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 28, 1997
AMERICAN INTERNATIONAL PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)
Nevada No. 0-14905 13-3130236
(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
(Address of principal executive offices) (Zip Code)
(212) 688-3333
(Registrant's telephone number, including area code)
(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 Regulation S Subscription Agreement for Common
Stock.
4.2 Form of 7% Convertible Debenture due February 1, 1999 (the
"Debentures").
4.3 Form of Subscription Agreement used in connection with the
offering of the Debentures, the form of which is attached
hereto as Exhibit 4.2.
4.4 Form of Convertible Debenture Escrow Agreement used in
connection with the offering of the Debentures, the form of
which is attached hereto as Exhibit 4.2.
4.5 Form of Regulation S Subscription Agreement used in connection
with the issuance of Registrant's common stock in exchange for
certain consulting services and prospect fees, respectively.
Item 9. Sales of Equity Securities Pursuant to Regulation S
(a)
(i) On January 28, 1997 the Registrant sold 1,000,000 shares (the
"Reg S Shares") of its common stock for gross proceeds of
$295,000.
(ii) On January 30, 1997, the registrant sold 7% Convertible
Debentures Due February 1, 1999. The total principal amount of
the Debenture was $2,000,000.
(iii) During January 1997, in lieu of cash payments, the Registrant
issued 300,000 shares (the "Exchange Shares") of its common
stock in exchange for a prospect fee and 5,000 shares of its
common stock in exchange for certain consulting services.
(b) Non-U.S. Persons only were permitted to purchase the Debentures and
Common Stock. The placement agent for the Debentures was LKB
Financials. The Reg S Shares and the Exchange Shares were placed
directly by the Registrant.
(c) The Registrant received net proceeds of $1,345,000 from sale of the
Debentures, and $296,000 from the sale of Common Stock. It also
received an aggregate of $153,000 worth of benefits and services in
lieu of cash in return for the issuance of 305,000 shares of its common
stock.
(d) The Offerings were made pursuant to a safe harbor from registration
under Regulation S to Non-U.S. Persons only.
(e) The Company has an agreement with the Holder of the Debentures whereby
the Company may redeem all or a portion of the
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Debentures prior to conversion. The Holder of the Debentures may
convert 50% of the principal amount of the Debentures after March 17,
1997 and the remainder 35 days later at a conversion price of the lower
of $0.75/share, the average closing bid price of the Company's common
stock for the five NASDAQ trading days immediately preceding each
conversion. The Company may redeem at any time all or a portion of the
principal amount of the Debentures at 100% of their face value.
The buyer of the 1,000,000 shares on January 28, 1997 has verbally
granted a right of first refusal to the Company to buy these shares
after March 10, 1997, the termination date of the 40-day Regulation S
restricted period.
The Company recently announced that it had reached an Agreement in
Principle to sell its Colombian and Peruvian wholly-owned subsidiaries.
In the event this transaction is consummated, the Company expects to
use some of the proceeds from this sale to redeem all or a portion of
the Debentures and purchase all or a portion of the Reg S Shares.
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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: February 12, 1997
AMERICAN INTERNATIONAL
PETROLEUM CORPORATION
By:___________________________
Denis J. Fitzpatrick
Chief Financial Officer
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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: February 12, 1997
AMERICAN INTERNATIONAL
PETROLEUM CORPORATION
/s/ Denis J. Fitzpatrick
By: ___________________________
Denis J. Fitzpatrick
Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
4.1 Form of Regulation S Subscription Agreement for Common Stock.
4.2 Form of 7% Convertible Debenture due February 1, 1999 (the
"Debentures").
4.3 Form of Subscription Agreement used in connection with the
offering of the Debentures, the form of which is attached hereto
as Exhibit 4.2.
4.4 Form of Convertible Debenture Escrow Agreement used in
connection with the offering of the Debentures, the form of
which is attached hereto as Exhibit 4.2.
4.5 Form of Regulation S Subscription Agreement used in conection
with the issuance of Registrant's common stock in exchange for
certain consulting services and prospect fees, respectively.
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Exhibit 4.1
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:
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(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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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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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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Exhibit 4.2
2,000,000.00USD
AMERICAN INTERNATIONAL PETROLEUM CORPORATION
$2,000,000 7% CONVERTIBLE 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 US 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.
THIS DEBENTURE is one of a duly authorized issue of Debentures of American
International Petroleum Corporation, a corporation duly organized and existing
under the laws of the State of Nevada (the "Issuer") designated as its Seven
Percent (7%) convertible Debenture due February 1, 1999, in an aggregate face
amount not exceeding Two Million US Dollars (USD$2,000,000.00), issuable in
Twenty Five Thousand (USD$25,000.00) par value face amounts.
FOR VALUE RECEIVED, the ISSUER promised to pay
-------------------------------
the registered HOLDER hereof and its successors and assign (the "Holder"), the
principal sum of
Two Million, (USD$2,000,000.00)
on February 1, 1999 (the "Maturity Date"), and to pay interest on the principal
sum outstanding at the rate of Seven (7) percent per annum, on the basis of the
actual number of days elapsed in a three hundred sixty five (365) day year, due
and payable quarterly in arrears commencing on the Date of Closing, and
subsequently on June 1, September 1, December 1, and march 1, for the term of
the Debenture or until the Debenture is completely converted. Accrual of
interest shall commence on the first day following the date hereof and shall
continue until payment in full of the principal sum hereof has been made or duly
provided for. The interest so payable will be paid, at the sole option of the
Issuer, in Cash or Common Stock of the ISSUER to the person in whose name this
debenture (or one or more predecessor Debentures) is registered on the records
of the ISSUER regarding registration and transfer of the Debenture (the
"Debenture Register"), provided, however, that the ISSUER's obligation to a
transferee of this Debenture arises only if such transfer, sale or other
disposition is made in accordance with terms and conditions of the Offshore
Subscription Agreement executed by the ISSUER and HOLDER (the "Offshore
Debentures Securities Subscription Agreement")in connection with this Debenture.
The principal of this Debenture is payable in such coin or currency of the
United State 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 ISSUER as designated in writing by the HOLDER hereof from time
to time. The ISSUER will pay the principal of and all accrued and unpaid
interest due upon this Debenture on the Maturity Date subject to the conversion
rights set forth herein, less any amounts required by law to be deducted or
withheld on account of, income or other similar taxes to the HOLDER at the last
address on the Debenture Register. The forwarding of such check shall, subject
to collection, constitute a payment of principal hereunder and shall satisfy and
discharge the liability for principal on this Debenture to the extent of the sum
represented by such check plus any amounts so deducted.
The Debenture is subject to the following additional provisions:
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1. The Debenture is issuable in minimum denominations of Twenty Five
Thousand ($25,000)US Dollars and in integral multiples thereof. The Debenture is
exchangeable for like Debentures in equal aggregate principal amount of
different authorized denominations, as registration or transfer or exchange.
2. The ISSUER 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 laws at the time of such payments.
3. This Debenture has been issued subject to investment representations
of the original HOLDER hereof and may be transferred or exchanged in the US only
in compliance with the Securities Act of 1933, as amended (the "Act") including
the rules and regulations promulgated thereunder) and applicable state
securities laws. Prior tot he due presentment for such transfer of this
Debenture, the ISSUER and any agent of the ISSUER may treat the person in whose
name this Debenture is duly registered on the ISSUER's Debenture Register as the
owner hereof for the purpose of receiving payment as herein provided and all
other purposes, whether or not this Debenture is overdue, and neither the ISSUER
nor any such agent shall be affected by notice to the contrary. The transferee
shall be bound, as the original HOLDER, by the same representations and terms
described herein and under the Offshore Debenture Securities Agreement.
4. The HOLDER of this Debenture is entitled, at its option, at any time
commencing from and after Forty Five (45) days after the closing date the "First
conversion Date"), as specified in the accompanying closing Certificate prepared
by the Escrow Agent, to convert up to Fifty percent (50%), of the original
principal amount of this Debenture into shares of common stock, $.08 par value,
of the ISSUER (the "Common stock") at a conversion price for each share of
Common Stock equal to One Hundred percent (100%) of the Market Price (as defined
below) of the Common Stock. Thereafter, the HOLDER of this Debenture is
entitled, at its option, at any time commencing from and after Thirty (30) days
after the first Conversion Date, to convert the remaining Fifty percent (50%),
of the original principal amount of this Debenture into shares of Common Stock,
$.08 par value, of the ISSUER (the "common Stock") at a conversion price for
each share of Common Stock equal to One Hundred percent (100% of the market
Price (as defined below) of the common Stock. For purposes of this Section 4,
the "Market Price" shall be the lesser of the average closing bide price of the
common stock of the ISSUER for the Five (5) NASDAQ trading Days immediately
preceding the applicable Conversion Date (as hereafter defined), as reported by
the National Association of Securities Dealers Automated Quotation System
(NASDAQ) (the "Floating Conversions Price"), or Seventy Five Cents (USD $0.75)
(the "Fixed Conversion Price"). Such conversion shall be effected by
surrendering the Debentures to be converted (with a copy of facsimile or
courier), the company, with the form of conversion notice attached hereto as
Exhibit 1 and incorporated herein by reference, executed by the HOLDER of this
Debenture or a specified portion (as provided) hereof, and accompanied, if
required by the ISSUER, by proper assignment hereof in blank. Accrued but unpaid
interest shall, at the sole option of the ISSUER, be subject to conversion under
the same terms and conditions as the principal amount of this Debenture at the
time of conversion of this Debenture or any portion thereof. No fractional
shares or script representing fractions of shares will be issued on conversion,
but the number of shares issuable shall be rounded up the nearest whole share.
For purposes of this Debenture, the "Conversion Date" on which notice of
conversion is given by the HOLDER shall be deemed to be the close of business
(5:00p.m.EST) on the date on which the HOLDER has telecopied its Notice of
Conversion, together with this Debenture, subject to the Conversion Dates
aforesaid and, with the conversion notice duly executed, to the Escrow Agent.
