EXHIBIT 10.10
FORM OF INVESTMENT AGREEMENT BY AND BETWEEN THE
REGISTRANT AND OCEAN RESOURCES CAPITAL HOLDINGS,
PLC DATED FEBRUARY 21, 2002
DATED __________________ 2003
(1) OCEAN RESOURCES CAPITAL HOLDINGS PLC
(2) BPK RESOURCES, INC
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INVESTMENT AGREEMENT
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Stallardsoliciors[GRAPHIC]
Centurion House
00 Xxxxx Xxxxxx
Xxxxxx
XX0X 0XX
Tel. 000 0000 0000 Fax. 000 0000
3002 DX. 822 London-City
Email: xxxx@xxxxxxxxxxx.xx.xx
OCEAN RESOURCES CAPITAL HOLDINGS PLC
Ocean House
00/00 Xxxxxx Xxxxxxx Xxxx
Xxxxxx
XX0X 0XX
Private and Confidential
To The Directors
BPK Resources, Inc
0000 Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx
XX 00000
XXX
21st February 2003
Dear Sirs
Investment Offer
Ocean Resources Capital Holdings Plc ("ORCH") is pleased to confirm its
intention to make an investment in BPK Resources, Inc ("the Company") on the
terms set out in this letter. This letter should be read in conjunction with the
accompanying schedules entitled "Conditions Precedent" and "Warranties".
1 Investment in the Company
1.1 ORCH will invest in the Company by way of subscription for
5,538,461 Series A 10% Convertible Preferred Stock in the
Company ("the BPK Shares") with a par value of US$0.001 at a
subscription price of US$0.65 each, credited as fully paid and
having the terms set out in the Certificate of Designation
attached as Schedule 1.
1.2 Subscription for the BPK Shares shall be satisfied by the
issue by ORCH of 4,390,000 Ordinary Shares of 1p each in ORCH
("the ORCH Shares") at a subscription price of 50p each,
credited as fully
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paid and ranking pari passu in all respects with the existing
shares in ORCH, together with 4,390,000 warrants issued in
accordance with the warrant instrument attached at Schedule 5
("the Warrants").
1.3 ORCH confirms to the Company that it is the intention of the
board of ORCH to seek to have the ORCH Shares traded on the
Alternative Investment Market ("AIM") of The London Stock
Exchange as soon as reasonably practicable and it is
acknowledged by the Company that the allotment and issue of
Shares in consideration for the issue of the BPK Shares is not
conditional upon such admission to AIM ("Admission").
2 Purpose
ORCH's investment is to be used for the purpose of providing working
capital for the business of the Company.
3 Availability
The subscription for the BPK Shares shall be made when ORCH is
satisfied that the conditions precedent set out in Schedule 2, headed
"Conditions Precedent", have been fulfilled or waived by ORCH .
4 Obligations of the Company
4.1 The Company agrees to make available such information with
regard to the Company and its business, assets and investments
as may reasonably be required by ORCH in connection with any
application for Admission.
4.2 The Company acknowledges that by accepting this offer and
accepting the allotment of shares in exchange for the issue of
the BPK Shares, the Company will not be entitled to dispose of
any of the ORCH Shares issued to it either prior to or during
a period of at least 2 months from Admission without the prior
consent of ORCH (which shall not be unreasonably withheld), or
as part of the placing by ORCH during such period.
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4.3 The Company further acknowledges that it will not be entitled
to dispose of the Warrants independently of the ORCH Shares
for a period of 3 months from Admission without the prior
consent of ORCH, or as part of the placing by ORCH during such
period.
4.4 The Company irrevocably undertakes that:
4.4.1 the Company will place US$720,000 of the net proceeds
from the sale of the ORCH Shares in an escrow account
until the second anniversary of this Agreement, on
terms satisfactory to ORCH, on the basis that this is
equal to two years' dividends in respect of the BPK
Shares and the funds standing to the credit of the
escrow account shall be entitled solely for payment
of dividends in respect of the BPK Shares; and
4.4.2 other than day to day creditors and the proposed
US$600,000 margin account with HSBC (of which details
have been disclosed to ORCH), the Company will not
incur more than US$1,000,000 further indebtedness,
without the prior written permission of ORCH, which
permission shall not be unreasonably withheld.
4.5 The Company agrees that ORCH shall be entitled to nominate a
director to the Board of Directors of the Company and
undertakes to take all such steps as may be required to
appoint such person to serve on the Board of Directors of the
Company until the next meeting of the stockholders of the
Company held for the purpose of electing directors. As a
condition to appointing such person to serve on the Board of
Directors of the Company, ORCH shall cause such person to
provide all information requested by the Company regarding
such person, including but not limited to, completing and
executing a standard and customary Directors & Officers
Questionnaire (the information set forth in such questionnaire
to be acceptable to the Company) and to execute and file any
and all documents requested by the Company including, but not
limited to, a Form 3 to be filed with the United Securities
and Exchange Commission.
