THIS COMMON STOCK PURCHASE WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING
THIS COMMON STOCK PURCHASE WARRANT, AGREES FOR THE BENEFIT OF THE COMPANY THAT
SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE
COMPANY, (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT, OR (C) IF REGISTERED UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS. IN ADDITION, A SECURITIES PURCHASE AGREEMENT, DATED THE DATE
HEREOF, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY AT ITS PRINCIPAL
EXECUTIVE OFFICE, CONTAINS CERTAIN ADDITIONAL AGREEMENTS AMONG THE PARTIES,
INCLUDING, WITHOUT LIMITATION, PROVISIONS WHICH LIMIT THE EXERCISE RIGHTS OF THE
HOLDER AND SPECIFY MANDATORY REDEMPTION OBLIGATIONS OF THE COMPANY.
AMERICAN INTERNATIONAL PETROLEUM
CORPORATION
COMMON STOCK PURCHASE WARRANT
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No. 1
Number of Shares: 560,000 Holder: Infinity Emerging Opportunities
Limited
00 Xxxxxxxx Xxxxxx
Purchase Price: $2.76 Xxxxxx, Xxxxxxx X0X 0XX
Expiration Date: April 21, 2003
For identification only.
The governing terms of this Warrant are set forth below.
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AMERICAN INTERNATIONAL PETROLEUM CORPORATION, a Nevada corporation (the
"Company"), hereby certifies that, for value received, INFINITY EMERGING
OPPORTUNITIES LIMITED or assigns, is entitled, subject to the terms set forth
below, to purchase from the Company at any time or from time to time after the
date hereof and prior to the fifth anniversary hereof (the "Exercise Period"),
at the Purchase Price hereinafter set forth, five hundred sixty thousand
(560,000) shares of the fully paid and nonassessable shares of Common Stock of
the Company. The number and character of such shares of Common Stock and the
Purchase Price are subject to adjustment as provided herein.
This Warrant (this "Warrant"; such term to include any warrants issued in
substitution therefor) is one of a series of 1,400,000 Common Stock Purchase
Warrants issued in connection with that certain Securities Purchase Agreement
(the "Purchase Agreement") dated of even date herewith among the initial Holder
hereof, the Company and certain other parties thereto.
The purchase price per share of Common Stock issuable upon exercise of
this Warrant (the "Purchase Price") shall initially be $2.76; provided, however,
that the Purchase Price shall be adjusted from time to time as provided herein.
Capitalized terms used herein not otherwise defined shall have the
meanings ascribed thereto in the Purchase Agreement. As used herein the
following terms, unless the context otherwise requires, have the following
respective meanings:
(a) The term "Company" shall include American International
Petroleum Corporation and any corporation that shall succeed or assume the
obligations of such corporation hereunder.
(b) The term "Common Stock" includes (a) the Company's common stock,
par value $.08 per share, (b) any other capital stock of any class or
classes (however designated) of the Company, authorized on or after such
date, the Holders of which shall have the right, without limitation as to
amount, either to all or to a share of the balance of current dividends
and liquidating dividends after the payment of dividends and distributions
on any shares entitled to preference, and the Holders of which shall
ordinarily, in the absence of contingencies, be entitled to vote for the
election of a majority of directors of the Company (even though the right
so to vote has been suspended by the happening of such a contingency) and
(c) any other securities into which or for which any of the securities
described in (a) or (b) may be converted or exchanged pursuant to a plan
of recapitalization, reorganization, merger, sale of assets or otherwise.
(c) The term "Other Securities" refers to any stock (other than
Common Stock) and other securities of the Company or any other person
(corporate or otherwise) that the Holder of this Warrant at any time shall
be entitled to receive, or shall have received, on the exercise of this
Warrant, in lieu of or in addition to Common Stock, or that at any time
shall be issuable or shall have been issued in exchange for or in
replacement of Common Stock or Other Securities pursuant to Section 4 or
otherwise.
