CONTRIBUTION AND ASSIGNMENT AGREEMENT
THIS
CONTRIBUTION AND ASSIGNMENT AGREEMENT (this “Agreement”), dated as of
November 14, 2009, is by and among International Three Crown Petroleum LLC, a
Colorado limited liability company (“ITC”), Bontan Oil & Gas
Corporation, an Ontario corporation (“Bontan”), Bontan Corporation
Inc., an Ontario corporation (“Bontan Parent”), Allied
Ventures Incorporated, a Belize corporation (“2.5% Holder”) and Israel
Petroleum Company, Limited, a Cayman Islands limited company (the “Company”), individually
sometimes referred to as a “Party” and collectively as the
“Parties.”
RECITALS
A. ITC
has previously entered into that certain Option Agreement for Purchase and Sale
(the “Option
Agreement”), dated October 15, 2009, between ITC and PetroMed
Corporation, a Belize corporation (“PetroMed”), pursuant to which
ITC obtained, among other things, an exclusive option to purchase PetroMed’s
interest in the Offshore Israel Project. Capitalized terms used but
not defined herein shall have the meanings ascribed to such terms in the Option
Agreement.
B. ITC,
Bontan and 2.5% Holder have formed the Company for the purpose of, among other
things, acquiring PetroMed’s interest in the Offshore Israel Project, and each
of ITC, Bontan and 2.5% Holder now desire to contribute, and, in the case of
Bontan, to commit to contribute, certain assets to the Company in exchange for
2,250 ordinary voting shares of the Company (“Ordinary Shares”),
representing a 22.5% equity interest in the Company, 7,500 Ordinary Shares,
representing a 75% equity interest in the Company, and 250 Ordinary Shares,
representing a 2.5% equity interest in the Company, respectively, on the terms
and subject to the conditions set forth herein.
C. In
consideration of the benefit Bontan Parent will receive from its ownership of
all of the outstanding equity interests of Bontan, Bontan Parent is willing to
enter into this Agreement.
AGREEMENT
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which is acknowledged, the Parties agree as follows:
1. Contribution, Assignment and
Assumption of Option Agreement. Concurrently with the
execution of this Agreement, ITC and the Company shall execute and deliver an
assignment agreement in the form attached hereto as Exhibit A (the “Assignment Agreement”),
pursuant to which ITC shall contribute, assign and transfer to the Company all
of ITC’s right, title and interest in, to, and under the Option Agreement, and
the Company will accept such contribution and assignment, and assume and agree
to perform all obligations of ITC under the Option Agreement. Upon
the execution and delivery of the Assignment Agreement by ITC and the Company,
ITC shall be relieved of all liability under the Option Agreement that arises or
accrues after the date hereof.
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2. Contributions by
Bontan.
(a) Initial
Contributions. Conditioned upon ITC’s or the Company’s
election to exercise the Option under the Option Agreement, Bontan shall
contribute the following to the Company on the date of Closing under the Option
Agreement (the “Initial
Contribution Date”); except that as an administrative
convenience to Bontan and the Company, Bontan Parent shall pay and deliver the
following directly to PetroMed, with all such deliverables (i) being first
deemed a contribution to Bontan by Bontan Parent, (ii) next being deemed a
subsequent contribution by Bontan to the Company and (iii) thereafter
constituting a subsequent payment and distribution by the Company to PetroMed
under the Option Agreement:
(i) US$850,000
by wire transfer of immediately available funds to the account or accounts
designated by PetroMed in the Option Agreement;
(ii) 8,617,686
shares of common stock of Bontan Parent (the “Contributed Shares”),
evidenced by a Stock Certificate, issued to and in the name of PetroMed;
and
(iii) a
warrant to purchase up to 22,853,058 shares of common stock of Bontan Parent in
the form attached hereto as Exhibit B and duly
executed by Bontan Parent.
(b) Contributions Upon
Closing. Immediately following the Closing under the Option
Agreement, Bontan Parent shall contribute to Bontan, which in turn shall
contribute to the Company, US$1,500,000 by wire transfer of immediately
available funds to the account or accounts designated by the Company, which
amounts shall be used to, among other things, (i) pay a monthly fee of US$20,000
to ITC for managing the Company pursuant to the Shareholder Agreement, (ii)
reimburse ITC for any expenses incurred after the Closing under the Option
Agreement in connection with the management of the Offshore Israel Project, and
(iii) pay the Company’s expenses following the Closing under the Option
Agreement.