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4.6 The Company shall ensure that the ORCH Director receives due
notice of all Board Meetings of the Company together with all
supporting board papers and other information as is provided
to all other members of the Company's Board of Directors.
4.7 The Company further undertakes that as a subscriber for ORCH
Shares in ORCH it will provide to ORCH and its advisers such
information as may from time to time be required under any
money laundering regulations to which ORCH may from time to
time be subject, whether in connection with the application
for admission on AIM or otherwise.
4.8 ORCH shall provide to the Company and its advisors any and all
information as may from time to time be requested by the
Company or its advisors in order to comply with any laws,
rules or regulations applicable to the Company including, but
not limited to, information required to be disclosed pursuant
to applicable United States securities laws, rules or
regulations.
4.9 ORCH shall prepare and file any and all forms, reports,
schedules or other information required to be filed by it
under applicable United States securities laws, rules or
regulations. ORCH further undertakes to cause each of its
employees, agents and affiliates, including any person it
designates to serve on the Board of Directors of the Company,
to prepare and file any and all forms, reports, schedules or
other information required to be filed by such persons under
applicable United States securities laws, rules and
regulations.
5 Warranties
5.1 The Company warrants and represents to ORCH in the terms of
Schedule 3 and/or set out in the Form of Acceptance.
5.2 Each of the Warranties shall be separate and independent and,
save as expressly provided, shall not be limited by reference
to any other Warranty or anything in this letter.
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6 Investment Representations
6.1 ORCH represents and warrants to the Company that:
6.1.1 the BPK Shares and the shares of common stock,
US$0.001 par value per shares, of the Company
issuable upon conversion of the BPK Shares
(collectively "the BPK Securities") are being
acquired for ORCH's own account for investment
purposes only and not with a view to, or with any
present intention of, distributing any of such BPK
Shares; and
6.1.2 all information relating to the legal status and
constitution of ORCH, the details of the authorized
and issued share capital of ORCH, its business and
financial position and all other information set
forth in the Admission Document to be published by
Ocean on its application for admission to AIM will be
true and accurate.
6.2 ORCH acknowledges and accepts that:
6.2.1 The BPK Securities have not been registered under the
United States Securities Act of 1933, as amended (the
"Securities Act"), or under any state securities or
blue sky laws and the transfer of the BPK Securities
is intended to be exempt from registration under the
Securities Act based, in part, upon the
acknowledgement of ORCH contained herein.
6.2.2 Neither the United States Securities and Exchange
Commission nor any state securities commission has
(i) approved the issuance and sale of the BPK
Securities or passed upon or endorsed the merits of
the BPK Securities, or (ii) confirmed the accuracy
of, determined the adequacy or, or reviewed any
documentation regarding the Company.
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6.2.3 ORCH has such knowledge and experience in financial
and business matters that it is capable of evaluating
the risk of investing in the Company and that it has
had access to all documents and records relating to
the Company; that it has reviewed such documents that
it has deemed necessary in order to make an informed
investment decision with respect to an investment in
the BPK Securities, including but not limited to, the
Company's filings with the United States Securities
and Exchange Commission, that it has had the
opportunity to ask representatives of the Company
certain questions and request certain additional
information regarding the terms and conditions of
this particular investment and the finances,
operations, business and prospects of the Company and
has had any and all such questions and requests
answered to its satisfaction; and that it understands
the risks and other considerations relating to an
investment in the BPK Securities.
6.2.4 ORCH is an "Accredited Investor" as that term is
defined in the Securities Act and the rules and
regulations promulgated thereunder.
6.2.5 ORCH is acquiring the BPK Securities in a private
transaction separately negotiated with the Company,
and in electing to make such a purchase was unaware
of, and did not rely on, and did not become aware of
the offering of the BPK Securities through or as a
result of, any form of general solicitation or
general advertising, including, without limitation,
any article, notice, advertisement or other
communication published in any newspaper, magazine or
similar media, or broadcast over television or radio
or the internet, in connection with the offer and
sale of the BPK Securities.
