Act providing
for the resale of the Warrant Stock is not then in effect, or (iii) by a
combination of the foregoing methods of payment selected by the Holder of this
Warrant.
(c) Cashless Exercise. Notwithstanding any provisions herein to the
contrary, if the Per Share Market Value of one share of Common Stock is greater
than the Warrant Price (at the date of calculation as set forth below), in lieu
of exercising this Warrant by payment of cash, the Holder may exercise this
Warrant by a cashless exercise and shall receive the number of shares of Common
Stock equal to an amount (as determined below) by surrender of this Warrant at
the principal office of the Issuer together with the properly endorsed Notice of
Exercise in which event the Issuer shall issue to the Holder a number of shares
of Common Stock computed using the following formula:
X = Y - (A)(Y)
------
B
Where X = the number of shares of Common Stock to be issued to the Holder.
Y = the number of shares of Common Stock purchasable upon exercise of
all of the Warrant or, if only a portion of the Warrant is being
exercised, the portion of the Warrant being exercised.
A = the Warrant Price.
B = the Per Share Market Value of one share of Common Stock.
(d) Issuance of Stock Certificates. In the event of any exercise of the
rights represented by this Warrant in accordance with and subject to the terms
and conditions hereof, (i) certificates for the shares of Warrant Stock so
purchased shall be dated the date of such exercise and delivered to the Holder
hereof within a reasonable time, not exceeding three (3) Trading Days after such
exercise or, at the request of the Holder, issued and delivered to the
Depository Trust Company ("DTC") account on the Holder's behalf via the Deposit
Withdrawal Agent Commission System ("DWAC") within a reasonable time, not
exceeding three (3) Trading Days after such exercise, and the Holder hereof
shall be deemed for all purposes to be the Holder of the shares of Warrant Stock
so purchased as of the date of such exercise and (ii) unless this Warrant has
expired, a new Warrant representing the number of shares of Warrant Stock, if
any, with respect to which this Warrant shall not then have been exercised (less
any amount thereof which shall have been canceled in payment or partial payment
of the Warrant Price as hereinabove provided) shall also be issued to the Holder
hereof at the Issuer's expense within such time.
(e) Transferability of Warrant. Subject to Section 2(g), this Warrant may
be transferred by a Holder without the consent of the Issuer. If transferred
pursuant to this paragraph and subject to the provisions of subsection (g) of
this Section 2, this Warrant may be transferred on the books of the Issuer by
the Holder hereof in person or by duly authorized attorney, upon surrender of
this Warrant at the principal office of the Issuer, properly endorsed (by the
Holder executing an assignment in the form attached hereto) and upon payment of
any necessary transfer tax or other governmental charge imposed upon such
transfer. This Warrant is exchangeable at the principal office of the Issuer for
Warrants for the purchase of the same
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aggregate number of shares of Warrant Stock, each new Warrant to represent the
right to purchase such number of shares of Warrant Stock as the Holder hereof
shall designate at the time of such exchange. All Warrants issued on transfers
or exchanges shall be dated the Original Issue Date and shall be identical with
this Warrant except as to the number of shares of Warrant Stock issuable
pursuant hereto.
(f) Continuing Rights of Xxxxxx. The Issuer will, at the time of or at any
time after each exercise of this Warrant, upon the request of the Holder hereof,
acknowledge in writing the extent, if any, of its continuing obligation to
afford to such Holder all rights to which such Holder shall continue to be
entitled after such exercise in accordance with the terms of this Warrant,
provided that if any such Holder shall fail to make any such request, the
failure shall not affect the continuing obligation of the Issuer to afford such
rights to such Holder.
(g) Compliance with Securities Laws.
(i) The Holder of this Warrant, by acceptance hereof, acknowledges
that this Warrant or the shares of Warrant Stock to be issued upon exercise
hereof are being acquired solely for the Holder's own account and not as a
nominee for any other party, and that the Holder will not offer, sell or
otherwise dispose of any shares of Warrant Stock to be issued upon exercise
hereof except pursuant to an effective registration statement, or an
exemption from registration, under the Securities Act and any applicable
state securities laws.
(ii) The restrictions imposed by this subsection (g) upon the transfer
of the shares of Warrant Stock to be purchased upon exercise hereof shall
terminate (A) when such securities shall have been resold pursuant to an
effective registration statement under the Securities Act, (B) upon the
Issuer's receipt of an opinion of counsel, in form and substance reasonably
satisfactory to the Issuer, addressed to the Issuer to the effect that such
restrictions are no longer required to ensure compliance with the
Securities Act and state securities laws or (C) upon the Issuer's receipt
of other evidence reasonably satisfactory to the Issuer that such
registration and qualification under the Securities Act and state
securities laws are not required.
3. Stock Fully Paid; Reservation and Listing of Shares; Covenants.
(a) Stock Fully Paid. The Issuer represents, warrants, covenants and agrees
that all shares of Warrant Stock which may be issued upon the exercise of this
Warrant or otherwise hereunder will, upon issuance, be duly authorized, validly
issued, fully paid and non-assessable and free from all taxes, liens and charges
created by or through Issuer. The Issuer further covenants and agrees that
during the period within which this Warrant may be exercised, the Issuer will at
all times have authorized and reserved for the purpose of the issue upon
exercise of this Warrant a sufficient number of shares of Common Stock to
provide for the exercise of this Warrant.
(b) Reservation. If any shares of Common Stock required to be reserved for
issuance upon exercise of this Warrant or as otherwise provided hereunder
require registration or
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qualification with any governmental authority under any federal or state law
before such shares may be so issued, the Issuer will in good faith use its best
efforts as expeditiously as possible at its expense to cause such shares to be
duly registered or qualified. If the Issuer shall list any shares of Common
Stock on any securities exchange or market it will, at its expense, list
thereon, maintain and increase when necessary such listing, of, all shares of
Warrant Stock from time to time issued upon exercise of this Warrant or as
otherwise provided hereunder, and, to the extent permissible under the
applicable securities exchange rules, all unissued shares of Warrant Stock which
are at any time issuable hereunder, so long as any shares of Common Stock shall
be so listed. The Issuer will also so list on each securities exchange or
market, and will maintain such listing of, any other securities which the Holder
of this Warrant shall be entitled to receive upon the exercise of this Warrant
if at the time any securities of the same class shall be listed on such
securities exchange or market by the Issuer.