1. Exercise of Warrant.
1.1. Method of Exercise.
(a) This Warrant may be exercised in whole or in part (but not as to
a fractional share of Common Stock), at any time and from time to time
during the Exercise Period by the Holder hereof by delivery of a notice of
exercise (a "Notice of Exercise") substantially in the form attached
hereto as Exhibit A via facsimile to the Company. Promptly thereafter the
Holder shall surrender this Warrant to the Company at its principal
office, accompanied by payment of the Purchase Price multiplied by the
number of shares of Common Stock for which this Warrant is being exercised
(the "Exercise Price"). Payment of the Exercise Price shall be made, at
the option of the Holder, (i) by check or bank draft payable to the order
of the Company, (ii) by wire transfer to the account of the Company, (iii)
in shares of Common Stock having a Market Value on the Exercise Date (as
hereinafter defined) equal to the
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COMMON STOCK PURCHASE WARRANT - Page 2
aggregate Exercise Price or (iv) by presentation and surrender of this
Warrant to the Company for cashless exercise (a "Cashless Exercise"), with
such surrender being deemed a waiver of the Holder's obligation to pay all
or any portion of the Exercise Price. In the event the Holder elects a
Cashless Exercise (which such election shall be irrevocable) the Holder
shall exchange this Warrant for that number of shares of Common Stock
determined by multiplying the number of shares of Common Stock being
exercised by a fraction, the numerator of which shall be the difference
between the then current Market Value of the Common Stock and the Purchase
Price, and the denominator of which shall be the then current Market Value
of the Common Stock. If the amount of the payment received by the Company
is less than the Exercise Price, the Holder will be notified of the
deficiency and shall make payment in that amount within five (5) business
days. In the event the payment exceeds the Exercise Price, the Company
will promptly refund the excess to the Holder. Upon exercise, the Holder
shall be entitled to receive, promptly after payment in full, one or more
certificates, issued in the Holder's name or in such name or names as the
Holder may direct, subject to the limitations on transfer contained
herein, for the number of shares of Common Stock so purchased. The shares
of Common Stock so purchased shall be deemed to be issued as of the close
of business on the date on which the Company shall have received from the
Holder payment in full of the Exercise Price (the "Exercise Date").
(b) Notwithstanding anything to the contrary set forth herein, upon
exercise of all or a portion of this Warrant in accordance with the terms
hereof, the Holder shall not be required to physically surrender this
Warrant to the Company. Rather, records showing the amount so exercised
and the date of exercise shall be maintained on a ledger substantially in
the form of Annex B attached hereto (a copy of which shall be delivered to
the Company or transfer agent with each Notice of Exercise). It is
specifically contemplated that the Holder hereof shall act as the
calculation agent for all exercises of this Warrant. In the event of any
dispute or discrepancies, such records maintained by the Holders shall be
controlling and determinative in the absence of manifest error. The Holder
and any assignee, by acceptance of this Warrant, acknowledge and agree
that, by reason of the provisions of this paragraph, following an exercise
of a portion of this Warrant, the number of shares of Common Stock
represented by this Warrant will be the amount indicated on Annex B
attached hereto (which may be less than the amount stated on the face
hereof).
1.2. Regulation D Restrictions. The Holder hereof represents and
warrants to the Company that it has acquired this Warrant and anticipates
acquiring the shares of Common Stock issuable upon exercise of the Warrant
solely for its own account for investment purposes and not with a view to
or for resale of such securities unless such resale has been registered
with the Commission or an applicable exemption is available therefor. At
the time this Warrant is exercised, the Company may require the Holder to
state in the Notice of Exercise such representations concerning the Holder
as are necessary or appropriate to assure compliance by the Holder with
the Securities Act.
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COMMON STOCK PURCHASE WARRANT - Page 3
1.3. Company Acknowledgment. The Company will, at the time of the
exercise of this Warrant, upon request of the Holder hereof, acknowledge
in writing its continuing obligation to afford to such Holder the
registration rights to which such Holder shall continue to be entitled
after such exercise in accordance with the provisions of a Registration
Rights Agreement dated the date hereof (the "Registration Rights
Agreement"). If the Holder shall fail to make any such request, such
failure shall not affect the continuing obligation of the Company to
afford such Holder any such rights.
1.4. Limitation on Exercise.. Notwithstanding the rights of the
Holder to exercise all or a portion of this Warrant as described herein,
such exercise rights shall be limited, solely to the extent set forth in
the Purchase Agreement as if such provisions were specifically set forth
herein. In addition, the number of shares of Common Stock issuable upon
exercise of this Warrant is subject to reduction as specified in Section
6.2 of the Purchase Agreement.
2. Delivery of Stock Certificates, etc., on Exercise. As soon as
practicable after the exercise of this Warrant, and in any event within five (5)
business days thereafter, the Company at its expense (including the payment by
it of any applicable issue, stamp or transfer taxes) will cause to be issued in
the name of and delivered to the Holder thereof, or, to the extent permissible
hereunder, to such other person as such Holder may direct, a certificate or
certificates for the number of fully paid and nonassessable shares of Common
Stock (or Other Securities) to which such Holder shall be entitled on such
exercise, plus, in lieu of any fractional share to which such Holder would
otherwise be entitled, cash equal to such fraction multiplied by the then
applicable Purchase Price, together with any other stock or other securities and
property (including cash, where applicable) to which such Holder is entitled
upon such exercise pursuant to Section 1 or otherwise.