(c) Contribution of Financing
Proceeds. As soon as practicable after its receipt thereof,
Bontan Parent shall contribute to Bontan, which in turn shall contribute to the
Company, the net proceeds of each closing under the Financings (as defined
below).
(d) Proceeds from Prior
Financing. If Bontan Parent receives any proceeds from a
Financing prior to the execution of the Agreement, it will hold the net proceeds
for contribution to Bontan, and for subsequent contribution to the Company, for
the purposes described in Sections 2(a)(i) and 2(b) above.
3. Issuance of Ordinary Shares;
Execution of Stockholders Agreement. Upon execution of this
Agreement, the Company shall issue 7,500 Ordinary Shares to Bontan, 2,250
Ordinary Shares to ITC and 250 Shares to 2.5% Holder (collectively, the “Shares”). Concurrently
with the execution of this Agreement, ITC, Bontan, Bontan Parent and 2.5% Holder
shall execute and deliver, the Stockholders Agreement of the Company, in the
form attached hereto as Exhibit C (the “Stockholders
Agreement”).
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4. Distribution of Over-Riding
Royalty. Immediately following the Closing under the Option
Agreement, the Company shall execute the Assignment of Overriding Royalty to H.
Xxxxxx Xxxxxx or its designee in the form attached hereto as Exhibit D conveying a
gross 1% over-riding royalty of all oil, gas and associated hydrocarbons
produced, saved and sold from the area covered by the Offshore Israel Project,
exclusive of existing burdens, and which shall not be reduced by subsequent
farmouts or transfers of other interests in the Offshore Israel
Project.
5. Warrant
Plan. As promptly as reasonably practicable following the
Closing, the Company and Bontan Parent shall enter into an agreement (the “Warrant Plan”), pursuant to
which Bontan Parent will be obligated to issue warrants, over a period to be
defined in the Warrant Plan, to purchase, in the aggregate, up to 500,000 shares
of common stock of Bontan Parent, which warrants shall be issued to officers,
employees, agents and consultants of the Company (other than Xxxxxx Xxxxxx) in
accordance with the Warrant Plan. The warrants issued or issuable
pursuant to the Warrant Plan shall be in a form mutually agreeable to the
Company and Bontan Parent, shall have an exercise price of $US0.35 or such other
price (which may be based on a formula) as is agreed to in the Warrant Plan, and
shall have such other terms, including vesting provisions, as shall be set forth
in the Warrant Plan. Bontan Parent agrees to use its best efforts to
register the common shares underlying all such warrants on Form S-8 (or such
other available form) prior to the first warrants to vest.
6. Financings.
(a) Financings. ITC
has assisted, and will endeavor to continue to assist, Bontan Parent, subject to
the limitations in Section 6(e), in identifying investors and/or lenders to
provide Bontan Parent with up to US$18,000,000 in financing (whether through one
or more debt or equity securities offerings or any other financing transactions)
to cover the cost of seismic and other technical work and other expenses
incurred, or expected to be incurred, in connection with the Offshore Israel
Project (the “Financings”), and Bontan
Parent shall use its best efforts to consummate the Financings.
(b) $850,000
Financing. It is anticipated that Bontan Parent will raise at
least US$850,000, net of expenses, through a Financing, the proceeds of which
will used by Bontan Parent and Bontan to satisfy the US$850,000 cash closing
obligation referred to in paragraph 2(a)(i) above and to cover related costs and
expenses. The proceeds from such Financing that are received prior to
the Closing under the Option Agreement shall be placed in escrow with Bontan
Parent’s counsel, and shall be delivered to the Company immediately following
such Closing. In the event such Closing shall not occur, such proceeds shall be
returned to the participants in the Financing. Subject to ITC’s
consent, Bontan Parent agrees to include the shares of Bontan Parent common
stock issued in such Financing, along with the shares underlying any warrants
issued in such Financing, in the first registration statement it files with the
U.S. Securities and Exchange Commission covering the resale of the Bontan Parent
stock underlying the warrants issued pursuant to Section 7(b)
below.