The ISSUER, at its sole option, may redeem any or all of the outstanding
Debentures that remain unconverted after at any time from the date of issuance
hereof at the aforesaid One Hundred (100) percent of the Face Amount of the
Debenture, provided that no event of default by the ISSUER has occurred or is
continuing. Notwithstanding the foregoing, the conversion right of the HOLDER
set forth herein shall be limited such that in no instance shall the maximum
number of shares of Common stock into which the HOLDER
2
<PAGE>
may convert this debenture exceed, at any one time, an amount equal to the
remainder of (I)4.99% of the then issued and outstanding shares of Common Stock
of the ISSUER following such conversion, minus (ii) the number of shares of the
ISSUER then held by the HOLDER.
5. If, prior to the conversion of all the Debentures, the number of
outstanding shares of Common Stock is increased by a stock split, stock dividend
or other similar event, the Fixed conversion Price shall be appropriately
reduced. If, prior the conversion of all the Debentures, the number of
outstanding shares of Common stock is decreased by a combination or
reclassification of shares, or other similar event, the Fixed Conversion Price
shall be appropriately increased.
6. If, prior to the conversion of all the Debentures at a time when the
conversion would be at a Floating Conversion Price, there is a stock split,
stock dividend, or other similar event which occurs during the five-day period
used in computing the conversion Price, then the Closing Bid Price shall be
adjusted appropriately to reflect such stock split, stock dividend or other
similar event.
7. If, prior to the conversion of all the Debentures the company fixes
a record date for the issuance of rights or warrants to all or substantially all
of the Common share Holders entitling them to subscribe for or purchase shares
of Common stock or Securities convertible into Common Stock at a price per
share, or having a conversion price per share, less than the market price of the
Common stock (calculated by taking the average closing bid price of the common
stock on the NASDAQ market, or on such market as the common stock then trades,
for the five (5) trading days immediately preceding the record date),then the
Fixed Conversion Price shall be appropriately and proportionately reduced.
8. If, prior the conversion of all the Debentures, there shall be a
merger, consolidation, exchange of shares, recapitalization, reorganization or
other similar event, as a result of which shares of common Stock of the ISSUER
shall be changed into the same or a different number of shares of the same or
another class or classes of stock or securities of the ISSUER or another entity,
the HOLDERS of the Debentures shall thereafter have the right to purchase and
receive upon conversion of the Debentures, upon the basis and upon the terms and
conditions specified herein and in lieu of Common stock immediately theretofore
issuable upon conversion, such shares of stock and/or securities as may be
issued or payable with respect to or in exchange for the number of shares of
Common stock immediately theretofore purchasable and receivable upon the
conversion of Debentures held by such HOLDERS had such merger, consolidation,
exchange of shares, recapitalization, reorganization or other similar event had
not taken place, and in any such case appropriate provisions shall be made with
respect to the rights and interest of the HOLDER of the Debentures to the end
that the provisions hereof (including, without limitation, provisions for
adjustment of the Fixed Conversion Price or the Floating Conversion Price and of
the number of shares issuable upon the conversion of the Debentures) shall
thereafter be applicable, as nearly as may be practicable in relation to any
shares of stock or securities thereafter deliverable upon the exercise hereof.
The ISSUER shall not effect any transaction described in this section unless the
resulting successor or acquiring entity (if the ISSUER) assumes by written
instrument the obligation to deliver to the HOLDERS of the Debentures such
shares of stock and/or securities as, in accordance with the foregoing
provisions, the HOLDERS of the Debentures may be entitled to purchase.
9. No adjustment need be made if it would result in a change of less
than One(1) percent of the conversion Price (whether Fixed or Floating
Conversion Price). Any adjustments required to be made shall be rounded up to
the nearest whole number of shares of Common Stock.
10. No provision of this Debenture shall alter or impair the obligation
of the ISSUER, which is absolute and unconditional, to pay the principal of, and
interest on, this Debenture at the place, time, and rate, and in the coin
3
<PAGE>
currency, herein prescribed.
11. The ISSUER 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.
12. The ISSUER agrees to pay all costs and expenses, including
reasonable attorneys' fees, which may be incurred by the HOLDER in collection
any amount due as a result of default by the ISSUER or exercising the conversion
rights under this Debenture.
13. If one or more of the following described "Events of Default"
shall occur.
a) The ISSUER shall default in the payment of principal
or interest on this Debenture when due; or
b) Any of the representations or warranties made by the
ISSUER herein, or in the Subscription Agreement shall have been incorrect in any
material respect when made; or
c) The ISSUER shall perform or observe any other covenant,
term, provision, condition, agreement or obligation of the ISSUER hereunder or
under this Subscription Agreement or Debenture and such failure shall continued
uncured for a period of seven (7) days after notice from the HOLDER of such
failure; or
(d) A trustee, liquidator or receiver shall be appointed for
the ISSUER 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
e) 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 ISSUER and shall not be dismissed within thirty (30) calendar days
thereafter; or
f) 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 ISSUER, and if
instituted against the ISSUER shall not have been dismissed within thirty(30)
calendar days.
g) The ISSUERS Common Stock is delisted from the exchange or
over- the-counter markets; or
h) The ISSUER shall default on any other unsecured debt
and such default is not cured within thirty (30) days.
Then, or 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 int he HOLDER's sole discretion, the
HOLDER may consider this Debenture immediately due and payable, without
presentment, demand protest or notice of any kind, 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.
14. This Debenture represents a general unsecured obligation of the
4
<PAGE>
ISSUER. 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 Issuer or any successor corporation,
whether by virtue of any constitution, statue 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.
15. 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 Issuer secured by a lien, mortgage, pledge or other
encumbrance against real or personal property (including common stock of the
Issuer or any of its subsidiaries) of the Issuer; (iii) any modifications,
renewals, extensions or refunding of the foregoing, except for any of such
obligations of the Issuer the payment of which is made expressly subordinate and
junior to this Debenture; (iv) indebtedness under the MG Trade Finance Corp.
("MGTF") loan agreement (the "Loan Agreement") or any indebtedness incurred to
refinance such obligations; (v) other indebtedness of the Issuer existing on the
date of this Debenture; and (vi) trade payables incurred in the ordinary course
of the Issuer or its subsidiaries.
16. If changes or modifications to the rules governing the transaction
restriction period and/or the exemptions for resales of the securities under
Regulation S are enacted during the period when any amounts due under this
Debenture remain outstanding, or at any time that the HOLDER owns any shares of
Common stock issued upon conversion of this Debenture, then the ISSUER
undertakes to file a Registration Statement to register the shares of Common
stock that have been or that are to be issued upon conversion with the United
States Securities Exchange Commission within Thirty (30) New York Stock Exchange
Trading Days of receipt of such demand. If such Registration Statement is not
effective within one hundred twenty (120) Calendar days of such demand, then the
interest rate payable on any outstanding principal and interest due under this
Debenture shall be increased by four (4) per cent per annum effective from sixty
(60) days from the date of the demand, payable in cash, quarterly.
17. 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.
18. This Debenture and the agreements referred to in this Debenture
constitute the full and entire understanding and agreement between the ISSUER
and the HOLDER with respect hereof. Neither this Debenture nor any terms hereof
may be amended, waived, discharged or terminated other than by a written
instrument signed by the ISSUER and the HOLDER.
19. If, upon conversion of the Debenture effected by the Holder
pursuant to the terms of this Subscription Agreement and Debenture, the ISSUER
fails to issue the certificate for the shares of Common Shares issuable upon
such conversion (the "Underlying Shares") the Holder bearing no restrictive
legend for any reason other than the ISSUER's good faith belief that the
representations and warranties made by the HOLDER in the Subscription Agreement
were untrue when made, then the ISSUER shall be required, at the request of the
HOLDER and at the ISSUER"s expense, to effect the registration of the Common
Stock issuable upon conversion of this Debenture under the Act and relevant Blue
Sky laws as provided
5
<PAGE>
below. The ISSUER and HOLDER shall cooperate in good faith in connection with
the furnishing of the information required in order to effect the registration.
The ISSUER shall file a registration within Thirty (30) days of the HOLDER's
demand thereof and shall use its best efforts to cause such registration
statement to become effective within Ninety (90) days of the date of the initial
filing thereof. Such best efforts shall include but not b e limited to, promptly
responding to all comments received from the staff of the Securities and
Exchange Commission, providing the HOLDER's counsel with a contemporaneous copy
of all written communications for 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 ISSUER shall cause such registration statement to remain effect
until the earlier of (i) the sale of all of the shares of Common stock issuable
upon conversion of this Debenture by the HOLDER, or (ii) One Hundred (120) days
after the effective date of such registration. If such Registration Statement is
not effective within Ninety (90) Calendar days of such demand, then the ISSUER
agrees to increase the interest rate payable on any outstanding principal and
interest due under this Debenture shall be increased to Eighteen Percent (18%)
per annum retroactive to the date of the demand, payable in cash on in
accordance with the terms of this Debenture until the date the registration
statement becomes effective. Upon receipt of such a demand from any HOLDER, the
ISSUER will give notice to all HOLDERS of Debentures and an opportunity to
participate in the Registration Statement. The ISSUER shall not be required to
file more than one (1) registration statement with respect to the Debentures.
20. The Issuer hereby grants the Holder of this Debenture, Warrants to
purchase the underlying Common Stock of the Issuer in the amount of Thirty Five
(35) percent of the Face Amount of the Debenture. The Warrants shall expire in
Two (2) years from the date of closing. The exercise price of the Warrants shall
be equal to the average closing bid price of the Issuers Common Stock for the
Five (5) days preceding the Closing Date. The Warrants shall be Issued to the
Holder no later than the Fifth (5th) Business day following the Closing Date.
21. This Debenture shall be governed by and construed in accordance
with the laws of the State of Nevada.
IN WITNESS WHEREOF, the ISSUER has caused this instrument to be duly executed by
an officer thereunto duly authorized.