(c) Covenants. The Issuer shall not by any action including, without
limitation, amending the Certificate of Incorporation or the by-laws of the
Issuer, or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other action, avoid or
seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such actions as may be necessary or appropriate to
protect the rights of the Holder hereof against dilution (to the extent
specifically provided herein) or impairment. Without limiting the generality of
the foregoing, the Issuer will (i) not permit the par value, if any, of its
Common Stock to exceed the then effective Warrant Price, (ii) not amend or
modify any provision of the Certificate of Incorporation or by-laws of the
Issuer in any manner that would adversely affect the rights of the Holders of
the Warrants, (iii) take all such action as may be reasonably necessary in order
that the Issuer may validly and legally issue fully paid and nonassessable
shares of Common Stock, free and clear of any liens, claims, encumbrances and
restrictions (other than as provided herein) upon the exercise of this Warrant,
and (iv) use its best efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may be
reasonably necessary to enable the Issuer to perform its obligations under this
Warrant.
(d) Loss, Theft, Destruction of Warrants. Upon receipt of evidence
satisfactory to the Issuer of the ownership of and the loss, theft, destruction
or mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security satisfactory to the Issuer
or, in the case of any such mutilation, upon surrender and cancellation of such
Warrant, the Issuer will make and deliver, in lieu of such lost, stolen,
destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same number of shares of Common Stock.
4. Adjustment of Warrant Price and Warrant Share Number. The number of
shares of Common Stock for which this Warrant is exercisable, and the price at
which such shares may be purchased upon exercise of this Warrant, shall be
subject to adjustment from time to time as set forth in this Section 4. The
Issuer shall give the Holder notice of any event described below which requires
an adjustment pursuant to this Section 4 in accordance with Section 5.
(a) Recapitalization, Reorganization, Reclassification, Consolidation,
Merger or Sale.
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(i) In case the Issuer after the Original Issue Date shall do any of
the following (each, a "Triggering Event"): (a) consolidate with or merge
into any other Person and the Issuer shall not be the continuing or
surviving corporation of such consolidation or merger, or (b) permit any
other Person to consolidate with or merge into the Issuer and the Issuer
shall be the continuing or surviving Person but, in connection with such
consolidation or merger, any Capital Stock of the Issuer shall be changed
into or exchanged for Securities of any other Person or cash or any other
property, or (c) transfer all or substantially all of its properties or
assets to any other Person, or (d) effect a capital reorganization or
reclassification of its Capital Stock, then, and in the case of each such
Triggering Event, proper provision shall be made so that, upon the basis
and the terms and in the manner provided in this Warrant, the Holder of
this Warrant shall be entitled upon the exercise hereof at any time after
the consummation of such Triggering Event, to the extent this Warrant is
not exercised prior to such Triggering Event, to receive at the Warrant
Price in effect at the time immediately prior to the consummation of such
Triggering Event in lieu of the Common Stock issuable upon such exercise of
this Warrant prior to such Triggering Event, the Securities, cash and
property to which such Holder would have been entitled upon the
consummation of such Triggering Event if such Xxxxxx had exercised the
rights represented by this Warrant immediately prior thereto, subject to
adjustments (subsequent to such corporate action) as nearly equivalent as
possible to the adjustments provided for elsewhere in this Section 4.
(ii) Notwithstanding anything contained in this Warrant to the
contrary, the Issuer will not effect any Triggering Event if, prior to the
consummation thereof, each Person (other than the Issuer) which may be
required to deliver any Securities, cash or property upon the exercise of
this Warrant as provided herein shall assume, by written instrument
delivered to, and reasonably satisfactory to, the Holder of this Warrant,
(A) the obligations of the Issuer under this Warrant (and if the Issuer
shall survive the consummation of such Triggering Event, such assumption
shall be in addition to, and shall not release the Issuer from, any
continuing obligations of the Issuer under this Warrant) and (B) the
obligation to deliver to such Holder such shares of Securities, cash or
property as, in accordance with the foregoing provisions of this subsection
(a), such Holder shall be entitled to receive, and such Person shall have
similarly delivered to such Holder an opinion of counsel for such Person,
which counsel shall be reasonably satisfactory to such Holder, stating that
this Warrant shall thereafter continue in full force and effect and the
terms hereof (including, without limitation, all of the provisions of this
subsection (a)) shall be applicable to the Securities, cash or property
which such Person may be required to deliver upon any exercise of this
Warrant or the exercise of any rights pursuant hereto.
(b) Stock Dividends, Subdivisions and Combinations. If at any time the
Issuer shall:
(i) take a record of the holders of its Common Stock for the
purpose of entitling them to receive a dividend payable in, or other
distribution of, Additional Shares of Common Stock,
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(ii) subdivide its outstanding shares of Common Stock into a
larger number of shares of Common Stock, or
(iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock,
then (1) the number of shares of Common Stock for which this Warrant is
exercisable immediately after the occurrence of any such event shall be adjusted
to equal the number of shares of Common Stock which a record holder of the same
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to the occurrence of such event would own or be entitled to
receive after the happening of such event, and (2) the Warrant Price then in
effect shall be adjusted to equal (A) the Warrant Price then in effect
multiplied by the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to the adjustment divided by (B) the number of
shares of Common Stock for which this Warrant is exercisable immediately after
such adjustment.