(c) $5,500,000
Financing. It is anticipated that Bontan Parent will also
raise an aggregate of US$5,500,000, net of expenses, through a Financing, the
net proceeds of which will be applied towards the remaining cash contributions
required to be made by Bontan pursuant to paragraph 2 and for the Company’s
general working capital purposes. Bontan Parent agrees to contribute
the proceeds, net of expenses, of the Financing contemplated by this Section
6(c) to Bontan for subsequent contribution to the Company pursuant
hereto. Not later than 60 days following completion of the Financing
contemplated by this Section 6(c), Bontan Parent agrees to file a registration
statement with the U.S. Securities and Exchange Commission covering the resale
of the shares of Bontan Parent common stock sold in such Financing, along with
the shares underlying any accompanying warrants, and to use its best efforts to
obtain effectiveness of such registration statement within 60 days thereafter
(and to maintain the effectiveness of such registration statement while any
shares are issuable pursuant to such warrants); provided, however, that to the
extent such Financing has closed prior to the effectiveness of the registration
statement required to be filed pursuant to Section 7(b) below, such shares may,
subject to ITC’s consent, be registered under such registration
statement.
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(d) Additional
Financings. Upon the Closing, the Company will have assumed
certain obligations under the Material Agreements. Bontan Parent
shall use its best efforts to complete additional Financings in order to raise
at least $12,500,000, and shall contribute the proceeds of any such Financing,
net of expenses, to Bontan for subsequent contribution to the Company as shall
be necessary to permit the Company (by virtue of the contribution of the
Financing proceeds) to perform all obligations of the Company under the Material
Agreements and any other obligations relating to the conduct of exploratory
operations on the Licenses and Permit, unless the Company is able to obtain the
payment of such obligations by third parties in exchange for farmouts or other
acquisitions of interests in the Offshore Israel Project; provided, however,
that Bontan and/or Bontan Parent shall be entitled to keep up to $500,000 (in
aggregate) of such proceeds, if and only if, Bontan Parent has raised and
contributed to the Company not less than $5,500,000 of proceeds from the
Financings. Not later than 60 days following completion of any such
Financing, Bontan Parent agrees to file a registration statement with the U.S.
Securities and Exchange Commission covering the resale of the shares of Bontan
Parent common stock sold in any such Financing, along with the shares underlying
any accompanying warrants, and to use its best efforts to obtain the
effectiveness of such registration statement within 60 days thereafter and to
maintain the effectiveness of such registration statement while any shares are
issuable pursuant to such warrants.
(e) ITC
Services. ITC shall agree to provide, and shall obtain the
agreement of its manager Xxxxxx Xxxxxx to provide, reasonable assistance to
Bontan Parent with respect to providing information on the Offshore Israel
Project and shall introduce prospective investors and lenders for the Financings
to Bontan Parent but shall not be involved in any meetings with potential
investors or other Bontan Parent selling efforts.
(f) Market
Stand-Off. Bontan Parent shall not file any registration
statement covering any shares other than the shares required to be registered
pursuant to this Agreement, or sell, dispose of, transfer, grant any option for
the purchase of, or enter into any transaction with the same economic effect as
a sale of, any such shares (other than pursuant to this Agreement, the
Financings or the Warrant Plan) prior to the earlier of (i) 120 days following
the effectiveness of the last registration statement required to be filed by
Bontan Parent pursuant to this Section 6 or Section 7(b), or (ii) 9 months
following the Closing under the Option Agreement.
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7. Additional
Agreements.
(a) Reimbursement. Upon
execution of this Agreement, Bontan Parent shall contribute to Bontan and Bontan
shall pay to ITC US$125,000 as a completion of reimbursement of ITC for the
Option Payment delivered to PetroMed and for expenses already incurred and
anticipated to be incurred by ITC in negotiation of the Option Agreement, travel
to Israel, due diligence, preparation for assuming operation of the Offshore
Israel Project, and accomplishing the Closing under the Option Agreement, and
for Xxxxxx Xxxxxx’x time in connection with the foregoing. Such
payment shall be nonrefundable regardless of the actual amount of such expenses
and regardless whether the Option is exercised or the acquisition of the
Offshore Israel Project is consummated provided that ITC duly performs its
Obligations under the Option Agreement.
