Document:

warrantcert_petromed.htm

    Bontan
Corporation Inc.

    47
Avenue Road, Suite 200

    Toronto,
Ontario, Canada M5R 2G3

    T:  416-929-1806

    F:  416-929-6612

     

     

     

     

     

     

     

     

    BONTAN
CORPORATION  INC.

     

    -
and -

     

    PETROMED
CORPORATION

     

     

     

     

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
 

    
      

       

      BONTAN
CORPORATION INC.

       

       

      - and
-

       

       

      PETROMED
CORPORATION

       

     

     

     

     

     

     

     

    

    
       22,853,058 WARRANTS

      Certificate
No.: PM –W2-09

       

       

      
        
           

          
            
               

            

            
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1 -

              
                

              

            

            
               

            

          

                  Warrant Certificate No. PM-W2-09

          No.
of Warrants :
22,853,058

          Void
After 4:00 p.m (Toronto time) on  NOVEMBER 13, 2016

                           

          THIS
WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND MAY NOT BE SOLD, PLEDGED OR
OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT OF 1933 OR, IN
THE OPINION OF COUNSEL SATISFACTORY TO THE COMPANY; AN EXEMPTION FROM
REGISTRATION IS AVAILABLE UNDER THE SECURITIES LAWS.

          

          UNLESS
PERMITTED UNDER CANADIAN SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY
SHALL NOT TRADE THE SECURITY BEFORE THE DATE THAT IS FOUR MONTHS AND ONE DAY
AFTER THE CLOSING DATE.

          

          

          WARRANT
CERTIFICATE

          FOR THE PURCHASE OF COMMON
SHARES OF

          

          BONTAN CORPORATION
INC.

          

          THIS IS TO CERTIFY THAT, for
value received, PetroMed
Corporation a
Belize corporation, having an address of No. 35, New Road,P.O.Box 1708, Belize
City, Belize, Central America (the "Warrant Holder") shall have the right
to purchase from BONTAN
CORPORATION, INC. an Ontario Corporation ("BONTAN"), upon and subject to
the terms and conditions hereinafter stated in this certificate (the "Warrant
Certificate") one fully paid and non-assessable common share of BONTAN (``Warrant Share``) for each
one (1) warrant specified above under "No. of Warrants" at the price of $4.00 US
Funds per common share in lawful money of the United States until 4:00 p.m.
Toronto time on or before  November 16,
2016.

          

          The right
to purchase common shares of BONTAN may only be exercised by the Warrant Holder
within the time hereinbefore set out by: (a) duly completing and executing the
subscription form attached hereto, in the manner therein indicated; (b)
surrendering this Warrant Certificate to BONTAN at 47 Avenue Road, Suite 200,
Toronto, Ontario M5R 2G3; and (c) paying the appropriate purchase price for the
common shares of BONTAN subscribed for by a wire transfer to the following
account of BONTAN.

          

          Bontan
Corporation Inc.

          HSBC
Bank Canada, Branch # 10362, 150 Bloor St. West

          Suite
M100, Toronto, ON M5S 2Y5

          Account
# 066663-070 Bank Code 001, Branch Code 00022

          Bank
Phone # 416-968-7622

          Swift:
MRMDUS33

          Correspondent
bank in US:  HSBC Bank USA, New York, NY

                 Or by a
certified cheque to be delivered to the BONTAN’s corporate office at 47 Avenue
Road, Suite 200, Toronto, Ontario M5R 2G3, Canada.

           

          
            
              
              

            

            
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          Upon
surrender and payment, BONTAN will issue to the Warrant Holder the number of
common shares subscribed for. Within five business days of surrender and payment
BONTAN will mail to the Warrant Holder a certificate evidencing the common
shares subscribed for. If the Warrant Holder subscribes for a lesser number of
common shares than the number of shares permitted by this Warrant Certificate,
BONTAN shall forthwith cause to be delivered to the Warrant Holder a further
warrant certificate in respect of the common shares referred to in this Warrant
Certificate but not subscribed for.