6.2.6 ORCH must bear must bear the substantial economic
risks of the investment in the BPK Securities
indefinitely because the BPK Securities may not be
sold, hypothecated or otherwise disposed of unless
registered under the Securities Act and
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applicable state securities laws or an exemption from
such registration is available in the legal opinion
of counsel to the Company. Legends shall be placed on
the certificates evidencing the BPK Securities to the
effect that the BPK Securities have not been
registered under the Securities Act or any applicable
state securities laws and appropriate notations
thereof will be made in the Company's stock transfer
books substantially as set forth below:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THESE SECURITIES MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE
OF REGISTRATION, OR THE AVAILABILITY OF AN EXEMPTION
FROM REGISTRATION, UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, BASED ON AN OPINION LETTER OF COUNSEL
ACCEPTABLE TO THE COMPANY.
6.2.7 Stop transfer instructions will be placed with any
transfer agent of the BPK Securities.
7 Information and publicity
7.1 Each party shall disclose such information concerning such
party and any subsidiary or associated companies as may be
required of it to comply with the rules of any applicable law,
Relevant Stock Exchange or other regulatory authority.
7.2 Any press release in relation to this transaction is to be
agreed in advance between the Company and ORCH.
8 Transaction fees
Each party shall be responsible for the fees of its own legal and
accountancy advisers in respect of this transaction.
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9 Procedure for acceptance
This offer may be accepted by signing and returning to ORCH the Form of
Acceptance enclosed herewith. When the Form of Acceptance is received
and accepted by ORCH this letter together with the Schedules hereto and
the Form of Acceptance shall form the share subscription agreement.
Yours faithfully
...........................................
Director/Authorised Signatory
Ocean Resources Capital Holdings Plc
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FORM OF ACCEPTANCE AND COMMITMENT
This letter must be completed and returned by facsimile to Xxxxxxxx Solicitors
by no later than 4.00 p.m. UK time on 21st February (for the attention of Xxxxxx
Xxxxxx on 020 7481 3002) and a hard copy, signed by you, must be returned within
a further 10 business days ("the Closing Date") to Xxxxxxxx Solicitors,
Centurion House, 00 Xxxxx Xxxxxx, Xxxxxx XX0X 0XX.
From:
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BPK Resources, Inc
0000 Xxxxxxxxxx Xxxxxx Reference ORCH/BPK
Suite 709
Houston Number of ORCH Shares 4,390,000
XX 00000
XXX Number of BPK Shares 5,538,461
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o February 2003
Dear Sirs
Issue by BPK Resources, Inc (the "Company") of 5,538,461 shares of Series A 10%
Convertible Preferred Stock in the Company ("the BPK Shares") to Ocean Resources
Capital Holdings Plc ("ORCH") in consideration for the issue by ORCH of
4,390,000 ordinary shares of 1p each in ORCH ("Shares") at a subscription price
of 50p each together with 4,390,000 Warrants
We hereby acknowledge receipt of your letter dated 21st February 2003 (the
"Offer Letter") and confirm our irrevocable obligation to allot and issue to
ORCH the BPK Shares set out above in consideration for the allotment and issue
to the Company or its agent by ORCH of the ORCH Shares set out above, on the
terms and subject to the conditions set out or referred to in the Letter, and
without limiting the foregoing. We expressly confirm our agreement in all
respects to the terms of the Letter.
By accepting such commitment we:
(a) represent and warrant to ORCH that we have full authority and
rights to issue the BPK Shares to ORCH or its agent as herein
provided including compliance with any stock exchange, company
legislation or other regulatory requirements where
appropriate;
(b) confirm that we may lawfully acquire the ORCH Shares;
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(c) undertake that the BPK Shares will (subject to the
satisfaction of the Conditions Precedent) be allotted and
issued to ORCH or its agent free from all liens, charges and
encumbrances and with all rights now and hereafter attached
thereto;
(d) enclose herewith or irrevocably undertake to deliver to you by
the Closing Date the following documents:
(a) a Board Resolution in terms reasonably acceptable to
you authorising the allotment and issue of the BPK
Shares; and
(b) a letter of consent and authority in respect of the
following:
(i) the holding of an EGM of ORCH in February
2003 at short notice for the purposes of
dealing with any formalities required for
Admission; and
(ii) the appointment of the Chairman of ORCH as
the corporate representative of the Company
for the purposes of such EGM
(e) further undertake not to dispose of any of the ORCH Shares
acquired pursuant to the issue of the BPK Shares prior to or
for a period of at least 2 months from Admission without the
prior written consent of ORCH, which shall not be unreasonably
withheld;
(f) hereby authorise and request ORCH (subject to the conditions
referred to in the Letter having been fulfilled), in
accordance with the instructions given below, to deliver to us
at our risk definitive certificates for the number of Shares
to which we are entitled.