(b) Issuance of
Warrants. Upon the completion of the Closing under the Option
Agreement, Bontan Parent shall issue to ITC a warrant to purchase up to
5,000,000 shares of common stock of Bontan Parent and shall issue to 2.5% Holder
a warrant to purchase up to 2,000,000 shares of common stock of Bontan Parent,
each in the form attached hereto as Exhibit D, which
warrants shall be exercisable for a period of five years and shall have an
initial exercise price of US$0.35 per share (which shall be subject to
adjustment as provided for therein). Bontan Parent agrees to file a
registration statement with the U.S. Securities and Exchange Commission covering
such warrants and the underlying shares within 60 days of the Closing under the
Option Agreement and to use its best efforts to obtain the effectiveness thereof
within 60 days of such filing and to maintain the effectiveness of such
registration statement while any shares are issuable pursuant to such warrants.
The company may also include in such registration statement any shares issued
(i) in a Financing (the net proceeds of which have been contributed to the
Company pursuant hereto), (ii) pursuant to the warrants issued in any such
Financing or (iii) pursuant to this Agreement, but no other shares may be
included in such registration statement.
(c) Joinder and
Deliveries. Bontan Parent and Bontan shall execute and
deliver, prior to the Closing under the Option Agreement, a joinder to the
Option Agreement for the limited purposes stated in Section 5.2(d) of the Option
Agreement, in form and substance satisfactory to the Company and PetroMed, and
shall deliver and perform, when required under the Option Agreement, all other
items required to be delivered and performed by Pubco under the Option
Agreement.
8. Representations and
Warranties.
(a) Company Representations and
Warranties. The Company represents and warrants to the other
parties, as of the date hereof, as follows:
(i) The
Company is an exempt company duly organized, validly existing and in good
standing under the laws of the Cayman Islands;
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(ii) All
action on the part of the Company necessary for the authorization of the
execution, delivery and performance of this Agreement and the Shareholder
Agreement by the Company has been taken;
(iii) Each
of this Agreement and the Stockholders Agreement, when executed and delivered,
will be the valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application affecting enforcement of creditors’ rights and general principles of
equity that restrict the availability of equitable remedies; and
(iii) Immediately
following the issuance thereof, the Equity Interests will be the only
outstanding equity interests in the Company.
(b) ITC Representations and
Warranties. ITC represents and warrants to the other parties,
as of the date hereof, as follows:
(i) ITC
is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Colorado;
(ii) All
action on the part of ITC, its managers and member necessary for the
authorization of the execution, delivery and performance of this Agreement and
the Shareholder Agreement by ITC has been taken;
(iii) Each
of this Agreement and the Stockholders Agreement, when executed and delivered,
will be the valid and binding obligation of ITC enforceable against ITC in
accordance with its terms, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
affecting enforcement of creditors’ rights and general principles of equity that
restrict the availability of equitable remedies;
(iv) ITC
has the full right, power and authority to assign the Option Agreement to the
Company, and to take any and all other actions required to be taken by it
hereunder, and no consent of any third party is required to assign the Option
Agreement to the Company or to take any and all other actions required to be
taken by it hereunder that has not been obtained.
(v) ITC
has performed, and will continue to perform, due diligence on the Offshore
Israel Project and will share all such information with Bontan and Bontan Parent
as requested and will otherwise cooperate with Bontan and Bontan Parent to
assist them and their counsel and advisors in their own due diligence of the
Option Agreement and the Offshore Israel Project. To the best of
ITC’s knowledge, the representations and warranties of PetroMed in the Option
Agreement are true and correct as of the date hereof in all material
respects. ITC shall not have changed its understanding regarding the
foregoing representations of PetroMed at the time of Closing under the Option
Agreement and will reconfirm this at the time of Closing under the Option
Agreement.
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(vi) Upon
making the contribution of the Option Agreement to the Company under Section 1
above, ITC will vest in the Company all of the right, title and interest in, to
and under the Option Agreement as originally conveyed by PetroMed to ITC under
the Option Agreement, free and clear of any mortgages, liens, pledges, charges,
claims, security interests, agreements, and encumbrances whatsoever, other than
those imposed by law, arising as a result of ITC’s ownership of the rights under
the Option Agreement.
(vii) All
of the equity owners of ITC are “accredited investors” within the meaning of
Regulation D of the U.S. Securities Act of 1933, as amended (the “Securities Act”).
