EXHIBIT 4.2
SECURED BRIDGE NOTE
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) SPECIFY VOLUNTARY AND
MANDATORY REPAYMENT, PREPAYMENT AND REDEMPTION RIGHTS AND OBLIGATIONS AND (B)
SPECIFY EVENTS OF DEFAULT FOLLOWING WHICH THE REMAINING BALANCE DUE AND OWING
HEREUNDER MAY BE ACCELERATED.
No. 2 $1,850,000.00
American International Petroleum Corporation
SECURED BRIDGE NOTE
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 One Million Eight
Hundred Fifty Thousand Dollars ($1,850,000.00) plus accrued Default Interest (as
hereinafter defined), or, if less, the principal amount of this Note 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 any Default Interest on (i) the Maturity Date, as
hereafter defined, and (ii) the date the principal amount of the Secured Bridge
Notes (the "Bridge Notes") 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 date of this Bridge
Note until payment in full of the principal sum hereof has been made.
The Bridge Note will bear no interest, with the except on of an Event of
Default, as hereafter defined, at which time interest will accrue 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"). Default
Interest on this Bridge Note will be calculated on the basis of a 360-day year
of twelve 30 day months. All payments of principal and Default Interest
hereunder shall be made for the benefit of the Holder pursuant to the terms of
the Agreement (hereafter defined).
This Bridge Note (this "Bridge Note") is secured by a Security Agreement
(the "Security Agreement") dated as of December 1, 1999, as amended and a
Mortgage Agreement made by the Company (or one of its subsidiaries, as
applicable) and Holder creating a security interest in favor of Holder in
certain of the assets described in the Security Agreement and the Mortgage
Agreement (the "Collateral").
This Bridge Note is a duly authorized issuance of $1,850,000.00 aggregate
principal amount of Bridge Notes of the Company dated as of the date hereof
between the Company and the Purchaser named herein. the "Agreement"). The
Agreement, the Security Agreement and the Mortgage contain certain additional
agreements among the parties with respect to the terms of this Bridge Note,
including, without limitation, provisions which (A) specify voluntary and
mandatory repayment, prepayment and redemption rights and obligations and (B)
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
Bridge Note and are incorporated herein by reference. This Bridge Note is
transferable and assignable to one or more Persons, in accordance with the
limitations set forth in the Agreement.
The Company shall keep a register (the "Register") in which shall be
entered the names and addresses of the registered holder of this Bridge Note and
particulars of this Bridge Note held by such holder and of all transfers of this
Bridge Note. References to the Holder or "Holders" shall mean the Person listed
in the Register as registered holder of such Bridge Notes. The ownership of this
Bridge Note shall be proven by the Register.
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.
2. Covenants. Unless the Majority Holders otherwise consent in writing, 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.
3. Payment of Principal. Subject to Section 4 of this Note, the Company
shall repay the remaining unpaid balance of this Bridge Note, plus accrued
Default Interest, if any, on August 28, 2000 (the "Maturity Date"). The Company
may, and shall be obligated to, prepay all or a portion of this Bridge Note on
the terms specified in the Agreement.
4. Pre-Payment of Principal. The Company may, at its option, pre-pay the
full principal amount of this Bridge Note at any time on or before May 28, 2000
(the "Pre-Payment Deadline Date") at a repayment price of $1,794,500; provided
that no Event of Default has occurred. On any date after May 28, 2000, the
Company shall be required to pay the full principal amount outstanding plus any
accrued Default Interest.
5. Ranking. This Bridge Note shall be junior in right of payment (but not
with respect to the rights in the Collateral) to the Company's (i) 5% Secured
Convertible Debentures due February 18, 2004, and (ii) 6% Secured Convertible
Debentures due August 19, 2004. This Bridge Note shall rank senior in respect to
any other indebtedness of the Company outstanding as of the date hereof other
than indebtedness to Holder.
6. Miscellaneous. This Bridge Note 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 Bridge Note, 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 Courts of New York and
of any New York state court sitting in New York for purposes of all legal
proceedings arising out of or relating to this Bridge Note. 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 Bridge Note.
The Holder of this Bridge Note by acceptance of this Bridge Note agrees to
be bound by the provisions of this Bridge Note which are expressly binding on
such Holder.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated: February __, 2000
AMERICAN INTERNATIONAL
PETROLEUM CORPORATION
By:
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Name: Xxxxx X. Xxxxxxxxxxx
Title: Chief Financial Officer
ANNEX A
REPAYMENT LEDGER
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Date Principal Balance Interest Paid Principal Paid New Principal Balance Issuer Initials Holder Initials
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FULL NAME AND ADDRESS OF SUBSCRIBER FOR REGISTRATION PURPOSES:
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ADDRESS:
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CONTACT
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DELIVERY INSTRUCTIONS (IF DIFFERENT FROM REGISTRATION NAME):
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SPECIAL INSTRUCTIONS: ___________________________________________
