Exhibit 4.44
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER
HEREOF, BY PURCHASING SUCH SECURITIES 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 AS OF 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 (A) LIMIT THE CONVERSION RIGHTS
OF THE HOLDER, (B) SPECIFY VOLUNTARY AND MANDATORY REPAYMENT, PREPAYMENT AND
REDEMPTION RIGHTS AND OBLIGATIONS AND (C) SPECIFY EVENTS OF DEFAULT FOLLOWING
WHICH THE REMAINING BALANCE DUE AND OWING HEREUNDER MAY BE ACCELERATED.
No. 1 $3,340,000
3% CONVERTIBLE DEBENTURE
of
American International Petroleum Corporation, a Nevada corporation
(together with its successors, the "Company"), for value received hereby
promises to pay to:
GCA Strategic Investment Fund Limited
(The "Holder") and registered assigns, the principal sum of Three Million Three
Hundred Forty Thousand Dollars ($3,340,000) or, if less, the principal amount of
this Debenture then outstanding, on the Maturity Date by wire transfer of
immediately available funds to the Holder in such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts, and to pay interest which shall accrue
beginning the date hereof, quarterly in arrears, on (i) the last day of March,
June, September and December of each year until the Maturity Date, commencing
June 30, 2001 (unless such day is not a Business Day, in which event on the next
succeeding Business Day) (each an "Interest Payment Date"), (ii) the Maturity
Date, (iii) each Conversion Date, as hereafter defined, and (iv) the date the
principal amount of the Convertible Debentures shall be declared to be or shall
automatically become due and payable, on the principal sum hereof outstanding in
like coin or currency, at the rates per annum set forth below, from the most
recent Interest Payment Date to which interest has been paid on this Convertible
Debenture, or if no interest has been paid on this Convertible Debenture, from
the date of this Convertible Debenture until payment in full of the principal
sum hereof has been made. The Maturity Date is April 24, 2002.
The interest rate shall be three percent (3%) per annum (the "Interest
Rate") or, if less, the maximum rate permitted by applicable law. Past due
amounts (including interest, to the extent permitted by law) will also accrue
interest at the Interest Rate plus 2% per annum or, if less, the maximum rate
permitted by applicable law, and will be payable on demand ("Default Interest").
Interest on this Convertible Debenture will be calculated on the basis of a
360-day year of twelve 30 day months. All payments of principal and interest
hereunder shall be made for the benefit of the Holder pursuant to the terms of
the Agreement (hereafter defined). At the option of the Company, interest may be
paid in cash or in shares of Common Stock. If the Company determines to pay
interest in shares of Common Stock, it shall be required to notify the Holder of
such election on the Closing Date. On each Conversion Date, interest shall be
paid in shares of Common Stock on the portion of the principal balance of the
Convertible Debenture then being converted. The number of shares of Common Stock
issued as interest shall be determined by dividing the dollar amount of interest
due on the applicable Interest Payment Date by the Conversion Price then in
effect.
This Convertible Debenture (this "Convertible Debenture") is a duly
authorized issuance of Convertible Debentures of the Company referred to in that
certain Securities Purchase Agreement dated as of the date hereof between the
Company and the Purchaser named therein (the "Agreement"). The Agreement
contains certain additional agreements among the parties with respect to the
terms of this Convertible Debenture, including, without limitation, provisions
which (A) limit the conversion rights of the Holder, (B) specify voluntary and
mandatory repayment, prepayment and redemption rights and obligations and (C)
specify Events of Default following which the remaining balance due and owing
hereunder may be accelerated. All such provisions are an integral part of this
Convertible Debenture and are incorporated herein by reference. This Convertible
Debenture is transferable and assignable to one or more Persons, in accordance
with the limitations set forth in the Agreement.
This Convertible Debenture shall be secured by a Pledge and Security
Agreement (the "Security Agreement") of even date herewith made by the Company
and Holder creating a security interest in favor of the Holder in certain of the
Company's assets described in the Security Agreement, and a Mortgage and
Security Agreement (the "Mortgage") of even date herewith made by St. Marks
Refinery, Inc., a wholly-owned subsidiary of the Company, creating a security
interest in favor of holder in certain real property described in the Mortgage.