(c) Certain Other Distributions. If at any time the Issuer shall take a
record of the holders of its Common Stock for the purpose of entitling them to
receive any dividend or other distribution of:
(i) cash (other than a cash dividend payable out of earnings or
earned surplus legally available for the payment of dividends under the
laws of the jurisdiction of incorporation of the Issuer),
(ii) any evidences of its indebtedness, any shares of stock of
any class or any other securities or property of any nature whatsoever
(other than cash, Common Stock Equivalents or Additional Shares of Common
Stock), or
(iii) any warrants or other rights to subscribe for or purchase
any evidences of its indebtedness, any shares of stock of any class or any
other securities or property of any nature whatsoever (other than cash,
Common Stock Equivalents or Additional Shares of Common Stock),
then (1) the number of shares of Common Stock for which this Warrant is
exercisable shall be adjusted to equal the product of the number of shares of
Common Stock for which this Warrant is exercisable immediately prior to such
adjustment multiplied by a fraction (A) the numerator of which shall be the Per
Share Market Value of Common Stock at the date of taking such record and (B) the
denominator of which shall be such Per Share Market Value minus the amount
allocable to one share of Common Stock of any such cash so distributable and of
the fair value (as determined in good faith by the Board of Directors of the
Issuer and supported by an opinion from an investment banking firm of recognized
national standing acceptable to the Holder) of any and all such evidences of
indebtedness, shares of stock, other securities or property or warrants or other
subscription or purchase rights so distributable, and (2) the Warrant Price then
in effect shall be adjusted to equal (A) the Warrant Price then in effect
multiplied by the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to the adjustment divided by (B) the number of
shares of Common Stock for which this Warrant is
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exercisable immediately after such adjustment. A reclassification of the Common
Stock (other than a change in par value, or from par value to no par value or
from no par value to par value) into shares of Common Stock and shares of any
other class of stock shall be deemed a distribution by the Issuer to the holders
of its Common Stock of such shares of such other class of stock within the
meaning of this Section 4(c) and, if the outstanding shares of Common Stock
shall be changed into a larger or smaller number of shares of Common Stock as a
part of such reclassification, such change shall be deemed a subdivision or
combination, as the case may be, of the outstanding shares of Common Stock
within the meaning of Section 4(b).
(d) Issuance of Additional Shares of Common Stock.
(i) In the event the Issuer shall at any time following the Original
Issue Date issue any Additional Shares of Common Stock (otherwise than as
provided in the foregoing subsections (a) through (c) of this Section 4), at a
price per share less than the Warrant Price then in effect or without
consideration, then the Warrant Price upon each such issuance shall be adjusted
to that price determined by multiplying the Warrant Price then in effect by a
fraction:
(A) the numerator of which shall be equal to the sum of (x) the
number of shares of Outstanding Common Stock immediately prior to the
issuance of such Additional Shares of Common Stock plus (y) 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 Warrant Price then in effect, and
(B) the denominator of which shall be equal to the number of
shares of Outstanding Common Stock immediately after the issuance of
such Additional Shares of Common Stock.
(ii) No adjustment of the number of shares of Common Stock for which
this Warrant shall be exercisable shall be made under paragraph (i) of Section
4(d) upon the issuance of any Additional Shares of Common Stock which are issued
pursuant to the exercise of any Common Stock Equivalents, if any such adjustment
shall previously have been made upon the issuance of such Common Stock
Equivalents or upon the issuance of any warrant or other rights therefor
pursuant to Sections 4(e) or 4(f), or in connection with any Permitted
Issuances.
(e) Issuance of Warrants or Other Rights. If at any time the Issuer shall
take a record of the Holders of its Common Stock for the purpose of entitling
them to receive a distribution of, or shall in any manner (whether directly or
by assumption in a merger in which the Issuer is the surviving corporation)
issue or sell any warrants or options, whether or not immediately exercisable,
and the Warrant Consideration (hereafter defined) per share for which Common
Stock is issuable upon the exercise of such warrant or option shall be less than
the Warrant Price in effect immediately prior to the time of such issue or sale,
then the Warrant Price then in effect immediately prior to the time of such
issue or sale, shall be adjusted to that price (rounded to the nearest cent)
determined by multiplying the Warrant 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
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immediately prior to the issuance or sale of such warrants or options plus (B)
the number of shares of Common Stock (rounded to the nearest whole share) which
the Warrant Consideration multiplied by the number of shares of Common Stock
issuable upon the exercise or conversion of all such warrants or options, would
purchase at a price per share equal to the Warrant 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
warrants and options. No adjustments of the Warrant Price then in effect shall
be made upon the actual issue of such Common Stock or of such Common Stock
Equivalents upon exercise of such warrants or other rights or upon the actual
issue of such Common Stock upon such conversion or exchange of such Common Stock
Equivalents. No adjustments of the Warrant Price shall be required under this
Section 4(e) in connection with any Permitted Issuances.
(f) Issuance of Common Stock Equivalents. If at any time the Issuer shall
take a record of the Holders of its Common Stock for the purpose of entitling
them to receive a distribution of, or shall in any manner (whether directly or
by assumption in a merger in which the Issuer is the surviving corporation)
issue or sell, any Common Stock Equivalents, whether or not the rights to
exchange or convert thereunder are immediately exercisable, and the Common Stock
Equivalent Consideration (hereafter defined) per share for which Common Stock is
issuable upon such conversion or exchange shall be less than the Warrant Price
in effect immediately prior to the time of such issue or sale, then the Warrant
Price then in effect immediately prior to the time of such issue or sale, shall
upon each such issuance or sale be adjusted to that price (rounded to the
nearest cent) determined by multiplying the Warrant 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 or sale of such
Common Stock Equivalents plus (B) the number of shares of Common Stock (rounded
to the nearest whole share) which the Common Stock Equivalent Consideration
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 Warrant 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 further adjustment of the Warrant Price then in effect shall be
made under this Section 4(f) upon the issuance of any Common Stock Equivalents
which are issued pursuant to the exercise of any warrants or other subscription
or purchase rights therefor, if any such adjustment shall previously have been
made upon the issuance of such warrants or other rights pursuant to Section
4(e). No further adjustments of the Warrant Price then in effect shall be made
upon the actual issue of such Common Stock upon conversion or exchange of such
Common Stock Equivalents. No adjustments of the Warrant Price shall be required
under this Section 4(f) in connection with any Permitted Issuances.
