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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event Reported) January 10, 1997
AMERICAN INTERNATIONAL PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)
Nevada No. 0-14905 13-3130236
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation
or organization)
444 MADISON AVENUE, SUITE 3203, NEW YORK, NEW YORK 10022
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(Address of principal executive offices) (Zip Code)
(212)688-3333
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year,
if changed since last report)
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of businesses acquired - N/A
(b) Pro forma financial information - N/A
(c) Exhibits
4.1 Form of 9% Series C Convertible Subordinated Redeemable
Debenture due January 10, 2000.
4.2 Form of Subscription Agreement used in connection with the
offering of Registrants debentures, the form of which is
attached hereto as Exhibit 4.1.
4.3 Form of Regulation S Subscription Agreement for Common
Stock.
ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S
(a)
(i) On January 10, 1997, the registrant sold 9% Convertible
Subordinated Redeemable Debenture Due January 10, 2000. The
total principal amount of the Debenture was $200,000.
(ii) On January 14, 1997 the Registrant sold 653,000 shares of its
common stock for gross proceeds of $150,000.
(b) Non-U.S. Persons only were permitted to purchase the Debentures
and Common Stock. The placement agent for the Debentures was
Zazoff & Associates. The Common Stock was placed directly by
the Registrant.
(c) The Registrant received net proceeds of $180,000 and $150,000
from sale of the Debentures and the Common Stock, respectively.
(d) The Offerings were made pursuant to a safe harbor from
registration under Regulation S to Non-U.S. Persons only.
(e) The 9% Series C Debentures, which are redeemable by the Company
in part or in full prior to conversion, are convertible on
February 24, 1997 into shares of the Company's Common Stock at
the lower of (i) 70% of the average closing bid price of the
Company's Common Stock for five business days prior to the date
of conversion or (ii) 75% of the average closing bid price of
the Company's Common Stock for the five business days prior to
the date of Subscription.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: January 24, 1997
AMERICAN INTERNATIONAL
PETROLEUM CORPORATION
By: /s/ Denis J. Fitzpatrick
Denis J. Fitzpatrick
Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
4.1 Form of 9% Series C Convertible Subordinated
Redeemable Debenture due January 9, 2000.
4.2 Form of Subscription Agreement used in connection
with the offering of Registrant's debenture, the
form of which is attached here to as Exhibit 4.1.
4.3 Form of Registration S Subscription Agreement for
Common Stock.
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EXHIBIT 4.1
FORM OF DEBENTURE
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY
NOT BE OFFERED OR SOLD IN THE UNITED STATES (AS DEFINED IN REGULATION S
UNDER THE ACT) OR TO, OR FOR THE ACCOUNT OR BENEFIT OF U.S. PERSONS (AS
DEFINED IN REGULATION S UNDER THE ACT) EXCEPT PURSUANT TO REGISTRATION
UNDER THE ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
ACT AND APPLICABLE STATE SECURITIES LAWS.
No.____________________ US $____________
AMERICAN INTERNATIONAL PETROLEUM CORPORATION
9% SERIES C CONVERTIBLE SUBORDINATED REDEEMABLE DEBENTURE
DUE JANUARY 9, 2000
THIS DEBENTURE is one of a duly authorized issue of Debentures of
American International Petroleum Corp., a corporation duly organized and
existing under the laws of the State of Nevada (the "Company") designated as its
9% Series C Convertible Subordinated Redeemable Debentures Due January 9, 2000,
in an aggregate principal amount not exceeding ________________________ (U.S.
$_____________).
FOR VALUE RECEIVED, the Company promises to pay to __________________________,
whose address is _____________________________________, the registered holder
hereof and its successors and assigns (the "Holder"), the principal sum of
_______________________ Dollars (US $________________) on January 9, 2000 (the
"Maturity Date"), and to pay interest on the principal sum outstanding, at the
rate of 9% per annum due and payable quarterly in arrears commencing January 9,
1997. Accrual of interest shall commence on the date hereof and shall continue
until payment in full of the outstanding principal sum has been made or duly
provided for. The interest so payable will be paid to the person in whose name
this Debenture (or one or more predecessor Debentures) is registered on the
records of the Company regarding registration and transfers of the Debentures
(the "Debenture Register"); provided, however, that the Company's obligation to
a transferee of this Debenture arises only if such transfer, sale or other
disposition is made in accordance with the terms and conditions of the Offshore
Securities Subscription Agreement dated as of January 7, 1997 between the
Company and the Holder (the "Subscription Agreement"). The principal of, and
interest on, this Debenture are payable in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts, at the address last appearing on the Debenture
Register of the Company as designated in writing by the Holder hereof from time
to time. The Company
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will pay the outstanding principal of and all accrued and unpaid interest due
upon this Debenture on the Maturity Date, less any amounts required by law to be
deducted or withheld, to the Holder of this Debenture as of the tenth (10th) day
prior to the Maturity Date by check or on the Maturity Date by wire transfer and
addressed to such Holder at the last address appearing on the Debenture
Register. The forwarding of such check shall constitute a payment of outstanding
principal and interest hereunder and shall satisfy and discharge the liability
for principal and interest on this Debenture to the extent of the sum
represented by such check plus any amounts so deducted.
This Debenture is subject to the following additional provisions:
1. The Debentures are issuable in denominations of Twenty-Five Thousand
Dollars (US$25,000) and integral multiples thereof. The Debentures are
exchangeable for an equal aggregate principal amount of Debentures of different
authorized denominations, as requested by the Holders surrendering the same but
not less than U.S. $25,000. No service charge will be made for such registration
or transfer or exchange, except that transferee shall pay any tax or other
governmental charges payable in connection therewith.
2. The Company shall be entitled to withhold from all payments of
principal of, and interest on, this Debenture any amounts required to be
withheld under the applicable provisions of the United States income tax or
other applicable laws at the time of such payments.
3. This Debenture has been issued subject to investment representations
of the original purchaser hereof and may be transferred or exchanged in the U.S.
only in compliance with the Securities Act of 1933, as amended (the "Act") and
applicable state securities laws. Prior to due presentment for transfer of this
Debenture, the Company and any agent of the Company may treat the person in
whose name this Debenture is duly registered on the Company's Debenture Register
as the owner hereof for the purpose of receiving payment as herein provided and
for all other purposes, whether or not this Debenture be overdue, and neither
the Company nor any such agent shall be affected or bound by notice to the
contrary. Any holder of this Debenture, electing to exercise the right of
conversion set forth in Section 4(a) hereof, in addition to the requirements set
forth in Section 4(a), and any prospective transferee of this Debenture, is also
required to give the Company (i) written confirmation that it is not a U.S.
Person and the Debenture is not being converted on behalf of a U.S. Person
("Notice of Conversion") or (ii) an opinion of U.S. counsel to the effect that
the Debenture and shares of common stock issuable upon conversion or transfer
thereof have been registered under the 1933 Act or are exempt from such
registration. In the event a Notice of Conversion or opinion of counsel is not
provided the Holder hereof will not be entitled to exercise the right to convert
or transfer the Debentures.
