<PAGE>
As filed with the Securities and Exchange Commission on May 7, 1999
Registration No. 333-________
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
FORM S-8
REGISTRATION STATEMENT
Under the Securities Act of 1933
AMERICAN INTERNATIONAL PETROLEUM CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Nevada 13-3130236
- ------------------------------- ----------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
444 Madison Avenue, Suite 3203, New York, NY 10022
(Address of principal executive offices) (zip code)
CONSULTANCY AGREEMENT WITH MAXIM TOLOKONNIKOV
(Full Title of the Plan)
Dr. George N. Faris, Chief Executive Officer
AMERICAN INTERNATIONAL PETROLEUM CORPORATION
444 Madison Avenue
New York, New York 10022
(212) 688-3333
(Name, Address and telephone number including area code, of agent for service)
A copy of all communications, including communications sent to the agent for
service, should be sent to:
Charles Snow, Esq.
Snow Becker Krauss P.C.
605 Third Avenue
New York, N.Y. 10158-0125
(212) 687-3860
Approximate date of commencement of proposed sale to the public: Upon filing of
this registration statement
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------------------------
Proposed Proposed
Title of Maximum Maximum Amount of
Securities to Amount to be Offering Price Aggregate Registration
be Registered Registered Per Share Offering Price Fee
- ------------- ------------ ---------- -------------- ------------
<S> <C> <C> <C> <C>
Common Stock,
$.08 par value 750,000 shs.(1) $0.88 $666,666 $185.33
</TABLE>
- ----------------------------
(1) Represents shares which may be issued to Maxim Tolokonnikov for consulting
services relating to the acquisition, development and commercial
exploitation of gas produced from a gas field in western Kazakstan pursuant
to a Consultancy Agreement dated May 20, 1998.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents By Reference
The following documents filed by the Registrant under the Securities
Exchange Act with the Securities and Exchange Commission are incorporated by
reference in this registration statement.
(1) Annual Report on Form 10-K for the fiscal year ended December 31, 1998,
including any amendment to that report.
(2) The description of the common stock contained in the Registrant's
Registration Statement on Form 8-A (File No. 0-14905) filed pursuant to Section
12(g) of the Securities Exchange Act, including any amendment or report filed
for the purpose of updating that description.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act, prior to the filing
of a post-effective amendment which indicates that all securities offered have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this registration statement to the
extent that a statement contained herein or in any other subsequently filed
document which also is incorporated or deemed to be incorporated by reference
herein modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this registration statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Snow Becker Krauss P.C., counsel to the Registrant, owns 268,212 shares of
common stock, and SBK Investment Partners, an investment nominee of Snow Becker
Krauss P.C. owns 225,905 shares of common stock, all of which was issued to it
for legal fees and disbursements. Snow Becker Krauss P.C. is rendering an
opinion upon the validity of the securities being registered hereby.
II-1
<PAGE>
Item 6. Indemnification of Directors and Officers.
Under Section 78.7502 of the Nevada Corporation Law ("NCL"), directors and
officers may be indemnified against judgments, fines and amounts paid in
settlement and reasonable expenses (including attorneys' fees), actually and
reasonably incurred as a result of specified actions or proceedings (including
appeals), whether civil or criminal (other than an action by or in the right of
the corporation--a "derivative action") if they acted in good faith and for a
purpose which they reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe their conduct was unlawful. A
similar standard of care is applicable in the case of derivative actions, except
that indemnification only extends to amounts paid in settlement and reasonable
expenses (including attorneys' fees) actually and reasonably incurred by them in
connection with the defense or settlement of such an action (including appeals),
except in respect of a claim, issue or matter as to which such person shall have
been finally adjudged to be liable to the corporation, unless and only to the
extent a court of competent jurisdiction deems proper.