(g) Superseding Adjustment. If, at any time after any adjustment of the
number of shares of Common Stock for which this Warrant is exercisable and the
Warrant Price then in effect shall have been made pursuant to Section 4(e) or
Section 4(f) as the result of any issuance of warrants, other rights or Common
Stock Equivalents, and (i) such warrants or other rights, or the right of
conversion or exchange in such other Common Stock Equivalents, shall expire, and
all or a portion of such warrants or other rights, or the right of conversion or
exchange with respect to all or a portion of such other Common Stock
Equivalents, as the case may be shall not
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have been exercised, or (ii) the consideration per share for which shares of
Common Stock are issuable pursuant to such Common Stock Equivalents, shall be
increased solely by virtue of provisions therein contained for an automatic
increase in such consideration per share upon the occurrence of a specified date
or event, then for each outstanding Warrant such previous adjustment shall be
rescinded and annulled and the Additional Shares of Common Stock which were
deemed to have been issued by virtue of the computation made in connection with
the adjustment so rescinded and annulled shall no longer be deemed to have been
issued by virtue of such computation. Upon the occurrence of an event set forth
in this Section 4(g) above, there shall be a recomputation made of the effect of
such Common Stock Equivalents on the basis of: (i) treating the number of
Additional Shares of Common Stock or other property, if any, theretofore
actually issued or issuable pursuant to the previous exercise of any such
warrants or other rights or any such right of conversion or exchange, as having
been issued on the date or dates of any such exercise and for the consideration
actually received and receivable therefor, and (ii) treating any such Common
Stock Equivalents which then remain outstanding as having been granted or issued
immediately after the time of such increase of the consideration per share for
which shares of Common Stock or other property are issuable under such Common
Stock Equivalents; whereupon a new adjustment of the number of shares of Common
Stock for which this Warrant is exercisable and the Warrant Price then in effect
shall be made, which new adjustment shall supersede the previous adjustment so
rescinded and annulled.
(h) Purchase of Common Stock by the Issuer. If the Issuer at any time while
this Warrant is outstanding shall, directly or indirectly through a Subsidiary
or otherwise, purchase, redeem or otherwise acquire any shares of Common Stock
at a price per share greater than the Per Share Market Value, then the Warrant
Price upon each such purchase, redemption or acquisition shall be adjusted to
that price determined by multiplying such Warrant Price by a fraction (i) the
numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such purchase, redemption or acquisition minus the number
of shares of Common Stock which the aggregate consideration for the total number
of such shares of Common Stock so purchased, redeemed or acquired would purchase
at the Per Share Market Value; and (ii) the denominator of which shall be the
number of shares of Common Stock outstanding immediately after such purchase,
redemption or acquisition. For the purposes of this subsection (h), the date as
of which the Per Share Market Price shall be computed shall be the earlier of
(x) the date on which the Issuer shall enter into a firm contract for the
purchase, redemption or acquisition of such Common Stock, or (y) the date of
actual purchase, redemption or acquisition of such Common Stock. For the
purposes of this subsection (h), a purchase, redemption or acquisition of a
Common Stock Equivalent shall be deemed to be a purchase of the underlying
Common Stock, and the computation herein required shall be made on the basis of
the full exercise, conversion or exchange of such Common Stock Equivalent on the
date as of which such computation is required hereby to be made, whether or not
such Common Stock Equivalent is actually exercisable, convertible or
exchangeable on such date.
(i) Other Provisions applicable to Adjustments under this Section. The
following provisions shall be applicable to the making of adjustments of the
number of shares of Common Stock for which this Warrant is exercisable and the
Warrant Price then in effect provided for in this Section 4:
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(i) Computation of Consideration. To the extent that any Additional
Shares of Common Stock or any Common Stock Equivalents (or any warrants or other
rights therefor) shall be issued for cash consideration, the consideration
received by the Issuer therefor shall be the amount of the cash received by the
Issuer therefor, or, if such Additional Shares of Common Stock or Common Stock
Equivalents are offered by the Issuer for subscription, the subscription price,
or, if such Additional Shares of Common Stock or Common Stock Equivalents are
sold to underwriters or dealers for public offering without a subscription
offering, the initial public offering price (in any such case subtracting any
amounts paid or receivable for accrued interest or accrued dividends and without
taking into account any compensation, discounts or expenses paid or incurred by
the Issuer for and in the underwriting of, or otherwise in connection with, the
issuance thereof). To the extent that such issuance shall be for a consideration
other than cash, then, except as herein otherwise expressly provided, the amount
of such consideration shall be deemed to be the fair value of such consideration
at the time of such issuance as determined in good faith by the Board of
Directors of the Issuer. The consideration for any Additional Shares of Common
Stock issuable pursuant to any warrants or other rights to subscribe for or
purchase the same shall be the consideration received by the Issuer for issuing
such warrants or other rights divided by the number of shares of Common Stock
issuable upon the exercise of such warrant or right plus the additional
consideration payable to the Issuer upon exercise of such warrant or other right
for one share of Common Stock (together the "Warrant Consideration"). The
consideration for any Additional Shares of Common Stock issuable pursuant to the
terms of any Common Stock Equivalents shall be the consideration received by the
Issuer for issuing such Common Stock Equivalent, divided by the number of shares
of Common Stock issuable upon the conversion or other exercise of such Common
Stock Equivalent, plus the additional consideration, if any, payable to the
Issuer upon the exercise of the right of conversion or exchange in such Common
Stock Equivalent for one share of Common Stock (together the "Common Stock
Equivalent Consideration"). In case of the issuance at any time of any
Additional Shares of Common Stock or Common Stock Equivalents in payment or
satisfaction of any dividends upon any class of stock other than Common Stock or
any class of the Issuer's preferred stock, the Issuer shall be deemed to have
received for such Additional Shares of Common Stock or Common Stock Equivalents
a consideration equal to the amount of such dividend so paid or satisfied.
