Adira Energy Corp. - Exhibit 4.9 - Filed by newsfilecorp.com






Exhibit 4.9

 

BROWNSTONE VENTURES INC. 
The Exchange Tower

130 King Street West, Suite 2500

  Toronto, Ontario, Canada M5X 1A9 

Strictly Confidential 

July 15, 2009 

Adira Energy Corp. 

Attention:      Ilan
Diamond

	Re: 	Letter of Intent for Israeli Petroleum Interests
  


Further to our discussions, this letter (the "Letter of
Intent") sets forth the understanding between Brownstone Ventures Inc.
(“Brownstone”) and Adira Energy Corp. ("Adira”) with respect to
the proposed Farm-in by Brownstone on Adira's interest in offshore Israeli oil
and gas exploration and development blocks, as and when such blocks are awarded
to Adira (each a "Block" and collectively the "Blocks"), and to
further participation by Brownstone in Adira's future offshore projects for a
three year period commencing on 15 July 2009) (“Agreed Term”). Brownstone and
Adira are each referred to herein individually as "Party" and
collectively as the "Parties". The Parties intend this Letter of Intent
to record their primary intentions with respect to the contemplated transaction
(the "Transaction") and permits them to expeditiously move forward with
the negotiation and execution of a mutually acceptable Farm-in agreement. Except
for the provisions related to good faith negotiations, exclusivity and
confidentiality set forth in paragraphs 1, 4, 5, 7 and 8 below, this
Letter of Intent is non-binding and is not intended to create any legal
obligations. 

	1. 	
      From the date hereof until February 15, 2010 or such
      other date as the Parties may agree, Brownstone and Adira will negotiate
      in good faith toward the conclusion of

	 	 	 
		(a) 	
      a formal farm-in (the "Farmin Agreement") pursuant
      to which Brownstone shall be entitled to earn a 15% participating interest
      in each of the Blocks for the Agreed Term and once farm-in is effective,
      continuing right will exist;

	 	 	 
		(b) 	
      such amendments to the operating agreements relating to
      the Blocks as may be deemed necessary and advisable by the Parties (the
      "Revised JOA's"); and








	 	(c) 	
      an area of mutual interest agreement pursuant to which
      the Parties shall be entitled to participate in other offshore Israeli oil
      and gas exploration and development blocks which the other Party acquires
      an interest (the "AMI") for the Agreed
Term.



(the Farmin Agreement, the Revised
JOA's and the AMI are collectively referred to herein as the "Formal
Agreements") 

	2. 	
      The Formal Agreements will include terms mutually
      satisfactory to the Parties to the effect that:

	 	 	 
		(a) 	
      Under the terms of the Farmin Agreement, and subject to
      the consent of the appropriate Israeli regulator, Brownstone will
      become a 15% participant in any offshore oil and gas blocks or
      concessions granted or acquired by Adira, or which Adira has made
      application, or has otherwise derived an interest, in Israel during the
      Agreed Term;

	 	 	 
		(b) 	
      Brownstone will become responsible for 15% of all costs
      and obligations associated with the Blocks upon becoming the farm-in
      partner on a pro-rata, unpromoted basis, including but not limited to all
      past costs at signature date, associated with the blocks to a maximum of
      $25,000 attributable to Brownstonewithout prior approval by Brownstone;
      and

	 	 	 
		(c) 	
      Brownstone will contribute its expertise and assistance
      and financial support, including such commercially reasonable letters
      and/or other financial instruments to further the development of the
      Blocks and the application for additional licenses.

	 	 	 
		(d) 	
      Adira will indemnify Brownstone from and against any
      claims, losses or damages relating to environmental or other liabilities
      attributable to the Blocks and which arose or accrued prior to the date
      hereof only in the event that such claims, losses or damages relating to
      environmental or other liabilities was caused by Adira. Such clause will
      not apply to claims, losses or damages relating to environmental or other
      liabilities which were latent or existing prior to Adira acquiring the
      license.