4. (a) The Holder of this Debenture is entitled, at its option, at any
time commencing 45 days after closing of the Offering hereof, by delivery of the
notice of conversion to convert all or any amount remaining of the original
principal amount of this Debenture into shares of common stock, $0.08 par value
per share, of the Company (the "Common Stock"), at
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a conversion price for each share of Common Stock equal to the lower of (x) 70%
of the average closing bid price of the Common Stock for the five (5) business
days immediately preceding the date of receipt by the Company of notice of
conversion or (y) 75% of the average of the closing bid price of the Common
Stock for the five (5) business days immediately preceding the date of
Subscription by the Holder accepted by the Company as reported by the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") (the
"Conversion Price") ("Conversion Shares"). Such conversion shall be effectuated
by surrendering the Debentures to be converted with the form of conversion
notice attached hereto as Exhibit I, executed by the Holder of this Debenture
evidencing such Holder's intention to convert this Debenture or a specified
portion (as above provided) hereof, and accompanied by proper assignment hereof
in blank. Accrued but unpaid interest shall be subject to conversion. No
fractional shares or scrip representing fractions of shares will be issued on
conversion, but the number of shares issuable shall be rounded to the nearest
whole share. The transferee or issuee shall execute such investment
representations or other documents as are respectively required by counsel in
order to ascertain the available registration exemption. The date on which
notice of conversion is given shall be deemed to be the date on which the Holder
has delivered this Debenture, with the assignment and conversion notice duly
executed, to the Seller, or, if earlier, the date set forth in such notice of
conversion if the Debenture is received by the Company within five (5) business
days thereafter. The transferee or issuee shall execute such investment
representations or other documents as are reasonably required by counsel in
order to ascertain the available registration exemption.
(b) Notwithstanding the provisions of paragraph 4(a) hereof,
the Company may redeem upon five days notice any or all of the Debentures after
issue hereof and prior to conversion by paying to the Holder in cash 125% of the
then outstanding principal balance of the Debenture plus accrued interest to
such date, and shall be less any amounts required by law to be deducted or
withheld. Such payment shall be made by delivering immediately available funds
in United States Dollars by wire transfer to the Holder, or if no wiring
instructions have been provided to the company, by cashier's or certified check
to the last address of Holder appearing on the Debenture Register. The wiring of
such funds or the forwarding of such check shall constitute payment of principal
and interest hereunder and shall satisfy and discharge the liability for
principal and interest on this Debenture to the extent of the sum represented by
such wire or check plus any amount so deducted. Such payment also to be made by
the Company within 2 business days of receipt of a conversion notice by the
Company from the Investor.
5. No provision of this Debenture shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the principal of,
and interest on, this Debenture at the time, place, and rate, and in the coin
currency, herein prescribed.
6. The Company hereby expressly waives demand and presentment for
payment, notice of nonpayment, protest, notice of protest, notice of dishonor,
notice of acceleration or intent to accelerate, bringing of suit and diligence
in taking any action to collect amounts called for hereunder and shall be
directly and primarily liable for the payment of all sums owing and to be owing
hereon, regardless of and without any notice, diligence, act or omission as or
with respect to the collection of any amount called for hereunder.
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7. The Company agrees to pay all costs and expenses, including
reasonable attorneys' fees, which may be incurred by the Holder in converting
and/or collecting any amount due under this Debenture.
8. If one or more of the following described "Events of Default" shall
occur and continue for 30 days:
(a) The Company shall default in the payment of principal
or interest on this Debenture; or
(b) Any of the representations or warranties made by the
Company herein, in the Subscription Agreement, or in
any certificate or financial or other written
statements heretofore or hereafter furnished by or on
behalf of the Company in connection with the
execution and delivery of this Debenture or the
Subscription Agreement shall be false or misleading
in any material respect at the time made; or
(c) The Company shall fail to perform or observe, in any
material respect, any other covenant, term,
provision, condition, agreement or obligation of the
Company under this Debenture [and such failure shall
continue uncured for a period of thirty (30) days
after notice from the Holder of such failure]; or
(d) The Company shall (1) become insolvent; (2) admit in
writing its liability to pay its debts generally as
they mature; (3) make an assignment for the benefit
of creditors or commence proceedings for its
dissolution; or (4) apply for or consent to the
appointment of a trustee, liquidator or receiver for
its or for a substantial part of its property or
business; or
(e) A trustee, liquidator or receiver shall be appointed
for the Company or for a substantial part of its
property or business without its consent and shall
not be discharged within thirty (30) days after such
appointment; or
(f) Any governmental agency or any court of competent
jurisdiction at the instance of any governmental
agency shall assume custody or control of the whole
or any substantial portion of the properties or
assets of the Company and shall not be dismissed
within thirty (30) days thereafter; or
(g) Any money judgment, writ or warrant of attachment, or
similar process in excess of One Hundred Thousand
($100,000) Dollars in the aggregate shall be entered
or filed against the Company or any of its properties
or other assets and shall remain unpaid, unvacated,
unbonded or unstayed for a period of fifteen (15)
days or in any event later than five (5) days prior
to the date of any proposed sale thereunder; or
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(h) Bankruptcy, reorganization, insolvency or liquidation
proceedings or other proceedings for relief under any
bankruptcy law or any law for the relief of debtors
shall be instituted by or against the Company and, if
instituted against the Company, shall not be
dismissed within thirty (30) days after such
instruction of the Company shall by any action or
answer approve of, consent to, or acquiesce in any
such proceedings or admit the material allegations
of, or default in answering a petition filed in any
such proceeding; or
(i) The Company shall have its Common Stock delisted from
the over-the-counter market.
Then, or at any time thereafter, and in each and every such case, unless such
Event of Default shall have been waived in writing by the Holder (which waiver
shall not be deemed to be a waiver of any subsequent default) at the option of
the Holder and in the Holder's sole discretion, the Holder may consider this
Debenture immediately due and payable, without presentment, demand, protest or
(further) notice of any kind (other than notice of acceleration), all of which
are hereby expressly waived, anything herein or in any note or other instruments
contained to the contrary notwithstanding, and the Holder may immediately, and
without expiration of any period of grace, enforce any and all of the Holder's
rights and remedies provided herein or any other rights or remedies afforded by
law.
9. (a) This Debenture represents a general unsecured obligation
of the Company. No recourse shall be had for the payment of
the principal of, or the interest on, this Debenture, or for
any claim based hereon, or otherwise in respect hereof,
against any incorporator, shareholder, officer or director, as
such, past, present or future, of the Company or any successor
corporation, whether by virtue of any constitution, statute or
rule of law, or by the enforcement of any assessment or
penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the
issue hereof, expressly waived and released.