(viii) ITC,
through its manager, Xxxxxx Xxxxxx, is experienced in making investments in
highly speculative investments, such as the warrants being acquired from Bontan
Parent and the Offshore Israel Project. ITC has had access to full
and complete information regarding Bontan and Bontan Parent and has used such
access to its satisfaction for the purpose of obtaining information about Bontan
and Bontan Parent. ITC has had the opportunity to ask questions of,
and to receive answers from, the officers of Bontan and Bontan Parent concerning
Bontan and Bontan Parent and the Bontan Parent warrants and underlying shares
and to obtain any additional information concerning Bontan and Bontan
Parent. ITC has received all information it considers necessary or
advisable in order to make an investment decision, and acknowledges that the
entire investment in Bontan Parent and the Company may be lost.
(ix) ITC
acknowledges that the warrants it is acquiring from Bontan Parent have not been
registered under the Securities Act or the securities laws of any state, and
that the warrants are offered in a transaction not involving a public offering
in accordance with Section 4(2) of the Securities Act and Rule 506 of Regulation
D. Accordingly, ITC recognizes that the warrants, and the shares
issuable upon their exercise, are “restricted securities” within the meaning of
Rule 144(a)(3) of the Securities Act. ITC understands that
Bontan Parent cannot assure that the shares underlying the warrants will
ultimately be registered under the Securities Act. ITC is acquiring
the warrants, and the shares in the Company, for investment and not with a view
to their distribution in whole or in part.
(x) ITC
agrees not to assign, sell, pledge, transfer or otherwise dispose of or transfer
the warrants, or the shares issuable upon their exercise, except in compliance
with the Securities Act and applicable state securities laws. ITC is
also aware that any resale inconsistent with applicable securities laws in the
Province of Ontario (“Canadian
Securities Laws”) may create liability on ITC’s part and/or the part of
Bontan Parent, and agrees not to assign, sell, pledge, transfer or otherwise
dispose of or transfer the warrants or the shares underlying them except in
compliance with Canadian Securities Laws.
(c) Bontan and Bontan Parent
Representations and Warranties. Bontan and Bontan Parent each
represent and warrant to the other Parties, as of the date hereof, as
follows:
(i) Each
is a corporation duly organized, validly existing and in good standing under the
laws of the province of Ontario;
(ii) All
action on the part of each, and its respective officers, directors and
stockholders necessary for the authorization of the execution, delivery and
performance by each of this Agreement, the Stockholders Agreement and the
warrants to be issued pursuant hereto (the “Warrants”) has been
taken;
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(iii) Each
of this Agreement, the Stockholders Agreement and the Warrants, when executed
and delivered, will be the valid and binding obligation of Bontan and Bontan
Parent enforceable, respectively, against each in accordance with its terms,
except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application affecting enforcement of
creditors’ rights and general principles of equity that restrict the
availability of equitable remedies;
(iv) Bontan
Parent has the full right, power and authority to issue and deliver the
Contributed Shares and the shares issuable upon exercise of the Warrants (the
“Warrant Shares”), and
to take any and all other actions required to be taken by it hereunder, and no
consent of any third party is required to issue the Contributed Shares or the
Warrant Shares, or to take any and all other actions required to be taken by it
hereunder, that has not been obtained; and
(v) The
Contributed Shares and the Warrant Shares, when issued, will be duly authorized,
validly issued and outstanding, fully paid and nonassessable, and free of all
preemptive rights, rights of first refusal or similar rights, and the recipient
of such shares will acquire good, valid, and marketable title thereto, free and
clear of all mortgages, liens, pledges, charges, claims, security interests,
agreements, and encumbrances whatsoever, other than those imposed by
law.
(vi) Bontan
Parent is experienced in making investments in highly speculative investments,
such as the investment in the Company and the Offshore Israel
Project. Bontan Parent has had access to full and complete
information regarding the Company and the Offshore Israel Project as provided by
the Company or ITC and has used such access to its satisfaction for the purpose
of obtaining information. Bontan Parent has had the opportunity to
ask questions of, and to receive answers from, the officers of the Company and
ITC concerning the Company, the Offshore Israel Project and the shares of the
Company and to obtain any additional information concerning the Company or the
Offshore Israel Project. Bontan Parent has received all information
it considers necessary or advisable in order to make an investment decision, and
acknowledges that the entire investment in the Company may be lost.
(vii) Bontan
and Bontan Parent acknowledges that the shares Bontan is acquiring in the
Company have not been registered under the Securities Act or the securities laws
of any state, and that such shares are offered in a transaction not involving a
public offering in accordance with Section 4(2) of the Securities Act and Rule
506 of Regulation D. Accordingly, Bontan and Bontan Parent recognize
that such shares of the Company are “restricted securities” within the meaning
of Rule 144(a)(3) of the Securities Act. Bontan and Bontan
Parent understand that those shares will not be registered under the Securities
Act. Bontan is acquiring such shares for investment and not with a
view to their distribution in whole or in part.
