Exhibit 10.1
SETTLEMENT AGREEMENT
     THIS SETTLEMENT AGREEMENT is entered into this 3rd day of April, 2009 by
and among ANS Investments LLC , a Delaware limited liability company (“ANS”),
Jonah M. Meer, an individual residing at 1488 East 27th Street, Brooklyn, N.Y.
11210 (“Meer”), and Magellan Petroleum Corporation, a Delaware corporation (the
“Company”). ANS and Meer are sometimes hereinafter referred to collectively as
the “ANS Parties.”
Recitals:
     A. The ANS Parties own, beneficially and of record, an aggregate of 668,985
shares (the “ANS Shares”) of the common stock, par value $.01 per share (“Common
Stock”) of the Company, 84,500 shares of which are owned of record by Meer and
584,485 shares of which are owned of record or beneficially by ANS.
     B. By letter dated March 6, 2008, the ANS Parties made a written demand to
inspect the Company’s shareholder lists and certain books and records (the
“Section 220 Demand”) pursuant to Section 220 of the General Corporation Law of
the State of Delaware (the “DGCL”).
     C. In response to the Section 220 Demand, the Company provided certain
shareholder lists to the ANS Parties and produced certain documents.
     D. The ANS Parties have given notice to the Company of ANS’ intention to
(a) nominate Meer for election (the “Contested Election”) as a member of the
Company’s Board of Directors (the “Board”) in opposition to the Company’s
director nominee, William H. Hastings (“Hastings”), in connection with the
Company’s planned 2008 Annual Meeting of Shareholders (the “Annual Meeting”) and
(b) bring before the Company’s shareholders the other business and proposals
(the “Other ANS Proposals”) described in the ANS Proxy Statement (as defined
below).
     E. The ANS Parties are currently engaged, or intend to engage, in a
solicitation of proxies from the Company’s shareholders with respect to the
matters described in the immediately preceding recital.
     F. The ANS Parties have made a number of filings with the U.S. Securities
and Exchange Commission (“SEC”) in connection with such solicitation and the
Contested Election, including the ANS Parties’ revised preliminary proxy
materials, filed with the SEC on October 27, 2008 (the “ANS Proxy Statement”)
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
     G. The Company has entered into a Securities Purchase Agreement with Young
Energy Prize S.A., a Luxembourg corporation (“YEP”), dated as of February 9,
2009 (the “YEP Purchase Agreement”) pursuant to which YEP has agreed to
purchase, 8,695,652 shares of the Company’s Common Stock at a purchase price of
$1.15 per share, or an aggregate of $10 million (the “YEP Equity Financing
Transaction”).

 

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     H. The Company filed its preliminary proxy materials with the SEC on
February 11, 2009 and plans to conduct the 2008 Annual Meeting in the near
future.
     I. The Board has determined that that it is in the best interests of the
Company and its shareholders to enter into this Agreement to avoid the expense
and disruption of the Contested Election and to facilitate the prompt completion
of the YEP Equity Financing Transaction.
     J. Without admitting any of the matters asserted by any of the parties
hereto, the ANS Parties, YEP and the Company wish to resolve the Contested
Election and all other related matters in dispute between them without further
expense or resort to litigation.
     NOW, THEREFORE, in consideration of the mutual promises contained herein
and for other good and valuable consideration, the undersigned parties to this
Agreement do hereby agree and undertake to settle the Contested Election and all
other related disputes as follows:
ARTICLE I
COVENANTS AND AGREEMENTS OF THE ANS PARTIES
     1.1 Withdrawal of Section 220 Demand. The ANS Parties hereby irrevocably
withdraw the Section 220 Demand.
     1.2 Termination of Contested Election. The ANS Parties shall immediately
cease, and shall cause their Affiliates and Associates (as defined in the
Exchange Act) to cease, any and all solicitation efforts with respect to the
Contested Election.
     1.3 Withdrawal of Nomination and Other Proposals. The ANS Parties hereby
irrevocably withdraw (a) the nomination of Meer for election as a member of the
Company’s Board of Directors and the related advance notice submissions tendered
to the Company on September 11, 2008 and January 9, 2009; and (b) the Other ANS
Proposals described in the ANS Proxy Statement.
     1.4 Termination of Proxy Solicitation Efforts. From the date hereof through
the completion of the Annual Meeting, neither ANS nor Meer, or any of their
respective Affiliates shall, directly or indirectly, other than as contemplated
by this Agreement and other than in a manner consistent with the recommendations
of the Board, (i) solicit proxies or consents for the voting of any shares of
Common Stock of the Company or otherwise become a “participant,” directly or
indirectly, in any “solicitation” of “proxies” or consents to vote, or become a
“participant” in any “election contest” involving the Company or the Company’s
securities (as such terms are defined in Instruction 3 of Item 4 of Schedule 14A
and Rule 14a-1 of Regulation 14A, respectively, under the Exchange Act ),
(ii) seek to advise or influence any person with respect to the voting of any
securities of the Company, other than in a manner consistent with the Board’s
recommendation with respect thereto, (iii) initiate, propose or otherwise
“solicit” Company shareholders for the approval of shareholder proposals,
(iv) otherwise communicate with Company shareholders or others pursuant to
Rule 14a-1(l)(2)(iv) under the Exchange Act, or (v) otherwise engage in any
course of conduct with the purpose of causing shareholders of the Company to
vote contrary to the recommendation of the Board on any matter presented to the
Company’s shareholders for their vote at the Annual Meeting.