American International Petroleum Corporation
by:_______________________________________
Official Signatory of ISSUER
Name(Printed): Denis J. Fitzpatrick
Title: Vice President
Date: January 30, 1997
6
Exhibit 4.3
OFFSHORE DEBENTURE SECURITIES SUBSCRIPTION AGREEMENT
This Offshore Debenture 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 Seven(7) percent convertible Debentures of
AMERICAN INTERNATIONAL PETROLEUM CORPORATION
444 MADISON AVENUE, STE. 3203
NEW YORK, NY 10022
National Association of Securities Dealers Automated Quotation System Symbol
("AIPN") a corporation organized under the laws of Nevada, United States of
America (hereinafter referred to as the "ISSUER")
The undersigned
NAME:
ADDRESS:
a Corporation organized under the laws of United Arab Emirates a non USA
Jurisdiction (hereinafter referred to as the "HOLDER"), hereby represents and
warrants to, and agrees with ISSUER as follows:
1. Agreement to Subscribe; Purchase Price.
a. The undersigned hereby subscribes for and agrees to purchase
that number of the ISSUER'S 7% Convertible Debentures convertible
into shares of Common Stock; $.08 par value per share (the
"Shares") of the ISSUER, substantially in form of the Debenture
attached hereto as Form of Debenture (singly a "Debenture", and
collectively the "Debenture") at par value. (The Debentures and
the Shares into which they are convertible are collectively
referred to as the "Securities")
b. Form of Payment. HOLDER shall receive Two Million United States
Dollars (US $2,000,000.00) face amount of the Issuers Debentures
of the total consideration of One Million Five Hundred Thousand US
Dollars (US$1,500,000.00), payable by wire transfer in United
States Dollars on or before January 31, 1997 into the account as
follows:
First Union Special Account
Sutherland Asbill & Brennan
Atlanta, GA
ABA #061000227
Account #: 2080000365174
Include: Originators Name
<PAGE>
Notify: Laurie Brown of Sutherland Asbill & Brennan (404) 853-8624
<PAGE>
2. HOLDER Representations; Access to Information; Independent Investigation.
a. Offshore Transaction, HOLDER represents and warrants to
ISSUER as follows:
(i) Neither the HOLDER or any person or entity for whom the
HOLDER is acting as fiduciary is a U.S. person, meaning any one of
the following:
(1) any natural person resident in the United States of
America;
(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
United States;
(6) any non-discretionary account or similar account (other
than an estate or trust) held by a dealer or other fiduciary for
the benefit or account of a U.S. person;
(7) any discretionary account or similar account (other than an
estate or trust) held by a dealer or other fiduciary organized,
incorporated, or (if an individual) resident in the United States;
and
(8) 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 investing in securities not
registered under the 1933 Act, unless it is
organized or incorporated, and owned by an
accredited investors (as defined in Rule
501(a) under the 1933 Securities Act) who are
not natural persons, estates or trusts
(whenever such term is used herein, it shall
have the meaning given in Regulation S);
(ii) At the time the buy order was originated, HOLDER was outside
the United States and is outside of the United States as of the
date of the execution and delivery of this Agreement; no offer to
purchase the Securities was made in the United States.
(iii) HOLDER is purchasing the Securities for its own account or
for the account of beneficiaries each of whom has entered into an
Offshore Debenture Securities Subscription Agreement with the
<PAGE>
HOLDER in a form similar to this Agreement with the effect such
that all representations, warranties and agreements herein were
made directly by such beneficiary.
(iv) Each distributor participating in the offering of the
Debentures to the HOLDER, if any, has agreed in writing that all
offers and sales of the Securities prior to the expiration of a
period commencing on the date of the closing of the offering of
the Debentures and ending 40 days thereafter (the "Restricted
Period") shall only be made in compliance with the safe harbor
contained in Regulation S, pursuant to registration of Securities
under the 1933 Act or pursuant to an exemption from registration.
(v) HOLDER represents and warrants and hereby agrees that all
offers and sales of the Securities prior to the expiration of the
Restricted Period or thereafter shall only be made in compliance
with the safe harbor contained in Regulation S, pursuant to
registration of Securities under the 1933 Act or pursuant to an
exemption from registration, and all offers and sales after the
Restricted Period shall be made only pursuant to such a
registration or to such exemption from registration.
(vi) All offering documents received by HOLDER include statements
to the effect that the Debentures and the Shares have not been
registered under the 1933 Act and may not be offered or sold in
the United States or to U.S. person or for the account or benefit
of a U.S. person (other than distributors as defined in Regulation
S) during the Restricted Period or thereafter, unless the
Securities are registered under the 1933 Act or an exemption from
the registration requirements is available.
(vii) HOLDER acknowledges that the purchase of the Securities
involves a high degree of risk and further acknowledges that it
can bear the economic risk of the purchase of the Securities,
including the total loss of its investment. HOLDER acknowledges
that it has obtained the advice of competent legal counsel in its
domicile jurisdiction that it is qualified under the laws of its
domicile to purchase the Securities offered hereunder and that the
offer and sale of said Securities will not violate the laws of its
domicile jurisdiction.
(viii) HOLDER understands that the Securities are being offered
and sold to it in reliance on specific exemptions from the
registration requirements of Federal and State securities laws and
that the ISSUER is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgements and
understandings of HOLDER set forth herein in order to determine
the applicability of such exemptions and the suitability of HOLDER
to acquire the Debentures.
(ix) HOLDER is sufficiently experienced in financial and business
matters to be capable of evaluating the merits and risks of its
investment in the Securities, and to make an informed decision
<PAGE>
relating thereto.
(x) In evaluating its investment in the Securities, HOLDER has
consulted its own investment and/or legal and/or tax advisors.
(xi) HOLDER understands that in the view of the SEC the statutory
basis for the exemption claimed for this transaction would not be
present if the offering of Securities, although in technical
compliance with Regulation S, is part of a plan or scheme to evade
the registration provisions of the 1933 ACT. HOLDER is acquiring
the Securities for investment purposes and has no present
intention to sell the Securities in the United States or to a U.S.
person or for the account or benefit of a U.S. person.
(xii) HOLDER represents and warrants that neither it nor any of
its affiliates will directly or indirectly maintain any short
position in Securities of the ISSUER from closing through the
applicable Conversion Dates.
IF HOLDER is purchasing the Securities subscribed for hereby in representative
or fiduciary capacity, the Holder warrants that the representation and
warranties in this Offshore Securities Subscription Agreement have been obtained
from the person or persons for whom HOLDER is so purchasing and the HOLDER
warrants them to be true. Furthermore the HOLDER shall provide the Issuer with
Holder representation letter upon each Conversion, if required by the ISSUER.
The foregoing representations and warranties are true and accurate as of the
date hereof, shall be true and accurate of the date of the acceptance by the
ISSUER of HOLDER'S subscription, and shall survive thereafter. If HOLDER has
knowledge, prior to the acceptance of its Offshore Debenture Securities
Subscription Agreement by the ISSUER, that any such representations or
warranties shall not be true and accurate in any respect, the HOLDER, prior to
such acceptance, will give written notice of such fact to the ISSUER specifying
which representations and warranties are not true and accurate and the reason
thereof.
b. Current Public Information. HOLDER acknowledges that HOLDER has
been furnished with or has acquired copies of the Company's most
recent Annual Report on Form 10-K and any Form 10-Q filed
thereafter (collectively the "SEC Filings"), and other publicly
available documents (other than the exhibits to such filings and
Issuers filings on Form 8-K).
c. Independent Investigation; Access, HOLDER acknowledges that
HOLDER in making the decision to purchase the Securities
subscribed for, has relied upon the representations, warranties
and covenants of the ISSUER contained herein and upon independent
investigations made by it and it's representatives, if any and
HOLDER and such representatives, if any, have prior to any sale to
it, been given access and the opportunity to examine all material
books and records of the ISSUER, all material contracts and
documents relating to this offering and an opportunity to ask
questions of, and to receive answers from ISSUER or any person
acting on its
<PAGE>
behalf concerning the terms and conditions of this offering.
HOLDER and its advisors, if any, have been furnished with access
to all publicly available materials relating to the offer and sale
of the Securities which have been required.
d. No Governmental Recommendation or Approval. HOLDER understands
that no federal or state agency has made or will make any findings
or determination relating to the fairness for public investment in
the Securities, or has passed or made, or will pass on or make,
any recommendation or endorsement of the Securities.
e. Entity Purchase. If HOLDER is a partnership, corporation or
trust, the person executing this Offshore Securities Subscription
Agreement on its behalf represents and warrants that:
(i) He or she has made due inquiry to determine the
truthfulness of the representation and warranties made
pursuant to this Offshore Securities Subscription agreement.
(ii) He or she is duly authorized (if the undersigned is a
trust, by the trust agreement) to make this investment and
to enter into and execute this Offshore Securities
Subscription Agreement on behalf of such entity.
3. ISSUER Representations. ISSUER represents and warrants to the HOLDER as
follows:
a. Reporting Company Status. ISSUER is a reporting issuer as
defined by Rule 092 of Regulation S, and is a corporation duly
organized, validly existing and in good standing under the laws of
the State of Nevada and is duly qualified as a foreign corporation
in all jurisdictions where the failure to so qualify would have a
material adverse effect ont he ISSUER. The ISSUER has registered
its 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 traded on the National Association of Securities
Dealers Automated Quotation System (the "NASDAQ Stock Market").
b. Offshore Transaction. ISSUER has not offered these Securities
to any person in the United States or to any U.S. person or for
the account or benefit of any U.S. person.
c. No Directed Selling Efforts. In regard to this transaction,
ISSUER has not conducted any "directed selling efforts" as that
term is defined in Rule 902 of Regulation S, nor has ISSUER
conducted any general solicitation relating to the offer and sale
of the Securities to U.S. person resident within the United States
or elsewhere.
d. Securities. The issuance, sale and delivery of the Debenture
and the shares of the Common Stock issuable upon conversion hereof
have been duly authorized by all requisite proper corporate action
on the part of the ISSUER and its Stockholders and are within the
ISSUERS corporate powers. The Debentures, when executed and
<PAGE>
delivered pursuant to their terms hereof and after receipt of
payment thereafter will be legal, valid and binding obligations of
the Issuer, enforceable against the Issuer in accordance with
their terms.
