Exhibit 4.4
EXHIBIT E
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is entered into as of
August 6th, 1997, by and among AMERICAN INTERNATIONAL PETROLEUM CORP., a Nevada
corporation (the "Company"), and _____________________________________________
("Investor").
RECITALS:
WHEREAS, pursuant to a Subscription Agreement (the "Subscription
Agreement"), by and between the Company and the Investor, the Company agreed to
sell and the Investor agreed to purchase the Company's Convertible Debentures
(the "Debentures"), convertible into shares of the Company's common stock, par
value $.08 per share of the Company (the "Common Stock"); and
WHEREAS, pursuant to the Subscription Agreement, the Company agreed to
issue to the Investor one or more warrants (collectively, the "Warrant") to
purchase shares of Common Stock; and
WHEREAS, pursuant to the terms of, and in partial consideration for, the
Investor's agreement to enter into the Subscription Agreement, the Company has
agreed to provide the Investor with certain registration rights with respect to
the shares of Common Stock into which the Debentures may be converted, and
issued upon exercise of the Warrant from time to time (the shares of Common
Stock issued upon conversion of the Debentures or exercise of the Warrant being
hereinafter referred to as the "Shares").
NOW THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in the Agreement and this
Registration Rights Agreement, the Company and the Investors agree as follows:
AGREEMENT:
1. Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
"Commission" shall mean the Securities and Exchange Commission or any
other Federal agency at the time administering the Securities Act.
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(American International Petroleum Corp.)
"Common Stock" shall mean the Company's Common Stock, par value $.08 per
share.
"Initiating Holders" shall mean holders of more than 50% of the
outstanding balance of the Debentures or of the Warrant.
"Other Registrable Shares" shall mean those shares of Common Stock
heretofore or hereafter issued pursuant to one or more agreements granting the
purchasers of such securities the right to have the Company register such
securities or include such securities in any other registration of the Company's
equity securities.
"Registrable Shares" shall mean (i) the Shares, and (ii) any Common Stock
of the Company issued or issuable in respect of the Shares or upon any stock
split, stock dividend, recapitalization or similar event; provided, however,
that Registrable Shares or other securities shall no longer be treated as
Registrable Shares if (A) they have been registered or sold to or through a
broker or dealer or underwriter in a public distribution or a public securities
transaction, (B) they have been sold in a transaction exempt from the
registration and prospectus delivery requirements of the Securities Act so that
all transfer restrictions and restrictive legends with respect thereto are
removed upon consummation of such sale, or (C) the Shares are available for sale
under the Securities Act (including Rule 144), in the opinion of counsel to the
Company, without compliance with the registration and prospectus delivery
requirements of the Securities Act so that all transfer restrictions and
restrictive legends with respect thereto may be removed upon the consummation of
such sale.
The terms "register", "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
"Registration Expenses" shall mean all expenses incurred by the Company in
compliance with Section 2 hereof, including, without limitation all registration
and filing fees, printing expenses, fees and disbursements of counsel for the
Company, blue sky fees and expenses, reasonable fees and disbursements (not to
exceed $10,000) of one counsel for all the selling holders of Registrable Shares
for a limited "due diligence" examination of the Company incident to such
registration (but excluding the compensation of regular employees of the
Company, which shall be paid in any event by the Company, and excluding all
underwriting discounts and selling commissions applicable to the sale of the
Registrable Shares).
"Securities Act" shall mean the Securities Act of 1933, as amended, or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Shares and all reasonable fees
and disbursements of one counsel for the
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(American International Petroleum Corp.)
selling holders of Registrable Shares (other than the fees and disbursements of
such counsel included in Registration Expenses).