(ii) When Adjustments to Be Made. The adjustments required by this
Section 4 shall be made whenever and as often as any specified event requiring
an adjustment shall occur, except that any adjustment of the number of shares of
Common Stock for which this Warrant is exercisable that would otherwise be
required may be postponed (except in the case of a subdivision or combination of
shares of the Common Stock, as provided for in Section 4(b)) up to, but not
beyond the date of exercise if such adjustment either by itself or with other
adjustments not previously made adds or subtracts less than one percent (1%) of
the shares of Common Stock for which this Warrant is exercisable immediately
prior to the making of such adjustment. Any adjustment representing a change of
less than such minimum amount (except as aforesaid) which is postponed shall be
carried forward and made as soon as such adjustment, together with other
adjustments required by this Section 4 and not previously made, would result in
a minimum adjustment or on the date of exercise. For the purpose of any
adjustment, any specified event shall be deemed to have occurred at the close of
business on the date of its occurrence.
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(iii) Fractional Interests. In computing adjustments under this
Section 4, fractional interests in Common Stock shall be taken into account to
the nearest one one-hundredth (1/100th) of a share.
(iv) When Adjustment Not Required. If the Issuer shall take a record
of the holders of its Common Stock for the purpose of entitling them to receive
a dividend or distribution or subscription or purchase rights and shall,
thereafter and before the distribution to stockholders thereof, legally abandon
its plan to pay or deliver such dividend, distribution, subscription or purchase
rights, then thereafter no adjustment shall be required by reason of the taking
of such record and any such adjustment previously made in respect thereof shall
be rescinded and annulled.
(j) Form of Warrant after Adjustments. The form of this Warrant need not be
changed because of any adjustments in the Warrant Price or the number and kind
of Securities purchasable upon the exercise of this Warrant.
(k) Escrow of Warrant Stock. If after any property becomes distributable
pursuant to this Section 4 by reason of the taking of any record of the holders
of Common Stock, but prior to the occurrence of the event for which such record
is taken, and the Holder exercises this Warrant, any shares of Common Stock
issuable upon exercise by reason of such adjustment shall be deemed the last
shares of Common Stock for which this Warrant is exercised (notwithstanding any
other provision to the contrary herein) and such shares or other property shall
be held in escrow for the Holder by the Issuer to be issued to the Holder upon
and to the extent that the event actually takes place, upon payment of the
current Warrant Price. Notwithstanding any other provision to the contrary
herein, if the event for which such record was taken fails to occur or is
rescinded, then such escrowed shares shall be cancelled by the Issuer and
escrowed property returned.
5. Notice of Adjustments. Whenever the Warrant Price or Warrant Share
Number shall be adjusted pursuant to Section 4 hereof (for purposes of this
Section 5, each an "adjustment"), the Issuer shall cause its Chief Financial
Officer to prepare and execute a certificate setting forth, in reasonable
detail, the event requiring the adjustment, the amount of the adjustment, the
method by which such adjustment was calculated (including a description of the
basis on which the Board made any determination hereunder), and the Warrant
Price and Warrant Share Number after giving effect to such adjustment, and shall
cause copies of such certificate to be delivered to the Holder of this Warrant
promptly after each adjustment. Any dispute between the Issuer and the Holder of
this Warrant with respect to the matters set forth in such certificate may at
the option of the Holder of this Warrant be submitted to one of the national
accounting firms currently known as the "big five" selected by the Holder,
provided that the Issuer shall have ten (10) days after receipt of notice from
such Holder of its selection of such firm to object thereto, in which case such
Holder shall select another such firm and the Issuer shall have no such right of
objection. The firm selected by the Holder of this Warrant as provided in the
preceding sentence shall be instructed to deliver a written opinion as to such
matters to the Issuer and such Holder within thirty (30) days after submission
to it of such dispute. Such opinion shall be final and binding on the parties
hereto.
-11-
6. Fractional Shares. No fractional shares of Warrant Stock will be issued
in connection with and exercise hereof, but in lieu of such fractional shares,
the Issuer shall make a cash payment therefor equal in amount to the product of
the applicable fraction multiplied by the Per Share Market Value then in effect.
7. Call. Notwithstanding anything herein to the contrary, commencing on the
second (2nd) anniversary of the Original Issue Date, the Issuer, at its option,
may call up to one hundred percent (100%) of this Warrant if the Per Share
Market Value of the Common Stock has been greater than $______ for a period of
ten (10) consecutive Trading Days immediately prior to the date of delivery of
the Call Notice (a "Call Notice Period") by providing the Holder of this Warrant
written notice pursuant to Section 13 (the "Call Notice"); provided, that (i)
the Registration Statement is then in effect and has been effective, without
lapse or suspension of any kind, for a period of 60 consecutive calendar days,
(ii) trading in the Common Stock shall not have been suspended by the Securities
and Exchange Commission or the OTC Bulletin Board and (iii) the Issuer is in
material compliance with the terms and conditions of this Warrant; provided,
further, that the Registration Statement must be effective from the date of
delivery of the Call Notice until the date which is the later of (i) the date
the Holder exercises the Warrant pursuant to the Call Notice and (ii) the 20th
day after the Holder receives the Call Notice (the "Early Termination Date").
The rights and privileges granted pursuant to this Warrant with respect to the
shares of Warrant Stock subject to the Call Notice (the "Called Warrant Shares")
shall expire on the Early Termination Date if this Warrant is not exercised with
respect to such Called Warrant Shares prior to such Early Termination Date. In
the event this Warrant is not exercised with respect to the Called Warrant
Shares, the Issuer shall remit to the Holder of this Warrant (i) $.01 per Called
Warrant Share and (ii) a new Warrant representing the number of shares of
Warrant Stock, if any, which shall not have been subject to the Call Notice upon
the Holder tendering to the Issuer the applicable Warrant certificate.
