TAMM OIL AND GAS CORP. Suite 460, 734 — 7th Avenue SW Calgary, Alberta T2P 3P8
TAMM
OIL AND GAS CORP.
Xxxxx
000, 000 — 0xx Xxxxxx XX
Xxxxxxx,
Xxxxxxx X0X 0X0
November
26, 2007
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TO:
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Muzz
Investments Inc.
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0000
00 Xxxxxx
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Xxxxx,
XX X0X 0X0
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AND
TO:
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1004731
Alberta Ltd.
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000,
000 - 0xx
Xxxxxx
X.X.
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Xxxxxxx,
XX X0X 0X0
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Dear
Sirs:
This
letter sets out the agreement (“Agreement”) reached among Tamm Oil and Gas Corp.
as purchaser (“Tamm”), and 1004731 Alberta Ltd. (“1004731”) and Muzz Investments
Inc. (“Muzz”), as vendors (collectively the “Vendors”) regarding the transfer
and sale by the Vendors of all of their interest in the Royalty Agreement and
Royalty (both as hereinafter defined) to Tamm by the Vendors upon the terms
and
conditions set forth herein.
Acquisition
| 1. |
The
Vendors hereby agree to sell, assign and transfer to Tamm their entire
right, title and interest
in the Muzz Assets and the 1004731 Assets on the terms and subject
to the
conditions
set out in this Agreement (the “Sale
Transaction”).
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Definitions
| 2. |
In
this Agreement the following terms have the following
meanings:
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|
“1004731
Assets” means a 1.25% interest in the Royalty Agreement, Royalty and Trust
Agreement;
“Muzz
Assets” means a .75% interest in the Royalty Agreement, Royalty and Trust
Agreement;
“Royalty”
means all right, title and interest granted to the grantee pursuant
to the
Royalty Agreement;
and
“Royalty
Agreement” means that royalty agreement made between Mikwec Energy
Canada
Ltd., as grantor, and Nearshore Petroleum Corporation, as grantee,
dated
December
12, 2003; and
“Trust
Agreement” means the Recognition of Trust made by Nearshore Petroleum
Corporation
in favour of the Vendors, and others, dated December 12,
2003.
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Consideration
| 3. |
In
consideration for the sale and transfer to Tamm of the Muzz Assets
and
1004731 Assets,
Tamm
agrees to issue to the Vendors 4,000,000 shares of common stock of
Tamm.
This represents 4.15% of the 96,300,000 issued and outstanding common
stock of Tamm
(the
“Tamm Shares”)
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| 4. |
The
Vendors acknowledge that the Tamm Shares will be restricted and
acknowledges that
the Tamm Shares issued pursuant to the terms and conditions set
forth in
this Agreement
will have such hold periods as are required under applicable securities
laws and
as a result may not be sold, transferred or otherwise disposed,
except
pursuant to an effective
registration statement under the Securities Act, or pursuant to
an
exemption from,
or in a transaction not subject to, the registration requirements
of the
Securities Act and
in each case only in accordance with all applicable securities
laws. Tamm
has not
undertaken, and will have no obligation, to register any of the
Tamm
Shares under the Securities
Act; provided, however, that Tamm will assist in providing legal
opinions
when
the Selling Shareholder may resell its respective shares under
Rule 144
promulgated
under the Securities Act.
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Closing
and Definitive Agreements
| 5. |
The
Closing will take place, subject to the terms and conditions of this
Agreement, on
the Closing Date.
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| 6. |
Closing
of the transactions contemplated herein (the “Closing”) will occur on or
before January
31, 2008 or on such other date as the parties may agree (the “Closing
Date”), to be
held at the City of Vancouver, Canada, at such place and time as
the
parties may agree.
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| 7. |
The
parties agree to instruct their attorneys to co-operate and complete
comprehensive and
definitive agreements for the Sale Transaction upon execution of
this
Agreement. The
definitive agreements will contain terms and representations customary
for
agreements
governing the purchase and sale of a royalty in Canada, as prepared
by
commercial
legal counsel of good reputation. In the event that any matter cannot
be
resolved
or agreed, the terms of this Agreement will govern respecting that
matter.
If no definitive
agreements are executed by the parties hereto, this Agreement will
remain
in full
force and effect.