2. Requested Registration.
The following registration rights will apply (i) as described in Section
11 of the Subscription Agreement, and (ii) if, and only if, at any time prior to
the termination of this Agreement, Regulation S promulgated under the Securities
Act is rescinded or modified so as to preclude Initiating Holders from reselling
in the United States public securities markets Shares received from the Company
upon conversion of the Debentures or exercise of the Warrant following
expiration of the Restricted Period or Warrant Restricted Period, as applicable
(as defined in the Subscription Agreement), or if, for any other reason, the
Company refuses or is unable to issue Shares at the times required by the
Subscription Agreement Debentures or Warrant bearing no restrictive legend to
Initiating Holders after expiration of the Restricted Period, or Warrant
Restricted Period, as applicable; provided, however, that no Investor shall be
entitled to request registration pursuant to this Agreement (and such Investor
shall not be considered an Initiating Holder pursuant to this Agreement, and the
securities held by such Investor shall not be considered Registrable Shares
pursuant to this Agreement) if a representation or warranty of such Investor in
the Subscription Agreement is inaccurate or was inaccurate when made, or such
Investor has failed to comply with the covenants and agreements of such Investor
set forth in the Subscription Agreement:
(a) Request for Registration. If the Company shall receive from
Initiating Holders, at any time after five (5) days and prior to
thirty-six (36) months following the final closing of the sale of the
Debentures pursuant to the Subscription Agreement, a written request that
the Company effect a registration with respect to all, but not less than
all, of the Registrable Shares held by such Initiating Holders (which
notice shall specify the intended method of disposition), the Company
shall:
(i) promptly give written notice of the proposed registration
to all other holders of Registrable Shares; and
(ii) as soon as practicable (A) cause to be filed a
Registration Statement on Form S-3 under the Securities Act (or such
other form as is then appropriate for use by the Company under the
Securities Act) and (B) use its best efforts to cause such
registration statement to be declared effective by the Commission
(including, without limitation, undertaking the actions described in
Section 4), all as may be so requested by the Initiating Holders so
as to permit or facilitate the sale and distribution of all or such
portion of such Registrable Shares as are specified in such request,
together with all or such portion of the Registrable Shares of any
holder or holders of Registrable Shares joining in such request as
are specified in a written request given within thirty (30) days
after receipt of such written notice from the Company; provided that
the Company shall not be obligated to effect, or to take any action
to effect, any such registration pursuant to this Section 2:
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(American International Petroleum Corp.)
(A) after the Company has effected one (1) such
registrations pursuant to this Section 2(a), and each
registration has been declared or ordered effective by the
Commission and remained effective for a continuous period of
three (3) years hereof; or
(B) within the period starting with the date sixty (60)
days prior to the Company's good faith estimated date of
filing of, and ending ninety (90) days following the effective
date of, any registered public offering of the Company's
securities.
Subject to the foregoing limitations in clauses (A) and (B) above,
the Company shall file a registration statement covering the Registrable
Shares so requested to be registered as soon as practicable after receipt
of the request or requests of the Initiating Holders, but no later than
forty-five (45) days following receipt of such request or requests, except
in the event audited financial statements not previously prepared are
required to be prepared prior to the filing of such registration
statement, in which case such registration statement must be filed as soon
as practicable, but in any event within ninety (90) days following receipt
of such request or requests. Nothing contained herein shall be deemed to
limit the number of Registrable Shares to be registered by the Company
hereunder. As a result, should the registration statment filed by the
Company and declared effective by the Commission pursuant toto the terms
hereof not relate to the maximum number of Registrable Shares aquired by (
of potentially aquirable by) the Holders thereof upon conversion of the
Debentures of exercise of the Warrants, the Company shall be Required to
immediately file a separate registration statement or amendment thereto
(utilizing Rule 462 where applicable) relating to such Registrable Shares
which then remain unregistered.
The registration statement filed pursuant to the request of the
Initiating Holders (the "Registration Statement") may, subject to the
provisions of Section 2(b) below, include Other Registrable Shares, other
securities of the Company which are held by officers or directors of the
Company or which are held by other holders of registration rights, and may
include securities of the Company being sold for the account of the
Company.