3. Adjustment for Extraordinary Events. The Purchase Price to be paid by
the Holder upon exercise of this Warrant, and the consideration to be received
upon exercise of this Warrant, shall be adjusted in case at any time or from
time to time pursuant to Article XI of the Purchase Agreement as if such
provisions were specifically set forth herein.
4. No Impairment. The Company will not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder of this Warrant against
impairment. Without limiting the generality of the foregoing, the Company (a)
will not increase the par value of any shares of stock receivable on the
exercise of this Warrant above the amount payable therefor on such exercise, (b)
will take all such action as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
stock on the exercise of this Warrant, and (c) will not transfer all or
substantially all of its properties and assets to any other person (corporate
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COMMON STOCK PURCHASE WARRANT - Page 4
or otherwise), or consolidate with or merge into any other person or permit any
such person to consolidate with or merge into the Company (if the Company is not
the surviving person), unless such other person shall expressly assume in
writing and will be bound by all the terms of this Warrant.
5. Accountants' Certificate as to Adjustments. In each case of any
adjustment or readjustment in the shares of Common Stock (or Other Securities)
issuable on the exercise of this Warrant, the Company at its expense will
promptly cause independent certified public accountants of national standing
selected by the Company to compute such adjustment or readjustment in accordance
with the terms of this Warrant and prepare a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based, including a statement of (a) the
consideration received or receivable by the Company for any additional shares of
Common Stock (or Other Securities) issued or sold or deemed to have been issued
or sold, (b) the number of shares of Common Stock (or Other Securities)
outstanding or deemed to be outstanding, and (c) the Purchase Price and the
number of shares of Common Stock to be received upon exercise of this Warrant,
in effect immediately prior to such issue or sale and as adjusted and readjusted
as provided in this Warrant. The Company will forthwith mail a copy of each such
certificate to the Holder of this Warrant, and will, on the written request at
any time of the Holder of this Warrant, furnish to such Holder a like
certificate setting forth the Purchase Price at the time in effect and showing
how it was calculated.
6. Notices of Record Date, etc. In the event of
(a) any taking by the Company of a record of the Holders of
any class or securities for the purpose of determining the Holders
thereof who are entitled to receive any dividend or other
distribution, or any right to subscribe for, purchase or otherwise
acquire any shares of stock of any class or any other securities or
property, or to receive any other right, or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the
Company or any transfer of all or substantially all the assets of
the Company to or consolidation or merger of the Company with or
into any other person, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
then and in each such event the Company will mail or cause to be mailed to the
Holder of this Warrant a notice specifying (i) the date on which any such record
is to be taken for the purpose of such dividend, distribution or right, and
stating the amount and character of such dividend, distribution or right, and
(ii) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up is to take
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COMMON STOCK PURCHASE WARRANT - Page 5
place, and the time, if any, as of which the Holders of record of Common Stock
(or Other Securities) shall be entitled to exchange their shares of Common Stock
(or Other Securities) for securities or other property deliverable on such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, dissolution, liquidation or winding-up. Such notice shall be mailed at
least 20 days prior to the date specified in such notice on which any action is
to be taken.
7. Reservation of Stock, etc. Issuable on Exercise of Warrant. The Company
will at all times reserve and keep available, solely for issuance and delivery
on the exercise of this Warrant, all shares of Common Stock (or Other
Securities) from time to time issuable on the exercise of this Warrant.
8. Exchange of Warrant.
(a) On surrender for exchange of this Warrant, properly endorsed and
in compliance with the restrictions on transfer set forth in the legend on the
face of this Warrant, to the Company, the Company at its expense will issue and
deliver to or on the order of the Holder thereof a new Warrant of like tenor, in
the name of such Holder or as such Holder (on payment by such Holder of any
applicable transfer taxes) may direct, calling in the aggregate on the face or
faces thereof for the number of shares of Common Stock called for on the face of
the Warrant so surrendered.
(b) Upon written notice from the Purchasers pursuant to Section
2.1(d) of the Purchase Agreement that the Purchasers have elected to transfer
amongst each other a portion of this Warrant, and on surrender for amendment and
restatement of this Warrant, the Company at its expense will issue and deliver
to or on the order of the Holder hereof a new Warrant of like tenor, in the name
of such Holder, calling in the aggregate on the face or faces thereof for the
number of shares of Common Stock as set forth in such notice reflecting such
transfer.