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     1.5 No Proxy Voting. The ANS Parties shall not vote or cause to be voted
any proxies that may have been received to date pursuant to the Contested
Election.
     1.6 Notice to the SEC. The ANS Parties shall promptly notify the staff of
the SEC in writing that it is terminating the Contested Election and the
solicitation pursuant to the ANS Proxy Statement, and provide the Company with a
copy of this communication.
     1.7 Annual Meeting Matters. The ANS Parties and their Affiliates and
Associates shall not object to the election of Hastings as the Company’s
director nominee at the Annual Meeting or make any public statement inconsistent
with the provisions of this Agreement. The ANS Parties and their Affiliates and
Associates shall, not later than the fifth business day prior to the Annual
Meeting, vote all of the ANS Shares, as follows:
     (a) “FOR” the election of Hastings as a director;
     (b) “FOR” the proposal to approve an amendment to the Company’s Restated
Certificate of Incorporation (the “Restated Certificate”) to repeal the “per
capita” voting requirements of Article 12th and 14th thereof;
     (c) “FOR” the proposal to approve an amendment to the Restated Certificate
to repeal Article 13th, the “super majority” voting provisions of the Restated
Certificate;
     (d) “FOR” the proposal to approve the YEP Equity Financing Transaction;
     (e) “FOR” the proposal to approve an amendment and restatement of the
Company’s 1998 Stock Option Plan to: (i) increase the authorized shares of
Common Stock reserved for awards under the Plan to an aggregate of 5,205,000;
(ii) authorize the Compensation Committee to award shares of restricted stock,
annual awards of stock to non-employee directors and performance-based awards;
and (iii) rename the Plan the “1998 Stock Incentive Plan;” and
     (f) “FOR” the proposal to ratify the appointment of Deloitte & Touche LLP
as the independent registered public accounting firm of the Company for the
fiscal year ending June 30, 2009.
Once cast in the foregoing manner, the ANS Parties shall not, and shall cause
their Affiliates and Associates not, to revoke or change any vote in connection
with the Annual Meeting.
     1.8 Grant of Irrevocable Proxy. In order to effectuate the provisions of
this Article I and in addition to and not in lieu of the provisions set forth in
Section 1.7 above, each of the ANS Parties hereby constitutes and appoints
Walter J. McCann and William H. Hastings, or either of them, as proxies, with
full power to act without the other and with full power of substitution, to
represent such ANS Party at the Annual Meeting, and at any adjournments or
postponements thereof, and to vote the ANS Shares and all other shares of Common
Stock which each such ANS Party is entitled to vote on all matters coming before
the Annual Meeting, it being understood and agreed that the aforementioned
proxies shall vote such shares in the manner set forth in Section 1.7 above and
in accordance with the Board’s voting recommendation for any other proposal(s)
properly submitted to shareholders at the Annual Meeting.

