EXHIBIT 99.1
THIS AGREEMENT made and dated effective December 31, 2005.
BETWEEN:
XXXXX XXXXX XXXXX, OF 000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx, XX X0X 0X0
(hereinafter referred to as "Dadon")
OF THE FIRST PART
AND:
BROOKMOUNT EXPLORATIONS, INC., a Nevada corporation, having its Head
Office at 000-000 Xxxxxxx Xxxxxx, Xxxxxxxxx, XX X0X 0X0
OF THE SECOND PART
W H E R E A S:
A. Brookmount and Dadon signed a Letter of Intent dated December 7, 2005 -
which anticipated that provisions thereof would be incorporated into a formal
agreement between the Parties ("Letter of Intent").
B. Some of the provisions of the Letter of Intent have been implemented.
NOW THEREFORE, in consideration of the premises and the covenants and agreements
hereinafter contained, and the funding which Dadon has raised for Brookmount,
the Parties agree as follows:
1. Dadon is hereby, by Brookmount, engaged and retained to, during the Term
(defined in Clause 8), provide the services to Brookmount hereinafter provided
for.
2. Dadon will, during the Term:
(a) serve Brookmount as a member of its Board of Directors, Chairman of
its Board of Directors, and Corporate Secretary (the "Positions");
(b) use his best reasonable efforts under the circumstances to, from time
to time, raise funding, whether debt or equity, for Brookmount if, as and
when, and from time to time, Brookmount resolves to seek funding.
3. In consideration of the services Dadon will provide to Brookmount, Dadon
will be entitled to receive the following:
(a) fees of $10,000 ($U.S.) per month to be paid monthly on the 1st day of
each month;
(b) reimbursement of all expenses which Dadon incurs on behalf of
Brookmount and in carrying out his duties for Brookmount:
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(c) monies equal to 10% of all funding raised by or on behalf of
Brookmount by Dadon, or as a result, in whole or in part, of Dadon's
efforts.
4. In further consideration of the services which Dadon is performing
and will perform for Brookmount, and for assuming the Positions, Brookmount
hereby grants to Dadon options to purchase up to 1,666,666 voting common shares
in the capital of Brookmount, exercisable at $0.18 per share during the 5-year
period ending December 31, 2010. Dadon shall be entitled to exercise the options
in whole or in part from time to time by giving an appropriate notice, sent to
the then existing head office address of Brookmount, together with payment for
the number of shares for which the option is being exercised.
5. Brookmount acknowledges that it has, pursuant to the Letter of Intent and
in consideration of the services which have been rendered - and are anticipated
to be rendered - by Dadon to Brookmount, issued and allotted to Dadon 4,291,000
voting common shares in its capital which have been issued to Dadon as fully
paid and non-assessable shares, and that such shares are free. of any liens or
encumbrances and free and clear of all trading restrictions - such shares being
represented by certificate 0694 which has been issued and delivered to Dadon.
6. To secure reimbursement of expenses incurred on behalf of Brookmount Dadon
will submit to Brookmount at its Head Office address from time to time a
statement providing reasonable details of the expenses with back-up invoices,
sales slips or other papers. Payment will be made to Dadon within 14 days of the
statement being received by Brookmount.
7. Dadon's duties in holding and exercising the Positions will include:
(a) all of the duties that are normally - or legally - required of a
director and of the officer positions that he holds of a publicly U.S.
traded company in such jurisdictions as now, or from time to time in the
future, have jurisdiction over the affairs of Brookmount;
(b) undertaking efforts in specific areas of endeavor or activity as he
may be instructed by resolution of the Board of Directors of Brookmount
("Board");
(c) reporting from time to time and as when requested to Xxxxx Xxxxxx,
President and Chief Executive Officer of Brookmount, or such other person
as may be designated from time to time by resolution of the Board.
8. The term of this Agreement will be for the 2-year period ending December
31, 2007, and it shall continue thereafter on a month-to-month basis until
terminated by not less than 60 days written notice by on Party to the other;
provided that it is agreed that Dadon shall be entitled to resign from any of
the Positions at any time by submitting a written resignation to Brookmount.
9. If Brookmount:
(a) shall obtain directors' and officers' liability insurance it shall
ensure that such insurance is designated to be available for the
protection of Dadon to at least the same extent as such insurance is for
the protection of any other director or officer of Brookmount; and
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(b) shall grant an Indemnification Agreement to any other of its directors
or officers it shall also grant an Indemnification Agreement containing
similar terms to Dadon.
10. (a) If Dadon shall at any time consider he is confronted with a question
or a potential problem which, in his opinion, requires that he obtain
independent legal advice he shall be entitled to do so at the expense of
Brookmount; provided that Dadon shall not incur any expense for legal
advice which is the responsibility of Brookmount without first referring
his concern to the lawyers who are then acting as Brookmount's general
legal counsel;
(b) If Brookmount's legal counsel advises Dadon that they consider they
have a conflict of interest, or for any other reason cannot provide him
with legal advice relating to his concerns, or if they advise that in
their opinion he should obtain separate independent legal advice, he shall
be entitled to do so subject to the requirement that the lawyers he
consults shall negotiate a retainer and fee arrangement with Brookmount's
legal counsel.