(b) The rights of any Holder to receive the principal sum or
any part thereof, and to receive the interest due on this
Debenture is and shall remain subordinate in priority to the
payment of the principal of and interest on (i) all future
obligations and guarantees of the Issuer for money borrowed
from any bank, trust company, insurance company or other
financial institution engaged in the business of lending
money, for which the Issuer is at the time of determination
responsible or liable as obligor or guarantor; (ii) all
existing or future obligations of the Corporation secured by a
lien, mortgage, pledge or other encumbrance against real or
personal property (including common stock of the Corporation
or any of its subsidiaries) of the Corporation; (iii) any
modifications, renewals, extensions or refunding of the
foregoing, except for any of such obligations of the
Corporation the payment of which is made expressly subordinate
and junior to this Debenture; (iv) indebtedness under the MG
Trade Finance Corp. ("MGTF") loan agreement
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(the "Loan Agreement") or any indebtedness incurred to
refinance such obligations; (v) other indebtedness of the
Corporation existing on the date of this Debenture; and (vi)
trade payables incurred in the ordinary course of business of
the Corporation or its subsidiaries.
10. The Holder of this Debenture, by acceptance hereof, agrees that
this Debenture is being acquired for investment and that such Holder will not
offer, sell or otherwise dispose of this Debenture or the Shares of Common Stock
issuable upon exercise thereof except under circumstances which will not result
in a violation of the Act or any applicable state Blue Sky law or similar laws
relating to the sale of securities.
11. In case any provision of this Debenture is held by a court of
competent jurisdiction to be excessive in scope or otherwise invalid or
unenforceable, such provision shall be adjusted rather than voided, if possible,
so that it is enforceable to the maximum extent possible, and the validity and
enforceability of the remaining provisions of this Debenture will not in any way
be affected or impaired thereby.
12. This Debenture and the agreements referred to in this Debenture
constitute the full and entire understanding and agreement between the Company
and the Holder with respect to the subject hereof. Neither this Debenture nor
any term hereof may be amended, waived, discharged or terminated other than by a
written instrument signed by the Company and the Holder.
13. This Debenture shall be governed by and construed in accordance
with the laws of New York. Holder hereby waives trial by jury and consents to
exclusive jurisdiction and venue in the State of New York.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by an officer thereunto duly authorized.
Dated: , 1997
AMERICAN INTERNATIONAL PETROLEUM CORP.
By:______________________________________
Denis J. Fitzpatrick, Vice President
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EXHIBIT I
"NOTICE OF CONVERSION" FOLLOWS
(ONE PAGE)
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NOTICE OF CONVERSION
(To be Executed by the Registered Holder in order to Convert the Debenture)
The undersigned hereby irrevocably elects to convert $______________ of
the above Debenture No. ___ into Shares of Common Stock of American
International Petroleum Corp. (the "Company") according to the conditions set
forth in such Debenture, as of the date written below.
The undersigned represents that it is not a U.S. Person as defined in
Regulation S promulgated under the Securities Act of 1933, as amended, and is
not converting the Debenture on behalf of any U.S. Person and the
representations contained in the Subscription Agreement are true. If Shares are
to be issued in the name of a person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect thereto.
Date of Conversion*____________________________________________________________
Applicable Conversion Price____________________________________________________
Signature______________________________________________________________________
[Print Name of Holder and Title of Signer]
Address:_______________________________________________________________________
_______________________________________________________________________________
_____________________________________________________________________
* This original Debenture and Notice of Conversion must be received by the
Company by the fifth business date following the Date of Conversion.
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EXHIBIT 4.2
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AMERICAN INTERNATIONAL PETROLEUM CORPORATION
REGULATION S SUBSCRIPTION AGREEMENT
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OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT
THIS OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT dated as of January 7,
1997 (the "Agreement"), is executed in reliance upon the exemption from
registration afforded by Regulation S ("Regulation S") as promulgated by the
Securities and Exchange Commission ("SEC"), under the Securities Act of 1933, as
amended. Capitalized terms used herein and not defined shall have the meanings
given to them in Regulation S.
This Agreement has been executed by the undersigned "Buyer" in
connection with the private placement of 9% Series C Convertible Subordinated
Redeemable Debentures of American International Petroleum Corp., a corporation
organized under the laws of the State of Nevada, with its principal executive
offices located at 444 Madison Avenue, Suite 3203, New York, New York 10022
(hereinafter referred to as "Seller"). Buyer hereby represents and warrants to,
and agrees with Seller:
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND THE
RULES AND REGULATIONS PROMULGATED THEREUNDER (THE "1933 ACT"), AND MAY
NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES (AS DEFINED IN
REGULATION S OF THE 1933 ACT) OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,
U.S. PERSONS (AS DEFINED IN REGULATION S OF THE 1933 ACT) EXCEPT
PURSUANT TO REGISTRATION UNDER OR AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE 1933 ACT.
1. Agreement To Subscribe; Purchase Price.
(a) SUBSCRIPTION. The undersigned Buyer hereby subscribes for
and agrees to purchase the Seller's 9% Series C Convertible Subordinated
Redeemable Debentures substantially in the form of the Debentures attached as
Exhibit A hereto and having an aggregate original principal amount of up to U.S.
$__________ (singly, a "Debenture," and collectively, the "Debentures"), at an
aggregate purchase price as set forth in subsection 1(b) herein.
(b) PAYMENT. The aggregate Purchase Price for the Debentures
shall be ____________________ United States Dollars (U.S. $_____________) (the
"Purchase Price"). Such sale and purchase shall take place upon payment of the
Purchase Price for the Debenture, by cashier's check, certified check or
electronic transfer of funds versus delivery of the Debenture through Buyer's
counsel Sommer & Schneider LLP.
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(c) CLOSING. Subject to the satisfaction of the conditions set
forth in Sections 7 and 8 hereof, payments of the Purchase Price may be made
from time to time in denominations of not less than $25,000 but all payments
hereunder, in any event must be completed on or before January 7, 1997, or such
earlier or later date as is mutually agreed to in writing by Buyer and Seller.
2. Buyer Representations and Covenants; Access to Information.
OFFSHORE TRANSACTION. In connection with the purchase and sale
of the Debentures, Buyer represents and warrants to, and covenants and agrees
with Seller as follows:
(i) Buyer is not a natural person and is not
organized under the laws of any jurisdiction within the United
States, was not formed by a U.S. Person (as defined in Section
902(o) of Regulation S) for the purpose of investing in
Regulation S securities and is not otherwise a U.S. Person.