          

          Save and
except in the case of the issuance of additional shares of BONTAN for
consideration, if the issued and outstanding shares of BONTAN are changed by a
subdivision, consolidation, reduction in capital or by any other capital
reorganization or reclassification of the capital stock of BONTAN, or
consolidation or merger of BONTAN with another corporation shall be effected,
then, the warrants herein shall be adjusted and lawful and adequate provision
shall be made whereby the Warrant Holder hereof shall thereafter have the right
to purchase and receive upon the basis and upon the terms and conditions
specified in this warrant certificate and in lieu of the shares of BONTAN
immediately theretofore purchasable and receivable upon the exercise of the
rights represented hereby, such shares of stock, securities or assets as may be
issued or payable with respect to or in exchange for a number of outstanding
shares equal to the number of shares of such stock immediately theretofore
purchasable and receivable upon the exercise of the warrants represented hereby
had such reorganization, reclassification, consolidation or merger not taken
place, and in any such case appropriate provision shall be made with respect to
the rights and interest of the Warrant Holder.

          

          THE
WARRANTS AND THE SECURITIES UNDERLYING THE WARRANTS  REPRESENTED
HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES  ACT OF 1933, AS AMENEDED (THE “U.S. SECURITIES ACT”) OR
ANY STATE SECURITIES LAWS, AND MAY BE OFFERED, SOLD, EXERCISED OR OTHERWISE
TRANSFERRED ONLY (A) TO BONTAN CORPORATION INC. (B) OUTSIDE THE UNTIED STATES IN
COMPLIANCE WITH REGULATIONS S UNDER THE U.S SECURITIES ACT, (C) IN COMPLIANCE
WITH AN EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE
SECRITIES LAW, OR (D) PURSUANT TO ANOTHER EXEMPTION FROM RESIGTRATION UNDER THE
U.S. SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS; AND BONTAN
CORPORATION INC. SHALL HAVE RECEIVED AN OPINION OF COUNSEL REASONABLY ACCETABLE
TO BONTAN CORPORATION INC. CONFIRMING THE AVAILABILITY OF AN EXEMPTION
FOR  ANY PROPOSED TRANSFER UNDER CLAUSES (B) THROUGH (D)
ABOVE.

           

          UNLESS
PERMITTED UNDER CANADIAN SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY
SHALL NOT TRADE THE SECURITY BEFORE THE DATE THAT IS FOUR MONTHS AND ONE DAY
AFTER THE CLOSING DATE.

          FURTHER,
THE TRANSFERABILITY OR SALE OF THE WARRANTS AND THE SECURITIES UNDERLYING THE
WARRANTS COVERED BY THIS CERTIFICATE ARE RESTRICTED FOR A PERIOD OF SIX MONTHS
AFTER THE DATE OF ISSUANCE AND AS TO 50% OF THE SHARES FOR AN ADDITIONAL SIX
MONTHS PERIOD THEREAFTER.

           

          
            
              
              

            

            
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          All
securities issued upon the exercise this warrant shall bear the legends set
forth in this Warrant Certificate.  The holding of this Warrant
Certificate will not entitle the Warrant Holder to any right or interest as a
shareholder of BONTAN.

          

          

          

          IN WITNESS WHEREOF, BONTAN has
caused this Warrant Certificate to be issued as of the November 13,
2009

          

          

          

          BONTAN
CORPORATION INC.

           

           

           

                                                                                      Per:

           

                  
/s/ Kam
Shah             

                                                                                            Kam Shah,
CEO 

           

           

           

          
            
               

            

            
              -
4 -pledgeagmt_castlerock.htm

    

     

    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:

     

     

    
      	
              1.

            	
              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").

            

    

     

    
      	
              2.

            	
              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. 

            

    

     

    
      	
              3.

            	
              In
      order to induce the Pledgee to accept this Agreement, the Pledgor hereby
      represents and warrants to the
Pledgee:

            

    

     

    
      	
               
      

            	
              (i)

            	
              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

            

    

     

     

    
      	
               
      

            	
              (ii)

            	
              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.

            	
              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.

            

    

     

     

    
      	
              5.

            	
              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.

            

    

     

     

    
      	
              6.

            	
              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.

            

    

     

     

    
      	
              7.

            	
              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.

            

    

     

    
      	
              8.

            	
              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.

            

    

     

     

    
      	
               
      

            	
              IN WITNESS WHEREOF, the
      parties have caused this Agreement to be duly executed under seal as of
      the date first above written.

            

    

     

    Bontan Corporation
Inc.

    [Missing Graphic
Reference]

     

     

               Kam
Shah, 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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