-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QjKmct6t6l6g6auaF7UdcNqLHTPUUdUp9fRTOQ5+WYw3NRAEdDRzwk+zbEbi0tR+ 1/qvjXS9qflR8TfQuvdaxw== 0000950169-97-000079.txt : 19970222 0000950169-97-000079.hdr.sgml : 19970222 ACCESSION NUMBER: 0000950169-97-000079 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19970128 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: FILED AS OF DATE: 19970212 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN INTERNATIONAL PETROLEUM CORP /NV/ CENTRAL INDEX KEY: 0000799119 STANDARD INDUSTRIAL CLASSIFICATION: LESSORS OF REAL PROPERTY, NEC [6519] IRS NUMBER: 133130236 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-14905 FILM NUMBER: 97527506 BUSINESS ADDRESS: STREET 1: 444 MADISON AVE STE 3203 CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2129563333 MAIL ADDRESS: STREET 1: 444 MADISON AVE STE 3203 CITY: NEW YORK STATE: NY ZIP: 10022 8-K 1 AMERICAN INTERNATIONAL PETROLEUM 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) 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 2 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. 3 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 4 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 4 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. 5 EX-4 2 EXHIBIT 4.1 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: (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. 2 (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. 3 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 4 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. 5 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. 6 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. 7 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. 8 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: 9 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." 10 EX-4 3 EXHIBIT 4.2 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: 1 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 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 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 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 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 EX-4 4 EXHIBIT 4.3 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 Notify: Laurie Brown of Sutherland Asbill & Brennan (404) 853-8624 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 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 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 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 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. 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 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. 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 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 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. 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. 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: ____________________________________________________ - --------------------------------------------------------------------------- - --------------------------------------------------------------------------- - --------------------------------------------------------------------------- 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 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 EX-4 5 EXHIBIT 4.4 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. 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. 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. 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 EX-4 6 EXHIBIT 4.5 Exhibit 4.5 AMERICAN INTERNATIONAL PETROELUM CORPORATION REGULATION S SUBSCRIPTION AGREEMENT 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 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 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 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 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 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 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 EX-4 7 EXHIBIT 4.5 Exhibit 4.5 AMERICAN INTERNATIONAL PETROLEUM CORPORATION REGULATION S SUBSCRIPTION AGREEMENT 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 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 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 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 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 6 904 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 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 -----END PRIVACY-ENHANCED MESSAGE-----