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ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
     2.1 Representations and Warranties of the ANS Parties. The ANS Parties
jointly and severally represent and warrant to the Company that (a) they are the
record and beneficial owners of the ANS Shares, as described in Recital A above,
(b) they have all requisite power and authority to execute, deliver and perform
this Agreement, (c) this Agreement constitutes a valid and binding obligation of
the ANS Parties, enforceable in accordance with its terms and (d) no consent,
approval, waiver, authorization or filing, which has not already been obtained
or is otherwise contemplated by this Agreement, is necessary for the execution,
delivery and performance by the ANS Parties of this Agreement.
     2.2 Representations and Warranties of the Company. The Company hereby
represents and warrants to the ANS Parties that (a) it has all requisite power
and authority to execute, deliver and perform this Agreement, (b) this Agreement
constitutes a valid and binding obligation of the Company, enforceable in
accordance with its terms, (iii) no consent, approval, waiver, authorization or
filing, which has not already been obtained or is otherwise contemplated by this
Agreement, is necessary for the execution, delivery and performance by the
Company of this Agreement.
ARTICLE III
MUTUAL RELEASES
     3.1 Release by the ANS Parties. Each of the ANS Parties, on behalf of
itself and its respective heirs, estates, agents, officers, directors, partners,
trustees, beneficiaries, successors, predecessors, subsidiaries, principals and
affiliates (the “ANS Releasors”), hereby do remise, release and forever
discharge, and covenant not to sue or take any steps to further any claim,
action or proceeding against the Company and its successors, affiliates,
subsidiaries, officers, directors, partners, employees, agents, representatives,
attorneys and any other advisors or consultants (the “Company Releasees”), and
each of them, from and in respect of any and all claims and causes of action,
whether based on any federal, state or foreign law or right of action, direct,
indirect or representative in nature, foreseen or unforeseen, matured or
unmatured, known or unknown, which all or any of the ANS Releasors have, had or
may have against the Company Releasees, or any of them, of any kind, nature or
type whatsoever, up to the date of this Agreement, except that the foregoing
release does not release any rights and duties under this Agreement or any
claims the ANS Releasors may have for the breach of any provisions of this
Agreement.
     3.2 Release by the Company. The Company, on behalf of itself and its
successors, affiliates, subsidiaries, officers, directors, partners, employees,
agents, representatives, attorneys and any other advisors or consultants (the
“Company Releasors”), hereby do remise, release and forever discharge, and
covenant not to sue or take any steps to further any claim, action or proceeding
against, the ANS Parties and their respective successors, affiliates,
subsidiaries, officers, directors, partners, trustees, beneficiaries, employees,
agents, representatives, attorneys and any other advisors or consultants (the
“ANS Releasees”), and each of them, from and in respect of any and all claims
and causes of action, whether based on any federal, state or foreign law or
right of action, direct, indirect or representative in nature, foreseen or
unforeseen, matured or unmatured, known or unknown, which all or any of the
Company Releasors have, had or may

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have against the ANS Releasees, or any of them, of any kind, nature or type
whatsoever, up to the date of this Agreement, except that the foregoing release
does not release any rights and duties under this Agreement or any claims the
Company Releasors may have for the breach of any provisions of this Agreement.
     3.3 Releases Binding, Unconditional and Final. The parties hereby
acknowledge and agree that the releases and covenants provided for in
Sections 3.1 and 3.2 are binding, unconditional and final as of the date hereof.
ARTICLE IV
STANDSTILL
     4.1 Standstill. From and after the date of this Agreement through the first
anniversary of the date of this Agreement, the ANS Parties and their respective
agents, representatives, Affiliates, Associates and all other persons acting in
concert with or under the control or direction of any of the ANS Parties shall
not, directly or indirectly, in any manner without the prior consent of the
Company:
          (a) solicit proxies (or written consents) or assist or participate in
any other way, directly or indirectly, in any solicitation of proxies (or
written consents), or otherwise become a “participant” in a “solicitation,” as
such terms are defined in Instruction 3 of Item 4 of Schedule 14A and Rule 14a-1
of Regulation 14A, respectively, under the Exchange Act in opposition to the
recommendation or proposal of the Board, or recommend or request or induce or
attempt to induce any other person to take any such actions, or seek to advise,
encourage or influence any person with respect to the voting of (or the
execution of a written consent in respect of) the securities of the Company, or
execute any written consent in lieu of a meeting of the holders of the
securities of the Company or grant a proxy with respect to the voting of the
securities of the Company to any person;
          (b) form, join or in any way participate in a “group” (within the
meaning of Section 13(d)(3) of the Exchange Act) for the purpose of acquiring,
holding, voting or disposing of any securities of the Company;
          (c) deposit any securities of the Company in a voting trust or enter
into any other arrangement or agreement with respect to the voting thereof;
          (d) acquire or agree, offer, seek or propose to acquire, or cause to
be acquired, ownership (including beneficial ownership) of any of the assets or
business of the Company or any rights or options to acquire any such assets or
business from any person;
          (e) seek, propose, or make any statement with respect to, or solicit,
negotiate with, or provide any information to any person with respect to, a
merger, consolidate, acquisition of control or other business combination,
tender or exchange offer, purchase, sale or transfer of assets or securities,
dissolution, liquidation, reorganization, recapitalization, dividend, share
repurchase or similar transaction involving the Company, its subsidiaries or its
business, whether or not any such transaction involves a change of control of
the Company;
          (f) take any action, alone or in concert with any other person,
advise, finance, assist or participate in or encourage any person to take any
action which is prohibited to be taken

