OPTION AGREEMENT
THIS OPTION AGREEMENT dated as of February 7, 2006 (the "Agreement")
between Graphite Technology Group, Inc., a Delaware corporation with an address
at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxx ("Graphite"); and BPK Resources,
Inc., a Nevada corporation with an address at 000 Xxxxx Xxxxxxxxx, Xxxxxx, Xxx
Xxxxxx 00000 ("BPK").
W I T N E S S E T H:
WHEREAS, BPK has committed to loan Graphite an amount up to $1,000,000 in
contemplation of the proposed business combination of Graphite and BPK;
WHEREAS, in consideration for making this loan, Graphite has agreed to
grant BPK a three-year option to purchase up to 13.33% of its common stock in
the event Graphite does not proceed with the proposed business combination;
NOW THEREFORE, in consideration of the promises and mutual covenants and
agreements hereinafter contained, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. OPTION TO PURCHASE STOCK. Graphite hereby agrees that in the event it
does not proceed with the proposed business combination with BPK, BPK shall have
an option (the "Option") to purchase for up to $1,000,000 at anytime prior to
December 31, 2008 (subject to earlier termination as specified below) such
number of shares of Graphite's common stock as shall equal up to 13.33% of
Graphite's then outstanding shares of common stock calculated on a fully diluted
basis (including all outstanding options, warrants and other securities
convertible or exchangeable into the common stock).
2. EXERCISE. The Option may be exercised in whole or in part only by the
delivery by BPK of written notice to Graphite at the address specified below
personally or by certified mail. Payment for such shares shall be in certified
or cashier's check or by offset of any amounts outstanding under the Promissory
Note or any other obligation owed by Graphite to BPK. The Option shall not be
deemed exercised until payment in the manner described above has been made.
3. ANTI-DILUTION. The number of shares of stock of Graphite covered by
this option, the option price and other relevant provisions shall be
appropriately adjusted in the event of a stock dividend, recapitalization,
forward stock split, reverse stock split or other similar corporate transaction
in order to prevent dilution or enlargement of benefits intended to be made
available hereby. In case Graphite issues any shares of its common stock between
the date hereof and the date of the exercise of such option, or issues any
option, warrant, convertible security or other right to purchase or acquire its
securities between the date hereof and the date of the exercise of the option,
then the option to purchase provided for in this paragraph 3 shall be adjusted
downward in price and upward in amount, on a "full-ratchet" basis, based on the
price of the securities so issued.
4. GOVERNING LAW. This Agreement shall be governed by and interpreted in
accordance with the laws of the Commonwealth of Pennsylvania.
5. MISCELLANEOUS. A facsimile transmission of this signed Agreement shall
be legal and binding on all parties hereto. This Agreement may be signed in one
or more counterparts, each of which shall be deemed an original. The headings of
this Agreement are for convenience of reference and shall not form part of, or
affect the interpretation of, this Agreement. If any provision of this Agreement
shall be invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement or the validity or enforceability of this Agreement
in any other jurisdiction. This Agreement may be amended only by an instrument
in writing signed by the party to be charged with enforcement. This Agreement,
the Promissory Note and the Security Agreement between the parties hereof dated
as of the date hereof, contain the entire agreement of the parties with respect
to the subject matter hereto, superceding all prior agreements, understandings
or discussions.
6. NOTICES. Any notice required or permitted hereunder shall be given in
writing (unless otherwise specified herein) and shall be deemed effectively
given, (i) on the date delivered, (a) by personal delivery, or (b) if advance
copy is given by fax, (ii) seven business days after deposit in the United
States Postal Service by regular or certified mail, or (iii) three business days
mailing by international express courier, with postage and fees prepaid,
addressed to each of the other parties thereunto entitled at the following
addresses, or at such other addresses as a party may designate by ten days
advance written notice to each of the other parties hereto.
GRAPHITE: GRAPHITE TECHNOLOGY GROUP, INC.
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Olive
Telecopier No.: (000) 000-0000
BPK: BPK RESOURCES, INC.
000 Xxxxx Xxxxxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxxxxxx Xxxxxxxx
Telecopier No.: (000) 000-0000
2
7. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
permitted assigns.
IN WITNESS WHEREOF, Graphite and BPK have caused this Agreement to be
executed on the date as first written above.
GRAPHITE TECHNOLOGY GROUP, INC. BPK RESOURCES, INC.
By: /s/ Xxxxx X. Olive By: /s/ Xxxxxxxxxxx Xxxxxxxx
------------------------- ------------------------------
Name: Xxxxx X. Olive Name: Xxxxxxxxxxx Xxxxxxxx
Title: President Title: President
3