11. Dadon agrees:
(a) that he will provide the services required of him pursuant to this
agreement from his own premises or office facilities (at no cost to
Brookmount unless previously agreed to by Brookmount) or at the offices
maintained by Brookmount. If office services and facilities are provided
to Dadon at Brookmount's offices they shall be at the expense of
Brookmount;
(b) that he will, in performing the Services, use all reasonable efforts
to ensure that he is not at any time in violation of any laws, rules or
regulations having jurisdiction over him or his efforts, or over
Brookmount and its subsidiaries, and that he will at all times use his
best efforts bona fide to enhance Brookmount and its subsidiaries and
their potential for business success, and to enhance the reputation of
Brookmount with the persons and companies with which it does or proposes
to do business, with its shareholders and potential shareholders, with the
regulatory authorities, and generally within the areas of the business
community in which Brookmount and its subsidiaries may be conducting, or
attempting to conduct their business.
12. If Brookmount, during the Term, issues any further options or share
purchase warrants to either of its other Executive Offices, 1/3rd of the total
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number of such further options or warrants shall be issued to Dadon on the same
terms as they are issued to the other Executive Officers.
13. This agreement shall be interpreted according to the laws of the Province
of British Columbia, Canada, and the laws of Canada applicable therein, and the
Parties submit themselves to the jurisdiction of the courts of British Columbia.
14. Any dispute, controversy or claim arising out of or relating to this
Agreement or the interpretation of any of the provisions hereof will be finally
settled by arbitration in accordance with the Arbitration Rules of the British
Columbia International Commercial Arbitration Centre ("Centre") in effect on the
date hereof. The Parties agree that:
(a) The appointing authority will be the Centre; (b)The case will be
administered by the Centre in accordance with its "Procedures for Cases
under the BCICAC Arbitration Rules";
(c) The place of arbitration will be Vancouver, British Columbia;
(d) The number of arbitrators will be one (1);
(e) The language used in the proceedings will be English;
(f) The arbitrator's fees will be paid by the Parties in equal parts,
during the course of the arbitration. In his final decision the arbitrator
shall assess liability against one or both of the arbitrating parties for
the costs incurred by the parties in the arbitration and for the
arbitration costs.
15. (a) Any notice which is required to be given hereunder shall be given in
writing and 1 will be effectively given if the same is:
(i) delivered or mailed by prepaid registered or certified post to
the address of the intended recipient set forth at the top of
this Agreement;
(ii) delivered to an intended recipient, or to a director or officer
of a corporate intended recipient; or sent by telecopier (fax)
to the intended recipient at the following numbers:
Brookmount (604) 632--3717
Dadon (604) 689--7724
Provided that any Party may give notice to the other Parties of new
addresses or new fax numbers to be used for the purpose of this Clause;
(b) any notice which is delivered shall be deemed to have been given on
the date of delivery. Any notice which is sent by fax shall be deemed to
be given on the first weekday following the date upon which the telecopied
message is transmitted. Any notice that is sent by prepaid mail shall be
deemed to have been given on the 5th weekday after the date upon which the
notice is mailed from a Post Office in Canada or the United States.
16. This Agreement shall enure to the benefit of and be binding upon the
Parties hereto and their respective administrators and permitted assigns, and
their related or associate companies or persons.
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17. The Parties hereto agree to do such further acts and execute such further
documents as may be necessary to carry out the true intent and meaning of this
Agreement.
IN WITNESS WHEREOF the Parties hereto have hereunto caused this Agreement
to be executed as of the day and year first above written.
Submitted by: Accepted by:
Xxxxx Xxxxx Xxxxx Brookmount Explorations, Inc.
By /s/ Xxxxx Xxxxx Xxxxx By /s/ Xx. Xxxxx Xxxxxx
--------------------- ---------------------
Xxxxx Xxxxx Xxxxx Xx. Xxxxx Xxxxxx, President & CEO
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XXXXX XXXXX XXXXX
--------------------------------------------------------------------------------
000 XXXXXX XXXXXX XXXX 0000
XXXXXXXXX, XX X0X 0X0
(604) 689--1814
December 7, 2005
Xx. Xxxxx Xxxxxx, President & CEO
Brookmount Explorations, Inc.
Park Place 660 - 000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX X0X 0X0
Re: Letter of Intent
Dear Xx. Xxxxxx:
Xxxxx Xxxxx Xxxxx (hereafter "DJD") is please to submit this Letter of
Intent to Mr. Xxxxx Brookmount Explorations, Inc. regarding the proposed
transaction between Brookmount Explorations, Inc. (hereinafter BEI) and DJD.