In accordance with Section 78.037(1) of the NCL, Article VIII of the
Registrant's Certificate of Incorporation, as amended, eliminates the personal
liability of the Registrant's directors to the Registrant or its shareholders
for monetary damages for breach of their fiduciary duties as directors, with
certain limited exceptions set forth in said Article VIII and Section 78.037(1).
Article VII of the Registrant's Bylaws provides for indemnification of
directors, officers and others as follows:
"On the terms, to the extent, and subject to the condition
prescribed by statute and by such rules and regulations, not
inconsistent with statute, as the Board of Directors may in its
discretion impose in general or particular cases or classes of cases,
(a) the Corporation shall indemnify any person made, or threatened to
be made, a party to an action or proceeding, civil or criminal,
including an action by or in the right of any other corporation of any
type or kind, domestic or foreign, or any partnership, joint venture,
trust, employee benefit plan or other enterprise which any director or
officer of the Corporation served in any capacity at the request of the
Corporation, by reason of the fact that he, his testator or intestate,
was a director or officer of the joint venture, trust, employee benefit
plan or other enterprise in any capacity, against judgments, fines,
amounts paid in settlement and reasonable expenses, including
attorneys' fees of any such action or proceeding, or any appeal
therein, and (b) the Corporation may pay, in advance of final
disposition of any such action or proceeding, expenses incurred by such
person in defending such action or proceeding.
On the terms, to the extent, and subject to the conditions
prescribed by statute and by such rules and regulations, not
inconsistent with statute, as the Board of Directors may in its
discretion impose in general or particular cases or classes of cases,
(a) the Corporation shall indemnify any person made a party to an
action by or in the right of the Corporation to procure a judgment in
its favor, by reason of the fact that he, his testator or intestate, is
or was a director or officer of the Corporation, against the reasonable
expenses, including attorneys' fees, actually and necessarily incurred
by him in connection with the defense of such action, or in connection
with an appeal therein, and (b) the Corporation may pay, in advance of
final disposition of any such action, expenses incurred by such person
in defending such action or proceeding."
The Registrant maintains insurance, at its expense, to reimburse itself and
directors and officers of the Registrant and of its direct and indirect
subsidiaries against any expense, liability or loss arising out of
indemnification claims against directors and officers and to the extent
otherwise permitted under the NCL.
II-2
<PAGE>
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE SECURITIES ACT
MAY BE PERMITTED TO DIRECTORS, OFFICERS OR PERSONS CONTROLLING THE REGISTRANT
PURSUANT TO THE FOREGOING PROVISIONS, THE REGISTRANT HAS BEEN INFORMED THAT IN
THE OPINION OF THE SECURITIES AND EXCHANGE COMMISSION SUCH INDEMNIFICATION IS
AGAINST PUBLIC POLICY AS EXPRESSED IN THE SECURITIES ACT AND IS THEREFORE
UNENFORCEABLE.
Item 7. Exemption From Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit No. Description of Exhibit
- ----------- ----------------------
5.1 Opinion of Snow Becker Krauss P.C.
10.1 Form of Consultancy Agreement dated May 20, 1999 among the
Registrant, American International Petroleum Corporation
Kazakstan and Maxim Tolokonnikov.
23.1 Consent of Snow Becker Krauss P.C. (included in Exhibit 5.1)
23.2 Consent of Hein + Associates LLP.
24.1 Power of Attorney (included on the signature page of this
Registration Statement).
Item 9. Required Undertakings.
The undersigned Registrant hereby undertakes:
(a)(l) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represents a fundamental change in the information set forth in the registration
statement;
II-3
<PAGE>
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Securities
Exchange Act) that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or controlling persons of
the Registrant pursuant to any arrangement, provision or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-8 and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of New York, State of New York, on May 6, 1999.