Buyer is not, and on the closing date will not be, an
affiliate of Seller;
(ii) At the time the buy order was originated, Buyer
was outside the United States and is outside of the United
States as of the date of the execution and delivery of this
Agreement;
(iii) No offer to purchase the Debentures or the
common stock of Seller issuable upon conversion of the
Debentures (collectively, the "Securities"), was made by Buyer
in the United States;
(iv) Buyer is purchasing the Securities for its own
account and Buyer is qualified to purchase the Securities
under the laws of its jurisdiction of residence, and the offer
and sale of the Securities will not violate the securities or
other laws of such jurisdiction;
(v) All offers and sales of any of the Securities by
Buyer prior to the end of the Restricted Period (as
hereinafter defined) shall be made in compliance with any
applicable securities laws of any applicable jurisdiction and
in accordance with Rule 903 and Rule 904, as applicable, of
Regulation S or pursuant to registration of securities under
the 1933 Act or pursuant to an exemption from registration. In
any case, none of the Securities have been or will be
encumbered, offered, sold or otherwise transferred by Buyer
to, or for the account or benefit of, a U.S. Person or within
the United States until after the end of the forty (40) day
period commencing on the later of (x) the date of closing of
the offering of the Securities or (y) the date of the first
offer of the Securities to persons other than distributors
(the "Restricted Period"), as calculated pursuant to
Regulation S and certified by
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Buyer to Seller and thereafter only pursuant to a Registration
Statement or an applicable exemption from the registration
provisions of the 1933 Act;
(vi) The transactions contemplated by this Agreement
(a) have not been and will not be pre-arranged by Buyer with a
purchaser located in the United States or a purchaser which is
a U.S. Person, and (b) are not and will not be part of a plan
or scheme by Buyer, to evade the registration provisions of
the 1933 Act;
(vii) Buyer understands that the Securities are not
registered under the 1933 Act and are being offered and sold
to it in reliance on specific exclusions from the registration
requirements of Federal and State securities laws, and that
Seller is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgments and
understandings of Buyer set forth herein in order to determine
the applicability of such exclusions and the suitability of
Buyer and any purchaser from Buyer to acquire the Securities;
(viii) Buyer shall take all reasonable steps to
ensure its compliance with Regulation S and shall promptly
send to each purchaser who acts as a distributor, dealer or a
person receiving a selling concession, fee or other
remuneration in respect of any of the Securities, who
purchases prior to the expiration of the Restricted Period
referred to in subparagraph (v) above, a confirmation or other
notice to the purchaser stating that the purchaser is subject
to the same restrictions on offers and sales as Buyer pursuant
to Section (c)(2)(iv) of Rule 901 of Regulation S;
(ix) Buyer has not conducted or permitted and shall
not conduct or permit on its behalf any "directed selling
efforts" as that term is defined in Rule 902(b) of Regulation
S; nor has Buyer conducted any general solicitation relating
to the offer and sale of any of the Securities in the United
States or elsewhere;
(x) Buyer has the full right, power and authority to
enter into this Agreement and to consummate the transaction
contemplated herein. This Agreement has been duly authorized,
validly executed and delivered on behalf of Buyer and is a
valid and binding agreement in accordance with its terms,
subject to general principles of equity and to bankruptcy or
other laws affecting the enforcement of creditors' rights
generally;
(xi) The execution and delivery of this Agreement and
the consummation of the purchase of the Securities, and the
transactions contemplated by this Agreement do not and will
not conflict with or result in a breach by Buyer of any of the
terms of provisions of, or constitute a
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default under, the articles of incorporation or by-laws (or
similar constitutive documents) of Buyer or any indenture,
mortgage, deed of trust, or other material agreement or
instrument to which Buyer is a party or by which it or any of
its properties or assets are bound, or any existing applicable
law, rule or regulation of the United States or any State
thereof or any applicable decree, judgment or order of any
Federal or State court, Federal or State regulatory body,
administrative agency or other United States governmental body
having jurisdiction over Buyer or any of its properties or
assets;
(xii) All invitation, offers and sales of or in
respect of, any of the Securities, by Buyer and any
distribution by Buyer of any documents relating to any offer
by it of any of the Securities will be in compliance with
applicable laws and regulations and will be made in such a
manner that no prospectus need be filed and no other filing
need be made by Seller with any regulatory authority or stock
exchange in any country or any political sub-division of any
country;
(xiii) Buyer will not make any offer or sale of the
Securities by any means which would not comply with the laws
and regulations of the territory in which such offer or sale
takes place or to which such offer or sale is subject or which
would in connection with any such offer or sale impose upon
Seller any obligation to satisfy any public filing or
registration requirement or provide or publish any information
of any kind whatsoever or otherwise undertake or become
obligated to do any act; and
(xiv) Neither the Buyer nor any of its affiliates has
entered, has the intention of entering, or will during the
Restricted Period enter into any put option, short position or
other similar instrument or position with respect to any of
the Securities or securities of the same class as the
Securities.
(xv) The Buyer (or others for whom it is contracting
hereunder) has been advised to consult its own legal and tax
advisors with respect to applicable resale restrictions and
applicable tax considerations and it (or others for whom it is
contracting hereunder) is solely responsible (and the Company
is not in any way responsible) for compliance with applicable
resale restrictions and applicable tax legislation.
(xvi) NO GOVERNMENT RECOMMENDATION OR APPROVAL. Buyer
understands that no Federal or State or foreign government
agency has passed on or made any recommendation or endorsement
of the Securities.
(xvii) CURRENT PUBLIC INFORMATION. Buyer acknowledges
that it and its advisors, if any, have been furnished with all
materials relating to the business, finances and operations of
Seller and all materials relating to the
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offer and sale of the Securities which have been requested by
Buyer, all of which contain a legend as required under Section
10 hereof. Buyer further acknowledges that it and its
advisors, if any, have received complete and satisfactory
answers to such inquiries.
(xviii) BUYER'S SOPHISTICATION. Buyer acknowledges
that the purchase of the Securities involves a high degree of
risk, including the total loss of Buyer's investment. Buyer
has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks
of purchasing the Securities. Buyer understands that the
Securities are not being registered under the 1933 Act, and
therefore Buyer must bear the economic risk of this investment
for an indefinite period of time.
(xix) TAX STATUS. Buyer is not a "10-percent
Shareholder" (as defined in Section 871(h)(3)(B) of the U.S.
Internal Revenue Code) of Seller.
3. Seller Representations and Covenants.
(a) REPORTING COMPANY STATUS. Seller is a "Reporting Issuer"
as defined by Rule 902 of Regulation S. Seller has registered its common stock,
$.08 par value per share (the "Common Stock"), pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Common
Stock is listed and trades on NASDAQ NMS. Seller has filed all material required
to be filed pursuant to all reporting obligations under either Section 13(a) or
15(d) of the Exchange Act for a period of at least twelve (12) months
immediately preceding the offer or sale of the Securities (or for such shorter
period that Seller has been required to file such material).
(b) CURRENT PUBLIC INFORMATION. Seller has furnished Buyer
with copies of its most recent reports, as amended, filed under the Exchange Act
referred to in Section 2(xvii) above, and other publicly available documents
requested by Buyer.
(c) OFFSHORE TRANSACTION. Seller has not offered any of the
Securities to any person in the United States, any identifiable groups of U.S.
citizens abroad, or to any U.S. Person, as such terms are used in Regulation S.
(i) At the time the buy order was originated, Seller
and/or its agents reasonably believe the Buyer was outside of
the United States and was not a U.S. person, based on the
representations of Buyer.
(ii) Seller and/or its agents reasonably believe that
the transaction has not been pre-arranged with a buyer in the
United States, based on the representations of Buyer.
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(iii) No offer to buy or sell the Securities was or
will be made by Seller to any person in the United States.
(iv) The sale of the Securities by Seller pursuant to
this Agreement will be made in accordance with the provisions
and requirements of Regulation S provided that the
representations and warranties of Buyer in Section 2 hereof
are true and correct.
(v) The transactions contemplated by this Agreement
(a) have not been and will not be pre-arranged by Seller with
a purchaser located in the United States or a purchaser which
is a U.S. Person, and (b) are not and will not be part of a
plan or scheme by Seller to evade the registration provisions
of the 1933 Act.