The Company shall keep a register (the "Register") in which shall be
entered the names and addresses of the registered holder of this Convertible
Debenture and particulars of this Convertible Debenture held by such holder and
of all transfers of this Convertible Debenture. References to the Holder or
"Holders" shall mean the Person listed in the Register as registered holder of
such Convertible Debentures. The ownership of this Convertible Debenture shall
be proven by the Register.
ARTICLE 1. Certain Terms Defined.
All terms defined in the Agreement and not otherwise defined herein shall
have for purposes hereof the meanings provided for in the Agreement.
ARTICLE 2. Covenants.
The Company covenants and agrees to observe and perform each of its
covenants, obligations and undertakings contained in the Agreement, which
obligations and undertakings are expressly assumed herein by the Company and
made for the benefit of the holder hereof.
ARTICLE 3. Payment of Principal; Prepayment.
The Company shall repay the remaining unpaid balance of this Convertible
Debenture on the Maturity Date. For so long as no Event of Default or Default
has occurred, the Company may prepay all of the outstanding principal amount and
accrued interest of this Convertible Debenture in accordance with this Section
3. Prepayment may occur on or before the 120th day following the date of this
Convertible Debenture for a prepayment price equal to 115% of the original
outstanding principal amount of this Convertible Debenture plus all accrued
interest thereon (the "Prepayment Price"). If Prepayment is made between the
121st day and the 150th day following the date of this Convertible Debenture,
the Prepayment Price is equal to 118% of the original outstanding principal
amount of this Convertible Debenture plus all accrued interest thereon. If
Prepayment is made between the 151st day and the 180th day following the date of
this Convertible Debenture, the Prepayment Price is equal to 120% of the
original outstanding principal of this Convertible Debenture plus all accrued
interest thereon. The Company's right to Prepay this Convertible Debenture shall
expire on the 181st day following the date of this Convertible Debenture.
Notwithstanding the foregoing, the Company may or shall be obligated under
certain circumstances, to redeem all or a portion of this Convertible Debenture
on the terms specified in the Agreement in accordance with Section 5 of this
Convertible Debenture.
ARTICLE 4. Conversion.
ARTICLE 4.1 Conversion of Convertible Debenture.
Subject to Section 5 hereof, the Holder shall have the right, at its
option, at any time following the date of issuance of this Convertible
Debenture, to convert the principal amount of this Convertible Debenture, or any
portion of such principal amount, into that number of fully paid and
nonassessable shares of Common Stock (as such shares shall then be constituted)
determined pursuant to this Section 4.1. The number of shares of Common Stock to
be issued upon each conversion of this Convertible Debenture shall be determined
by dividing the Conversion Amount (as defined below) by the Conversion Price in
effect on the date (the "Conversion Date") a Notice of Conversion
is delivered to the Company, as applicable, by the Holder by facsimile or other
reasonable means of communication dispatched prior to 5:00 p.m., E.S.T. The term
"Conversion Amount" means, with respect to any conversion of this Convertible
Debenture, the sum of (1) the principal amount of this Convertible Debenture to
be converted in such conversion plus (2) accrued and unpaid interest, if any, on
such principal amount at the interest rates provided in this Convertible
Debenture to the Conversion Date plus (3) Default Interest, if any, on the
interest referred to in the immediately preceding clause (2) plus (4) at the
Holder's option, any amounts owed to the Holder pursuant to Section 4.3 hereof,
Sections 10.1 and 10.4 of the Agreement.
ARTICLE 4.2 Conversion Price.
At the option of the Holder, any portion or all of the outstanding
principal amount of this Convertible Debenture shall be converted into a number
of shares of Common Stock at the conversion price (the "Conversion Price") equal
to 90% of the average of the three (3) lowest Closing Bid Prices of the Common
Stock as reported by Bloomberg L.P. during the twenty (20) Trading Days
immediately preceding but not including the date of the related Notice of
Conversion.
ARTICLE 4.3 Authorized Shares.