AMERICAN INTERNATIONAL PETROLEUM CORPORATION
By: /s/George M. Faris By: /s/ Denis J. Fitzpatrick
-------------------------- -------------------------------
George M. Faris Denis J. Fitzpatrick
President and Chief Chief Financial Officer
Executive Officer (Principal financial and
(Principal executive accounting officer)
officer)
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints George
N. Faris or Denis J. Fitzpatrick, his true and lawful attorney-in-fact and
agent, with power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this registration statement, and to
file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying all
that said attorney-in-fact and agent or his substitute or substitutes, or any of
them, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities indicated
on May 6, 1999.
Signature Title
--------- -----
/s/ George N. Faris President, Chief Executive Officer and
- --------------------------- Chairman of the Board of Directors
George N. Faris (principal executive officer)
/s/Denis J. Fitzpatrick Chief Financial Officer
- --------------------------- (principal financial
Denis J. Fitzpatrick and accounting officer)
Director
- ---------------------------
Donald G. Rynne
/s/Daniel Y. Kim Director
- ---------------------------
Daniel Y. Kim
/s/ William R. Smart Director
- ---------------------------
William R. Smart
/s/ Richard W. Murphy Director
- ---------------------------
Richard W. Murphy
II-5
<PAGE>
EXHIBIT 5.1
May 6, 1999
American International Petroleum Corporation
444 Madison Avenue
New York, New York 10022
Gentlemen:
We are counsel to American International Petroleum Corporation, a Nevada
corporation (the "Company"), in connection with the filing by the Company with
the Securities and Exchange Commission pursuant to the Securities Act of 1933,
as amended (the "Securities Act"), of a registration statement on Form S-8 (the
"Registration Statement") relating to 750,000 shares (the "Shares") of the
Company's common stock, par value $.08 per share (the "Common Stock"). The
Shares may be issued to Maxim Tolokonnikov, a consultant, pursuant to a
Consultancy Agreement dated May 20, 1999.
We have examined such corporate documents and records and we have made such
investigations of law as we have deemed necessary or appropriate in order to
render the opinions hereinafter set forth.
Based on the foregoing, we are of the opinion that:
1. The Company has been duly organized, is validly existing
and in good standing under the laws of the State of Nevada.
2. The Shares have been duly authorized, and when issued in
consideration for the services contemplated by the
Consultancy Agreement, will be legally issued, fully paid and
non-assessable.
Our firm owns 268,212 shares of Common Stock, and an investment nominee of our
firm owns 225,905 shares of Common Stock.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference in the Registration Statement to
this firm under Item 5 captioned "Interests of Named Experts and Counsel." In
giving this consent, we do not hereby admit that we are within the category of
persons whose consent is required under Section 7 of the Securities Act, or the
rules and regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Snow Becker Krauss P.C.
-----------------------------
SNOW BECKER KRAUSS P.C.
<PAGE>
EXHIBIT 10.1
CONSULTANCY AGREEMENT
This Agreement is entered into and made on this 20 day of May 1998 by and
between AMERICAN INTERNATIONAL PETROLEUM CORPORATION hereinafter referred to as
(the Company) in behalf of its Kazakstan affiliate AMERICAN INTERNATIONAL
PETROLEUM CORPORATION KAZAKSTAN, a Nevada Corporation with office at 444 Madison
Avenue, New York City, New York, and MAXIM TOLOKONNIKOV, an independent
consultant registered to do business in the Republic of Kazakstan with offices
located at 521 Seifullin street #319, Almanty 480083, Republic of Kazakstan.
WITNESSETH:
WHEREAS, The Company represents that its affiliate AMERICAN INTERNATIONAL
PETROLEUM CORPORATION KAZAKSTAN (hereinafter referred to as "AIPK") is
interested in participating in a Republic of Kazakstan Open Tender for the
purpose of acquiring, developing, and exploitation the Shagyrly-Shomyshty gas
field in Western Kazakstan.
WHEREAS, The Company desires to retain the legal, technical, and commercial
consulting services of Mr. Tolokonnikov to support the Company in all filings,
and presentations to the Kazakstan Government regarding this Open Tender and to
advise the Company on all political, technical, and commercial aspects and
assist in the preparation and execution of a successful tender bid proposal by
the official Open Tender due date 20th of July 1998.
