EXHIBIT 1
February 3, 2004
Xx. Xxx Xxxxxxxx
Chief Executive Officer
Ortec International Inc.
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Gentlemen:
This letter Agreement (the "Agreement") confirms the engagement of Xxxxxxx Hill
Partners ("BHP"), a division of Pali Capital, Inc., by Ortec International (the
"Company") to act as its exclusive placement agent in connection with the
Company's issuance of common stock and warrants pursuant to the S-2 registration
statement initially filed with the Securities and Exchange Commission on
September 22, 2003 ("Financing").
As compensation related to the Financing, BHP shall be paid a cash commission of
seven and one-half (7.5%) percent of the gross proceeds of the Financing. In
connection with the cash exercise of investor warrants issued in the Financing,
BHP shall be paid a cash fee equal to four (4%) percent of the gross proceeds
received by the Company if such warrants are exercised within thirty-six months
of the Financing, except for investor warrants exercised within thirty-six
months of the financing but after the Company elects to redeem the investor
warrants in which event BHP's fee shall be reduced to two (2%) percent of gross
proceeds received by the Company from such exercise.
BHP or their assigns shall be issued Placement Agent Warrants in an amount equal
to 10% of the common shares issued in the Financing. The Placement Agent
Warrants shall be exercisable at the purchase price of the common shares issued
in the Financing (which is currently anticipated to range from $2-$4) and shall
expire five years from the issuance date. The shares underlying the Placement
Agent Warrants shall have standard piggyback registration rights after the
Closing, a cashless exercise provision, shall be non-redeemable and shall become
exercisable six months and one day after the Closing.
The Company shall reimburse BHP for all documented out-of-pocket expenses, which
amount shall not exceed $2,500 without the prior written approval of the
Company.
Notice given pursuant to any of the provisions of this Agreement shall be given
in writing and shall be sent by recognized overnight courier or personally
delivered (a) if to the Company, to the Company's office at 0000 Xxxxxxxx, Xxx
Xxxx, XX 00000. Attention: Xxx Xxxxxxxx, Chief Executive Officer; and (b) if to
BHP, to its office at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000. Attention: Xxxxx
Xxxxxxx, Managing Director.
BHP's engagement related to the Financing hereunder shall expire upon the
earlier of the completion of the Financing or ninety (90) days from the
effective date of the registration statement, which date may be extended in
thirty day intervals upon written agreement of the Company and BHP.
BHP is a division of Pali Capital Inc., a European American Investment Group
Company. The letter agreement shall remain in full force and effect as to BHP
and the Company in the event that BHP becomes an independent entity. In
connection with this engagement, BHP is acting as an independent contractor with
duties owing solely to the Company. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard to
conflicts of law principles thereof. This Agreement may not be amended or
modified except in writing signed by each of the parties hereto.
This letter and the indemnification Agreement contain the entire Agreement of
the parties with respect to the Financing. The invalidity or unenforceability of
any provision of this letter Agreement shall not affect the validity or
enforceability of any other provisions of this Agreement or the indemnification
Agreement.
We are delighted to accept this engagement and look forward to working with you
on this assignment. Please confirm that the foregoing is in accordance with your
understanding by signing and returning to us the enclosed duplicate of this
Agreement.
Very truly yours,
Xxxxxxx Xxxx Partners
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: Managing Director
Accepted and Agreed to as of the date first written above:
Ortec International, Inc.
By: /s/ Xxx Xxxxxxxx
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Name: Xxx Xxxxxxxx
Title: Vice Chairman and Chief Executive Officer