	 	 	 
		(e) 	
      Adira will take such steps and obtain such approvals as
      are possible to cause the transfer to Brownstone of a 15% interest in each
      Block to be approved and recorded by the applicable governmental
      authorities, and to add Brownstone to such Block applications or
      concession applications, as applicable.

	 	 	 
		(f) 	
      Brownstone shall have the right to acquire up to a 15%
      participating interest on the same terms and conditions subject always to
      applicable governmental regulations regarding de minimus interests, in any
      offshore oil and gas production sharing contracts, leases, producing
      properties, licences or permits, farm-ins, rights to participate, joint
      ownership, royalties, net profit interests, or other similar rights
      acquired directly or indirectly by Adira or any subsidiary of Adira in
      Israel (an "AMI Asset") for the Agreeed Term.

	 	 	 
		(g) 	
      Brownstone will be subject to rights of first refusal in
      favour of Adira with respect to dispositions of any interest in the
      Blocks.

	 	 	 
		(h) 	
      The Formal Agreements will contain drag-along provisions
      such that Brownstone’s interest in any Block subject to disposition or
      farm-in would participate in such diposition or farm-in.

	 	 	 
	3. 	
      Formal Agreements in accordance with paragraph 1 above
      and the execution of the Formal Agreements shall be subject to the
      following conditions precedent:








	 	(a) 	
      The parties shall, on a timely basis, disclose to each
      other any material information of which they each become aware which could
      have an adverse effect on (i) their respective ownership of its interest
      in the Blocks; or (ii) the value of their respective interest in the
      Blocks, including, without limitation any claims or potential claims
      relating to the Blocks.;

	 	 	 
	 	(b) 	
      Adira shall, provide Brownstone, on a timely basis, with
      copies of all material contracts, applications, or licenses that pertain
      to Adira's interests in the Blocks and shall provide Brownstone with
      reasonable access to the records, files, licenses, reports, budgets,
      titles, and other items directly relating to the Blocks;

	 	 	 
	 	(c) 	
      Adira will obtain all necessary waivers and consents as
      required under its agreement with AMG Oil Ltd;
and




	4. 	
      Upon execution of this Letter of Intent, each Party
      agrees not to hold any discussions or negotiations with respect to sale,
      disposition, assignment or farm-in of or on the Blocks with any party
      other than a Party to this Letter of Intent and to not directly or
      indirectly encourage or assist in the proposal or consummation of any
      transaction similar in form or substance with the proposed Transaction
      relating to the Blocks with any party other than a Party to this Letter of
      Intent during the period beginning on the date hereof and ending on the
      earlier date date on which either the Formal Agreements referenced herein
      have been executed by each of the Parties or 15 February 2010.
      Notwithstanding, Adira will have the unfettered right to raise finance, or
      dispose of its interest in any block, subject to the rights of first
      refusal to be included in the Formal Agreements as set out in item 3(d)
      above.

	 	 	 
	5. 	
      In the event of Brownstones exercise of Farm-in rights,
      each of Brownstone and Adira acknowledge that this Letter of Intent, the
      Transaction proposed hereunder and any information relating to the Blocks,
      including without limitation all geological, seismic information, and all
      analyses, compilations, data studies, interpretations, evaluations,
      reports and other interpretive documents whether written, oral or
      electronic furnished by either Party in contemplation of the Transaction
      constitutes confidential business information (the "Confidential
      Information") and shall be kept in strict confidence. Each Party further
      agrees that:

	 	 	 
		(a) 	
      the Confidential Information shall not be disclosed to
      any Person except with the prior written consent of both Parties.
      Notwithstanding the foregoing, either Party may disclose the existence and
      terms of this Letter of Intent and the Transaction proposed hereunder to
      its subsidiaries, affiliates, directors, officers, employees, agents,
      representatives, consultants or advisors having a need to know such
      information for the purposes of evaluating the Transaction;

	 	 	 
		(b) 	
      Each Party assumes liability for damages arising from any
      disclosure of the Confidential Information by it or its representatives.
      Each Party shall indemnify the other Party, its subsidiaries and
      affiliates and their respective directors, officers, employees, agents,
      representatives, consultants and advisors from and against all actions,
      proceedings, claims, demands, loss, costs, damages and expenses whatsoever
      which may be brought against or suffered by them or which they may
      sustain, pay or incur by reason of an unauthorized disclosure of the
      Confidential Information by it or its representatives;