<PAGE>
The Shares, when issued and delivered following the conversion
thereof, pursuant to the Debentures, will be duly and validly
authorized and issued, fully paid and non-assessable and will not
subject the holders thereof to any liability by reason of being
such holders.
e. Offshore Securities Subscription Agreement. The Offshore
Securities Subscription Agreement has been duly authorized,
validly executed and delivered on behalf of the ISSUER and is a
valid and binding agreement in accordance with its terms except as
limited by applicable bankruptcy, or other similar laws affecting
creditors rights.
f. Non-contravention. The execution and delivery of the Offshore
Securities Subscription Agreement and the consummation of the
issuance of the Securities and the transactions contemplated by
the Subscription Agreement do not and will not conflict with or
result in a breach by the ISSUER of any of the terms or
provisions, of, or constitute a default under, the certificate of
incorporation or by-laws of the ISSUER, or any indenture,
mortgage, deed of trust, or other material agreement or instrument
to which the ISSUER is a party or by which it or any of its
properties or assets are bound, or any existing applicable law,
rule, or regulation or any applicable decrees judgement or order
of any court, Federal or State regulatory body, administrative
agency or other governmental body having jurisdiction over the
ISSUER or any of its properties or assets.
g. Filings. ISSUER undertakes and agrees pursuant to the sale of
its Securities under Regulation S, to make all necessary filings
in connection with the sale of its securities as required by the
laws and regulation of all appropriate jurisdictions.
h. SEC Filings. ISSUER has previously delivered to Holder copies
of (i) its Form 10-K for the fiscal year ended 12/31/95, (ii) its
Form 10-Q for the three (3) month period ended 8/31/96 and (iii)
all Form 8-Ks filed with the SEC after 9/30/96 and prior to the
date of this Subscription Agreement. Each such filing was timely
filed with the SEC, and did not at the time it was filed, contain
any misstatement of material or an omission of a material fact
required to be stated therein necessary to make the statements
therein not misleading as of the time such document was filed. As
of their respective dates, such reports compiled in all material
respects with applicable requirements of the Securities Exchange
Act of 1934 as amended (the "Exchange Act"). Since the date of the
latest Form 10-Q of the ISSUER date 9/30/96, (i) ISSUER has
conducted its business in the ordinary, regular course, (ii) there
has been no change in the financial condition of ISSUER which has
had a material adverse effect, or any event, condition or state of
facts, the occurrence of which has had, or could have, material or
adverse effect on the business, properties, assets conditions
(financial or otherwise) results of operations or prospects of the
Issuer and, (iii) except in the ordinary, regular course of its
<PAGE>
business, ISSUER has not made any dispositions of any material
assets, borrowed any funds, absolute or contingent, or paid,
discharged or satisfied any claim, liability or obligation except
as herein set forth. As of September 30, 1996, 34,450,000 shares
of Common Stock of the Issuers are issued and outstanding.
j. Opinion of Counsel. The Holder shall, upon the purchase of the
Debentures, receive an opinion letter from the Issuers counsel to
the effect that (i) the Issuer is duly incorporated and validly
existing; (ii) this Subscription Agreement, the issuance of this
Debenture and the issuance of Common Stock upon conversion of this
Debenture have been approved and duly authorized by all required
corporate action, and that all such securities, upon delivery,
shall be validly issued and outstanding, fully paid and
non-assessable.
k. S-3 Eligibility. ISSUER has filed all materials required to be
filed pursuant to all applicable 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 and
sale of the Debentures, ISSUER currently meets the eligibility
requirements of the Commission with respect to the use of the Form
S-3 for the filing of a resale registration statement with the
SEC.
<PAGE>
l. Litigation. Except as disclosed in the ISSUERS filings with the
Commission referred to above, there is no action, suit or
preceding before or by an court or governmental agency or body,
foreign or domestic, now prevailing or to the knowledge of the
ISSUER, threatened against or affecting the ISSUER, or any of its
properties, which might result in any material adverse change in
the condition (financial or otherwise) or in the earnings,
business affairs or business prospects of the ISSUER.
m. No Default. Except as disclosed in the ISSUERS filings with the
Commission referred to above, ISSUER is not in default in the
performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed
of trust or any other instrument or agreements to which it or its
property might be bound.
n. Full Disclosure. There is no fact known to the ISSUER (other
than general economic conditions known to the public generally)
that has not been disclosed to the HOLDER in writing that (i)
could reasonably be expected to have a material adverse effect on
the conditions (financial or otherwise) or in the earnings,
business affairs or business prospects, properties or assets of
the ISSUER or (ii) could reasonably be expected to have a material
adverse effect on the ability of the ISSUER to perform its
obligations pursuant to this Agreement.
4. Covenants of the ISSUER. For so long as any Debentures held by HOLDER
remain outstanding, the ISSUER covenants and agrees with the HOLDER that:
(a) ISSUER will maintain the listing of its Common Stock on
the NASDAQ Stock Market;
(b) Except as expressly set forth in Section 7 below, ISSUER
will not issue stop transfer instructions to its transfer
agent and will not place a restrictive legend on the shares
of Common stock issuable upon conversion of the Debentures;
(c) ISSUER will reserve from its authorized shares of Common
Stock a sufficient number of shares to permit conversion in
full of all outstanding Debentures and,
(d) ISSUER will not enter into any transaction with
"affiliates" (as such term is defined in the exchange act)
on terms which vary from the terms that could be obtained in
an arms length transaction.
5. Expiration of Restricted Period. The transaction restriction in connection
with this offshore offer and sale restrict the HOLDER from offering and selling
to U.S. persons or for the account or benefit of a U.S. person for a forty (40)
day period. The rules do not require the placement of such a restrictive legend
on the share certificate issued
<PAGE>
pursuant to conversion of the Debenture. Rule 903(c)(2) governs the forty(40)
day transaction restriction. Title to the Securities may be transferred by
HOLDERS to other Non United States persons or entities in accordance with
Regulation S.
6. Exemption; Reliance on Representations. HOLDER understands that the offer and
sale of the Securities is not being registered under the 1933 Act. ISSUER is
relying on the rules governing offers and sales made outside the United States
pursuant to Regulation S. Rules 901 through 903 of Regulation S govern this
transaction. ISSUER acknowledges that the HOLDER may resell the Securities
without violation of United States law, provided all offers and sales by HOLDERS
are made in accordance with Rule 904 of Regulation S, pursuant to Registration
under the 1933 Act or an available exemption under the 1933 Act, and this
agreement.
7. Transfer Agent Instructions.
a. Debentures. Upon the conversion of the Debentures, the HOLDER
thereof shall submit such Debentures to the ISSUER, and ISSUER
shall, instruct ISSUER'S Transfer Agent to issue one or more
certificates within Three (3) New York Stock Exchange trading days
(the "Deadline"), 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
the Debentures. If ISSUER fails for any reason to effect the
delivery of such shares of Common Stock before the Deadline,
HOLDER will be entitled, but not obligated to revoke the relevant
Notice of Conversion by delivering a notice to such effect to
ISSUER whereby ISSUER and HOLDER shall be restored to their
original position immediately preceding the delivery of such
Notice of Conversion. Notwithstanding the forgoing, if the ISSUER
fails to deliver the Common Shares by the Fifth New York Stock
Exchange trading day from the date of Conversion (the "Penalty
Date"), the HOLDER shall receive, in cash, Twenty-Five Hundred
($2,500.00) US Dollars per day for each day the delivery of the
Shares occurs past the Penalty Date.
b. No Legends on Certificates. Upon conversion of any Debenture
ISSUER'S Transfer Agent will be instructed to issue one or more
share certificates representing Shares without restrictive legend
in the names of Holder to be specified prior to conversion in such
denominations to be specified at conversion representing the
number of shares of Common Stock issuable upon such conversion.
ISSUER further warrants that no stop transfer instructions other
than a stop transfer for the Debentures for (40) days to U.S.
persons have been given or will be given to the Transfer Agent and
that the Shares, when issued upon conversion after the expiration
of the Forty (40) Day Transaction Restriction Period applicable to
the Debentures in accordance with the terms of the Debenture,
shall be freely transferable on the books and records of the
ISSUER subject to compliance with applicable securities laws,
including, without limitation, Rule 904 of Regulation S.
c. Removal of Stop Transfer. Upon the fortieth (40) day after
<PAGE>
closing of the issuance of the Debentures, the ISSUER agrees to
cause the stop transfer instruction, if any, to be removed from
the Debentures and the Shares forthwith in accordance with and to
the extent permitted by the Conversion Dates of the Debenture.
ISSUER agrees to accept a HOLDER Notice of Conversion from the
HOLDER in the form of Exhibit '1' attached hereto and incorporated
herein by reference, as sole and sufficient evidence that the
HOLDER has complied with applicable securities laws and upon
receipt of such Notice of Conversion shall promptly instruct the
Transfer Agent to issue the Shares to the Holder as per clauses
(a) and (c) above, provided however that, ISSUER shall not be
required to deliver such instruction if it knows, or reasonably
believes, any of the representation made in the Notice of
Conversion.
8. Indemnification. Each of the ISSUER and the HOLDER agrees to indemnify and to
hold the other harmless from and against any and all losses, damages,
liabilities, costs and expenses which the other may sustain or incur in
connection with the breech by the indemnifying party of any representation,
warranty or covenant made by this agreement.
9. Notices. All notices, requests, demands and other communications provided for
herein (collectively "Notices") shall be in writing. All Notices shall be sent
by hand delivery, U.S. mail with return receipt requested, overnight courier, or
facsimile with all delivery charges prepaid. All notices will be effective when
received by the addressee as indicated by the return receipt or on the
facsimile. All Notices shall be delivered to the applicable party at the
addresses indicated below:
ISSUER:
American International Petroleum Corporation
444 Madison Avenue, Ste. 3203
New York, NY 10022
Telephone: (212) 688-3333
Facsimile: (212) 688-6657
Attn: Denis J. Fitzpatrick
HOLDER:
10. Closing Date. This agreement shall be effective from, and the Debentures
shall be dated as of the date of Closing by the HOLDER. The date of this
issuance of the Debentures shall be no later five (5) New York Stock Exchange
Trading Days after acceptance thereof or such other mutually agreed to time.
Closing shall be effected through delivery of funds and certificates to
Designated Escrow Agent in accordance with the terms of the Convertible
Debenture Escrow Agreement dated January 29, 1997 among the ISSUER, HOLDER and
the Escrow Agent named therein (the "Escrow Agreement"). HOLDER shall forthwith
deliver the necessary funds as indicated in Paragraph 1.
