STOCK PLEDGE AGREEMENT
THIS AGREEMENT (the "Agreement"), made
and entered into as of the 12th day
of November,
2009
by and between Castle Rock
Resources II, LLC a corporation duly organized under the laws of The State of
Colorado, USA (the "Pledgee") and Bontan
Corporation Inc., a corporation duly organized under the laws of Province of
Ontario, Canada ("Pledgor");
WITNESSETH:
WHEREAS the Pledgor, as Borrower, has
entered into that certain loan evidenced by a Promissory Note in favour of the
Pledgee as Lender dated 12th day
of November,
2009 in
the principal sum of US$850,000
(as amended or supplemented from time to time, the "Promissory Note"), the terms
and provisions of which are incorporated herein by reference; and
WHEREAS, terms which are defined in the
Promissory Note and which are used herein but not otherwise defined herein shall
have the same meanings herein as ascribed thereto in the Promissory Note;
and
WHEREAS, to induce the Lender to extend
credit to the Pledgor, the Pledgor has agreed to make and enter into this
Agreement.
NOW THEREFORE, for $10.00 and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and to induce the Pledgee to extend credit to the Pledgor, the
Pledgor hereby agrees as follows:
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1.
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The
Pledgor does hereby pledge, hypothecate, assign, transfer, set over,
deliver and grant a security interest in and to the Pledgee, in all that
stock of the Pledgor set forth and described on Schedule "A", attached
hereto and by reference made a part hereof, together with any and all
other securities, cash or other property at any time and from time to time
receivable or otherwise distributed in respect of or in exchange for any
or all of such pledged stock, and together with the proceeds thereof
(hereinafter said property being collectively referred to as the "Stock
Collateral"), all as security for the payment and performance when due of
any and all obligations of the Pledgor, as Borrower, to the Pledgee, as
Lender, under the loan evidenced by the Promissory Note (the
"Obligations").
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2.
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The
Pledgor acknowledges and agrees that the Pledgee shall hold the Stock
Collateral, together with all right, title, interest, powers, privileges
and preferences pertaining or incidental thereto forever, subject,
however, to return of the Stock Collateral (or such portion thereof as may
be existing from time to time hereafter after giving effect to the terms
hereof) by the Pledgee or the Pledgor upon payment and performance in full
of all the obligations and termination by the Lender in writing of any and
all credit commitments with respect thereto. Notwithstanding the
foregoing, any cash dividends received under the Stock Collateral shall
first be used to retire the Principal Sum and the Pledgee shall have the
right to exercise all voting rights under the Stock Collateral until all
accrued interest and the Principal Sum are paid in
full.
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3.
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In
order to induce the Pledgee to accept this Agreement, the Pledgor hereby
represents and warrants to the
Pledgee:
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(i)
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that
the Pledgor has the complete and unconditional authority to pledge the
Stock Collateral, holds (or will hold on the date of the pledge hereof)
the Stock Collateral free and clear of any and all liens, charges,
encumbrances and security interests thereon (other than in favour of the
Pledgee) and has (or will have on the date of the pledge thereof) good
right, title and legal authority to pledge the Stock Collateral in the
manner contemplated herein; and
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(ii)
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that
all stock now owned or hereafter owned by the Pledgor and constituting or
which will constitute Stock Collateral hereunder is, or will be on the
date of the pledge thereof, validly issued, fully paid and
non-assessable.
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4.
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The
Pledgor further covenants with the Pledgee that the Pledgor will cause any
additional securities or other property issued to or received by the
Pledgor with respect to any of the Stock Collateral, whether for value
paid by the Pledgor or otherwise, to be deposited forthwith with the
Pledgee and pledged hereunder, in each case accompanied by proper
instruments of assignment duly executed by the Pledgor in such form as may
be required by the Agent.
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5.
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The
Pledgor further acknowledges and agrees that the Pledgee may hold any of
the Stock Collateral in its own name for its benefit, endorsed or signed
in blank or in the name of any nominee or nominees, and the Pledgee, after
occurrence of a default in payment under the Promissory Note, may deliver
any or all of the Stock Collateral to the issuer or issuers thereof for
the purpose of making denominational exchanges or registrations or
transfer or for such other purposes in furtherance of this Agreement as
the Pledgee may deem advisable.
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6.
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The
Pledgor hereby agrees that it will not assign, attempt to encumber,
subject to further pledge or security interest, sell, transfer or
otherwise dispose of any of the Stock Collateral without the prior written
consent of the Pledgee.
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7.
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From
and after the occurrence of a default in payment under the Promissory
Note, the Pledgor acknowledges and agrees that the Pledgee shall be
entitled to collect and receive all distributions in respect of the Stock
Collateral and that the Pledgee may exercise any and all rights and
remedies of the Pledgor with respect thereto, including, but not limited
to, sale and voting rights, in addition to the exercise by the Pledgee of
any and all rights, powers and remedies of the Pledgee existing by law or
agreement.
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8.
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This
Agreement shall be governed by and construed in accordance with the laws
of the province of Ontario
and shall enure to the benefit of and be binding upon the successors and
assigns of the parties hereto.
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IN WITNESS WHEREOF, the
parties have caused this Agreement to be duly executed under seal as of
the date first above written.
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Bontan Corporation
Inc.
[Missing Graphic
Reference]
Xxx
Xxxx, CEO__ /s/ __
(Authorized
Signing Officer)
Castle
Rock Resouces II, LLC
Per:
_______/s/___________________
_
_________________/s/___________
(Authorized
Signing Officer)
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Schedule
"A"
Stock
Collateral:
1,125 Shares
of Israel
Petroleum Company Limited
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