We have reviewed the BEI business plan and proposal, base upon such
review, believe there is a significant strategic rationale to support a
combination/acquisition of DJD and BEI.. We plan to precede in an expeditious
manner so that subject to the terms and conditions of the proposal and the
completion of a definitive agreement, the transaction can be consummated as soon
as practicable.
PROPOSED TRANSACTION
The basic terms of the proposed transaction are that DJD would offer,
contingent on the results of successful initial due diligence, To
include the followings; (1) DJD to acquire $300,000 in new investment
on behalf of BEI (2) Phase two to provide additional investment of
$10,000,000 subject to the company filing SB--2 and accepted by the
Securities and Exchanges Commission (3) DJD to receive approve expenses
and the (10%) bonus on all funds acquire on behalf of the company (4)
to appoint DJD to the board of directors and to serve as Chairman of
the Board. (5) upon the signing of this Letter of Intent DJD to receive
and equal amount shares as held by the President of the company (6) DJD
to be appointed the position of Secretary of the company upon the
execution of this Letter of Intent DJD to receive and equal amount
shares as held by the President of the company (6) DJD to be appointed
the position of Secretary of the company upon the execution of this
Letter of Intent,. The Company, in exchange for the above, shall cause
the BEI and DJD to complete the acquisition of the above venture. The
issuance of common shares shall be issued under rule 144 of the
Securities and Exchange Act of 1934. Upon consummation of this
acquisition, BEI a publicly traded company on the Over the Counter
Bulletin Board symbol BMXI shall work together with DJD for the
interest of BEI and its shareholders and to grow the company.
This Letter of Intent shall be subject to the negotiation and execution of a
mutually acceptable agreement and any ancillary agreements (collectively the
"Definitive Agreements"). The Definitive Agreements shall contain mutually
acceptable representations, warranties, covenants, indemnification provisions,
closing conditions (including the delivery of an opinion of Company's counsel)
and other provisions. Each party shall pay its own costs and expenses (including
the fees and disbursements for its legal counsel and financial advisors)
incurred in connection with the proposed transaction and the negotiation,
preparation and performance of the Definitive Agreements, except as provided for
in the Expense Reimbursement paragraph below. Further, this Letter of Intent
shall be subject to the confirmatory legal and accounting due diligence by both
parties.
BINDING PROVISIONS TO THE LETTER OF INTENT
BEI and DJD agree that the following provisions shall be legally
binding upon the parties upon the execution of this Letter of Intent.
Exclusivity. The letter constitutes the agreement of each party to work
exclusively with each other towards the closing of the transaction contemplated
herein. Accordingly, from the date of this letter until the earlier of (a)
December 31, 2005 or (b) the mutual termination by both parties of the
negotiations for the transaction contemplated herein, the parties shall not (i)
directly or indirectly through any other third party engage in any negotiations
with or provide any information to any other person, firm or corporation with
respect to an acquisition of its capital interest, assets or this Letter of
Intent, (ii) directly or indirectly through any other third party solicit any
proposal relating to the acquisition, sale or transfer of the equity or assets,
and (iii) dispose of any material assets or incur any debt other than in the
ordinary course of business and shall maintain and continue to operate their
business as it has in the past and will not engage in any transactions outside
the ordinary course of business.
Dissemination of Information. It is mutually agreed that BEI shall not,
without the prior written approval of the parties, issue any press release or
public statement or make any disclosure of this Letter of Intent or any of the
transactions contemplated hereby, including without limitation the terms of the
proposed transaction, except to the extent required by applicable law. All
information provided is confidential unless previously made public.
Expense Reimbursement. Notwithstanding anything in this letter to the
contrary, if after executing this Letter of Intent, but prior to the execution
of the Definitive Agreements, BEI or DJD elects not to expeditiously proceed
with the Letter of Intent, then the breaching party shall (i) reimburse the
non-breaching party for its out-of-pocket expenses, including without
limitation, its legal fees and disbursements, but not to exceed the sum of
$3,000 and (ii) indemnify and hold harmless the non-breaching party for any
expenses, not to exceed the sum of $3,000, incurred by the breaching party in
connection with this Letter of Intent, including but not limited to accounting
and legal fees.
Please let me know promptly if you are agreeable to proceeding along
the line of this letter, which is a non-binding expression of interest and may
not be construed as an offer or to create any rights or obligations except as
provided in the Binding Provisions Paragraphs. As noted above, we are confident
of our ability with your cooperation to expeditiously complete our due diligence
and close the proposed transactions.
Submitted by: Accepted by:
Xxxxx Xxxxx Xxxxx Brookmount Explorations, Inc.
By /s/ Xxxxx Xxxxx Xxxxx By /s/ Xx. Xxxxx Xxxxxx
--------------------- ---------------------
Xxxxx Xxxxx Xxxxx Xx. Xxxxx Xxxxxx, President & CEO