<PAGE>
11. Conditions to the Company's Obligation to Sell.
a. ISSUER'S Right to Reject. ISSUER shall have the right to
reject any given Offshore Debenture Securities Subscription
Agreement which is rendered to the ISSUER, but only for the
reason that the ISSUER reasonably believes any
representations and warranties of such HOLDER to be untrue,
and in such event ISSUER shall provide HOLDER written notice
of such rejection and the reason therefore and shall provide
reasonable opportunity for a response to such stated reason.
HOLDER understands that ISSUER's obligation to sell the
Debentures is conditioned upon:
(i) The receipt and acceptance by ISSUER of duly
executed copy of this Offshore Securities
Subscription Agreement for all of the Securities
is evidenced by execution of this subscription
agreement by the ISSUER or ISSUER'S duly
authorized agent. In the absence of a written
acknowledgement of this Agreement by the ISSUER,
the delivery of Debenture Certificates to the
Designated Escrow Account, as identified in the
Escrow Agreement, and/or the transfer of funds to
the ISSUER shall be deemed to the constructive
acceptance of this Offshore Debenture Securities
Subscription Agreement. HOLDER understands this
Offshore Debenture Securities Subscription
Agreement is irrevocable.
(ii) Delivery into the designated Escrow account
by HOLDER of good funds as payment in full for the
purchase of the Securities, and all fees and
commissions.
12. Conditions to HOLDER'S Obligation to Purchase. ISSUER understands that
HOLDER'S obligation to purchase the Debentures is conditioned upon delivery of
the Debenture as described herein, the representations and warranties of the
ISSUER made herein being true and correct in all material respects as of the
date hereof as if made on such date and the absence of any event or circumstance
that could reasonably be expected to have a material adverse effect on the
business, financial, business prospects or other condition of the ISSUER, or the
market price of the ISSUER'S Common Stock, or in any such event as determined by
the HOLDER in its reasonable discretion, provided, that upon delivery of the
Debenture against payment thereof, such purchase shall be final.
13. Governing Law. This agreement shall be governed by and construed under
the laws of the State of Nevada without regard to conflict law.
<PAGE>
14. Entire Agreement. This Offshore Securities Subscription Agreement
constitutes the entire agreement among the parties hereof with respect to the
subject matter hereof and supersedes any and all prior or contemporaneous
representations, warranties, agreements and understanding in connection
therewith. This Offshore Securities Subscription Agreement may be amended only
by a writing executed by all parties hereto. This agreement may be executed in
counterparts and the facsimile transmission of an executed counterpart to this
Agreement shall be effective as an original.
15. Full Name and Address of HOLDER for Registration Purposes:
NAME:
ADDRESS:
TEL NO.:
FAX NO.:
CONTACT: NAME:____________________________
16. Delivery Instructions: (if different from Registration Name):
NAME: ___________________________________________
ADDRESS: _____________________________________
-------------------------------------
-------------------------------------
TEL NO.: ____________________
FAX NO.: ___________________
CONTACT NAME: ________________________________
SPECIAL INSTRUCTIONS: ____________________________________________________
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
<PAGE>
IN WITNESS WHEREOF, this Offshore Securities Subscription Agreement was duly
executed on the date first written below. This Agreement must be accepted by the
ISSUER no later than 5:00 p.m. Eastern Time, on the third New York Stock
Exchange Trading day after the date of execution by the HOLDER or it shall be
deemed to be null and void.
Dated this ________ day of the month of ___________, 1997.
NAME:
BY: ________________________________________________
Official Signature of HOLDER
NAME (PRINTED):________________________________________
TITLE:__________________________
COUNTY OF EXECUTION:___________________________________
Accepted this 30th day of the month of January, 1997.
AMERICAN INTERNATIONAL PETROLEUM CORPORATION
BY:_____________________________________________________
Official Signatory of ISSUER
NAME (PRINTED): Denis J. Fitzpatrick
TITLE: Vice President
<PAGE>
IN WITNESS WHEREOF, this Offshore Securities Subscription Agreement was duly
executed on the date first written below. This Agreement must be accepted by
ISSUER no later than 5:00 p.m. Eastern Time, on the third New York Stock
Exchange Trading day after the date of execution by the HOLDER or it shall be
deemed to be null and void.
Dated this ________ day of the month of ___________, 1997.
NAME:
BY: ________________________________________________
Official Signature of HOLDER
NAME (PRINTED):________________________________________
TITLE:__________________________
COUNTY OF EXECUTION:___________________________________
Accepted this 30th day of the month of January, 1997.
AMERICAN INTERNATIONAL PETROLEUM CORPORATION
BY:_____________________________________________________
Official Signatory of ISSUER
NAME (PRINTED): Denis J. Fitzpatrick
TITLE: Vice President
Exhibit 4.4
CONVERTIBLE DEBENTURE ESCROW AGREEMENT
THIS AGREEMENT is made as of January 29, 1997 by and among American
International Petroleum Corporation, with its principal office at 444 Madison
Avenue, Ste. 3203, New York, NY 10022 (hereinafter the "Company"), (hereinafter
the "Purchaser"), and Sutherland, Asbill & Brennan, 999 Peachtree St., N.E.,
Atlanta, Georgia, 30309 (hereinafter the "Escrow Agent").
W I T N E S S E T H:
WHEREAS, the Purchaser will be purchasing Convertible Debentures (the
"Securities") from the Company at a purchase price as set forth in a Convertible
Debenture Offshore Securities Subscription Agreement (the "Subscription
Agreement") signed by the Company and the Purchaser; and
WHEREAS, it is intended that the purchase of Securities be consummated
in accordance with the requirements set forth by Regulation S promulgated under
the Securities Act of 1933, as amended; and
WHEREAS, the Company has requested that the Escrow Agent hold the funds
of the Purchaser in escrow until the Escrow Agent has received the Securities
and had the opportunity to speak with the Company to confirm their issuance. The
Escrow Agent will then immediately wire transfer or otherwise deliver at the
Company's direction immediately available funds to the Company or the Company's
account and arrange for delivery of the Securities to the Purchaser per the
Purchaser's written instructions.
NOW, THEREFORE, in consideration of the covenants and mutual promises
contained herein and other good and valuable consideration, the receipt and
legal sufficiency of which are hereby acknowledged, and intending to be legally
bound hereby, the parties agree as follows:
ARTICLE 1.
TERMS OF THE ESCROW
1.1. The parties hereby agree to establish an escrow account with the
Escrow Agent whereby the Escrow Agent shall hold the funds for the purchase of
the Securities.
1.2. Upon the Escrow Agent's receipt of funds into his attorney trustee
account, he shall notify the Company, or the Company's designated attorney or
agent, of the amount of funds he has received into his account.
1.3. The Company, upon receipt of said notice and acceptance of the
Purchaser's Subscription Agreements, as evidenced by the Company's execution
thereof, shall deliver to the Escrow Agent the Securities being purchased. The
Escrow Agent shall then communicate with the Company to confirm the validity of
its issuance.
<PAGE>
1.4. Once the Escrow Agent confirms the validity of the issuance of the
Securities, he shall immediately wire to the Company that amount of funds
necessary to purchase the Securities, per the written instructions of the
Company. Once the funds have been received per the Company's instructions, the
Escrow Agent shall then arrange to have the Securities delivered as per
instructions from the Purchaser.
1.5. If, for any reason, these transactions contemplated by the
Subscription Agreement are not consummated within five (5) days of the date
hereof, the Escrow Agent will promptly return any funds received by it from the
Purchaser to the Purchaser, without any further instructions from either the
Company or Purchaser.
1.6. This Agreement may be altered or amended only with the consent of
all of the parties hereto. Should the Company attempt to change this Agreement
in a manner which, in the Escrow Agent's discretion, shall be undesirable, the
Escrow Agent may resign as Escrow Agent by notifying the Company and the
Purchasers in writing. In the case of the Escrow Agent's resignation or removal
pursuant to the foregoing, his only duty, until receipt of notice from the
Company and the Purchasers or their agents that a successor escrow agent shall
have been appointed, shall be to hold and preserve the Securities and/or funds.
Upon receipt by the Escrow Agent of said notice from the Company and the
Purchasers of the appointment of a successor escrow agent, the name of a
successor escrow account and a direction to transfer the Securities and/or
funds, the Escrow Agent shall promptly thereafter transfer all the Securities
and/or funds held in escrow to said successor escrow agent. Immediately after
said transfer of Securities, the Escrow Agent shall furnish the Company and the
Purchasers with proof of such transfer. The Escrow Agent is authorized to
disregard any notices, request, instructions or demands received by it from the
Company or the Purchasers after notice of resignation or removal shall have been
given, unless the same shall be the aforementioned notice from the Company and
the Purchaser to transfer the Securities and funds to a successor escrow agent
or to return same to the respective parties.
1.7. The Escrow Agent shall be reimbursed by LKB Financial LLC for any
reasonable expenses incurred in connection with its performance hereunder,
including in the event there is a conflict between the parties and the Escrow
Agent shall deem it necessary to retain counsel.
1.8. The Company and the Purchaser warrant to and agree with the Escrow
Agent that:
(i) there is no security interest in the Securities or
any part thereof;
(ii) no financing statement under the Uniform Commercial
Code is on file in any jurisdiction claiming a
security interest or in describing (whether
specifically or generally) the Securities or any part
thereof; and
(iii) the Escrow Agent shall have no responsibility at any
time to ascertain whether or not any security
interest exists in the Securities or any part
thereof or to file any financing statement under
the Uniform Commercial Code with respect to the
Securities or any part thereof.
1.9. The Escrow Agent has no liability hereunder to either party other
than to hold the Securities and funds, to complete the Orders in accordance with
the Notice of Conversion and any instructions it receives for the Company, and
to deliver them in accordance with the terms hereof. The Escrow Agent shall not
be liable for any action taken or omitted by him in good faith; and in no event
shall the Escrow Agent be liable or responsible except for the Escrow Agent's
own gross negligence or willful misconduct.
<PAGE>
1.10. Each party hereto agrees to indemnify and hold harmless the
Escrow Agent from and with respect to any and all suits, claims, damages,
demands, actions, liabilities or losses arising in any way out of this
transaction including the obligation to defend any legal action brought which in
any way arises out of or is related to this Agreement.
