Exhibit 4.4
ORTEC INTERNATIONAL, INC.
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
January 3, 2005
Exchange of Series C Convertible Preferred Stock for Common Stock
and Participation Commitment in Proposed Private Placement.
To: Holders of Series C Convertible Preferred Stock:
Reference is hereby made to (i) the Series C Convertible Preferred
Stock Purchase Agreement dated as of May 23, 2003, as amended on July 29, 2003
(the "Purchase Agreement"), by and among Ortec International, Inc. (the
"Company") and the investors named therein (each, a "Series C Holder") and (ii)
the Certificate of Designation of the Relative Rights and Preferences of the
Series C Convertible Preferred Stock (the "Series C Preferred Stock") of the
Company filed on May 23, 2004 with the Delaware Secretary of State (the
"Certificate of Designation"). Capitalized terms not otherwise defined herein
shall have the meanings assigned to such terms in the Purchase Agreement and the
Certificate of Designation, as applicable.
The Company is undertaking a private placement of its shares of Common
Stock and Warrants to purchase shares of Common Stock (the "Placement") under
terms provided in the term sheet attached as Exhibit A.
In order to facilitate the completion of the proposed Placement, the
Company is making the following offer to the holders of its Series C Preferred
Stock:
The Company will accept shares of the Series C Preferred Stock, at the
Liquidated Preference Amount of $6,000 per share plus dividends accrued thereon,
as purchase price in exchange for the Securities issued in the Placement, if
such Series C Holder purchases for cash a dollar amount in the Placement equal
to at least 30% of the total Liquidation Preference Amount of such shares of
Series C Preferred Stock exchanged by such Series C Holder for shares in the
Placement.
For holders of Series C Preferred Stock whose participation in this
offer would result in ownership in excess of 9.99% of the Common Stock currently
outstanding, such holders shall be issued in lieu of Common Stock so many shares
of Ortec's Series D Convertible Preferred Stock ("Series D Preferred Stock") as
would entitle such holder to acquire, upon conversion, the same number of shares
of Common Stock. Such Series D Preferred Stock pays no dividend and shall
convert into common stock when the holder's ownership percentage falls below
9.99%.
This proposal will significantly streamline the Company's capital
structure, provide additional working capital and facilitate the completion of
the Placement.
The undersigned holder of Series C Preferred Stock hereby accepts the offer
discussed
herein and agrees to fund their allocable portion of the Placement prior to
Closing pursuant to instructions to be provided by the Company pursuant to the
Placement documents.
This letter agreement may be executed in two or more counterparts, all
of which shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party.
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Kindly acknowledge your agreement to the foregoing by signing in the
place indicated below and returning the signed copy to the Company.
Sincerely,
ORTEC INTERNATIONAL, INC.
By: /s/ Xxx Xxxxxxxx
------------------
Name: Xxx Xxxxxxxx
Title: Vice Chairman and Chief Executive Officer
Agreed and accepted:
Number of Series C Preferred
Stock to be exchanged _______
SERIES C HOLDER:
By:____________________________
Name:
Title:
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