(b) Underwriting. If the Initiating Holders intend to distribute the
Registrable Shares covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made pursuant
to Section 2 and the Company shall include such information in the written
notice referred to in Section 2(a)(i) above. The right of any holder of
Registrable Shares to registration pursuant to Section 2 shall be
conditioned upon such holder's participation in such underwriting and the
inclusion of such holder's Registrable Shares in such underwriting (unless
otherwise mutually agreed by a majority in interest of the Initiating
Holders and such holder with respect to such participation and inclusion)
to the extent provided herein. A holder of Registrable Shares may elect to
include in such underwriting all or a part of the Registrable Shares it
holds.
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(American International Petroleum Corp.)
(i) If the Company shall request inclusion in any registration
pursuant to Section 2 of securities being sold for its own account,
or if officers or directors of the Company holding other securities
of the Company or other holders of registration rights, shall
request inclusion in any registration pursuant to Section 2, the
Initiating Holders shall, on behalf of all holders of Registrable
Shares, offer to include Other Registrable Shares and the securities
of the Company, such officers and directors and such other holders
of registration rights in the underwriting and may condition such
offer on their acceptance of the further applicable provisions of
this Agreement. The Company shall (together with all holders of
Registrable Shares, officers and directors, other holders of
registration rights and holders of Other Registrable Shares
proposing to distribute their securities through such underwriting)
enter into an underwriting agreement in customary form with the
underwriter or representative of the underwriters selected for such
underwriting by the Company, which underwriter(s) shall be
reasonably acceptable to a majority in interest of the Initiating
Holders.
(ii) Notwithstanding any other provision of this Section 2, if
the representative of the underwriters advises the Company in
writing that marketing factors require a limitation on the number of
shares to be underwritten, the Company shall so advise all holders
of Registrable Shares and other shareholders whose securities would
otherwise be underwritten pursuant to such registration, and the
number of Registrable Shares and other securities that may be
included in the registration and underwriting shall be allocated in
the following manner: the securities to be offered by the Company
and the securities of the Company held by officers and directors of
the Company (other than Registrable Shares) shall be excluded from
such registration and underwriting to the extent required by such
limitation, and, if a limitation on the number of shares is still
required, the Other Registrable Shares shall be excluded pro rata
with Registrable Shares, unless another method of determining such
exclusion is specified in the agreements governing the Other
Registrable Shares, according to the relative number of Other
Registrable Shares requested to be included in such registration and
underwriting, from such registration and underwriting to the extent
required by such limitation, and, if a limitation on the number of
shares is still required, the number of Registrable Shares that may
be included in the registration and underwriting shall be allocated
among all holders of Registrable Shares in proportion, as nearly as
practicable, to the respective amounts of Registrable Shares which
they had requested to be included in such registration at the time
of filing the registration statement. No Registrable Shares or any
other securities excluded from the underwriting by reason of the
underwriter's marketing limitation shall also be included in such
registration.
(iii) If the Company or any officer, director or holder of
Registrable Shares or Other Registrable Shares who has requested
inclusion in such registration and underwriting as provided above
disapproves of the terms of the underwriting, such person may elect
to withdraw therefrom by written notice to the Company, the
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(American International Petroleum Corp.)
underwriter and the Initiating Holders. The securities so withdrawn
shall also be withdrawn from registration.
3. Expenses of Registration. The Company shall bear all Registration
Expenses incurred in connection with any registration, qualification or
compliance of the Registrable Shares pursuant to this Agreement. All Selling
Expenses shall be borne by the holders of the securities so registered pro rata
on the basis of the number of their shares so registered (except for the fees
and disbursements of counsel to the Investors).