WHEREAS, Mr. Tolokonnikov agrees to make his services available to the Company
subject to the terms and conditions of this Agreement, and further represents
that he has experience in successfully representing petroleum companies for the
award and contracting of Petroleum Rights in Kazakstan, and Mr. Tolokonnikov is
prepared to support AMERICAN INTERNATIONAL PETROLEUM KAZAKSTAN in the
evaluation, preparation of the bid proposal, Operating contract negotiations,
and the registration of the Shagryl - Shomyshty Gas Field License and Contract.
WHEREAS, the Kazakstan Government requires all participants in the Shagryl -
Shomyshty Gas Field Open Tender to submit their technical and commercial bids by
August 27, 1998, AIPK will require Mr. Tolokonnikov to expedite the acquisition
of technical data, conduct a market survey for potential gas sales, and assist
AIPK in the preparation of its technical and commercial bid by the due date.
NOW, THEREFORE, in consideration of the mutual promises herein contained, the
Company and Mr. Tolokonnikov agree as follows:
1.0 Employment.
The Company hereby in behalf of its Kazakstan affiliate AMERICAN
INTERNATIONAL PETROLEUM CORPORATION KAZAKSTAN contracts with Mr.
Tolokonnikov to employ him as a consultant and Mr. Tolokonnikov,
(hereinafter referred to as CONTRACTOR) hereby accepts such contract
subject to the terms and conditions contained in this Agreement.
CONTRACTOR is engaged
<PAGE>
consultant to the Company and neither CONTRACTOR nor the Company intend
to create a joint venture, partnership or other relationship which
might impose a fiduciary obligation on the part of CONTRACTOR other
than as an independent contractor and not as an employee of the Company
in performance of this Agreement.
2.0 CONTRACTOR's Duties.
CONTRACTOR shall provide exclusive technical, legal, marketing, and
advisory services as an independent contractor on behalf of the Company
with respect to all matters relating to or affecting the Company's
business efforts in evaluating, bidding, acquiring, developing, and
marketing the gas produced from the Shagryl - Shomyshty gas field in
Western Kazakstan. CONTRACTOR agrees by providing experienced personnel
competent to perform the assigned tasks by AIPK, to facilitate the
acquisition of all essential technical and commercial data necessary to
submit a competitive by AIPK in time to meet the Tender Due Date of
July 20, 1998.
2.1 In the event that AIPK is successful in winning the Open
Tender for the Shagyrly - Shomyshty gas field, CONTRACTOR
shall then support the Company's efforts to negotiate and
consummate the acquisition of a contract, its registration,
and issuance of a license to develop and produce the Shagryl -
Shomyshty gas field. CONTRACTOR will also provide its
experienced personnel to facilitate, negotiate, and consummate
the acquisition of all permits, contracts, and documentation
necessary to the commercial development and exploitation of
the Shagryl -Shomyshty gas field.
2.2 Throughout the term of this Agreement, the CONTRACTOR will
provide services to the Company on a part-time basis and will
devote the time and attention reasonably necessary to perform
his duties and will use his best efforts to achieve the
objectives of the Company as described above. The CONTRACTOR
may continue to be engaged as a consultant by third parties
regarding services that are not related to the Shagryl -
Shomyshty gas field Open Tender.
3.0 Compensation.
The Company agrees to a maximum compensation of $2,000,000.00 (Two
Million U.S. Dollars) to the CONTRACTOR based on the detailed
contractor's scope of duties outlined in Appendix 1. These payments
will only be made if the Company is declared the winner of the Shagryl
- Shomyshty gas field Open Tender by the appropriate Kazakstan
government authorities and the Company is successful in negotiating an
acceptable Operating contract that will allow for the commercial
exploitation of the gas field.