(a) Consistent with Section 7.11 of the Agreement, the Company (i)
shall promptly irrevocably instruct the Company's transfer agent to issue
certificates for the Common Stock issuable upon conversion of this
Convertible Debenture and (ii) agrees that its issuance of this Convertible
Debenture shall constitute full authority to its officers and agents who
are charged with the duty of executing stock certificates to execute and
issue the necessary certificates for shares of Common Stock in accordance
with the terms and conditions of this Convertible Debenture.
(b) If at any time a Holder of this Convertible Debenture submits a
Notice of Conversion (x) the Company does not have sufficient authorized
but unissued shares of Common Stock available to effect such conversion in
full in accordance with the provisions of this Article 4 or (y) the Company
is prohibited by the applicable rules of the OTC Bulletin Board or the
National Market on which the Common Shares are listed and traded at that
time to effect such conversion in full as provided in subsection (d) below,
without stockholder approval (each, a "Conversion Default"), the Company
shall issue to the Holder all of the shares of Common Stock which are then
available to effect such conversion. The portion of this Convertible
Debenture which the Holder included in its Conversion Notice and which
exceeds the amount which is then convertible into available shares of
Common Stock (the "Excess Amount") shall, notwithstanding anything to the
contrary contained herein, not be convertible into Common Stock in
accordance with the terms hereof until (and at the Holder's option at any
time after) the date additional shares of Common Stock are authorized by
the Company, or its stockholders, as applicable, at which time the
Conversion Price in respect thereof shall be the lower of (i) the
Conversion Price on the Conversion Default Date (as defined below) and (ii)
the Conversion Price on the Conversion Date thereafter elected by the
Holder in respect thereof. The Company shall pay to the Holder payments
("Conversion Default Payments") for a Conversion Default in the amount of
(N/365) x .24 x the Excess Amount on the Conversion Date in respect of the
Conversion Default (the "Conversion Default Date"), where N = the number of
days from the Conversion Default Date to the date (the "Authorization
Date") that the Company, or its stockholders, as applicable, authorizes a
sufficient number of shares of Common Stock to effect conversion of the
full outstanding principal balance of this Convertible Debenture. The
Company shall use its best efforts to authorize, or cause its stockholders
to authorize within 40 days of the occurrence of a Conversion Default, as
applicable, a sufficient number of shares of Common Stock as soon as
practicable following the earlier of (i) such time that the Holder notifies
the Company or that the Company otherwise becomes aware that there are or
likely will be insufficient shares to allow full conversion thereof and
(ii) a Conversion Default. The Company shall send notice to the Holder of
the authorization of additional shares of Common Stock, the Authorization
Date and the amount of Holder's accrued Conversion Default Payments. The
accrued Conversion Default Payments for each calendar month shall be paid
in cash or shall be convertible into Common Stock (at such time as there
are sufficient authorized shares of Common Stock) at the Market Price, at
the Holder's option, as follows:
(i) In the event the Holder elects to take such payment in cash,
cash payment shall be made to Holder by the fifth Business Day of the
month following the month in which it has accrued; and
(ii) In the event the Holder elects to take such payment in
Common Stock, the Holder may convert such payment amount into Common
Stock at the Conversion Price (as in effect at the time of conversion)
at any time after the fifth Business Day of the month following the
month in which it has accrued (at such time as there are sufficient
authorized shares of Common Stock) in accordance with the terms of
this Article 4.
(c) The Holder's election pursuant to this Section 4.3 shall be made
in writing to the Company at any time prior to 5:00 p.m., E.S.T., on the
third Business Day of the month following the month in which Conversion
Default payments have accrued. If no election is made, the Holder shall be
deemed to have elected to receive cash. Nothing herein shall limit the
Holders right to pursue actual damages (to the extent in excess of the
Conversion Default Payments) due to the Company's failure to maintain a
sufficient number of authorized shares of Common Stock.