4. Registration Procedures. Pursuant to this Agreement, the Company will
keep each holder of Registrable Shares advised in writing as to the initiation
of a registration under this Agreement and as to the completion thereof. At its
expense, the Company will:
(a) Use reasonable efforts to keep such registration effective until
three (3) years from the date hereof or until the holder or holders of
Registrable Shares have completed the distribution described in the
registration statement relating thereto or until the securities registered
cease to be Registrable Shares, whichever first occurs;
(b) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply
with the provisions of the Securities Act with respect to the disposition
of securities covered by such registration statement;
(c) Furnish such number of prospectuses and other documents
incidental thereto, including any amendment of or supplement to the
prospectus, as a holder of Registrable Shares from time to time may
reasonably request;
(d) use reasonable efforts to (i) register and qualify the
Registrable Shares covered by the Registration Statement under such other
securities or blue sky laws of such jurisdictions as the Investors who
hold a majority in interest of the Registrable Shares being offered
reasonably request, (ii) prepare and file in those jurisdictions such
amendments (including post-effective amendments) and supplements, (iii)
take such other actions as may be necessary to maintain such registrations
and qualifications in effect until such date set forth in clause (a) above
and (iv) take all other actions reasonably necessary or advisable to
qualify the Registrable Shares for sale in such jurisdictions; provided,
however, that the Company shall not be required in connection therewith or
as a condition thereto to (I) qualify to do business in any jurisdiction
where it would not otherwise be required to qualify but for this Section
4(d), (II) subject itself to general, taxation in any such jurisdiction,
(III) file a general consent to service of process in any such
jurisdiction, (IV) provide any undertakings that cause more than nominal
expense or burden to the Company or (V) make any change in its charter or
by-laws, which in each case the Board of Directors of the Company
determines to be contrary to the best interests of the Company and its
stockholders;
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(American International Petroleum Corp.)
(e) in the event Investors who hold a majority in interest of the
Registrable Shares being offered in the offering select underwriters for
the offering, enter into and perform its obligations under an underwriting
agreement, in usual and customary form, including, without limitation,
customary indemnification and contribution obligations, with the managing
underwriter of such offering;
(f) as promptly as practicable after becoming aware of such event,
notify each Investor of the happening of any event of which the Company
has knowledge, as a result of which the prospectus included in the
Registration Statement, as then in effect, includes an untrue statement of
a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and use its best
efforts promptly to prepare a supplement or amendment to the Registration
Statement to correct such untrue statement or omission, and deliver a
number of copies of such supplement or amendment to each Investor as such
Investor may reasonably request;
(g) as promptly as practicable after becoming aware of such event,
notify each Investor who holds Registrable Shares being sold (or, in the
event of an underwritten offering, the managing underwriters) of the
issuance by the Commission of any stop order or other suspension of
effectiveness of the Registration Statement at the earliest possible time;
(h) permit a single firm of counsel designated as selling
stockholders' counsel by the Investors who hold a majority in interest of
the Registrable Shares being sold to review the Registration Statement and
all amendments and supplements thereto a reasonable period of time prior
to their filing with the Commission, and shall not file any document in a
form to which such counsel reasonably objects;
(i) Reserved
(j) at the request of the Investors who hold a majority in interest
of the Registrable Shares being sold, furnish on the date that Registrable
Shares are delivered to an underwriter for sale in connection with the
Registration Statement (i) a letter, dated such date, from the Company's
independent certified public accountants in form and substance as is
customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the
underwriters; and (ii) an opinion, dated such date, from counsel
representing the Company for purposes of such Registration Statement, in
form and substance as is customarily given in an underwritten public
offering, addressed to the underwriters and the Investors;
(k) make available for inspection by any Investor, any underwriter
participating in any disposition pursuant to the Registration Statement,
and any attorney, accountant or other agent retained by any such Investor
or underwriter (collectively, the "Inspectors"), all pertinent financial
and other records, pertinent corporate documents and properties of the
REGISTRATION RIGHTS AGREEMENT - Page 7
(American International Petroleum Corp.)