The CONTRACTOR'S scope of duties as outlined on Appendix 1 are only to
be recognized as a general guideline of the work to be performed by the
CONTRACTOR, which will be necessary in order for the Company to
participate in, and in the event the Company is awarded the Tender,
negotiate and register the License and Operating Contract. The dollar
amounts for work to be performed in each phase as outlined in Article
3.1, is to be viewed only as a general estimated work program for the
CONTRACTOR'S planning purposes only. In the event that additional work
not listed in Appendix 1 may be required, both Parties recognize and
agree that any additional work and its associated expense not listed in
Appendix 1, will be completed by the CONTRACTOR at the CONTRACTOR'S
expense. No payments will be due to the CONTRACTOR for completion of
any individual duties in each phase of the Contractor's Scope of Duties
as shown in Appendix 1. Partial payments of the total amount of two
million U.S. dollars ($2,000,000.00) however will be made based on the
successful completion of three key contractual events and not per each
individual duty performed in the Appendix 1.
2
<PAGE>
3.1 Payment Schedule.
The above compensation will be paid in three equal
installments corresponding with the completion of key phases
or events of meeting the Company's directives as described
below.
a) Tender and License Award - Phase I A sum of $666,666
US dollars will be paid to CONTRACTOR five (5)
working days after AMERICAN INTERNATIONAL PETROLEUM
KAZAKSTAN
1) is officially announced the winner of the
Open Tender for the Shagryl - Shomyshty
gas field and an official announcement
declaring AIPK the winner of the Shagyrly
- Shomyshty gas field Tender is published
in the media (newspaper or magazine) in
Almaty by the appropriate Kazakstan
governmental entity;
2) is officially awarded a signed and
registered License to develop and exploit
the Shagyrly-Shomyshty gas field by the
appropriate competent Kazakstan entity;
b) Operating Contract Executed - Phase II A sum of
$666,667 US dollars will be paid to CONTRACTOR five
(5) working days after AMERICAN INTERNATIONAL
PETROLEUM KAZAKSTAN receives a singed final
Operating Contract that has been approved by the
appropriate Kazakstan governmental authorities which
will provide for:
1) a conservation license and related
environmental licenses to construct
facilities and develop infrastructure to
produce the natural gas and any other
produced hydrocarbons from the Shagyrly -
Shomyshty gas field;
2) terms and conditions acceptable to the
Company regarding;
a) the contract and schedule of the
minimum work program,
b) local and Federal taxes
c) social programs and training
d) royalties, production bonuses and any
other direct or indirect payments to
the government.
3
<PAGE>
c) Contract Registration Act - Phase III
A sum of $666,667 US dollars will be paid to
CONTRACTOR five (5) working days after AMERICAN
INTERNATIONAL PETROLEUM KAZAKSTAN receives a signed
Act from the appropriate competent Kazakstan
authorities registering the License and / or Contract
in the name of AIPK with the appropriate provision to
market and export the production from the Shagryl -
Shomyshty gas field.
4.0 Taxes
CONTRACTOR assumes full and exclusive liability for payment of all
taxes, levies and contributions imposed by the government of any
country or any political subdivision, including those measured by
wages, salaries or other remuneration paid to persons engaged or
employed by CONTRACTOR in the performance of services rendered under
this Agreement, and shall report and pay such taxes and contributions
directly when required by law and otherwise comply with the law and
other applicable regulations.
5.0 Payments
The Company will pay this consulting fee for services to the CONTRACTOR
in shares of its common stock, $08 par value, or in US dollars via wire
transfer to the specified account. CONTRACTOR will provide wiring
instructions for this purpose, as per Section 3.1 of the Agreement.