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(d) 2.5% Holder Representations
and Warranties. The 2.5% Holder represents and warrants to the
other parties, as of the date hereof, as follows:
(i) 2.5%
Holder is a corporation duly organized, validly existing and in good standing
under the laws of Belize;
(ii) All
action on the part of 2.5% Holder, its managers and member necessary for the
authorization of the execution, delivery and performance of this Agreement and
the Stockholders Agreement by 2.5% Holder has been taken;
(iii) Each
of this Agreement and the Stockholders Agreement, when executed and delivered,
will be the valid and binding obligation of 2.5% Holder enforceable against 2.5%
Holder in accordance with its terms, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
affecting enforcement of creditors’ rights and general principles of equity that
restrict the availability of equitable remedies;
(iv) All
of the equity owners of 2.5% Holder are “accredited investors” within the
meaning of Regulation D of the Securities Act.
(v) 2.5%
Holder, through its manager, is experienced in making investments in highly
speculative investments, such as the warrants being acquired from Bontan Parent
and the Offshore Israel Project. 2.5% Holder has had access to full
and complete information regarding Bontan Parent and has used such access to its
satisfaction for the purpose of obtaining information about Bontan
Parent. 2.5% Holder has had the opportunity to ask questions of, and
to receive answers from, the officers of Bontan Parent concerning Bontan Parent
and the warrants and underlying shares and to obtain any additional information
concerning Bontan Parent. 2.5% Holder has received all information it
considers necessary or advisable in order to make an investment decision, and
acknowledges that the entire investment in Bontan Parent and the Company may be
lost.
(vi) 2.5%
Holder acknowledges that the warrants it is acquiring from Bontan Parent have
not been registered under the Securities Act or the securities laws of any
state, and that the warrants are offered in a transaction not involving a public
offering in accordance with Section 4(2) of the Securities Act and Rule 506 of
Regulation D. Accordingly, 2.5% Holder recognizes that the warrants,
and the shares issuable upon their exercise, are “restricted securities” within
the meaning of Rule 144(a)(3) of the Securities Act. 2.5% Holder
understands that Bontan Parent cannot assure that the shares underlying the
warrants will ultimately be registered under the Securities Act. 2.5%
Holder is acquiring the warrants, and the shares in the Company, for investment
and not with a view to their distribution in whole or in part.
(vii) 2.5%
Holder agrees not to assign, sell, pledge, transfer or otherwise dispose of or
transfer the warrants, or the shares issuable upon their exercise, except in
compliance with the Securities Act and applicable state securities
laws. 2.5% Holder is also aware that any resale inconsistent with
Canadian Securities Laws may create liability on 2.5% Holder’s part and/or the
part of Bontan, and agrees not to assign, sell, pledge, transfer or otherwise
dispose of or transfer the warrants or the shares underlying them except in
compliance with Canadian Securities Laws.
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9. Risk
Acknowledgment. Bontan, Bontan Parent and 2.5% Holder each
acknowledge and agree that all information provided by or on behalf of ITC or
the Company is being provided solely for the purpose of assisting Bontan, Bontan
Parent and 2.5% Holder in conducting their own independent evaluations and
analysis and the recipient’s reliance on or use of the same is at the
recipient’s sole risk. Bontan, Bontan Parent and 2.5% Holder
acknowledge and agree that ITC and its representatives, officers, directors,
employees, agents, affiliates and controlling persons expressly disclaim any and
all liability and responsibility for the quality, accuracy, completeness or
materiality of the information, including, without limitation: (i) the existence
of any and all prospects or potential upside opportunities referenced in the
information, (ii) the geological or geophysical characteristics associated with
any and all prospects or potential upside opportunities referenced in the
information, (iii) the existence, quality, quantity, or recoverability of
hydrocarbon reserves associated with the property, (iv) the costs, expenses,
revenues or receipts associated with the property, (v) the ownership of or title
to the property, (vi) the contractual, economic or financial data associated
with the property, (vii) the present or future value, financial viability or
productivity of the property, (viii) regulatory matters that may bear on the
ability to conduct operations on the Licenses and Permit or on the cost or
profitability thereof; and/or (ix) the environmental, security or physical
condition of the property or of the surrounding area.