8. Certain Exercise Restrictions.
(a) Notwithstanding anything to the contrary set forth in this Warrant, at
no time may a holder of this Warrant exercise this Warrant if the number of
shares of Common Stock to be issued pursuant to such exercise 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 4.999% of all of the Common Stock outstanding at such time; provided,
however, that upon a holder of this Warrant providing the Issuer with sixty-one
(61) days notice (pursuant to Section 13 hereof) (the "Waiver Notice") that such
holder would like to waive this Section 8(a) with regard to any or all shares of
Common Stock issuable upon exercise of this Warrant, this Section 8(a) will be
of no force or effect with regard to all or a portion of the Warrant referenced
in the Waiver Notice; provided, further, that this provision shall be of no
further force or effect (i) during the sixty-one (61) days immediately preceding
the expiration of the term of this Warrant or (ii) upon the Holder's receipt of
a Call Notice.
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(b) Notwithstanding anything to the contrary set forth in this Warrant, at
no time may a holder of this Warrant exercise this Warrant if the number of
shares of Common Stock to be issued pursuant to such exercise 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 9.999% of all of the Common Stock outstanding at such time; provided,
however, that upon a holder of this Warrant providing the Issuer with sixty-one
(61) days notice (pursuant to Section 13 hereof) (the "Waiver Notice") that such
holder would like to waive this Section 8(b) with regard to any or all shares of
Common Stock issuable upon exercise of this Warrant, this Section 8(b) will be
of no force or effect with regard to all or a portion of the Warrant referenced
in the Waiver Notice; provided, further, that this provision shall be of no
further force or effect (i) during the sixty-one (61) days immediately preceding
the expiration of the term of this Warrant or (ii) upon the Holder's receipt of
a Call Notice.
9. Definitions. For the purposes of this Warrant, the following terms have
the following meanings:
"Additional Shares of Common Stock" means all shares of Common Stock
issued by the Issuer after the Original Issue Date, and all shares of Other
Common, if any, issued by the Issuer after the Original Issue Date, except
for Permitted Issuances.
"Board" shall mean the Board of Directors of the Issuer.
"Capital Stock" means and includes (i) any and all shares, interests,
participations or other equivalents of or interests in (however designated)
corporate stock, including, without limitation, shares of preferred or
preference stock, (ii) all partnership interests (whether general or
limited) in any Person which is a partnership, (iii) all membership
interests or limited liability company interests in any limited liability
company, and (iv) all equity or ownership interests in any Person of any
other type.
"Certificate of Incorporation" means the Certificate of Incorporation
of the Issuer as in effect on the Original Issue Date, and as hereafter
from time to time amended, modified, supplemented or restated in accordance
with the terms hereof and thereof and pursuant to applicable law.
"Common Stock" means the Common Stock, par value $.001 per share, of
the Issuer and any other Capital Stock into which such stock may hereafter
be changed.
"Common Stock Equivalent" means any Convertible Security or warrant,
option or other right to subscribe for or purchase any Additional Shares of
Common Stock or any Convertible Security.
"Common Stock Equivalent Consideration" has the meaning specified in
Section 4 (i) (i) hereof.
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"Convertible Securities" means evidences of Indebtedness, shares of
Capital Stock or other Securities which are or may be at any time
convertible into or exchangeable for Additional Shares of Common Stock. The
term "Convertible Security" means one of the Convertible Securities.
"Governmental Authority" means any governmental, regulatory or
self-regulatory entity, department, body, official, authority, commission,
board, agency or instrumentality, whether federal, state or local, and
whether domestic or foreign.
"Holders" mean the Persons who shall from time to time own any
Warrant. The term "Holder" means one of the Holders.
"Independent Appraiser" means a nationally recognized or major
regional investment banking firm or firm of independent certified public
accountants of recognized standing (which may be the firm that regularly
examines the financial statements of the Issuer) that is regularly engaged
in the business of appraising the Capital Stock or assets of corporations
or other entities as going concerns, and which is not affiliated with
either the Issuer or the Holder of any Warrant.
"Issuer" means Ortec International, Inc., a Delaware corporation, and
its successors.
"Majority Holders" means at any time the Holders of Warrants
exercisable for a majority of the shares of Warrant Stock issuable under
the Warrants at the time outstanding.
"Original Issue Date" means
"OTC Bulletin Board" means the over-the-counter electronic bulletin
board.
"Other Common" means any other Capital Stock of the Issuer of any
class which shall be authorized at any time after the date of this Warrant
(other than Common Stock) and which shall have the right to participate in
the distribution of earnings and assets of the Issuer without limitation as
to amount.
"Outstanding Common Stock" means, at any given time, the aggregate
amount of outstanding shares of Common Stock, assuming full exercise,
conversion or exchange (as applicable) of all options, warrants and other
Securities which are convertible into or exercisable or exchangeable for,
and any right to subscribe for, shares of Common Stock that are outstanding
at such time.
"Permitted Issuances" means (i) the issuance of the Warrant Stock;
(ii) issuances in connection with strategic license agreements so long as
such issuances are not for the purpose of raising capital; (iii) issuances
in connection with a merger and/or acquisition, consolidation, sale or
disposition of all or substantially all of the Issuer's assets; (iv)
issuances in connection with a public offering by the Issuer of its shares
of Common
-14-
Stock; (v) to the Issuer's officers, directors and employees for the
issuance of (A) up to 1,800,000 shares of Common Stock without payment
therefore, provided that the persons or other entities to whom such shares
are issued agree in writing not to sell, hypothecate, transfer or otherwise
dispose of such shares prior to January 2007, and (B) for the grants of
options or warrants to purchase up to an aggregate of 1,000,000 shares of
Common Stock whether the grants of such options or warrants are made under
the Issuer's Employee Stock Option Plan as it now exists, or is hereafter
amended, an employee or director stock option plan hereafter adopted or
otherwise; (vi) securities issued upon the exercise, conversion or exchange
of any Common Stock Equivalents outstanding on the Original Issue Date;
(vii) for the issuance of common stock or warrants to third party providers
of goods and services for goods or services provided or in satisfaction of
outstanding liabilities, as approved by the Issuer's Board of Directors;
and (viii) warrants, common shares or other securities issued to a
placement agent or its designees as consideration for the sale of the
Issuer's Common Stock and the warrants contemplated by the Registration
Statement or in any other sales of the Issuer's securities and the shares
of Common Stock issued upon exercise of any such warrants or conversion of
any such other securities.
