Pioneer Exploration Inc.
202 – 000
Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx,
Xxxxxxx Xxxxxxxx
X0X
0X0
November
5, 2008
Ian
McGavney
00
Xxxxxxx Xxxx
Xxxxxxxx,
Xxx Xxxxxxxxx
X0X
0X0
Dear
Sir:
Re: Macallan Oil
& Gas Inc. - Option to purchase Shares
This
letter will confirm our numerous discussions concerning the proposed purchase of
up to 50,000 free trading common shares in the capital of Macallan Oil & Gas
Inc. (the “Shares”).
This
Letter Agreement sets forth the terms and conditions of the proposed purchase,
which, when accepted by you, will form a binding agreement between us, such
agreement to be embodied in due course in a more formal agreement (the “Formal
Agreement”).
Background
For the
purposes of our proposed acquisition, we have each relied upon the following
information:
|
(a)
|
Macallan
Oil & Gas Inc. (the “Company”) has a 39%
revenue interest in an oil discovery in
Trinidad;
|
|
(b)
|
you
are the beneficial owner of your Shares and have the authority and control
to sell those Shares:
|
|
(c)
|
there
are no options, rights or other agreements to purchase the Shares, and
none of you have granted anyone else the right to purchase the
Shares.
|
Proposed
Acquisition
Based on
the foregoing information, we agree as follows:
|
1.
|
We
or our nominee will purchase from all of you all of the
Shares.
|
|
2.
|
The
total purchase price of the Shares will be CDN$37,500, with $6000 payable
within 10 days of closing and 4 payments of $7500 and 1 final
payment of $1500 each every 60 days
thereafter
|
|
3.
|
You
will deliver the Shares upon receipt of final
payment
|
|
4.
|
If
we raise CDN$250,000 or more at any one time we will pay out the remaining
payments on demand.
|
|
5.
|
It
is understood that contained in the Formal Agreement will be the normal
and usual covenants and warranties for a transaction of this nature,
including among other things, but without limitation, the ownership of the
Shares and your right to sell the
Shares.
|
|
6.
|
The
Formal Agreement will also contain customary conditions precedent to
closing, including, without limitation, the
following:
|
|
|
a.
|
We
conduct due diligence searches and obtain satisfactory results from those
searches.
|
|
|
b.
|
You
obtain any required consents for the transfer of the
Shares.
|
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|
|
The
Formal Agreement will provide that if these conditions are not fulfilled
or waived prior to closing, the obligations of the parties thereunder will
be null and void unless the fulfilment of any such condition was
reasonably capable of being
performed.
|
|
7.
|
All
information will be kept confidential and will be divulged by the parties
only to their respective principals and professional advisors or as
required by law.
|
|
8.
|
Prior
to execution of the Formal Agreement and so long as negotiations on this
proposal continue and are being pursued in good faith, you agree to
neither solicit expressions of interest nor offers from any other parties
concerning the sale of the Shares nor to negotiate same or to take any
steps in furtherance thereof.
|
Miscellaneous
|
9.
|
Each
of the parties hereby will pay their own costs, expenses and fees
(including, without limitation, legal counsel) incurred in connection with
the preparation, execution and the consummation of this Letter Agreement
and the Formal Agreement.
|
|
10.
|
This
Letter Agreement and the Formal Agreement will be interpreted in
accordance with the laws of the Province of British Columbia and will
enure to the benefit of and be binding upon us and our respective heirs,
successors and permitted assigns.
|
|
11.
|
We
agree to sign such further and other deeds and documents, including
without limitation, the Formal Agreement and to give such further and
other assurances as may be necessary to fully implement this Letter
Agreement.
|
|
12.
|
If
the foregoing accurately sets forth your understanding of our agreement,
please sign this Letter Agreement where indicated below which will then
form a binding agreement between us, subject only to the terms and
conditions aforesaid. We will then immediately begin our due
diligence and preparation of the Formal
Agreement.
|
13 Should
the purchaser fail to make payment with in 5 business days of the agreed to
purchasedays the seller has the right to withdraw from this purchase and sale
agreement whereby thepurchaser waives the right to purchase the balance of
shares agreed to in this documentunless otherwise agreed to by the
seller.
Yours
truly,
Per: /s/ Xxx
Xxxxx c/s
Authorized
Signatory
ACCEPTED
AND AGREED TO THIS 5TH DAY OF
NOVEMBER, 2008:
/s/ Ian McGavney
Ian McGavney
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