6.0 Confidentiality
CONTRACTOR agrees to keep and maintain strict confidentiality of this
Agreement, all data, reports, analysis, information and affairs of the
Company and its Affiliates, its contractors, subcontractors, and
associated companies, which may be revealed to CONTRACTOR in the
execution of this Agreement. CONTRACTOR will not disclose or discuss in
any form the affairs of the Company of AIPK with representatives of any
government, organization or person, without specific written
authorization of the Company or AIPK. CONTRACTOR agrees to defend,
indemnify and hold the Company and AIPK harmless from any claim or
action resulting from a breach of this confidentiality obligation. This
agreement to maintain confidentiality shall continue beyond the
termination of this Agreement until CONTRACTOR has been given release
in writing to publish or reveal part or all of such information.
7.0 Entire Agreement
This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter herein contained, and no
modification hereof will be effective unless made by a supplemental
written agreement executed by all of the parties hereto.
8.0 Disclosure to Government Agencies
It is understood, that the Company or AIPK shall have the right, in its
sole discretion, to disclose the covenants, representations, terms and
conditions of this Agreement (as it may be amended from time to time),
including without limitations, fees paid under this Agreement, to
agencies of the United States of America, to agencies of the government
of the Territory, or to agencies of the government of CONTRACTOR'S
principal place of business or domicile.
4
<PAGE>
9.0 Attorneys' Fees
If any party institutes an action or proceeding against any other party
relating to the provisions of this Agreement or any default hereunder,
the unsuccessful party to such action or proceeding will reimburse the
successful party therein for the reasonable expenses of attorneys' fees
and disbursements and litigation expenses incurred by the successful
party.
10.0 Term
This Agreement will commence on May 20, 1998 and be in force through
out the tendering process, contract negotiations, and registration of
the License and Operating contract for the Shagyrly-Shomyshty gas field
as appropriate. This contract will end without further compensation due
if the Open Tender process is canceled by the competent Kazakstan
government authorities. In the event the Company is declared the winner
of the Tender for the Shagyrly-Shomyshty gas field by the appropriate
Kazakstan government authorities, the CONTRACTOR will continue to
assist and provide its consulting services to the Company during the
contract negotiation and registration period, as provided above and in
Appendix 1 of the Agreement.
11.0 Termination.
This Agreement will continue in effect until the expiration of the term
stated in Section 10.0 of the Agreement unless earlier terminated
pursuant to this Section 11.0.
11.1 Termination by the Company for Cause
The Company may terminate this Agreement for cause if
CONTRACTOR: (a) misappropriates the property of the Company or
commits any other act of dishonesty; (b) engages in gross
personal misconduct which materially injures the Company; (c)
willfully violates any law or regulation relating to the
business of the Company which results in material injury to
the Company; or (d) willfully and repeatedly fails to perform
it' duties hereunder and does not commence in good faith to
cure such performance deficiencies immediately after receiving
oral or written notice thereof. In the event this Agreement is
terminated for cause, the Company will not have any obligation
to provide any further payments to CONTRACTOR after the date
of such acts.
11.2 Either Party may make unilateral termination of this Agreement
without cause by giving 30 days formal Notice for the
withdrawal from this Agreement. The Company may only terminate
the Agreement under this Section if there is no Tender award
within one year from the effective date of this Agreement. The
CONTRACTOR will not be entitled to any compensation earned
under Section 3.0 with the application of termination under
this Section.
5
<PAGE>
12.0 Notice
Any notice, payment, demand or communication required or permitted to
be given by any provision of this Agreement will be in writing and will
be deemed to have been given when delivered personally or by facsimile
to the party designated to receive such notice, or on the date
following the day sent by overnight courier, or on the third (3rd)
business day after the same is sent by certified mail, postage and
charges prepaid, directed to the following address or to such other or
additional addresses as any party might designate by written notice to
the other party:
To: The Company American International Petroleum Corporation
444 Madison Avenue
New York City, New York
To: CONTRACTOR Mr. Maxim Tolokonnikov
521 Seifullin street #319
Almanty 480083
Republic of Kazakstan
13.0 Insurance
CONTRACTOR will maintain all insurance required by the Republic of
Kazakstan law.