1.11. Escrow Agent shall not be responsible for: (I) the sufficiency or
correctness as to the form, execution or the validity of this Agreement; or (ii)
the identity authority or right of any person executing any notice or documents
given to Escrow Agent.
ARTICLE 2.
MISCELLANEOUS
2.1. No waiver or any breach of any covenant or provision herein
contained shall be deemed a waiver of any preceding or succeeding breach
thereof, or of any other covenant or provision herein contained. No extension of
time for performance of any obligation or act shall be deemed any extension of
the time for performance of any other obligation or act.
2.2. All notices or other communications required or permitted
hereunder shall be in writing, and shall be sent writing, and shall be sent by
fax, overnight courier, registered or certified mail, postage prepaid, return
receipt requested, and shall be deemed received upon receipt thereof, as
follows:
(i) To the Company:
American International Petroleum Corporation
444 Madison Avenue, Suite 3203
New York, NY 10022
Attn: George N. Faris
Telephone: (212) 688-3333
Facsimile: (212) 688-6657
(ii) To the Purchaser:
---------------------------
---------------------------
---------------------------
(iii) To the Escrow Agent:
----------------------------
----------------------------
----------------------------
2.3. This Agreement shall be binding upon and shall inure to the
benefit of the permitted successors and assigns of the parties hereto.
<PAGE>
2.4. This Agreement is the final expression of, and contains the entire
Agreement between, the parties with respect to the subject matter hereof and
supersedes all prior understandings with respect thereto. This Agreement may not
be modified, changed, supplemented or terminated, nor may any obligations
hereunder be waived, except by written instrument signed by the parties to be
charged or by its agent duly authorized in writing or as otherwise expressly
permitted herein.
2.5. Whenever required by the context of this Agreement, the singular
shall include the plural and masculine shall include the feminine. This
Agreement shall not be construed as if it had been prepared by one of the
parties, but rather as if both parties had prepared the same. Unless otherwise
indicated, all references to Articles are to this Agreement.
2.6. The Company and the Purchaser acknowledge and confirm that they
are not being represented in a legal capacity by Sutherland, Asbill & Brennan
and they have had the opportunity to consult with their own legal advisors prior
to the signing of this Agreement.
2.7. The parties hereto expressly agree that this Agreement shall be
governed by, interpreted under and construed and enforced in accordance with the
laws of the State of Georgia. Any action to enforce, existing out of, or
relating in any way to, any provisions of this Agreement shall be brought
through American Arbitration Association at the designated locale of Atlanta,
Georgia.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
January 29, 1997.
American International Petroleum Corporation
By:_________________________________
Officer
By:__________________________________
SUTHERLAND, ASBILL & BRENNAN
By:_________________________________
Partner
Exhibit 4.5
AMERICAN INTERNATIONAL PETROELUM CORPORATION
REGULATION S SUBSCRIPTION AGREEMENT
<PAGE>
THE SECURITIES BEING OFFERED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO
U.S. PERSONS UNLESS THE SECURITIES ARE REGISTERED UNDER THE
ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE ACT IS AVAILABLE.
REGULATION S SUBSCRIPTION AGREEMENT
THIS AGREEMENT has been executed by the undersigned, In Trust for
___________________________, whose address ______________________________, (the
"Subscriber"), in connection with the purchase of up to 300,000 shares (the
"Shares") of common stock, $.08 par value (the "Common Stock") of AMERICAN
INTERNATIONAL PETROLEUM CORPORATION (the "Company") located at 444 Madison
Avenue, Suite 3203, New York, New York 10022, a corporation organized under the
laws of Nevada, United States of America.
WHEREAS, the Company proposes to issue 300,000 Shares pursuant to
Regulation S, ("Regulation S") promulgated under the Securities Act of the 1933,
as amended (the "Act") as consideration for a $150,000 partial prospect fee (the
"Fee") effective on the acceptance of this subscription by the Company, and
WHEREAS, the Shares will be offered and issued pursuant to an exemption
from registration provided by Regulation S, and
WHEREAS, upon original issuance thereof, and until such time as the
same is no longer required under the applicable requirements of the Act, the
Share Certificates shall bear the following legend:
THE SECURITY EVIDENCED HEREBY WAS ORIGINALLY ISSUED
PURSUANT TO REGULATION S ("REGULATION S") UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER
SECTION 5 OF THE SECURITIES ACT, AND THE SECURITY EVIDENCED
HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
THE UNITED STATES OR TO U.S. PERSONS (AS DEFINED IN
REGULATION S) IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM AND IN EACH CASE, IN
ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION.
2
<PAGE>
NOW THEREFORE, the Subscriber agrees with the Company as follows:
1. Subscription. Subject to its terms and conditions and further
subject to acceptance of this Agreement by the Company, the Subscriber agrees to
purchase from the Company 300,000 Shares for an aggregate purchase price of U.S.
$150,000, in an offering of up to 300,000 Shares ending at the close of business
on January 27, 1997 (the "Payment Date").
2. Delivery and Payment. Delivery of and payment for the Shares
shall be made at such time and place as the Company and the Subscriber shall
agree.
Shares shall be registered in the Subscriber's name and issued not
later than three full business days after the acceptance of this Agreement by
the Company. Shares shall be registered in the Subscriber's name and not in
nominee or other names.
3. Representations and Warranties of the Subscriber. The Subscriber
hereby represents and warrants to the Company as follows:
(a) The Subscriber acknowledges that he has received a
copy of the Company's Annual Report on Form 10-K for
the year ended December 31, 1995, the Company's Form
10-Q for the quarterly period ended September 30,
1996, all Form 8-Ks filed subsequent to September 30,
1996, and a Proxy Statement of the Company dated June
12, 1996 and is acquainted with the business and
financial conditio n of the Company. The Subscriber
further acknowledges that he has had an opportunity
to ask questions of and receive answers from the
Company's executive officers concerning the Company
and the terms and conditions of this investment and
all such questions have been answered to the full
satisfaction of the Subscriber. The Subscriber
hereby further represents and warrants that it is
aware that there are substantial risks incident to an
investment in the Company and that no Federal or
State agency has passed upon the Shares or made any
finding or determination as to the fairness of an
investment in the Company.
(b) The Subscriber has the full right, power and
authority to enter into this Agreement and to carry
out and consummate the transactions contemplated
herein. This Agreement constitutes the legal, valid
and binding obligation of the Subscriber enforceable
in accordance with its terms.
(c) The Subscriber is acquiring Shares for its own
account and risk and not as part of any plan or
scheme to evade the registration requirements of the
Act, and no other person has or will have at the
Payment Date any interest in or participation in the
Subscriber's Shares or any right, option, security
interest, pledge or other interest in or to such
Shares. The Subscriber understands and agrees that
it must bear the economic risk of its investment in
the Shares for an indefinite period of time. The
Shares have not been registered under the Act. The
Shares may not be offered or sold, directly or
indirectly, in the United States or to any natural
person who is a resident of the United States or to
any U.S. person, as defined in Regulation S, or for
the account or benefit of any U.S. person unless
registered or exempt from registration under the Act
and any applicable state securities or blue sky laws
(the "State Acts"). The Subscriber also understands
that the Company is under no obligation to register
any Shares on behalf of the Subscriber or to assist
it in complying with any exemption from
3
<PAGE>
registration.
(d) The Subscriber is not a U.S. person, and is not
acquiring the Shares, directly or indirectly, for the
account or benefit of any U.S. person in violation of
Regulation S pursuant to which regulation the Shares
are being sold.
(e) The Subscriber agrees to dispose of or encumber its
Shares only if (i) such Shares are duly registered
under the Act and all applicable State Acts, or (ii)
an exemption from registration under the Act,
including any exemption from the registration
requirements of the Act pursuant to Regulation S, and
all applicable State Acts, is available.
(f) This Agreement has not been executed or delivered by
the Subscriber in the United States, and neither the
Subscriber nor any person acting on behalf of the
Subscriber engaged directly or indirectly in any
negotiations with respect to this Agreement in the
United States or was located in the United States at
the time of the buy order or offer to purchase the
securities.
(g) Neither the Subscriber, nor any officer, director or
5% or more shareholder thereof, has been:
(i) Convicted within the preceding ten years of
any felony or misdemeanor in connection with
the offer, purchase or sale of any security
or commodity involving the making of a false
filing with the Commission.
(ii) Subject to any order, judgment or decree of
any court of competent jurisdiction
temporarily or preliminary enjoining or
restraining, or subject to any order,
judgment or decree of any court of competent
jurisdiction, entered within the preceding
five years, permanently enjoining or
restraining the investor from engaging in or
continuing any conduct or practice in
connection with the purchase or sale of any
security or commodity or involving the
making or a false filing with the Commission
or any state, or arising out of the conduct
of the business of any underwriter, broker,
dealer, municipal securities dealer or
investment advisor.
(iii) Subject to an order of the Commission entered
pursuant to Section 15(b), 15B(a) or 15B(c)
of the Securities Exchange Act of l934, as
amended (the "Exchange Act"); or subject to
an order or the Commission entered pursuant
to Section 203(e) or (f) of the Investment
Advisers Act of l940.
(iv) Suspended or expelled from membership in, or
suspended or barred from association with a
member of, an exchange registered as a
national securities exchange pursuant to
Section 6 of the Exchange Act, an association
registered as a national securities
association under Section 15A of the Exchange
Act or a Canadian securities exchange or
association for any act or omission to act
constituting conduct inconsistent with just
and equitable principles of trade.
(v) Filed a registration statement which is the
subject of a registration stop order entered
pursuant to the Act or
4
<PAGE>
any State Act within the preceding five
years.
(vi) Subject to any state's administrative
enforcement order or judgment which
prohibits, denies or revokes the use of any
exemption from registration in connection
with the offer, purchase or sale of
securities.
(h) The offer leading to the sale evidenced hereby was
made in an "offshore transaction", for purposes of
Regulation S. Subscriber is familiar with the
provision of Regulation S.