10. Further Assurances;
Access. The parties shall promptly execute and deliver any
additional instruments or documents which may be reasonably necessary to
evidence or better effect the transactions contemplated
hereby. Without limiting the foregoing, each Party agrees to give the
other Parties and their respective management personnel, legal counsel,
accountants, and technical and financial advisors, access and opportunity before
the Closing under the Option Agreement to inspect and investigate the books,
records, contracts, and other documents of such Party as it relates to its
respective business and all of its assets and liabilities (actual or contingent)
(except that ITC shall not be obligated to provide confidential information
regarding its investors) and further agrees to provide the other with such
additional information as may be reasonably requested pertaining to its
respective business and assets to the extent reasonably necessary to complete
the transactions contemplated herein.
11. Counterparts. This
Agreement may be executed in any number of counterparts and by each party on a
separate counterpart or counterparts, each of which when so executed and
delivered shall be deemed an original and all of which taken together shall
constitute but one and the same instrument.
12. Governing
Law. This Agreement shall be deemed to be an agreement made
under the laws of the State of Delaware and for all purposes shall be governed
by and construed in accordance with such laws.
13. Binding
Effect. This Agreement shall be binding upon and inure to the
benefit of each of the parties and its successors and assigns.
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14. No-Shop;
Confidentiality.
(a) Bontan,
Bontan Parent and 2.5% Holder, directly or indirectly, in any manner,
specifically agree not to contact the Israeli government, PetroMed or any party
involved with the Offshore Israel Project or the Option Agreement without ITC’s
prior written consent and without ITC being present for the
communication. Bontan Parent agrees that it will not, for the period
from execution of this Contribution Agreement through the Closing under the
Option Agreement (or, if the Closing does not occur, through November
16, 2009), without the prior written consent of ITC, take any action
to solicit, initiate, encourage or assist the submission of any proposal,
negotiation or offer from any person or entity other than ITC relating to the
sale or issuance, of any of the capital stock of Bontan Parent (other than in
furtherance of the Financings) or the acquisition, sale, lease, other
disposition of Bontan Parent or any material part of the stock or assets of
Bontan Parent and shall notify ITC promptly of any inquiries by any third
parties in regards to the foregoing.
(b) Without
the prior written consent of the other Parties, no Party will disclose the terms
of this Contribution Agreement to any person other than its respective officers,
members of the Board, accountants and attorneys, investors, or advisors, all of
whom will agree to maintain the confidentiality hereof. Despite the
foregoing, the Parties acknowledge that Bontan Parent plans to publicly announce
this Agreement and its terms on the earlier of five days from execution and
delivery of the Agreement or the Closing under the Option Agreement and to file
a copy of the Agreement with the U.S. Securities and Exchange
Commission. Bontan Parent shall cooperate with the Company in seeking
confidential treatment for any information that may be appropriately kept
confidential. All Parties agree that they will not issue a press
release until Bontan Parent issues the press release referred to above, without
the prior written consent of the Company and Bontan Parent.
(c) In
addition, no Party shall assign any of its rights or obligations under this
Contribution Agreement without the prior written consent of the other Parties,
which may be withheld in their absolute discretion, and any purported assignment
by a Party without such prior consent shall be void.
[Signature Page
Follows]
0812351.02
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IN
WITNESS WHEREOF, Assignor and Sundance have executed this Agreement as of the
date first hereinabove written.
INTERNATIONAL
THREE CROWN PETROLEUM LLC, a Colorado limited liability company
By:_________________________________
Name: H. Xxxxxx Xxxxxx
Title: Manager
BONTAN
OIL & GAS CORPORATION, an
Ontario
corporation
By:_________________________________
Name:
______________________________
Title:
_______________________________
BONTAN
CORPORATION, INC., an Ontario corporation
By:_________________________________
Name:
______________________________
Title:
_______________________________
ALLIED
VENTURES INCORPORATED, a Belize corporation
By:_________________________________
Name:
______________________________
Title:
_______________________________
ISRAEL
PETROLEUM COMPANY, LIMITED, a Cayman Islands limited company
|
|
By:
INTERNATIONAL THREE CROWN PETROLEUM LLC, a Colorado limited liability
company
|
By:___________________________
Name: H.
Xxxxxx Xxxxxx
Title:
Manager
-- 0812351.02
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