Exhibit 10.1
SETTLEMENT
AGREEMENT
THIS SETTLEMENT
AGREEMENT (the “Agreement”) is entered into this 1st
day of September, 2009 (the “Effective Date”), by and
between Tamm Oil and Gas Corp. (“TAMM”), Garry Tighe,
William Tighe, Sean Dickenson, John Muzzin, Guido Hilekes, Peter
Schriber, Olaf Herr, Arthur Sulzer, LB (Swiss) Private Bank, Ltd.
and Rahn & Bodmer Co. (fka Rahn & Bodmer Banquiers)
(collectively, the “TAMM Parties”) on the one hand, and
Deep Well Oil and Gas, Inc. (“DWOG”) on the other. The
TAMM Parties and DWOG are each referred to as a “Party”
and are collectively referred to as the
“Parties.”
RECITALS
WHEREAS, DWOG is a publicly traded Nevada
corporation in the business of oil and gas exploration and
development, primarily focused on oil sands located in Alberta,
Canada;
WHEREAS, TAMM is a publicly traded Nevada
corporation in the business of oil and gas exploration and
development, primarily focused on oil sands located in Alberta,
Canada;
WHEREAS, Garry Tighe is a citizen of Canada who
resides at Dufourstrasse 85, CH- 8008, Zürich,
Switzerland;
WHEREAS, William Tighe is a citizen of Canada
who resides at 245 Citadel Way NW, Calgary, Alberta, CanadaT3G
4W8;
WHEREAS, Sean Dickenson is a citizen of Canada
who resides at 203 2630 Arbutus Street, Vancouver, Canada, A1 V6J
5L8;
WHEREAS, John Muzzin is a citizen of Canada who
works for Muzz Investments, Inc., which is located at 3779 34th
Street, Ladner (Delta), British Columbia, Canada V4K
3N2;
WHEREAS, Guido Hilekes is a citizen of The
Netherlands who works at Medicor AG, Gewerbestrasse 10, 6330 Cham,
Switzerland;
WHEREAS, Peter Schriber is a citizen of
Switzerland who lives at Gotthardstrasse 38, CH-8002 Zürich,
Switzerland;
WHEREAS, Olaf Herr is a citizen of Switzerland
who works at LB (Swiss) Private Bank, Ltd., Börsenstrasse 16,
CH-8022, Zürich, Switzerland;
WHEREAS, Arthur Sulzer is a citizen of
Switzerland who resides at Oberer Husliweg 33, CH-8166,
Niederweningen, Switzerland;
WHEREAS, LB (Swiss) Private Bank, Ltd. is a bank
in Switzerland with principal executive offices located at
Börsenstrasse 16, CH-8022, Zürich, Switzerland
WHEREAS Rahn & Bodmer Co. was formerly known
as Rahn & Bodmer Banquiers and is a bank in Switzerland with
its offices located at Talstrasse 15, CH-8001 Zürich,
Switzerland;
WHEREAS, DWOG alleges, inter alia , that
the TAMM Parties engaged in an illegal tender offer targeting DWOG,
and in furtherance of the illegal tender offer conspired to take
actions that violated various federal and state laws;
WHEREAS, in light of DWOG’s allegations,
certain disputes arose between the TAMM Parties and DWOG, which led
to a lawsuit filed by DWOG against the TAMM Parties in the United
States District Court, District of Nevada, Case
No.:3:08-cv-00173-ECR-RAM (the “Action”) (a true and
correct copy of the First Amended Complaint of the same is attached
as Exhibit A );
WHEREAS, the TAMM Parties dispute the
allegations made by DWOG, including the allegations of
jurisdiction;
WHEREAS, the Parties have reached a compromise
and settlement of the disputes between them and wish to fully and
finally resolve the disputes between them, including the Action, by
entering into the Agreement, doing so freely and voluntarily, after
having received the benefit of independent counsel and with full
knowledge of the binding and conclusive nature thereof.
NOW THEREFORE , based upon the foregoing and the mutual
covenants and agreements contained herein, the Parties agree as
follows:
TERMS
1. The
obligations incurred pursuant to the Agreement shall be in full and
final disposition of the Action and any and all additional claims
released herein.
2.