(d) NO DIRECTED SELLING EFFORTS. In regard to this
transaction, Seller has not conducted any "directed selling efforts" as that
term is defined in Rule 902 of Regulation S nor has Seller conducted any general
solicitation relating to the offer and sale of any of the Securities in the
United States or elsewhere.
(e) CONCERNING THE SECURITIES. The issuance, sale and delivery
of the Debentures have been duly authorized by all required corporate action on
the part of Seller, and when issued, sold and delivered in accordance with the
terms hereof and thereof for the consideration expressed herein and therein,
will be duly and validly issued, fully paid and non-assessable. The Common Stock
issuable upon conversion of the Debenture has been duly and validly reserved for
issuance and, upon issuance in accordance with the terms of the Debentures,
shall be duly and validly issued, fully paid, and non-assessable and will not
subject the holders thereof, if such persons are non-U.S. persons, to personal
liability by reason of being such holders. There are no pre-emptive rights of
any shareholder of Seller.
(f) SUBSCRIPTION AGREEMENT. This Agreement has been duly
authorized, validly executed and delivered on behalf of Seller and is a valid
and binding agreement in accordance with its terms, subject to general
principles of equity and to bankruptcy or other laws affecting the enforcement
of creditors' rights generally.
(g) NON-CONTRAVENTION. The execution and delivery of this
Agreement and the consummation of the issuance of the Securities and the
transactions contemplated by this Agreement do not and will not conflict with or
result in a breach by Seller of any of the terms or provisions of, or constitute
a default under, the articles of incorporation or by-laws of Seller, or any
indenture, mortgage, deed of trust, or other material agreement or instrument to
which Seller is a party or by which it or any of its properties or assets are
bound, or any existing applicable law, rule or regulation of the United States
or any State thereof or any applicable decree, judgment or order of any Federal
or State court, Federal or State regulatory body, administrative agency or other
United States governmental body
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having jurisdiction over Seller or any of its properties or assets.
(h) APPROVALS. Seller is not aware of any authorization,
approval or consent of any U.S. governmental body which is legally required for
the issuance and sale of the Debentures and the Common Stock issuable upon
conversion thereof to persons who are non-U.S. Persons, as contemplated by this
Agreement. Seller is relying entirely upon Buyer and Distributor with respect to
foreign consents and approvals.
4. Exemption; Reliance on Representations. Buyer understands that the
offer and sale of the Securities are not being registered under the 1933 Act.
Seller and Buyer are relying on the rules governing offers and sales made
outside the United States pursuant to Regulation S.
5. Transfer Agent Instructions.
(a) DEBENTURES. Upon the conversion of the Debentures, the
holder thereof shall submit such Debenture together with a notice of conversion
to the Seller, and Seller shall instruct Seller's transfer agent to issue one or
more Certificates representing that number of shares of Common Stock into which
the Debenture or Debentures are convertible in accordance with the provisions
regarding conversion set forth in Exhibit A hereto. The Seller shall act as
Debenture Registrar and shall maintain an appropriate ledger containing the
necessary information with respect to each Debenture.
(b) COMMON STOCK TO BE ISSUED WITHOUT RESTRICTIVE LEGEND. Upon
the conversion of any Debenture up to the total of the "Initial Conversion
Amount" (as defined in the Debenture) and 40 days after the issuance of any
"Additional Conversion Amount" (as defined in the Debenture) by a person who is
a non-U.S. Person, Seller shall instruct Seller's transfer agent to issue Stock
Certificates up to the total of the "Initial Conversion Amount" (as defined in
the Debenture) and 40 days after the "Additional Conversion Amount" (as defined
in the Debenture) without restrictive legend in the name of Buyer upon receipt
of an opinion of Buyer's Counsel to remove such legend (or its nominee (being a
non-U.S. Person) or such non-U.S. Persons as may be designated by Buyer prior to
the closing) and in such denominations to be specified at conversion
representing the number of shares of Common Stock issuable upon such conversion,
as applicable. Seller warrants that no instructions other than these
instructions and instructions to impose a "stop transfer" instruction with
respect to the certificates until the end of the respective Restricted Period of
the Initial Conversion Shares and Additional Conversion Shares, if any, have
been given or will be given to the transfer agent and that the Common Stock
shall otherwise be freely transferable on the books and records of Seller.
Nothing in this Section 5, however, shall affect in any way Buyer's or such
nominee's obligations and agreements to comply with all applicable securities
laws upon resale of the Securities.
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6. Registration. If upon conversion of Debentures effected by the Buyer
pursuant to the terms of this Agreement the Company fails to issue certificates
for shares of Common Stock issuable upon such conversion (the "Underlying
Shares") to the Buyer bearing no restrictive legend (after the applicable
Restrictive Period of the Initial Conversion Shares or Additional Conversion
Shares, if any) for any reason other than the Company's reasonable good faith
belief that the representations and warranties made by the Buyer in this
Agreement or the Notice of Conversion were untrue when made, or if the
restricted period under Regulation S is extended, or if Additional Conversion
Amount Shares are required to be issued, then the Company shall be required, at
the request of the Buyer and at the Company's expense, to effect the
registration of the Underlying Shares and/or Additional Conversion Shares
issuable upon conversion of the Debentures under the Act and relevant Blue Sky
laws as promptly as is practicable. The Company and the Buyer shall cooperate in
good faith in connection with the furnishing of information required for such
registration and the taking of such other actions as may be legally or
commercially necessary in order to effect such registration. The Company shall
file such a registration statement within 30 days of Buyer's demand therefor and
shall use its best efforts to cause such registration statement to become
effective as soon as practicable thereafter. Such best efforts shall include,
but not be limited to, promptly responding to all comments received from the
staff of the Securities and Exchange Commission, providing Buyer's counsel with
a contemporaneous copy of all written communications from and to the staff of
the Securities and Exchange Commission with respect to such registration
statement and promptly preparing and filing amendments to such registration
statement which are responsive to the comments received from the staff of the
Securities and Exchange Commission. Once declared effective by the Securities
and Exchange Commission, the Company shall cause to be delivered to the Buyer at
least ten copies of the Prospectus and shall cause such registration statement
to remain effective until the earlier of (i) the sale by the Buyer of all
Underlying Shares registered or (ii) nine months after the effective date of
such registration statement. In the event the Company undertakes to file a
Registration Statement on Form S-3 in connection with the Common Stock, upon the
effectiveness of such Registration, Buyer shall have the option to sell the
Common Stock pursuant thereto. The foregoing shall not in any way limit Buyer's
rights in connection with the Common Stock pursuant to Regulation S.
7. Delivery Instructions. The Debentures being purchased hereunder
shall be delivered to the Buyer at such time and place as shall be mutually
agreed by Seller and Buyer.
8. Conditions To Seller's Obligation To Sell. Seller's obligation to
sell the Debentures is conditioned upon:
(a) The receipt and acceptance by Seller of this Agreement as
executed by Buyer.
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(b) Delivery into the closing depository of good funds by
Buyer as payment in full of the purchase price of the Debentures.
