TERMINATION, OPTION AND PUT AGREEMENT
This Agreement is made as of the _____ day
of ________, 2005.
BETWEEN:
(the "Preferred Shareholder")
- and -
DEEP
WELL OIL & GAS, INC.
( "Deep Well")
- and -
NORTHERN ALBERTA OIL LTD.
("Northern")
A. WHEREAS the Preferred Shareholder is the
registered holder of Class R
non-voting preferred shares of Northern
(the "Northern Preferred Shares");
B. AND WHEREAS the Preferred Shareholder,
Deep Well, and Northern (then called
"Mikwec Energy Canada Ltd.") entered into a
share exchange agreement (the
"Exchange Agreement") dated the 8th day of
July, 2004;
C. AND WHEREAS subsections 3.04(c) and
3.04(h) of the Exchange Agreement
required the Preferred Shareholder to
provide Deep Well with an executed option
agreement on the Closing Date (as defined
in the Exchange Agreement) in the form
set forth in Schedule 3.04(c) to the
Exchange Agreement;
D. AND WHEREAS the Preferred Shareholder
and Deep Well entered into an option
agreement (the "Original Option Agreement")
on the 8th day of July, 2004 rather
than on the Closing Date contrary to the
terms of subsections 3.04(c) and
3.04(h) of the Exchange Agreement;
E. AND WHEREAS pursuant to subsection 3.01
of the Exchange Agreement, in
consideration of the Preferred Shareholder
executing the Original Option
Agreement, Deep Well was required, on the
Closing Date, to issue to the
Preferred Shareholder thirty (30) shares of
its common stock (the "Deep Well
Common Shares") for every one (1) Northern
Preferred Share owned by the
Preferred Shareholder;
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F. AND WHEREAS the Preferred Shareholder,
Deep Well and Northern entered into an
amending agreement (the "Amending
Agreement") to the Exchange Agreement dated
the 25th day of April, 2005 whereby they
agreed, among other things, to extend
the Closing Date (as defined in the
Exchange Agreement);
G. AND WHEREAS the parties have agreed to
waive the requirements in the Exchange
Agreement which relate to the Northern
Preferred Shares, including but not
limited to the requirements in section 3.01
to enter into an option agreement in
the form of Schedule 3.04(c) of the
Exchange Agreements;
H. AND WHEREAS the parties have agreed to
waive the closing conditions in
subsections 3.04(c) and 3.04(h) of the
Exchange Agreement and wish to terminate
the Original Option Agreement;
I. AND WHEREAS the parties wish to enter
into a new option agreement on the
Closing Date pursuant to which the
Preferred Shareholder will have a put option
to sell to Deep Well, all or any part of
the Northern Preferred Shares owned by
the Preferred Shareholder and Deep Well
shall have a call option ("Call Option")
to purchase all or any part of the Northern
Preferred Shares owned by the
Preferred Shareholder, in accordance with
the terms hereof;
NOW THEREFORE in consideration of the mutual promises of the
parties hereto and the mutual benefits to
be gained by the performance thereof
and for other good and valuable condition,
the receipt and sufficiency of which
is hereby acknowledged, the parties hereto
agree as follows:
SECTION 1
TERMINATION OF ORIGINAL OPTION AGREEMENT
1.1 The Original Option Agreement shall
terminate upon execution of this
Agreement and be of no further force and
effect.
1.2 Northern, the Preferred Shareholder and
Deep Well agree to waive the
requirements in the Exchange Agreement
which relate to the Northern Preferred
Shares, including but not limited to the
requirements in section 3.01 to enter
into an option agreement in the form of
Schedule 3.04(c) of the Exchange
Agreements.
1.3 Northern, the Preferred Shareholder and
Deep Well agree to waive the closing
conditions in subsections 3.04(c) and
3.04(h) of the Exchange Agreement.
2
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SECTION 2
GRANT OF PUT AND CALL OPTIONS
2.1 At any time and from time to time
during the Term (as subsequently defined
herein) the Preferred Shareholder may, upon
providing ten (10) days written
notice to Deep Well, require Deep Well to
purchase all, or any number as may be
designated in the notice, of the Northern
Preferred Shares held by the Preferred
Shareholder at that time (the "Put
Option"). The purchase price for any Northern
Preferred Share that Deep Well is required
to purchase under this Put Option
shall be satisfied by Deep Well issuing
thirty (30) Deep Well Common Shares to
the Preferred Shareholder subject to the
anti-dilution provisions in section 3
of this Agreement.
2.2 At any time during the final month of
the Term (as defined here