	 	 	 
		(c) 	
      Upon the unsuccessful conclusion of negotiations in
      respect of the Transaction, each Party shall forthwith return all copies
      of Confidential Information received from the other Party which are in
      written or other tangible form that are in its
  possession;








	 	(d) 	
      Notwithstanding the foregoing, each Party acknowledges
      that pursuant to applicable laws the Parties hereto are obligated to issue
      a press release concerning this Letter of Intent and the Transaction
      proposed hereunder. The Parties will consult with each other on the timing
      and content of such public disclosure with respect to this Letter of
      Intent and neither Party shall issue any such release without having first
      obtained the consent of the other Party to the contents thereof, provided
      that no Party shall be prohibited from issuing or making any public
      announcement to the extent it is necessary to do in order to comply with
      applicable laws, rules or regulations of any government, legal
      proceedings, or stock exchange having jurisdiction over such
  Party.




	6. 	
      Each Party acknowledges and agrees that unless and until
      definitive Formal Agreements have been executed and delivered, no contract
      or agreement providing for the Transaction between the Parties shall be
      deemed to exist, and neither Party will be under any legal obligation of
      any kind whatsoever with respect to such Transaction by virtue of this or
      any written or oral expression thereof, except, for the matters
      specifically set forth in paragraphs 1, 4, 5, 7 and 8 hereof.

	 	 
	7. 	
      In no event shall either Party be liable for incidental,
      consequential, indirect, special or punitive damages, loss of profits or
      revenue, or other such claims whether in contract or negligence arising
      pursuant to or in relation with a breach of the confidentiality
      undertakings described in this Letter of Intent. The limitation of
      liability set forth in this section shall prevail over any conflicting or
      inconsistent provisions contained herein.

	 	 
	8. 	
      Each Party shall be solely responsible for payment of any
      costs incurred by it in the negotiation, preparation and implementation of
      this Letter of Intent and the Formal Agreements, including any costs
      incurred in satisfaction of the conditions precedent described in Section
      3 hereto, subject to Brownstone being responsible for Adira’s legal costs,
      to a maximum of $25,000, in the event that Brownstone fails to execute the
      Formal Agreements without cause attributable to Adira.

	 	 
	9. 	
      This Letter of Intent shall be governed by, and construed
      in accordance with, the laws of the Province of Ontario and of Canada
      applicable therein. The parties to this Letter of Intent hereby
      irrevocably and unconditionally attorn to the exclusive jurisdiction of
      the courts of the Province of Ontario and all courts of appeal therefrom.
      This Letter of Intent and any interest herein shall not be assigned by
      either Party without the prior written consent of the other Party, which
      consent may be unreasonably withheld.

	 	 
	10. 	
      Each provision of the Letter of Intent shall be construed
      as though the Parties participated equally in the drafting of the same.
      Consequently, the Parties acknowledge and agree that any rule of
      construction that a document is to be construed against the drafting party
      shall not be applicable to this Letter of Intent. Each Party acknowledges
      and agrees that it has been represented by legal counsel and that it has
      consented to the legal counsel engaged by the other Party.

	 	 
	11. 	
      This Letter of Intent may be executed in separate
      counterparts and by facsimile, and all of the executed counterparts shall
      together constitute one instrument and shall have the same force and
      effect as if all of the Parties executing such counterparts had executed
      the same instrument.



Should this Letter of Intent meet with your acceptance, please
so indicate by signing, dating and returning one (1) copy to the attention of
the undersigned.

This Letter of Intent shall remain open for acceptance until
4:00 P.M. on July [ ], 2009.

Yours very truly, 




BROWNSTONE VENTURES INC. 

Per:      “Signed” 

 

ACCEPTED AND AGREED TO this____ day of July, 2009. 

ADIRA ENERGY CORP. 

Per:      “Signed”