(c) All of the representations and warranties of the
Subscriber contained in this Agreement shall be true and correct on the Payment
Date with the same force and effect as if made on and as of the Payment Date.
The Subscriber shall have performed or complied with all agreements and
satisfied all conditions on its part to be performed, complied with or satisfied
at or prior to the Payment Date.
(d) No order asserting that the transactions contemplated by
this Agreement are subject to the registration requirements of the Act shall
have been issued, and no proceedings for that purpose shall have been commenced
or shall be pending or, to the knowledge of the Company, be contemplated. No
stop order suspending the sale of the Debentures shall have been issued, and no
proceedings for that purpose shall have been commenced or shall be pending or,
to the knowledge of the Company, be contemplated.
(e) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency that would prevent the issuance of the Debentures. No
injunction, restraining order or order of any nature by a federal or state court
of competent jurisdiction shall have been issued that would prevent the issuance
of the Debentures.
9. Conditions To Buyer's Obligation To Purchase. Buyer's obligation to
purchase the Debentures is conditioned upon:
(a) The confirmation of receipt and acceptance by Seller of
this Agreement as evidenced by execution of this Agreement by the duly
authorized officer of Seller.
(b) Delivery of the Debentures to the Buyer or its designated
representative.
10. Offering Materials. All offering materials and documents used in
connection with offers and sales of the Securities prior to the expiration of
the Restricted Period referred to in Section 2(a)(v) hereof shall include
statements to the effect that the Securities have not been registered under the
1933 Act or applicable state securities laws, and that neither Buyer, nor any
direct or indirect purchaser of the Securities from Buyer, may directly or
indirectly offer or sell the Securities in the United States or to U.S. Persons
(other than distributors) unless the Securities are registered under the 1933
Act any applicable state securities laws, or any exemption from the registration
requirements of the 1933 Act or such state securities laws is available. Such
statements shall appear (1) on the cover of any prospectus or offering circular
used in connection with the offer
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<PAGE>
or sale of the Securities, (2) in the underwriting section of any prospectus or
offering circular used in connection with the offer or sale of the Securities,
and (3) in any advertisement made or issued by Seller, Buyer, any other
distributor, any of their respective affiliates, or any person acting on behalf
of any of the foregoing.
11. No Shareholder Approval. Seller hereby agrees that from the Closing
Date until the issuance of Common Stock upon the conversion of the Debentures,
Seller will not take any action which would require Seller to seek shareholder
approval of such issuance unless such shareholder approval is required by law or
regulatory body (including but not limited to the NASDAQ Stock Market, Inc.) as
a result of the issuance of the Securities hereunder.
12. Miscellaneous.
(a) Except as specifically referenced herein or in the
Distribution Agreement, this Agreement constitutes the entire contract between
the parties, and neither party shall be liable or bound to the other in any
manner by any warranties, representations or covenants except as specifically
set forth herein. Any previous agreement among the parties related to the
transactions described herein is superseded hereby. The terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties hereto. Nothing in this Agreement, express
or impled, is intended to confer upon any party, other than the parties hereto,
and their respective successors and assigns, any rights, remedies, obligations
or liabilities under or by reason of this Agreement, except as expressly
provided herein.
(b) Buyer is an independent contractor, and is not the agent
of Seller. Buyer is not authorized to bind Seller, or to make any
representations or warranties on behalf of Seller.
(c) Seller states that, other than what is set forth in the
Seller's most recent reports, as amended, filed under the Exchange Act, Seller
makes no further representations or warranty with respect to Seller, its
finances, assets, business prospects or otherwise. Buyer will advise each
purchaser, if any, and potential purchaser of the Securities, of the foregoing
sentence, and that such purchaser is relying on its own investigation with
respect to all such matters, and that such purchaser will be given access to any
and all documents and Seller personnel as it may reasonably request for such
investigation.
(d) All representations and warranties contained in this
Agreement by Seller and Buyer shall survive the closing of the transactions
contemplated by this Agreement.
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(e) This Agreement shall be construed in accordance with the
laws of New York applicable to contracts made and wholly to be performed within
the State of New York and shall be binding upon the successors and assigns of
each party hereto. Buyer hereby waives trial by jury and consents to exclusive
jurisdiction and venue in the State of New York. This Agreement may be executed
in counterparts, and the facsimile transmission of an executed counterpart to
this Agreement shall be effective as an original.
(f) Buyer agrees to indemnify and hold Seller harmless from
any and all claims, damages and liabilities arising from Buyer's breach of its
representations and/or covenants set forth herein.
AMOUNT SUBSCRIBED FOR
$______________________
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of
the date first set forth above.
Accepted this 7th day of January, 1997, as evidenced by the Parties'
authorized signatures below:
Official Signatory of Seller:
American International Petroleum Corp.
By:_________________________
Title: Vice President
----------------------
Official Signatory of Buyer:
____________________________
By:____________________________________
Title:_________________________________
Address of Buyer:
_________________________________
_________________________________
_________________________________
Fax No.:_________________________
Tel No.:_________________________
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EXHIBIT 4.3
OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT
THIS OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT is executed in reliance
upon the transaction exemption afforded by Regulation S ("Regulation S") as
promulgated by the Securities and Exchange Commission ("SEC"), under the
Securities Act of 1933, as amended ("1933 Act").
THIS AGREEMENT has been executed by the undersigned in connection with
the private placement of shares of Common Stock (hereinafter referred to as the
"Shares") of AMERICAN INTERNATIONAL PETROLEUM CORPORATION (hereinafter referred
to as "AIPN") located at 444 Madison Avenue, Suite 3203, New York, New York
10022: a corporation organized under the laws of Nevada, United States of
America (hereinafter referred to as "Seller" or "Company". the
undersigned,_____________________________ a corporation organized under the laws
of _____________________ jurisdiction (hereinafter referred to as "Purchaser"),
hereby represents and warrants to, and agrees with Seller as follows:
1. AGREEMENT TO SUBSCRIBE; PURCHASE PRICE
a. The undersigned hereby subscribes for ___________ Shares of Common
Stock of AIPN for an aggregate amount of $____________ (US).
b. Form of Payment. Purchaser shall pay the purchase price by
delivering immediately available funds in United States Dollars
__________________________________ _________________________________________ as
Escrow Agent, by delivery of securities versus payment.
2. ACCEPTANCE OF SUBSCRIPTION
a. This subscription may be accepted or rejected by the Company at its
sole discretion.
b. This subscription shall be deemed accepted only when this Agreement
is signed by the Company in the space provided on the signature page hereof.
c. If the Company receives subscriptions from multiple subscribers, it
has no obligation to accept subscriptions in the order received.
3. PURCHASER REPRESENTATIONS AND WARRANTIES
a. Offshore Transaction. Purchaser hereby represents and warrants to
Seller as of the date hereof and as of the Closing Date as follows:
<PAGE>
(i) If the Purchaser is a corporation, it is duly
organized, validly existing and in good standing
under the laws of the jurisdiction of its
incorporation, and if the Purchaser is a
partnership or other organization, it is duly
organized, validly existing and in good standing
under the laws of its jurisdiction of organization.