(d) In no event shall the Company issue more than the Maximum Number
of Shares upon conversion of this Convertible Debenture, unless the Company
shall have obtained approval by the stockholders of the Company
("Stockholder Approval") or a waiver of such requirement by the OTC
Bulletin Board or the National Market on which the Common Shares are listed
and traded at that time. Once the Maximum Number of Shares has been issued
(the date of which is hereinafter referred to as the "Maximum Conversion
Date"), unless the Company shall have obtained Stockholder Approval or a
waiver of such requirement by the OTC Bulletin Board or the National Market
on which the Common Shares are listed and traded at that time within 40
days of the Maximum Conversion Date, the Company shall pay to the Holder
within five (5) Business Days of the Maximum Conversion Date (or, if the
Company is, in good faith, using its best efforts to obtain Stockholder
Approval, then the earlier of (x) 40 days following the Maximum Conversion
Date, and (y) such date that it becomes reasonably apparent that
Stockholder Approval will not be obtained within such 40 days period), the
Formula Price plus accrued and unpaid Default Interest, if any. The Maximum
Number of Shares shall be subject to adjustment from time to time for stock
splits, stock dividends, combinations, capital reorganizations and similar
events relating to the Common Stock occurring after the date hereof as
contemplated by Article XI of the Agreement. With respect to each Holder of
Convertible Debentures, the Maximum Number of Shares shall refer to such
Holder's pro rata share thereof based upon the aggregate principal balance
of the Convertible Debentures then outstanding. In the event that the
Company obtains Stockholder Approval, approval of the OTC Bulletin Board or
the National Market on which the Common Shares are listed and traded at
that time, or otherwise is able to increase the number of shares to be
issued above the Maximum Number of Shares (such increased number being the
"New Maximum Number of Shares"), the references to Maximum Number of Shares
above shall be deemed to be, instead, references to the New Maximum Number
of Shares.
ARTICLE 4.4 Method of Conversion.
(a) Notwithstanding anything to the contrary set forth herein, upon
conversion of this Convertible Debenture in accordance with the terms
hereof, the Holder shall not be required to physically surrender this
Convertible Debenture to the Company unless the entire unpaid principal
amount of this Convertible Debenture is so converted. Rather, records
showing the principal amount converted (or otherwise repaid) and the date
of such conversion or repayment shall be maintained on a ledger
substantially in the form of Annex A attached hereto (a copy of which shall
be delivered to the Company or transfer agent with each Notice of
Conversion). It is specifically contemplated that the Holder hereof shall
act as the calculation agent for conversions and repayments. In the event
of any dispute or discrepancies, such records maintained by the Holder
shall be controlling and determinative in the absence of manifest error or
failure of Holder to record the principal amount converted (or otherwise
repaid) from time to time, in which events the record of the Company shall
be controlling and determinative. The Holder and any assignee, by
acceptance of this Convertible Debenture, acknowledge and agree that, by
reason of the provisions of this paragraph, following a conversion of a
portion of this Convertible Debenture, the principal amount represented by
this Convertible Debenture will be the amount indicated on Annex A attached
hereto (which may be less than the amount stated on the face hereof).
(b) The Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of
shares of Common Stock or other securities or property on conversion of
this Convertible Debenture in a name other than that of the Holder (or in
street name), and the Company shall not be required to issue or deliver any
such shares or other securities or property unless and until the person or
persons (other than the Holder or the custodian in whose street name such
shares are to be held for the Holder's account) requesting the issuance
thereof shall have paid to the Company the amount of any such tax or shall
have established to the satisfaction of the Company that such tax has been
paid.
(c) Subject to Section 5 hereof, upon receipt by the Company of a
Notice of Conversion, the Holder shall be deemed to be the holder of record
of the Common Stock issuable upon such conversion, the outstanding
principal amount and the amount of accrued and unpaid interest on this
Convertible Debenture shall be deemed reduced to reflect such conversion,
and, unless the Company defaults on its obligations under this Article 4,
all rights with respect to the portion of this Convertible Debenture being
so converted shall forthwith terminate except the right to receive the
Common Stock or other securities, cash or other assets, as herein provided,
on such conversion. Subject to Section 5 hereof, if the Holder shall have
given a Notice of Conversion as provided herein, the Company's obligation
to issue and deliver the certificates for shares of Common Stock shall be
absolute and unconditional, irrespective of the absence of any action by
the Holder to enforce the same, any waiver or consent with respect to any
provisions thereof, the recovery of any judgment against any person or any
action by the Holder to enforce the same, any failure or delay in the
enforcement of any other obligation of the Company to the Holder of record,
or any setoff, counterclaim, recoupment, limitation or termination, or any
breach or alleged breach by the Holder of any obligation to the Company,
and subject to Section 4.4(a) irrespective of any other circumstance which
might otherwise limit such obligation of the Company to the Holder in
connection with such conversion. The date of receipt (including receipt via
telecopy) of such Notice of Conversion shall be the Conversion Date so long
as it is received before 5:00 p.m., E.S.T., on such date.