"Person" means an individual, corporation, limited liability company,
partnership, joint stock company, trust, unincorporated organization, joint
venture, Governmental Authority or other entity of whatever nature.
"Per Share Market Value" means on any particular date (a) the closing
bid price for a share of Common Stock in the over-the-counter market, as
reported by the OTC Bulletin Board or in the National Quotation Bureau
Incorporated or similar organization or agency succeeding to its functions
of reporting prices) at the close of business on such date, or (b) if the
Common Stock is not then reported by the OTC Bulletin Board or the National
Quotation Bureau Incorporated (or similar organization or agency succeeding
to its functions of reporting prices), then the average of the "Pink Sheet"
quotes for the relevant conversion period, as determined in good faith by
the holder, or (c) if the Common Stock is not then publicly traded the fair
market value of a share of Common Stock as determined by the Board in good
faith; provided, however, that the Majority Holders, after receipt of the
determination by the Board, shall have the right to select, jointly with
the Issuer, an Independent Appraiser, in which case, the fair market value
shall be the determination by such Independent Appraiser; and provided,
further that all determinations of the Per Share Market Value shall be
appropriately adjusted for any stock dividends, stock splits or other
similar transactions during such period. The determination of fair market
value shall be based upon the fair market value of the Issuer determined on
a going concern basis as between a willing buyer and a willing seller and
taking into account all relevant factors determinative of value, and shall
be final and binding on all parties. In determining the fair market value
of any shares of Common Stock, no consideration shall be given to any
restrictions on transfer of the Common Stock imposed by agreement or by
federal or state securities laws, or to the existence or absence of, or any
limitations on, voting rights.
-15-
"Registration Statement" means the registration statement on Form S-2
(Registration No. 333-109027) filed by the Issuer under the Securities Act
which was declared effective by the Securities and Exchange Commission on
February ____, 2004, for the public offering of shares of the Issuer's
common stock and the Warrants.
"Securities" means any debt or equity securities of the Issuer,
whether now or hereafter authorized, any instrument convertible into or
exchangeable for Securities or a Security, and any option, warrant or other
right to purchase or acquire any Security. "Security" means one of the
Securities.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute then in effect.
"Subsidiary" means any corporation at least 50% of whose outstanding
Voting Stock shall at the time be owned directly or indirectly by the
Issuer or by one or more of its Subsidiaries, or by the Issuer and one or
more of its Subsidiaries.
"Term" has the meaning specified in Section 1 hereof.
"Trading Day" means (a) a day on which the Common Stock is traded on
the OTC Bulletin Board, or (b) if the Common Stock is not traded on the OTC
Bulletin Board, a day on which the Common Stock is quoted in the
over-the-counter market as reported by the National Quotation Bureau
Incorporated (or any similar organization or agency succeeding its
functions of reporting prices); provided, however, that in the event that
the Common Stock is not listed or quoted as set forth in (a) or (b) hereof,
then Trading Day shall mean any day except Saturday, Sunday and any day
which shall be a legal holiday or a day on which banking institutions in
the State of New York are authorized or required by law or other government
action to close.
"Voting Stock" means, as applied to the Capital Stock of any
corporation, Capital Stock of any class or classes (however designated)
having ordinary voting power for the election of a majority of the members
of the Board of Directors (or other governing body) of such corporation,
other than Capital Stock having such power only by reason of the happening
of a contingency.
"Warrants" means the Class E Warrants issued and sold pursuant to the
Registration Statement including, without limitation, this Warrant, and any
other warrants of like tenor issued in substitution or exchange for any
thereof pursuant to the provisions hereof or of any of such other Warrants.
"Warrant Consideration" has the meaning specified in Section 4(i)(i)
hereof.
"Warrant Price" initially means U.S. $_______, as such price may be
adjusted from time to time as shall result from the adjustments specified
in this Warrant, including Section 4 hereto.
-16-
"Warrant Share Number" means at any time the aggregate number of
shares of Warrant Stock which may at such time be purchased upon exercise
of this Warrant, after giving effect to all prior adjustments and increases
to such number made or required to be made under the terms hereof.
"Warrant Stock" means Common Stock issuable upon exercise of any
Warrant or Warrants or otherwise issuable pursuant to any Warrant or
Warrants.
10. Other Notices. In case at any time:
(A) the Issuer shall make any distributions to the holders
of Common Stock; or
(B) the Issuer shall authorize the granting to all holders
of its Common Stock of rights to subscribe for or
purchase any shares of Capital Stock of any class or of
any Common Stock Equivalents or other rights; or
(C) there shall be any reclassification of the Capital
Stock of the Issuer; or
(D) there shall be any capital reorganization by the
Issuer; or
(E) there shall be any (i) consolidation or merger
involving the Issuer or (ii) sale, transfer or other
disposition of all or substantially all of the Issuer's
property, assets or business (except a merger or other
reorganization in which the Issuer shall be the
surviving corporation and its shares of Capital Stock
shall continue to be outstanding and unchanged and
except a consolidation, merger, sale, transfer or other
disposition involving a wholly-owned Subsidiary); or
(F) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Issuer or any partial
liquidation of the Issuer or distribution to holders of
Common Stock;
then, in each of such cases, the Issuer shall give written notice to the Holder
of the date on which (i) the books of the Issuer shall close or a record shall
be taken for such dividend, distribution or subscription rights or (ii) such
reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be, shall take place.