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by the ANS Parties or any of their Affiliates or Associates pursuant to this
Agreement, or make any investment in or enter into any arrangement with, any
other person that engages, or offers or proposes to engage in any of the
foregoing;
          (g) disclose publicly or privately, in a manner that could reasonably
be expected to become public, any intention, plan or arrangement inconsistent
with the foregoing;
          (h) commence, encourage, or support any derivative action in the name
of the Company, or any class action against the Company or any of its officers
or directors; or
          (i) take any action challenging the validity or enforceability of any
provisions of this Article IV.
ARTICLE V
NONDISPARAGEMENT; NO LITIGATION
     5.1 Nondisparagement by the ANS Parties. Each of the ANS Parties hereby
covenants and agrees, from and after the date of this Agreement through the
first anniversary of the date of this Agreement, not to:
          (a) make, or cause to be made, any statement or announcement that
relates to and constitutes an ad hominem attack on, or relates to and otherwise
disparages, the Company, its officers, directors, employees, or any person who
has served as an officer, director or employee of the Company; or
          (b) pursue, directly or indirectly (or assist any other person or
entity to initiate or pursue, directly or indirectly) any litigation,
arbitration, suit, claim, or complaint against the Company, its officers,
directors or employees, excluding, however, any litigation, arbitration, suit,
claim, or complaint filed solely to remedy a breach of this Agreement.
     5.2 Nondisparagement by the Company. The Company hereby covenants and
agrees, from and after the date of this Agreement through the first anniversary
of the date of this Agreement, not to:
          (a) make, or cause to be made, any statement or announcement that
relates to and constitutes an ad hominem attack on, or relates to and otherwise
disparages, the ANS Parties or their respective officers, directors, employees,
or any person who has served as an officer, director or employee of the ANS
Parties; or
          (b) pursue, directly or indirectly (or assist any other person or
entity to initiate or pursue, directly or indirectly) any litigation,
arbitration, suit, claim, or complaint against the ANS Parties (or their
respective officers, directors or employees), excluding, however, any
litigation, arbitration, suit, claim, or complaint filed solely to remedy a
breach of this Agreement.
     5.3 Exceptions. Notwithstanding Sections 5.1 and 5.2 of this Agreement,
nothing contained herein shall limit the ability of any party to this Agreement
to provide documents or information responsive to legal process or legal
proceedings, or requests from any government or regulatory agency or authority
in connection with any formal or informal inquiry, investigation or proceeding
(a “Request”) where such legal process or proceeding has not been initiated by,
or

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on behalf of, or at the suggestion of, a party to this Agreement or their agent
or representative. If any party to this Agreement receives such a Request, it
shall give prompt written notice, in accordance with Section 7.13 hereof, of
such Request to the other parties to this Agreement.
ARTICLE VI
FEES AND EXPENSES
     6.1 Reimbursement of the Fees and Expenses of the ANS Parties. Within five
business days after the submission of a written request therefor, together with
any appropriate documentation substantiating the same reasonably requested by
the Company, the Company shall reimburse the ANS Parties for their reasonable,
documented out-of-pocket legal fees and expenses incurred in connection with
(a) the Contested Election, (b) the preparation of the Section 220 Demand, the
ANS Proxy Statement, and any other documents or filings related to the Contested
Election, and (c) the preparation for and the solicitation of proxies for the
Annual Meeting. In no event, however, shall the costs and expenses to be
reimbursed by the Company pursuant to this Section 6.1 exceed $125,000.
     6.2 Other Expenses. Except as specified in Section 6.1 above, each party
shall pay all expenses incurred by such party, including those related to the
negotiation, preparation, execution, delivery, and performance of this
Agreement.
ARTICLE VII
MISCELLANEOUS
     7.1 No Concession of Liability. This Agreement shall not in any event
constitute, be construed or deemed a concession or admission of any liability or
wrongdoing of any of the parties.
     7.2 Entire Agreement. This Agreement constitutes the entire agreement of
the parties with respect to the subject matter hereof. The representations,
warranties, covenants and agreements set forth in this Agreement constitute all
the representations, warranties, covenants and agreements of the parties hereto
and upon which the parties have relied and except as may be specifically
provided herein, no change, modification, amendment, addition or termination of
this Agreement or any part thereof shall be valid unless in writing and signed
by or on behalf of the party to be charged therewith.
     7.3 Public Disclosures.
          (a) Immediately following the execution and delivery of this
Agreement, the ANS Parties and the Company shall issue a joint press release,
substantially in the form attached hereto as Exhibit A (the “Press Release”).
None of the parties hereto will make any public statements (including in any
filing with the SEC or any other regulatory or governmental agency, including
any national securities exchange) that are inconsistent with, or otherwise
contrary to, the statements contained in the Press Release.
          (b) The parties acknowledge and understand that the Company shall
disclose this Agreement in a Current Report on Form 8-K filed with the SEC in
the time period required by applicable law and file this Agreement as an exhibit
to such Form 8-K.