(d) Notwithstanding the foregoing, if a Holder has not received
certificates for all shares of Common Stock prior to the expiration of the
Deadline with respect to a conversion of any portion of this Convertible
Debenture for any reason, then (unless the Holder otherwise elects to
retain its status as a holder of Common Stock by so notifying the Company),
the Holder shall regain the rights of a Holder of this Convertible
Debenture with respect to such unconverted portions of this Convertible
Debenture and the Company shall, as soon as practicable, return such
unconverted Convertible Debenture to the holder or, if the Convertible
Debenture has not been surrendered, adjust its records to reflect that such
portion of this Convertible Debenture not been converted. In all cases, the
Holder shall retain all of its rights and remedies (including, without
limitation, (i) the right to receive Conversion Default Payments to the
extent
required thereby for such Conversion Default and any subsequent Conversion
Default and (ii) the right to have the Conversion Price with respect to
subsequent conversions determined in accordance with Section 4.3 for the
Company's failure to convert this Convertible Debenture.
(e) In lieu of delivering physical certificates representing the
Common Stock issuable upon conversion, provided the Company's transfer
agent is participating in the Depository Trust Company ("DTC") Fast
Automated Securities Transfer program, upon request of the Holder and its
compliance with the provisions contained in Section 4.1 and in this Section
4.4, the Company shall use its best efforts to cause its transfer agent to
electronically transmit the Common Stock issuable upon conversion to the
Holder by crediting the account of Holder's Prime Broker with DTC through
its Deposit Withdrawal Agent Commission System.
ARTICLE 5. Redemption by Company.
ARTICLE 5.1 Company's Right to Redeem.
In accordance with the provisions of the Purchase Agreement and subject to
the provisions of Section 3 hereof, the Company may elect at any time following
the 180th day following the date of issuance of this Convertible Debenture, or
be required under certain circumstances to redeem in whole or in part, the
remaining unpaid principal amount of this Convertible Debenture, for cash at a
redemption price (the "Redemption Price") equal to (x) the number of shares of
Common Stock into which this Convertible Debenture is then convertible, times
(y) the average Closing Bid Price of Common Stock for the five (5) trading days
as reported by Bloomberg L.P. immediately prior to the date that this
Convertible Debenture is called for redemption, plus accrued and unpaid
interest.
ARTICLE 5.2 Mechanics of Redemption.
The Company shall effect each such redemption within three business days of
giving notice of its election to redeem by facsimile with a copy by either
overnight or 2-day courier to the Holder of this Convertible Debenture to be
redeemed at the address and facsimile number of such Holder appearing in the
Company's register for the Convertible Debentures. Such redemption notice shall
indicate whether the Company will redeem all or part of such portion of the
Convertible Debenture to be redeemed and the applicable Redemption Price. The
Company shall not be entitled to send any notice of redemption and begin the
redemption procedure unless it has (i) the full amount of the Redemption Price,
in cash, available in a demand or other immediately available account in a bank
or similar financial institution or (ii) immediately available credit
facilities, in the full amount of the Redemption Price, with a bank or similar
financial institution on the date the redemption notice is sent to the Holders
of this Convertible Debenture. Provided, however, the Company will process any
Notice of Conversion received prior to the issuance of a notice of redemption;
and further provided that, after a notice of redemption has been issued, the
Holder may issue a Notice of Conversion which will not be honored unless the
Company fails to make the redemption payment when due. In the event of such
failure, the Notice of Conversion will be honored as of the date of the Notice
of Conversion. Additionally, if the Company fails to make full payments of the
Redemption Price of this Convertible Debenture being redeemed by the third
business day following the notice or redemption, then the Company waives its
right to redeem any of the remaining then outstanding Debentures, unless
approved by the Holder.
ARTICLE 5.3 Payment of Redemption Price.
The Redemption Price shall be paid to the Holder of this Convertible
Debenture within three business days of the delivery of the notice of such
redemption to such Holder.