14.0 Governing Law and Arbitration
14.1 This Agreement shall be governed by and construed in
accordance with the laws of the Republic of Kazakstan, that
are applicable to contracts executed and performed entirely
within
14.2 Because the Company and its subsidiary AIPK are corporations
which are subject to the laws of the United States of America,
each Party shall comply with the United States of America
Foreign Corrupt Practices Act of 1977 dealing with improper or
illegal payments, gifts or gratuities and shall not offer,
make or give any payments, gifts or gratuities in violation of
such Act to any person (whether governmental official or
private individual) for the purposes of inducing such person
or individual to make a buying or commercial decision, or to
take any other action favorable to any Party in connection
with the award of the Open Tender.
14.3 Any dispute between the Parties arising out of or in
connection with this Agreement, or any breach thereof, shall,
if the Parties are unable to amicably resolve such dispute, be
settled under and in accordance with the then existing Rules
of Conciliation and Arbitration of the International Chamber
of Commerce in London England by three arbitrators appointed
in accordance with such rules. The award of the arbitrators
appointed in accordance with such rules may be entered in any
court having jurisdiction in respect thereof. Such award shall
be final and binding and not subject to any appeal and shall
include a decision as to the apportionment between the Parties
of the costs of such arbitration and presentation of the case.
Unless otherwise mutually agreed, such arbitration shall be
held in London and the proceedings shall be conducted in
English.
6
<PAGE>
15.0 Force Majeure
If any Party (is respective assignees, subcontractors or Affiliates) is
prevented from performing any obligation under this Agreement (except
for failure to make payment hereunder) as a result of Force Majeure,
the performance of such obligation by such Party, as far as it is
affected by Force Majeure, shall be suspended from the inception of any
such inability until it is corrected (unless a longer period is agreed
to in writing by the Parties) or until termination of this Agreement.
For the purpose of this Agreement, "Force Majeure" shall mean an event
or occurrence that is beyond a Party's reasonable control and that
prevents the performance of a Party's obligation hereunder, including
fire, flood, inclement weather, acts of God, acts of government
(excluding acts of government directly involving Contractor), roots,
wars, terrorism, civil insurrection or other acts of violence,
embargoes, strikes, lockouts, or other labor difficulties, accidents in
transportation, or other causes; provided, however, that the Party so
prevented from complying herewith shall not have caused such Force
Majeure and shall have used reasonable diligence to avoid such Force
Majeure and to ameliorate its effects.
The Party claiming an inability to perform shall, immediately after the
occurrence of the Force Majeure event, notify the other Parties of the
nature, date of inception and expected duration of the Force Majeure
and the extent to which it will prevent the Party giving such notice
from performing it obligations under this Agreement. The party claiming
inability to perform shall promptly correct such inability to the
extent it may be corrected through the exercise of reasonable
diligence.
16.0 Suppression
This Agreement is the final, complete and exclusive expression of the
agreement between the Company, AIPK and CONTRACTOR and supersedes and
replaces in all respects any prior agreements. Upon execution of this
Agreement by the AIPC and CONTRACTOR, the relationship between the AIPC
and CONTRACTOR will be governed by terms of this Agreement and not by
any prior agreements.
IN WITNESS WHEREOF, the undersigned authorized representatives of the Parties
hereto have executed this Agreement in duplicate this 20th day of May 1998.
Company: American International Petroleum Corporation
By:
----------------------------------
Lorrie Olivier
Vice President
CONTRACTOR: Maxim Tolokonnikov
----------------------------------
7
<PAGE>
Exhibit 23.2
Independent Auditors Consent
The Board of Directors
American International Petroleum Corporation:
We hereby consent to the incorporation by reference in the
Registration Statement on Form S-8, of our report dated March 30, 1999,
appearing on page F-1 of American International Petroleum Corporation's Annual
Report on Form 10-K/A for the year ended December 31, 1998.
HEIN + ASSOCIATES LLP
Houston, Texas
May 6, 1999