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     7.4 Waivers. No waiver of the provisions hereof shall be effective unless
in writing and signed by the party to be charged with such waiver. No waiver
shall be deemed a continuing waiver or waiver in respect of any subsequent
breach or default, either of similar or different nature, unless expressly so
stated in writing.
     7.5 Governing Law; Severability. This Agreement shall be governed,
interpreted and construed in accordance with the laws of the State of Delaware
applicable to contracts to be performed entirely within that State. Should any
clause, section or part of this Agreement be held or declared to be void or
illegal for any reason, all other clauses, sections or parts of this Agreement
which can be effected without such illegal clause, section or part shall
nevertheless continue in full force and effect.
     7.6 Jurisdiction and Venue. Each party hereto hereby agrees that any
proceeding relating to this Agreement shall be brought in a state court of
Delaware. Each party hereto hereby consents to personal jurisdiction in any such
action brought in any such Delaware court, consents to service of process by
registered mail made upon such party and/or such party’s agent and waives any
objection to venue in any such Delaware court and a claim that any such Delaware
court is an inconvenient forum.
     7.7 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns or
heirs and personal representatives.
     7.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one instrument.
     7.9 Survival of Representations. All of the representations, warranties,
covenants, and releases of the parties set forth in this Agreement will survive
the execution and delivery of this Agreement.
     7.10 No Third Party Rights. The representations, warranties and agreements
of the parties contained herein are intended solely for the benefit of the party
to whom such representations, warranties or agreements are made, shall confer no
rights hereunder, whether legal or equitable, in any other person or entity, and
no other person or entity shall be entitled to rely thereon; provided, however;
that YEP shall be deemed to be an intended beneficiary of this Agreement and
shall have the right to enforce its terms and provisions.
     7.11 Construction. This Agreement shall not be more strictly construed
against one party than against any other merely because it was prepared by
counsel for that party, it being recognized that, because of the arm’s length
negotiations, all parties have materially and substantially contributed to the
preparation, review and final terms of this Agreement.
     7.12 Specific Performance; Injunctive Relief. The parties to this Agreement
agree that solely a remedy at law for breach of this Agreement is inadequate and
that any party by whom this Agreement is enforceable shall be entitled to
institute and prosecute proceedings, either at law or in equity, to seek
specific performance of the terms and conditions of this Agreement, to obtain
injunctive relief or to obtain any other appropriate relief or remedy. Such
remedies shall,

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however, be cumulative and not exclusive and shall be in addition to any other
remedies which a party may have under this Agreement or at law.
     7.13 Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile on a business day,
(b) the business day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (c) upon actual receipt by the party to
whom such notice is required to be given. The addresses for such notices and
communications shall be as follows:

     
If to the ANS Parties:
  ANS Investments LLC
50 Battery Place, Suite 7F
New York, N.Y. 10280
Facsimile: (508) 629-0074
Attention: Jonah M. Meer, CEO
 
   
with a copy to:
  Salisbury & Ryan LLP
1325 Avenue of the Americas, 7th Floor
New York, NY 10019-6026
Facsimile: (212) 621-0321
Attention: Patrick P. Salisbury, Esq.
 
   
If to the Company:
  Magellan Petroleum Corporation
10 Columbus Boulevard
Hartford, CT 06106
Facsimile: (860) 293-2349
Attention: William H. Hastings, President/CEO
 
   
with a copy to:
  Murtha Cullina LLP
CityPlace I
185 Asylum Street, 29th Floor
Hartford, CT 06103
Facsimile: (860) 240-6150
Attention: Edward B. Whittemore, Esq.

or such other address as may be designated in writing hereafter, in the same
manner, by such Person.
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     IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date above first written.

            MAGELLAN PETROLEUM CORPORATION
      By   /s/ William H. Hastings         William H. Hastings        President
and Chief Executive Officer        ANS INVESTMENTS LLC
      By:   /s/ Jonah M. Meer         Jonah M. Meer        Chief Executive
Officer              /s/ Jonah M. Meer       Jonah M. Meer         

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