(ii) (a) If the Purchaser is a corporation, the
execution, delivery and performance of this
Agreement has been duly authorized by all necessary
corporate action, (b) if the Purchaser is a
partnership or other organization, the other
governing documents to enter into this agreement
and to consummate the transactions contemplated
hereby and all necessary consents and approvals
required by the partnership agreement or other
governing documents have been obtained, and (c)
this Agreement constitutes a legal, valid and
binding obligation of the Purchaser, enforceable
against the Purchaser in accordance with its terms,
except to the extent that enforceability may be
limited by applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws
affecting creditors' rights generally.
(iii) The Purchaser did not receive any offer to purchase
the Shares in the United States. This Agreement has
not been executed by the Purchaser in the United
States.
(iv) The Purchaser is not a "U.S. person," as defined by
Rule 902(o) of Regulation S (a "U.S. Person"),
promulgated under the Securities Act of 1933, as
amended (the "1933 Act") and as set forth in
Schedule A attached hereto, and is not acquiring
the Shares, directly or indirectly, for the account
or benefit of any U.S. Person.
(v) The Purchaser (a) has received a copy of the
Disclosure Documents (as hereinafter defined) and
has carefully reviewed and understands the
Disclosure Documents and this Agreement and (b)
understand that, except as set forth in the
Disclosure Documents and in this Agreement, no
representations or warranties have been made to the
Purchaser by the Company or by any distributor, or
by any of their officers, directors, employees,
agents or affiliates, and (c) agrees that, in
connections with the purchase of the Shares, it is
not relying upon any information concerning the
Company, other than (i) that contained in the
Disclosure documents and in this Agreement and (ii)
on the results of its own independent
investigations. The term "Disclosure Documents"
shall mean (a) the company's latest Annual report
to Shareholders on Form 10- K (without exhibits),
(b) the Company's Quarterly Reports on Form 10-Q
and Form 8-K thereafter, and (c) copies of the
Company's significant press releases issued after
said Annual Reports.
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(vi) The Purchaser understands that (a) no governmental
authority has passed upon the accuracy or
completeness of the Disclosure Documents or has
made any finding or determination concerning the
appropriateness or suitability of an investment in
the Shares and (b) no governmental authority has
recommended or endorsed, or will recommend or
endorse, the investment in the Shares.
(vii) The Purchaser is not purchasing the Shares with a
view to the distribution thereof within the meaning
of the 1933 Act.
(vii) The Purchaser will not engage in any transaction or
series of transaction that, although in technical
compliance with Regulation S, is part of a plan or
scheme to evade the registration requirements of
the 1933 act with respect to the Shares.
(ix) All subsequent offers and sales of the Shares by
Purchaser shall be made in compliance with
Regulation S under the Securities Act, pursuant to
registration under the Securities Act or pursuant
to an exemption from such registration. In any
case, the Shares shall not be resold to U.S.
persons or within the United States during the
period of forty (40) days commencing on the date of
Closing or the purchase of the Shares.
(x) Purchaser understands that the Shares are being
offered and sold to it in reliance of specific
exemptions from the registration requirements of
Federal and State securities laws and that the
Seller is relying upon the truth and accuracy of
the representations, warranties, agreements
acknowledgements and understandings of Purchaser
set forth herein in order to determine the
applicability of such exemptions and the
suitability of Purchaser to acquire the Shares.
(xi) Purchaser agrees to indemnify and hold the Company,
the Distributor, their respective officers,
directors and shareholders or any other person who
may be deemed to control the Company or the
Distributor harmless from any loss, liability,
claim, damage or expense, arising out of the
inaccuracy of any of Purchaser's representations,
warranties or statements or the breach of any of
the agreements contained herein.
4. LIMITATION ON TRANSFER AND CERTAIN COVENANTS.
a. The Purchaser acknowledges that (i) the Shares have not been
registered under the 1933 Act in reliance on provisions of Rule 903 or Rule 904
of Regulation S, nor have the Shares been registered or qualified for sale under
the laws of any other jurisdiction (either within or outside of the United
States) and (ii) the Company has no obligations hereunder or any current
intention to effect any such registration or qualification.
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<PAGE>
b. The Purchaser covenants and agrees that is will not sell the Shares
to a U.S. Person, or for the account or benefit of a U.S. Person, prior to the
expiration of a period of 40 days following the Closing date ("Restricted
Period").
c. The Purchaser acknowledges that the certificates evidencing the
Shares will bear the following legend:
"These shares have been issued pursuant to Regulation S as an exemption
to the registration provisions under the Securities Act of 1933, as
amended. These shares cannot be transferred, offered or sold in the
U.S. or to U.S. person (as defined in Regulation S) until after
_________, 1997 (Forty-one days after issuance)."
The Company covenants and agrees that following expiration of the
Restricted Period it will advise the transfer agent for the Common Stock, upon
the request of a recordholder of the Shares, that the foregoing legend can be
removed from the certificate for the Shares.
d. The Purchaser represents and warrants to the Company that, as of the
date hereof and as of the closing Date, neither it nor any of its affiliates
has, and covenants that during the restricted Period neither it nor any of its
affiliates will establish or maintain, any short position (including any short
call position or any long put position) with respect to the common Stock of the
Company, and that no such person or entity is a party to, nor shall it enter
into during the Restricted Period, any contract or arrangement having the effect
of eliminating or substantially diminishing the risk of ownership of the Shares.
5. REPRESENTATIONS AND WARRANTIES OF THE SELLER.
The Seller represents and warrants to the Purchaser, as of the date
hereof and as of the Closing Date, that:
a. The Company is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation.
b. The execution, delivery and performance of this Agreement has been
duly authorized by all necessary corporate action and this Agreement
constitutes a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except to the extent
that enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting
creditors' right generally.
c. The execution, delivery and performance of this Agreement does and
will not (i) violate any provision of the Company's Certificate of
Incorporation or By-laws, (ii) violate or breach any material contract
or agreement to which the Company is a party, (iii) result in the
creation of any lien, security interest, charge or encumbrance on any
property or
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<PAGE>
assets of the Company, or (iv) require the authorization, consent or
approval of any court or any administrative or governmental body
pursuant to any law, statute, rule or regulation to which the Company
is subject to any order, judgment or decree by which the Company is
bound.
d. When issued in accordance with the terms of this Agreement, the
Shares:
(i) except for the Regulation S legend provided in this
Agreement, will be free and clear of any restrictions, liens,
claims or other encumbrances by the Company (other than those
that may arise by reason of any action or inaction of the
Purchaser);
(ii) will be duly authorized, validly issued, fully paid an
nonassessable;
(iii) will not have been issued or sold in violation of any
preemptive or other similar rights of the holders of any
securities of the Company; and
(iv) will not subject the holders thereof to personal
liability to the Company solely by reason of their ownership
of such Shares.
e. The Company is a "Reporting Issuer" as defined by Rule 901(1) of
Regulation S. The Company is in full compliance, to the extent
applicable, with all reporting obligations under either Section 12(b),
12(g) or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). The Common Stock trades on NASDAQ National Market
System and its trading symbol is "AIPN"".
f. Seller has not offered the securities which are the subject of this
transaction to any person in the United States, any identifiable groups
of U.S. citizens abroad, or to any U.S. person as that term is defined
in Regulation S.
g. At the time the buy order was originated, Seller and/or its agents
reasonably believed Purchaser was outside of the United States and was
not a U.S. person.
h. Seller and/or its agents reasonably believe that the transaction has
not been pre- arranged with a buyer in the United States.
i. In regard to this transaction, Seller has not conducted any "direct
selling efforts" as that term is defined in Rule 902 of regulation S
nor has Seller conducted any general solicitation relating to the offer
and sale of the securities which are the subject of this transaction to
person resident within the United States or elsewhere.