Such notice also shall specify the date as of which the holders of Common Stock
of record shall participate in such dividend, distribution or subscription
rights, or shall be entitled to exchange their certificates for Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, disposition, dissolution, liquidation
or winding-up, as the case may be. Such notice shall be given at least twenty
(20) days prior to the
-17-
action in question and not less than twenty (20) days prior to the record date
or the date on which the Issuer's transfer books are closed in respect thereto.
The Holder shall have the right to send two (2) representatives selected by it
to each meeting, who shall be permitted to attend, but not vote at, such meeting
and any adjournments thereof. This Warrant entitles the Holder to receive copies
of all financial and other information distributed or required to be distributed
to the holders of the Common Stock.
11. Amendment and Waiver. Any term, covenant, agreement or condition in
this Warrant may be amended, or compliance therewith may be waived (either
generally or in a particular instance and either retroactively or
prospectively), by a written instrument or written instruments executed by the
Issuer and the Majority Holders; provided, however, that no such amendment or
waiver shall reduce the Warrant Share Number, increase the Warrant Price,
shorten the period during which this Warrant may be exercised or modify any
provision of this Section 11 without the consent of the Holder of this Warrant.
12. Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAW.
13. Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earlier of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified for notice prior to 5:00 p.m., eastern time, on a
Trading Day, (ii) the Trading Day after the date of transmission, if such notice
or communication is delivered via facsimile at the facsimile telephone number
specified for notice later than 5:00 p.m., eastern time, on any date and earlier
than 11:59 p.m., eastern time, on such date, (iii) the Trading Day following the
date of mailing, if sent by nationally recognized overnight courier service or
(iv) actual receipt by the party to whom such notice is required to be given.
The addresses for such communications shall be with respect to the Holder of
this Warrant or of Warrant Stock issued pursuant hereto, addressed to such
Holder at its last known address or facsimile number appearing on the books of
the Issuer maintained for such purposes, or with respect to the Issuer,
addressed to:
Ortec International, Inc.
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Chief Financial Officer
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
with a copy to:
Xxxxx, Xxxxxxxxx, Xxxxxxxx, Weber, Scala & Bass
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxxx, Esq.
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Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
Copies of notices to the Holder shall be sent to Xxxxxxx & Xxxxxxxxx Xxxxxx
Xxxxxx LLP, The Chrysler Building, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxxxxxxxxx X. Xxxxxxx, Tel No.: (000) 000-0000, Fax No.:
(000) 000-0000. Any party hereto may from time to time change its address for
notices by giving at least ten (10) days written notice of such changed address
to the other party hereto.
14. Warrant Agent. The Issuer may, by written notice to each Holder of this
Warrant, appoint an agent having an office in New York, New York for the purpose
of issuing shares of Warrant Stock on the exercise of this Warrant pursuant to
subsection (b) of Section 2 hereof, exchanging this Warrant pursuant to
subsection (d) of Section 2 hereof or replacing this Warrant pursuant to
subsection (d) of Section 3 hereof, or any of the foregoing, and thereafter any
such issuance, exchange or replacement, as the case may be, shall be made at
such office by such agent.
15. Remedies. The Issuer stipulates that the remedies at law of the Holder
of this Warrant in the event of any default or threatened default by the Issuer
in the performance of or compliance with any of the terms of this Warrant are
not and will not be adequate and that, to the fullest extent permitted by law,
such terms may be specifically enforced by a decree for the specific performance
of any agreement contained herein or by an injunction against a violation of any
of the terms hereof or otherwise.
16. Successors and Assigns. This Warrant and the rights evidenced hereby
shall inure to the benefit of and be binding upon the successors and assigns of
the Issuer, the Holder hereof and (to the extent provided herein) the Holders of
Warrant Stock issued pursuant hereto, and shall be enforceable by any such
Holder or Holder of Warrant Stock.
17. Modification and Severability. If, in any action before any court or
agency legally empowered to enforce any provision contained herein, any
provision hereof is found to be unenforceable, then such provision shall be
deemed modified to the extent necessary to make it enforceable by such court or
agency. If any such provision is not enforceable as set forth in the preceding
sentence, the unenforceability of such provision shall not affect the other
provisions of this Warrant, but this Warrant shall be construed as if such
unenforceable provision had never been contained herein.
18. Headings. The headings of the Sections of this Warrant are for
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.
IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the day and
year first above written.
ORTEC INTERNATIONAL, INC.
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By:
-------------------------------
Name:
Title:
-20-
EXERCISE FORM
CLASS E WARRANT
ORTEC INTERNATIONAL, INC.
The undersigned _______________, pursuant to the provisions of the within
Warrant, hereby elects to purchase _____ shares of Common Stock of Ortec
International, Inc. covered by the within Warrant.
Dated: Signature
----------------- -------------------------
Address
-------------------------
-------------------------
Number of shares of Common Stock beneficially owned or deemed beneficially owned
by the Holder on the date of Exercise determined in accordance with Section 16
of the Securities Exchange Act of 1934, as amended: ____________________
ASSIGNMENT
FOR VALUE RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the within Warrant and all rights evidenced thereby and does
irrevocably constitute and appoint _____________, attorney, to transfer the said
Warrant on the books of the within named corporation.
Dated: Signature
----------------- -------------------------
Address
-------------------------
-------------------------
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the right to purchase _________ shares of Warrant Stock
evidenced by the within Warrant together with all rights therein, and does
irrevocably constitute and appoint ___________________, attorney, to transfer
that part of the said Warrant on the books of the within named corporation.
Dated: Signature
----------------- -------------------------
Address
-------------------------
-------------------------
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FOR USE BY THE ISSUER ONLY:
This Warrant No. W-_____ canceled (or transferred or exchanged) this _____ day
of ___________, _____, shares of Common Stock issued therefor in the name of
_______________, Warrant No. W-_____ issued for ____ shares of Common Stock in
the name of _______________.
-22-