The Royalty Option . Effective upon the Parties’
filing of the Stipulated Judgment of Dismissal of the Action
contemplated by this Agreement, TAMM hereby grants to DWOG an
option (the “Option”) to purchase all of the right,
title and interest TAMM has in the Royalty Agreement between Mikwec
Energy Canada, Ltd. and Nearshore Petroleum Corporation, dated
December 12, 2003 (hereinafter the “Royalty
Agreement”), which right, title and interest Tamm acquired
pursuant to the Acquisition of Royalty Interest Agreement, dated
November 26, 2007, between TAMM, on the one hand, and Muzz
Investments, Inc. and 1004731 Alberta Ltd., on the other, a true
copy of which is attached hereto as Exhibit B. TAMM warrants and
represents it has true and good right, title and interest to a
royalty of 2% of the sales from 37 sections of Sawn Lake oil sands,
pursuant and subject to the terms of the Royalty Agreement and as
set forth in the attached Exhibit B. TAMM’s said right, title
and interest in the Royalty Agreement shall hereinafter in the
Agreement be referred to as “Tamm’s Royalty
Rights.” It is further agreed that:
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The purchase
price of the Option (the “Purchase Price”) will be (a)
the current fair market value of Tamm’s Royalty Rights as
determined by Ryder Scott Company Canada (the “Engineering
Firm”), less (b) USD $400,000 in acknowledgement of the costs
and expenses of the Action incurred by DWOG;
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Within ten (10)
business days of the execution of the Agreement, DWOG and TAMM,
acting in good faith, shall jointly retain the Engineering Firm to
complete an appraisal of the current fair market value of
Tamm’s Royalty Rights, effective August 1, 2009 (the
“Appraisal”). All fees and expenses incurred by the
Engineering Firm to complete the Appraisal will be paid jointly in
equal amounts by DWOG and TAMM. The Engineering Firm shall be
required to complete the Appraisal within sixty (60) days of the
later of the Effective Date or the date of the Engineering
Firm’s engagement, or as soon as commercially reasonable
thereafter so long as work on the Appraisal has commenced and is
diligently being pursued. If, as mutually determined in good faith
by DWOG and TAMM, Ryder Scott Company Canada cannot be retained or
cannot or will not complete the Appraisal for any reason (other
than as a result of a failure of either DWOG or TAMM to pay the
engineering fees), AJM Petroleum Consultants shall be the
Engineering Firm for purposes of this Section 2, and DWOG and TAMM,
acting in good faith, shall retain it within ten (10) business days
of the date DWOG and TAMM mutually determine Ryder Scott Company
Canada is unacceptable.
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The Option
shall be exercisable at any time during the period commencing on
the date the Engineering Firm issues the Appraisal and continuing
until ninety (90) days after the date the Appraisal is issued (the
“Option Term”). If unexercised, the Option shall expire
at 5:00 p.m. (Pacific time) on the last day of the Option Term. The
Option shall be exercisable by DWOG delivering to TAMM an
irrevocable written notice to purchase Tamm’s Royalty Rights
for the Purchase Price. Upon exercise of the Option, the Purchase
Price shall be payable in (a) immediately available funds in an
amount to be negotiated in good faith by DWOG and TAMM; and (b) a
secured promissory note (the “Note”) for the balance of
the Purchase Price upon commercially reasonable terms to be
negotiated in good faith by DWOG and TAMM.
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Nothing herein
shall constitute or be construed as an admission by DWOG of the
validity or enforceability of the Royalty Agreement.
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Notwithstanding
anything to the contrary in the Agreement, except for a reduction
in the Purchase Price as provided in this Section 2 as a result of
an exercise of the Option by DWOG, TAMM shall have no obligation of
any kind whatsoever to give any credit for, set off or otherwise
pay any of the attorneys’ fees and costs of DWOG.
3.
Stipulated Dismissal . Immediately upon execution of the
Agreement, DWOG and the TAMM Parties shall file a stipulation,
substantially in the form of Exhibit C hereto, dismissing the
Action with prejudice as to all Parties, and without an award of
attorneys’ fees and costs to any party. Any obligation on the
part of TAMM or DWOG to perform under the Agreement will be subject
to and contingent upon the stipulation to dismiss the Action with
prejudice being filed in the Action and the entry of an order of
dismissal by the Court.
4.
Removal of Legends . To the extent legally permissible, and
subject to applicable law, DWOG shall not interfere with any
attempt by the TAMM Parties to remove the restrictive legends from
shares of DWOG common stock beneficially owned by them, either
directly or indirectly through their clients. In addition, DWOG
acknowledges that the Termination and Rescission Agreements between
certain of the TAMM Parties, dated July 1, 2008 (the
“Rescission Agreements,” true copies of whi
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