Each of the foregoing representations and warranties shall survive the
Closing.
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6. REMEDIES.
In the event of a breach by the Purchaser of any of the
representations, warranties or covenants contained in this Agreement, and
without limitation of any other remedy available to the Company at law or in
equity, the Company shall have the right and the option to rescind the sale of
the Shares to the Purchaser. In such case, the amount payable to the Purchaser
upon rescission will be the aggregate Purchase Price, less all expenses, costs
and damages incurred by the Company, and whereupon the Company shall have no
further liability or obligation to the Purchaser under this agreement or
otherwise.
7. ASSIGNABILITY.
Neither this Agreement, nor the rights or obligations of either party
hereunder, may be transferred or assigned without the prior written consent of
the other party (which may be withheld for any reason in the sole discretion of
the party required to provide such consent) and any purported transfer or
assignment not so consented to shall be void. This Agreement shall be binding on
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
8. ENTIRE AGREEMENTS.
This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter of hereof, and there are no
representations, warranties, covenants or other agreements of either party
except as stated herein.
9. AMENDMENTS.
No provision of this Agreement shall be waived, discharged or amended,
except by an instrument in writing signed by the party against whom any such
waiver, modification, discharge or amendment is sought.
10. WAIVERS.
No waiver by either party of any default with respect to any provision,
condition or requirements of this Agreement shall be deemed to be a waiver of
any future default with respect to the same provision, condition or requirement,
or a waiver of any other provision, condition or requirement hereof. No delay or
omission of either party to exercise any right hereunder shall in any manner
impair the exercise of such right at any future time.
11. APPLICABLE LAW.
This Agreement shall be construed in accordance with and governed by
the laws of the State of New York without regard to the conflicts of laws
principles thereof.
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12. SEVERABILITY.
Each provision of this Agreement shall be considered severable and if
for any reason any provision which is not essential to the effectuation of the
basic purposes of this Agreement is determined by a court of competent
jurisdiction to be invalid or unenforceable, or contrary to existing or future
applicable law, such invalidity shall not impair the operation of or affect
those provisions of this Agreement which are valid. In such case, this Agreement
shall be construed so as to limit any term or provision so as to make it
enforceable or valid within the requirements of any applicable law, and in the
event such term or provision cannot be so limited, this Agreement shall be
construed to omit such invalid or unenforceable provision.
13. FAX SIGNATURES AND COUNTERPARTS.
This Agreement may be executed in any number of counterparts, including
counterparts transmitted by telecopier or FAX, any one of which shall constitute
an original of this Agreement. When counterparts of facsimile copies have been
executed by all parties, they shall have the same effect as the signature to
each counterpart or copy were upon the same documents and copies of such
documents shall be deemed valid as originals. The parties agree that all such
signatures amy be transferred to a single document upon the request of any
party.
14. NOTICES
Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be effective (a) upon hand delivery or
delivery by telecopy or facsimile at the address or number designated below (if
delivery on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be:
If to the Company: American International Petroleum Corporation
444 Madison Avenue, Suite 3203
New York, NY 10022
If to the Purchaser, as set forth on the signature page hereof.
Either party hereto may from time to time change its address for
notices under this Section 15 by giving at least 10 days written notice of such
changed address to the other party hereto.
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15. HEADINGS.
The headings herein are for convenience of reference only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
the interpretation of any of the provisions hereof.
16. NO THIRD PARTY BENEFICIARIES.
This Agreement is intended for the benefit of the parties hereto and
their respective successors and permitted assigns, and is not for the benefit
of, nor may any provisions hereof be enforced by, any other person.
17. FEES AND EXPENSES.
Each party shall pay for the fees and expenses of its own advisers,
counsel, accountants and other experts, if any, and all other expenses incurred
by such party incident to the negotiation, preparation, execution and delivery
and performance of this Agreement.
18. CONSENT TO JURISDICTION.
Each of the Company and the Purchaser (i) hereby irrevocably submits to
the nonexclusive jurisdiction of the United States District Court for the
Southern District of New York of any New York State Court sitting in New York
City for the purposes of any suit, action or proceeding rising out of or
relating to this Agreement and (ii) hereby waives, and agrees not to assert in
any such suit, action or proceeding, any claim that it is brought in an
inconvenient forum or that the venue of the suit, action or proceeding is
improper. Each of the Company and the Purchaser consents to process being served
in any such suit, action or proceeding by mailing a copy thereof to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing in the paragraph shall affect or limit any right to serve
process in any other manner permitted by law.
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IN WITNESS WHEREOF, the undersigned has caused this Offshore Securities
Subscription Agreement to be executed by a duly authorized officer:
________________________________________
Name of Purchaser (Please Print or Type)
By:_____________________________
NAME:
TITLE
Date:___________________
________________________
________________________
________________________
Business Address
________________________ ____________________
Telephone Number Facsimile Number
ACCEPTED:
AMERICAN INTERNATIONAL PETROLEUM CORPORATION
By:____________________________________
NAME:
TITLE:
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SCHEDULE A
CATEGORIES OF U.S. PERSONS
1.) Any natural person resident in the United States;
2.) Any partnership or corporation organized or incorporated under the
laws of the United States;
3.) Any estate of which any executor or administrator is a U.S. person;
4.) Any trust of which any trustee is a U.S. person;
5.) Any agency or branch of a foreign entity located in the U.S.;
6.) Any non-discretionary account or similar account (other than estate
or trust) held by a dealer or other fiduciary for the benefit or
account of a U.S. person;
7.) Any partnership or corporation if; (A) organized or incorporated
under the laws of any foreign jurisdiction; and (B) formed by a
U.S. person principally for the purpose of investment in securities
not registered under the Act, unless it is organized or
incorporated, and owned, by accredited investors (as defined in
Rule 501[a]) who are not natural persons, estates or trusts.
8.) Any employee benefit plan established and administered in
accordance with the law of a country other than the United States
and customary practices and documentation of such country shall not
be deemed a U.S. person.
9.) Any agency or branch of a U.S. person located outside the United
States shall not be deemed a "U.S. person" if:
the agency or branch operates for valid business
reasons; and the agency or branch is engaged in
the business of insurance or banking and is
subject to substantive insurance or banking
regulation, respectively, in the jurisdiction
where located.
10.) The International Monetary Fund, the International Bank for
Reconstruction and Development, the Inter-American Development
Bank, the Asian Development Bank, the African Development Bank, the
United States, and their agencies, affiliates and pension plans,
and any other similar international organizations, their agencies,
affiliates and pension plans shall not be deemed "U.S. person."
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