We further warrant, acknowledge and agree that:
(a) we are applying and subscribing for, the number of Shares specified
above upon and subject to the terms and conditions set out in the
Letter, and the Memorandum and Articles of Association of ORCH and,
without prejudice to the generality of the foregoing in accepting the
commitment hereunder:-
(i) except for the foregoing and the ORCH Admission Document for
admission to trading on AIM, we have not relied on any
information given or any representations or statements made at
any time by ORCH or any director, associate, employee, agent
or adviser of ORCH;
(ii) we have obtained all necessary consents and authorities
required (and in particular, but without prejudice to the
generality of the foregoing, any exchange control consents)
and observed any formalities in any jurisdiction to enable us
to issue the BPK Shares and to subscribe for the ORCH Shares
and to enter into and comply with this Form of Acceptance and
the signatory of the Form of Acceptance is, and will continue
to have, full authority to bind us to its terms;
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(b) time shall be of the essence as regards obligations pursuant to the
Form of Acceptance;
(c) we will be liable as a principal in respect of our obligations and the
terms and conditions of the letter and this Form of Acceptance will be
governed by, and construed in accordance with, the laws of England and
we agree to submit, for the benefit of ORCH to the exclusive
jurisdiction of the English courts.
Yours faithfully,
SIGNATURE: ____________________________________STATUS_________________________
FULL NAME:
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ON BEHALF OF:
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DELIVERY INSTRUCTIONS FOR SHARES
The registration details for and, if different, the person to whom you are
requested to deliver the Shares are as follows:
NAME _______________________________________________________________________
ADDRESS ____________________________________________________________________
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POSTCODE _________________
DELIVERY ADDRESS FOR CERTIFICATES (if different from the first-named above):
NAME _____________________________________________________________________
ADDRESS _____________________________________________________________________
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POSTCODE _________________
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SCHEDULE 1
Certificate of Designation
of Series A 10% Convertible Preferred Stock
of BPK Resources, Inc.
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SCHEDULE 2
CONDITIONS PRECEDENT
The Investor's investment shall be available when:
1 The Board and the investment committee of ORCH have approved the
investment terms.
2 ORCH and its advisers are satisfied that all formalities necessary for
the issue of the BPK Shares to ORCH have been complied with.
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SCHEDULE 3
WARRANTIES
1 Shares
1.1 All information relating to the legal status and constitution
of the company, including details of the authorised and issued
share capital of the Company, and its business and financial
position supplied to ORCH or its advisers was when given and
remains true and accurate.
1.2 The Articles of Incorporation and Bylaws of the Company,
Audited Accounts, Management Accounts and other documents
supplied to ORCH are up to date, accurate and complete copies
of the originals.
2 Insolvency
2.1 No administrator, administrative receiver, receiver, manager
or receiver and manager has been appointed over the whole or
any part of the assets or undertaking of the Company and no
such appointment has been threatened in writing within the
preceding twelve months.
2.2 The Company is not insolvent nor has it stopped payment of its
debts nor is the Company unable to pay its debts.
3 Legal Proceedings
3.1 The Company is not engaged or involved in or threatened with:-
3.1.1 any litigation, prosecution, arbitration or other legal
proceedings (whether as plaintiff, defendant or third party),
except for normal debt collection; or
3.1.2 any proceedings or enquiries before any tribunal, board of
enquiry, commission or any other administrative body, whether
judicial or quasi- judicial;
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3.2 There is no judgement or order of the court against the
Company, which has not been satisfied or discharged.
3.3 The Company has not committed any breach of or failed to
perform or observe any provision of its Memorandum or Articles
of Association or terms or conditions of any consent or
licence by which it carries on business.
3.4 The Company is not in breach of any of the listing rules,
regulations or requirements of OTC BB.
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SCHEDULE 4
Definitions
"Act" the Companies Xxx 0000 as amended and from time
to time in force;
"AIM" the Alternative Investment Market of the London
Stock Exchange;
"Articles of Association" the articles of association of the Company as
amended pursuant to the terms of this letter, and
in force from time to time;
"Completion" the subscription by ORCH for the BPK Shares and
the allotment by ORCH to the Company of the ORCH
Shares;
"Instrument" the Instrument constituting the BPK Shares in the
form set out as Schedule 1 hereto;
"ORCH" Ocean Resources Capital Holdings Plc;
"ORCH Director" the person to be nominated by ORCH and appointed
to the board of directors of the Company in
accordance with the terms of this Agreement;
"OTC BB" Over The Counter Bulletin Board;
"Shares" the Ordinary Shares of 1p each in the share
capital of ORCH;
"Warranties" the warranties and representations set out in
Schedule 3.
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SCHEDULE 5
The Warrant Instrument
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