(i) Neither the Subscriber nor any affiliate of the
Subscriber or any person acting on their behalf, has
made or is aware of any "directed selling efforts" in
the United States, which is defined in Regulation S
to be any activity undertaken for the purpose of, or
that could reasonably be expected to have the effect
of, conditioning the market in the United States for
any of the securities being purchased hereby.
(j) The Subscriber understands that the Company is the
issuer of the securities which are the subject of
this Agreement. The Subscriber shall not, during the
40-day restricted period set forth under Rule
903(c)(2) of Regulation S, act as a distributor,
either directly or through any affiliate, nor shall
he sell, transfer, hypothecate or otherwise convey
the securities offered hereby or any interest
therein, other than to a non U.S. person, or in any
other manner offer or sell securities of the Company
in violation of Regulation S or the Act. Such 40-day
restricted period shall not begin until the closing
of the Offering at the end of business on the Payment
Date and, otherwise, as provided in Regulation S.
(k) If the Subscriber is a corporation or trust or other
entity, the officer or trustee or other person
executing this Agreement represents and warrants that
he is authorized to so sign and that the entity is
authorized by the governing documents of the entity,
to make this investment;
(l) The Subscriber understands that the offer and sale of
the Shares is being made only by means of this
Agreement. In deciding to subscribe for the Shares,
the Subscriber has not considered any information
other than that contained in this Agreement and all
documents provided to the Subscriber by the Company.
The Subscriber acknowledges that each of such
documents contain on the cover thereof a legend as to
the absence of registration of the Shares under the
Act and the restrictions arising under the Act. The
Subscriber acknowledges and agrees that the purchase
of the Shares involves a high degree of risk and that
the Subscriber may sustain, and has the financial
ability to sustain, the loss of its entire
investment.
4. Representations and Warranties of the Company. The Company
represents and warrants to the Subscriber, that:
(a) This Agreement has been duly authorized by the Company.
(b) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Nevada. The Company has the corporate power and authority necessary to enter
into and perform its obligations under this Agreement, and to issue, sell and
deliver the Shares.
(c) There is no statute, rule, regulation or order that has
been enacted, adopted or issued by any governmental agency or that has been
proposed by any governmental body which might prevent the issuance of the
Shares. No
5
<PAGE>
injunction, restraining order or order of any nature by a federal or state court
of competent jurisdiction has been issued that would prevent the issuance of the
Shares.
(d) No form of general solicitation or general advertising was
used by the Company or any of its representatives in connection with the offer
and sale of the Shares, including, but not limited to, articles, notices or
other communications published in any newspaper, magazine, or similar medium or
broadcast over television or radio, and no seminar or meeting whose attendees
have been invited by any general advertising was used by the Company or any of
its representatives in connection with the offer and sale of the Shares.
(e) Reporting Company Status. The Company is a "Reporting
Company" as ]defined by Rule 902 of Regulation S. The Company is in full
compliance, to the extent applicable, with applicable reporting obligations
under either Section 12(b), 12(g) or 15(d) of the Securities and Exchange Act of
1934, as amended.
5. Reliance on Representations. The Subscriber understands that the
Company is relying on the Subscriber's representations concering the
Subscriber's compliance with the rules governing offers and sales made outside
the United States pursuant to Regulation S.
6. Conditions of the Subscriber's Obligations. The Subscriber's
obligation to purchase the Shares subject to the satisfaction of each and every
one of the following conditions as of the Payment Date:
(a) 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 Shares 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.
(b) 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 Shares. 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 Shares.
7. Conditions of the Company's Obligations. The Company's obligations
to sell the Shares under this Agreement on the Payment Date, is subject to the
satisfaction of each and every one of the following conditions as of the Payment
Date:
(a) 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.
(b) 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 Shares 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.
(c) 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 Shares. 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 Shares.
6
<PAGE>
8. Subsequent Transfers of the Securities. The Subscriber further
agrees that, in connection with the resale of the Shares it will offer to sell
the Shares only after 41 days from the date of the closing of the last purchase
under the Offering, and only to, and will solicit offers to buy the Shares only
from, persons who in purchasing such Shares will have represented and agreed
that (1) they are purchasing the Shares for their own account, (2) all
requirements of Regulation S have been satisfied, (3) if sold outside the United
States, the sale shall be to a foreign person in a transaction meeting the
requirements of Rule 904 of Regulation S under the Act, and (4) the holder will,
and each subsequent holder is required to, notify any purchaser from it of the
security evidenced thereby of the resale restrictions set forth in Regulation S.
9. Notice. Notices given pursuant to any provision of this Agreement
shall be addressed as follows: (i) if to the Company, to American International
Petroleum Corporation, 444 Madison Avenue, Suite 3203, New York, New York 10022,
Attention: Denis J. Fitzpatrick, with a copy to Snow Becker Krauss P.C., 605
Third Avenue, New York, New York 10158, (ii) if to the Subscriber at the address
set forth at the signature page of this Agreement, or in any case to such other
address as the person to be notified may have requested in writing.
10. Miscellaneous. Except as otherwise provided, this Agreement has
been and is made solely for the benefit of the Company and shall be binding upon
the Subscriber and its successors and assigns, all as and to the extent provided
in this Agreement, and no other persons shall acquire or have any right under or
by virtue of this Agreement. Subscriber shall not assign this Agreement. A
facsimile transmission of this signed Agreement shall be legal and binding on
all parties hereto. This Agreement may be signed in various counterparts, which
together shall constitute one and the same instrument.
THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES, AND EACH PARTY HEREBY AGREES THAT ALL PERFORMANCE DUE WITH RESPECT
TO TRANSACTIONS UNDERTAKEN PURSUANT TO THIS AGREEMENT SHALL BE DEEMED TO BE DUE
OR TO HAVE OCCURRED IN NEW YORK. THE EXCLUSIVE VENUE AND PLACE OF JURISDICATION
FOR ANY LITIGATION ARISING FROM OR RELATED TO THIS AGREEMENT SHALL BE THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK OR THE NEW YORK
STATE SUPREME COURT LOCATED IN THE COUNTY OF NEW YORK. THE PARTIES HERETO WAIVE
TRIAL BY JURY OF ANY DISPUTES BETWEEN THEM.
7
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement, the 27th
day of January , 1997.
Number of Shares
subscribed for: 300,000
_____________________________
Name of Subscriber
By: ______________________
Name:
Title:
Address:
Country in which this Agreement is executed by Subscriber:
Telephone Number:
Telecopier Number:
Social Security No. or Tax I.D. No. (if applicable): N/A
AMERICAN INTERNATIONAL
PETROLEUM CORPORATION
By: _____________________________
Denis J. Fitzpatrick
Vice President
ACCEPTED this 27th day of January , 1997
8
Exhibit 4.5
AMERICAN INTERNATIONAL PETROLEUM CORPORATION
REGULATION S SUBSCRIPTION AGREEMENT
<PAGE>
THE SECURITIES BEING OFFERED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), AND MAY NOT BE OFFERED
OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS
UNLESS THE SECURITIES ARE REGISTERED UNDER THE
ACT OR AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE ACT IS AVAILABLE.
REGULATION S SUBSCRIPTION AGREEMENT
THIS AGREEMENT has been executed by the undersigned, ________________,
whose address is __________________________ (the "Subscriber"), in connection
with the purchase of 5,000 shares (the "Shares") of common stock, $.08 par value
(the "Common Stock") of AMERICAN INTERNATIONAL PETROLEUM CORPORATION (the
"Company") located at 444 Madison Avenue, Suite 3203, New York, New York 10022,
a corporation organized under the laws of Nevada, United States of America.
WHEREAS, the Company proposes to issue 5,000 Shares pursuant to
Regulation S, ("Regulation S") promulgated under the Securities Act of the 1933,
as amended (the "Act") in consideration for $2,500 worth of certain consulting
services ("Services") effective on the acceptance of this subscription by the
Company, and
WHEREAS, the Shares will be offered and issued pursuant to an exemption
from registration provided by Regulation S, and
WHEREAS, upon original issuance thereof, and until such time as the
same is no longer required under the applicable requirements of the Act, the
Share Certificates shall bear the following legend:
THE SECURITY EVIDENCED HEREBY WAS ORIGINALLY
ISSUED PURSUANT TO REGULATION S ("REGULATION S")
UNDER THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER
SECTION 5 OF THE SECURITIES ACT, AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE UNITED STATES OR TO
U.S. PERSONS (AS DEFINED IN REGULATION S) IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM AND IN EACH CASE, IN
ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF
ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION.
2
<PAGE>
NOW THEREFORE, the Subscriber agrees with the Company as follows:
1. Subscription. Subject to its terms and conditions and further
subject to acceptance of this Agreement by the Company, the Subscriber agrees to
purchase from the Company 5,000 Shares for an aggregate purchase price of U.S.
$2,500, in an offering of 5,000 Shares ending at the close of business on
November 8, 1996 (the "Payment Date").
2. Delivery and Payment. Delivery of and payment for the Shares
shall be made at such time and place as the Company and the Subscriber shall
agree.
Shares shall be registered in the Subscriber's name and issued not
later than three full business days after the acceptance of this Agreement by
the Company. Shares shall be registered in the Subscriber's name and not in
nominee or other names.
3. Representations and Warranties of the Subscriber. The Subscriber
hereby represents and warrants to the Company as follows:
(a) The Subscriber acknowledges that he has received a
copy of the Company's Annual Report on Form 10-K for
the year ended December 31, 1995, the Company's Form
10-Q for the quarterly period ended June 30, 1996,
and a Proxy Statement of the Company dated June 12,
1996 and is acquainted with the business and
financial condition of the Company. The Subscriber
further acknowledges that he has had an opportunity
to ask questions of and receive answers from the
Company's executive officers concerning the Company
and the terms and conditions of this investment and
all such questions have been answered to the full
satisfaction of the Subscriber. The Subscriber
hereby further represents and warrants that it is
aware that there are substantial risks incident to an
investment in the Company and that no Federal or
State agency has passed upon the Shares or made any
finding or determination as to the fairness of an
investment in the Company.
(b) The Subscriber has the full right, power and
authority to enter into this Agreement and to carry
out and consummate the transactions contemplated
herein. This Agreement constitutes the legal, valid
and binding obligation of the Subscriber enforceable
in accordance with its terms.