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Due
Diligence
| 8. |
Tamm
and the Vendors will each have the right to conduct due diligence
on the
other in connection
with the transactions contemplated hereunder. Each of Tamm and the
Vendors
and their respective accountants, legal counsel and other representatives
will have
full access during normal business hours to the management, properties,
books, records,
contracts, commitments and other documents of the other and their
subsidiaries in
connection with the transactions contemplated
herein.
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Closing
Conditions
| 9. |
This
Agreement and the Closing hereof is subject to the
following:
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| (a) |
all
representations and warranties contained herein and to be contained
in the
definitive
agreements described in Sections 10 and 11 hereof shall be true and
correct
at the date of Closing.
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Representations
of Tamm
| 10. |
Tamm
represents and warrants to the Vendor
that:
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| (a) |
the
authorized capital of Tamm consists of 300,000,000 common shares
with
a par
value of $0.001 per share, of which there are presently 92,300,000
common shares
issued and outstanding;
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| (b) |
inclusive
to what is set out in (a) above and as contemplated under
this Agreement,
there are 800,000 Warrants issued and outstanding with an exercise
price
of $1.75. There are no additional other rights, warrants or
options outstanding
pursuant to which any shares of Tamm may be issued and there
are no
other securities issued and outstanding or issuable which are or
may be
convertible
or converted into shares of Tamm;
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| (c) |
Tamm
is duly incorporated under the laws of the state of
Nevada;
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| (d) |
Tamm
is a reporting issuer under the Securities
Exchange Act of 1934;
and
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| (e) |
all
of Tamm’s continuous disclosure filings with the United States Securities
and Exchange
Commission (the “SEC”) are in good standing and are complete
and accurate
and other than as contemplated herein, there are no material changes
in Tamm’s
business and affairs from that which is disclosed in Tamm’s
continuous disclosure
documents.
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Representations
of the Vendors
| 11. |
Each
of the Vendors represent and warrant to Tamm
that:
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| (a) |
1004731
is the beneficial owner of 1004731
Assets;
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| (b) |
Muzz
is the beneficial owner of the Muzz Assets;
and
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| (c) |
Each
of the Vendors has the full power and authority to transfer or cause
to
be transferred
the Muzz Assets and the 1004731 Assets to Tamm free and clear
of any
charges, encumbrances, liens or
claims.
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Covenants
| 12. |
Tamm
hereby covenants to the Vendors as
follows:
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| (a) |
Tamm
shall conduct its business in the ordinary and normal course and
shall
not, without
the prior written consent of the Vendors, enter into any transaction
which would
cause any of its representations or warranties or agreements contained
in this
Agreement to be incorrect or to constitute a breach of any covenant
or agreement
of Tamm herein;
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| (b) |
Each
of the Vendors hereby covenants to Tamm that neither of the Vendors
will transfer
any of their interest in the Royalty Agreement, the Trust Agreement
or the
Royalty to any other party except in accordance with the terms of
this Agreement.
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Binding
Agreement
| 13. |
Upon
acceptance of the terms of this Agreement by all of the parties hereto,
this Agreement
shall be deemed to constitute and shall be a legally valid and binding
agreement.
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Confidentiality
| 14. |
The
Vendors acknowledge that Tamm is a public company and has an obligation
to
disclose
all material information about its affairs. The Vendors agree that
they
will not trade
in the securities of Tamm while in possession of, nor will they inform
others of (except
on a need to know basis), any non-disclosed material information
about
Tamm.
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General
| 15. |
All
Tamm’s legal costs in connection with the preparation of this Agreement
and the completion
of the transactions contemplated herein shall be for the account
of Tamm,
whether
or not the transactions contemplated hereby are completed. The Vendors
will pay
their own legal costs of review of this Agreement and any definitive
agreements prepared
by Tamm’s legal counsel.
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| 16. |
This
Agreement shall be governed and interpreted in accordance with the
laws of
the Province
of Alberta.
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| 17. |
This
Agreement may be executed in counterparts with the same effect as
if each
of the parties
hereto had signed the same document and all counterparts will be
construed
together
and constitute one and the same
instrument.
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| 18. |
This
Agreement will inure to the benefit of and be binding upon the parties
hereto and their
respective heirs, executors, personal representatives, successors
and
assigns.
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| 19. |
This
Agreement represents the entire agreement between the parties with
respect
to the transactions
contemplated herein and supersedes all other prior agreements,
understandings,
negotiations and discussions.
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If
the
foregoing correctly sets out the terms of our agreement, please execute this
letter in the space provided.