9. Replacement of Warrant. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant
and, in the case of any such loss, theft or destruction of this Warrant, on
delivery of an indemnity agreement or security reasonably satisfactory in form
and amount to the Company or, in the case of any such mutilation, on surrender
and cancellation of this Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
10. Remedies. The Company stipulates that the remedies at law of the
Holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
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COMMON STOCK PURCHASE WARRANT - Page 6
11. Negotiability, etc. This Warrant is issued upon the following terms,
to all of which each Holder or owner hereof by the taking hereof consents and
agrees:
(a) title to this Warrant may be transferred by endorsement
and delivery in the same manner as in the case of a negotiable
instrument transferable by endorsement and delivery.
(b) any person in possession of this Warrant properly endorsed
is authorized to represent himself as absolute owner hereof and is
empowered to transfer absolute title hereto by endorsement and
delivery hereof to a bona fide purchaser hereof for value; each
prior taker or owner waives and renounces all of his equities or
rights in this Warrant in favor of each such bona fide purchaser,
and each such bona fide purchaser shall acquire absolute title
hereto and to all rights represented hereby;
(c) until this Warrant is transferred on the books of the
Company, the Company may treat the registered Holder hereof as the
absolute owner hereof for all purposes, notwithstanding any notice
to the contrary; and
(d) notwithstanding the foregoing, this Warrant may not be
sold, transferred or assigned except pursuant to an effective
registration statement under the Securities Act or pursuant to an
applicable exemption therefrom.
12. Registration Rights. The Company is obligated to register the shares
of Common Stock issuable upon exercise of this Warrant in accordance with the
terms of the Registration Rights Agreement.
13. Notices, etc. All notices and other communications from the Company to
the Holder of this Warrant shall be mailed by first class registered or
certified mail, postage prepaid, at such address as may have been furnished to
the Company in writing by such Holder or, until any such Holder furnishes to the
Company an address, then to, and at the address of, the last Holder of this
Warrant who has so furnished an address to the Company.
14. Miscellaneous. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Warrant shall be construed and enforced in accordance with and
governed by the internal laws of the State of Nevada. The headings in this
Warrant are for purposes of reference only, and shall not limit or otherwise
affect any of the terms hereof. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision.
[Signature Page Follows]
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COMMON STOCK PURCHASE WARRANT - Page 7
DATED as of April 21, 1998.
AMERICAN INTERNATIONAL
PETROLEUM CORPORATION
By: s/ Xxxxxx X. Xxxxx
----------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Executive Officer
[Corporate Seal]
Attest:
By: s/ Xxxxx X. Xxxxxxxxxxx
----------------------------
Secretary
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COMMON STOCK PURCHASE WARRANT - Page 8
EXHIBIT A
FORM OF NOTICE OF EXERCISE - WARRANT
(To be executed only upon exercise
of the Warrant in whole or in part)
To American International Petroleum Corporation
The undersigned registered Holder of the accompanying Warrant hereby
exercises such Warrant or portion thereof for, and purchases thereunder,
______________(1) shares of Common Stock (as defined in such Warrant) and
herewith makes payment therefor in the amount and manner set forth below, as of
the date written below. The undersigned requests that the certificates for such
shares of Common Stock be issued in the name of, and delivered to,
_________________________________ whose address is _____________________________
_______________________________________________________________________________.
The Exercise Price is paid as follows:
Bank draft payable to the Company in the amount of $__________. Wire
transfer to the account of the Company in the amount of $________.
Delivery of ___________ previously held shares of Common Stock having an
aggregate
Market Value of $_________.
Cashless exercise. Surrender of __________ shares purchasable under this
Warrant for such shares of Common Stock issuable in exchange therefor
pursuant to the Cashless Exercise provisions of the Warrant, as
provided in Section 1.1(iv) thereto.
Upon exercise pursuant to this Notice of Exercise, the Holder will be in
compliance with the Limitation on Exercise (as defined in the Securities
Purchase Agreement pursuant to which this Warrant was issued).
Dated: _______________ _________________________________________________
(Name must conform to name of Holder as specified
on the face of the Warrant)
By:______________________________
Name:________________________
Title:_______________________
Address of Holder:_______________
_______________
_______________
Date of exercise:______________
----------
(1) Insert the number of shares of Common Stock as to which the accompanying
Warrant is being exercised. In the case of a partial exercise, a new Warrant or
Warrants will be issued and delivered, representing the unexercised portion of
the accompanying Warrant, to the holder surrendering the same.