ARTICLE 6. Holder's Right to Advance Notice of Election Redeem.
ARTICLE 6.1 Holder's Right to Elect to Receive Notice of Cash Redemption by
Company.
The Holder of this Convertible Debenture shall have the right to require
Company to provide advance notice
stating whether the Company will elect to redeem all or part of the redeemable
portion in cash, pursuant to the Company's redemption rights discussed in
Section 5.1 above.
ARTICLE 6.2 Mechanics of Holder's Election Notice.
Holder shall give notice to the Company by facsimile (the "Election
Notice"), requiring that the Company disclose whether the Company would elect to
redeem the redeemable portion of this Convertible Debenture (in whole or in
part) if the Holder were to provide a Notice of Conversion and sought to convert
the Convertible Debenture in such principal amount as is specified in the Notice
of Election.
ARTICLE 6.3 Company's Response.
Company must respond, disclosing its election, within two (2) business days
of receipt of Holder's Election Notice via facsimile. If Company does not
respond to Holder within two (2) business days (by 12:00 noon, if required
above) via facsimile, Company shall be deemed to have forfeited its right to
exercise redemption pursuant to Section 5(a) upon its receipt of (but only with
respect to) that Notice of Conversion.
ARTICLE 7. Miscellaneous.
This Convertible Debenture shall be deemed to be a contract made under the
laws of the State of New York, and for all purposes shall be governed by and
construed in accordance with the laws of said State. The parties hereto,
including all guarantors or endorsers, hereby waive presentment, demand, notice,
protest and all other demands and notices in connection with the delivery,
acceptance, performance and enforcement of this Convertible Debenture, except as
specifically provided herein, and asset to extensions of the time of payment, or
forbearance or other indulgence without notice. The Company hereby submits to
the exclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York, New York state court sitting in New
York for purposes of all legal proceedings arising out of or relating to this
Convertible Debenture. The Company irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of the venue of any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in an inconvenient
forum. The Company hereby irrevocably waives any and all right to trial by jury
in any legal proceeding arising out of or relating to this Convertible
Debenture.
The Holder of this Convertible Debenture by acceptance of this Convertible
Debenture agrees to be bound by the provisions of this Convertible Debenture
which are expressly binding on such Holder.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated: April ___, 2001
AMERICAN INTERNATIONAL PETROLEUM
CORPORATION
By:
------------------------------------------
Name:
----------------------------------------
Title:
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Convertible Debenture
ANNEX A
CONVERSION AND REPAYMENT LEDGER
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Date Principal Interest Principal New Issuer Holder
Balance Converted Converted Principal Initials Initials
or or Balance
Paid Paid
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FULL NAME AND ADDRESS OF SUBSCRIBER FOR REGISTRATION PURPOSES:
NAME:
ADDRESS:
TEL NO:
FAX NO:
CONTACT
NAME:
DELIVERY INSTRUCTIONS (IF DIFFERENT FROM REGISTRATION NAME):
NAME:
ADDRESS:
TEL NO:
FAX NO:
CONTACT
NAME:
SPECIAL INSTRUCTIONS: _________________________________________________
_________________________________________________
NOTICE OF CONVERSION
(To be Executed by the Registered Holder
in order to Convert the Convertible Debenture)
The undersigned hereby irrevocably elects to convert $________ of the
principal balance of the Convertible Debenture into shares of Common Stock, .08
par value per share (the "Common Stock"), of American International Petroleum
Corporation (the "Company") according to the conditions hereof, as of the date
written below. No fee will be charged to the Holder for any conversion, except
for transfer taxes, if any. The undersigned, as contemplated by Section 5.1 of
the Securities Purchase Agreement pursuant to which the Convertible Debenture
was issued, hereby states that the representations and warranties of the
undersigned set forth therein are true and correct in all material respects as
of the date hereof (provided, the undersigned makes no representations
concerning its investment intent with respect to the Common Stock received upon
this conversion).
Conversion calculations:
_______________________________________________
Date of Conversion
_______________________________________________
Applicable Conversion Price
_______________________________________________
Number of Shares
_______________________________________________
Name/Signature
Address:
_______________________________________________
_______________________________________________