(c) The Subscriber is acquiring Shares for its own
account and risk and not as part of any plan or
scheme to evade the registration requirements of the
Act, and no other person has or will have at the
Payment Date any interest in or participation in the
Subscriber's Shares or any right, option, security
interest, pledge or other interest in or to such
Shares. The Subscriber understands and agrees that
it must bear the economic risk of its investment in
the Shares for an indefinite period of time. The
Shares have not been registered under the Act. The
Shares may not be offered or sold, directly or
indirectly, in the United States or to any natural
person who is a resident of the United States or to
any U.S. person, as defined in Regulation S, or for
the account or benefit of any U.S. person unless
registered or exempt from registration under the Act
and any applicable state securities or blue sky laws
(the "State Acts"). The Subscriber also understands
that the Company is under no obligation to register
any Shares on behalf of the Subscriber or to assist
it in complying with any exemption from registration.
(d) The Subscriber is not a U.S. person, and is not
acquiring the Shares, directly or indirectly, for the
account or benefit of any U.S. person in violation of
Regulation S pursuant to which
3
<PAGE>
regulation the Shares are being sold.
(e) The Subscriber agrees to dispose of or encumber its
Shares only if (i) such Shares are duly registered
under the Act and all applicable State Acts, or (ii)
an exemption from registration under the Act,
including any exemption from the registration
requirements of the Act pursuant to Regulation S, and
all applicable State Acts, is available.
(f) This Agreement has not been executed or delivered by
the Subscriber in the United States, and neither the
Subscriber nor any person acting on behalf of the
Subscriber engaged directly or indirectly in any
negotiations with respect to this Agreement in the
United States or was located in the United States at
the time of the buy order or offer to purchase the
securities.
(g) Neither the Subscriber, nor any officer, director or
5% or more shareholder thereof, has been:
(i) Convicted within the preceding ten years of
any felony or misdemeanor in connection with
the offer, purchase or sale of any security
or commodity involving the making of a false
filing with the Commission.
(ii) Subject to any order, judgment or decree of
any court of competent jurisdiction
temporarily or preliminary enjoining or
restraining, or subject to any order,
judgment or decree of any court of competent
jurisdiction, entered within the preceding
five years, permanently enjoining or
restraining the investor from engaging in or
continuing any conduct or practice in
connection with the purchase or sale of any
security or commodity or involving the
making or a false filing with the Commission
or any state, or arising out of the conduct
of the business of any underwriter, broker,
dealer, municipal securities dealer or
investment advisor.
(iii) Subject to an order of the Commission
entered pursuant to Section 15(b), 15B(a) or
15B(c) of the Securities Exchange Act of
l934, as amended (the "Exchange Act"); or
subject to an order or the Commission
entered pursuant to Section 203(e) or (f) of
the Investment Advisers Act of l940.
(iv) Suspended or expelled from membership in, or
suspended or barred from association with a
member of, an exchange registered as a
national securities exchange pursuant to
Section 6 of the Exchange Act, an
association registered as a national
securities association under Section 15A of
the Exchange Act or a Canadian securities
exchange or association for any act or
omission to act constituting conduct
inconsistent with just and equitable
principles of trade.
(v) Filed a registration statement which is the
subject of a registration stop order entered
pursuant to the Act or any State Act within
the preceding five years.
(vi) Subject to any state's administrative
enforcement order or judgment which
prohibits, denies or revokes the use of any
exemption from registration in connection
with the offer, purchase or sale of
securities.
(h) The offer leading to the sale evidenced hereby was
made in an "offshore transaction", for purposes of
Regulation S.
4
<PAGE>
Subscriber is familiar with the provision of
Regulation S.
(i) Neither the Subscriber nor any affiliate of the
Subscriber or any person acting on their behalf, has
made or is aware of any "directed selling efforts" in
the United States, which is defined in Regulation S
to be any activity undertaken for the purpose of, or
that could reasonably be expected to have the effect
of, conditioning the market in the United States for
any of the securities being purchased hereby.
(j) The Subscriber understands that the Company is the
issuer of the securities which are the subject of
this Agreement. The Subscriber shall not, during the
40-day restricted period set forth under Rule
903(c)(2) of Regulation S, act as a distributor,
either directly or through any affiliate, nor shall
he sell, transfer, hypothecate or otherwise convey
the securities offered hereby or any interest
therein, other than to a non U.S. person, or in any
other manner offer or sell securities of the Company
in violation of Regulation S or the Act. Such 40-day
restricted period shall not begin until the closing
of the Offering at the end of business on the Payment
Date and, otherwise, as provided in Regulation S.
(k) If the Subscriber is a corporation or trust or other
entity, the officer or trustee or other person
executing this Agreement represents and warrants that
he is authorized to so sign and that the entity is
authorized by the governing documents of the entity,
to make this investment;
(l) The Subscriber understands that the offer and sale of
the Shares is being made only by means of this
Agreement. In deciding to subscribe for the Shares,
the Subscriber has not considered any information
other than that contained in this Agreement and all
documents provided to the Subscriber by the Company.
The Subscriber acknowledges that each of such
documents contain on the cover thereof a legend as to
the absence of registration of the Shares under the
Act and the restrictions arising under the Act. The
Subscriber acknowledges and agrees that the purchase
of the Shares involves a high degree of risk and that
the Subscriber may sustain, and has the financial
ability to sustain, the loss of its entire
investment.
4. Representations and Warranties of the Company. The Company
represents and warrants to the Subscriber, that:
(a) This Agreement has been duly authorized by the Company.
(b) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Nevada. The Company has the corporate power and authority necessary to enter
into and perform its obligations under this Agreement, and to issue, sell and
deliver the Shares.
(c) There is no statute, rule, regulation or order that has
been enacted, adopted or issued by any governmental agency or that has been
proposed by any governmental body which might prevent the issuance of the
Shares. No injunction, restraining order or order of any nature by a federal or
state court of competent jurisdiction has been issued that would prevent the
issuance of the Shares.
(d) No form of general solicitation or general advertising was
used by the Company or any of its representatives in connection with the offer
and sale of the Shares, including, but not limited to, articles, notices or
other communications published in any newspaper, magazine, or similar medium or
broadcast over television or radio, and no seminar or meeting whose attendees
5
<PAGE>
have been invited by any general advertising was used by the Company or any of
its representatives in connection with the offer and sale of the Shares.
(e) Reporting Company Status. The Company is a "Reporting
Company" as ]defined by Rule 902 of Regulation S. The Company is in full
compliance, to the extent applicable, with applicable reporting obligations
under either Section 12(b), 12(g) or 15(d) of the Securities and Exchange Act of
1934, as amended.
5. Reliance on Representations. The Subscriber understands that the
Company is relying on the Subscriber's representations concering the
Subscriber's compliance with the rules governing offers and sales made outside
the United States pursuant to Regulation S.
6. Conditions of the Subscriber's Obligations. The Subscriber's
obligation to purchase the Shares subject to the satisfaction of each and every
one of the following conditions as of the Payment Date:
(a) 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 Shares 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.
(b) 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 Shares. 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 Shares.
7. Conditions of the Company's Obligations. The Company's obligations
to sell the Shares under this Agreement on the Payment Date, is subject to the
satisfaction of each and every one of the following conditions as of the Payment
Date:
(a) 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.
(b) 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 Shares 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.
(c) 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 Shares. 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 Shares.
8. Subsequent Transfers of the Securities. The Subscriber further
agrees that, in connection with the resale of the Shares it will offer to sell
the Shares only after 41 days from the date of the closing of the last purchase
under the Offering, and only to, and will solicit offers to buy the Shares only
from, persons who in purchasing such Shares will have represented and agreed
that (1) they are purchasing the Shares for their own account, (2) all
requirements of Regulation S have been satisfied, (3) if sold outside the United
States, the sale shall be to a foreign person in a transaction meeting the
requirements of Rule
6
<PAGE>
904 of Regulation S under the Act, and (4) the holder will, and each subsequent
holder is required to, notify any purchaser from it of the security evidenced
thereby of the resale restrictions set forth in Regulation S.
9. Notice. Notices given pursuant to any provision of this Agreement
shall be addressed as follows: (i) if to the Company, to American International
Petroleum Corporation, 444 Madison Avenue, Suite 3203, New York, New York 10022,
Attention: Denis J. Fitzpatrick, with a copy to Snow Becker Krauss P.C., 605
Third Avenue, New York, New York 10158, (ii) if to the Subscriber at the address
set forth at the signature page of this Agreement, or in any case to such other
address as the person to be notified may have requested in writing.
10. Miscellaneous. Except as otherwise provided, this Agreement has
been and is made solely for the benefit of the Company and shall be binding upon
the Subscriber and its successors and assigns, all as and to the extent provided
in this Agreement, and no other persons shall acquire or have any right under or
by virtue of this Agreement. Subscriber shall not assign this Agreement. A
facsimile transmission of this signed Agreement shall be legal and binding on
all parties hereto. This Agreement may be signed in various counterparts, which
together shall constitute one and the same instrument.
THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES, AND EACH PARTY HEREBY AGREES THAT ALL PERFORMANCE DUE WITH RESPECT
TO TRANSACTIONS UNDERTAKEN PURSUANT TO THIS AGREEMENT SHALL BE DEEMED TO BE DUE
OR TO HAVE OCCURRED IN NEW YORK. THE EXCLUSIVE VENUE AND PLACE OF JURISDICATION
FOR ANY LITIGATION ARISING FROM OR RELATED TO THIS AGREEMENT SHALL BE THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK OR THE NEW YORK
STATE SUPREME COURT LOCATED IN THE COUNTY OF NEW YORK. THE PARTIES HERETO WAIVE
TRIAL BY JURY OF ANY DISPUTES BETWEEN THEM.
7
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement, the 8th
day of November, 1996.
Number of Shares subscribed for:
Name of Subscriber:
Address:
Country in which this Agreement is executed by Subscriber:
Telephone Number:
Telecopier Number:
Social Security No. or Tax I.D. No. (if applicable): N/A
AMERICAN INTERNATIONAL
PETROLEUM CORPORATION
By: ____________________________________
Denis J. Fitzpatrick, Vice President
8