Company (collectively, the "Records"), as shall be reasonably necessary to
enable each Inspector to exercise its due diligence responsibility, and
cause the Company's officers, directors and employees to supply all
information which any Inspector may reasonably request for purposes of
such due diligence; provided, however, that each Inspector shall hold in
confidence and shall not make any disclosure (except to an Investor) of
any Record or other information which the Company determines in good faith
to be confidential, and of which determination the Inspectors are so
notified, unless (i) the disclosure of such Records is necessary to avoid
or correct a misstatement or omission in any Registration Statement, (ii)
the release of such Records is ordered pursuant to a subpoena or other
order from a court or government body of competent jurisdiction or (iii)
the information in such Records has been made generally available to the
public other than by disclosure in violation of this or any other
agreement. The Company shall not be required to disclose any confidential
information in such Records to any Inspector until and unless such
Inspector shall have entered into confidentiality agreements (in form and
substance satisfactory to the Company) with the Company with respect
thereto, substantially in the form of this Section 4(k). Each Investor
agrees that it shall, upon learning that disclosure of such Records is
sought in or by a court or governmental body of competent jurisdiction or
through other means, give prompt notice to the Company and allow the
Company, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, the Records deemed
confidential. The Company shall hold in confidence and shall not make any
disclosure of information concerning an Investor provided to the Company
pursuant to Section 5(e) hereof unless (i) disclosure of such information
is necessary to comply with federal or state securities laws, (ii) the
disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release
of such information is ordered pursuant to a subpoena or other order from
a court or governmental body of competent jurisdiction or (iv) such
information has been made generally available to the public other than by
disclosure in violation of this or any other agreement. The Company agrees
that it shall, upon learning that disclosure of such information
concerning an Investor is sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt notice to such
Investor, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, such information;
(l) either (i) cause all the Registrable Shares covered by the
Registration Statement to be listed on a national securities exchange and
on each additional national securities exchange on which similar
securities issued by the, Company are then listed, if any, if the listing
of such Registrable Shares is then permitted under the rules of such
exchange or (ii) secure designation of all the Registrable Shares covered
by the Registration Statement as a NASDAQ security within the meaning of
Rule 11Aa2-1 of the Commission under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and the quotation of the Registrable
Shares on the NASDAQ or, if, despite the Company's best efforts to satisfy
the preceding clause (i) or (ii) , the Company is unsuccessful in
satisfying the preceding clause (i) or (ii) , to secure listing on a
national securities exchange or NASDAQ authorization and quotation for
such Registrable Shares and, without limiting the generality of the
foregoing,
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(American International Petroleum Corp.)
to arrange for at least two market makers to register with the National
Association of Securities Dealers, Inc. ("NASD") as such with respect to
such Registrable Shares;
(m) provide a transfer agent and registrar, which may be a single
entity, for the Registrable Shares not later than the effective date of
the Registration Statement;
(n) cooperate with the Investors who hold Registrable Shares being
offered and the managing underwriter or underwriters, if any, to
facilitate the timely preparation and delivery of certificates (not
bearing any restrictive legends) representing Registrable Shares to be
offered pursuant to the Registration Statement and enable such
certificates to be in such denominations or amounts as the case may be, as
the managing underwriter or underwriters, if any, or the Investors may
reasonably request and registered in such names as the managing
underwriter or underwriters, if any, or the Investors may request; and
(o) take all other reasonable actions necessary to expedite and
facilitate disposition by the Investor of the Registrable Shares pursuant
to the Registration Statement.
5. Indemnification.
(a) The Company will indemnify each holder of Registrable Shares, each of
its officers, directors and partners, and each person controlling such holder of
Registrable Shares, with respect to which registration has been effected
pursuant to this Agreement, and each underwriter, if any and each person who
controls any underwriter, and their respective counsel against all claims,
losses, damages and liabilities (or actions, proceedings or settlements in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus, or other
document incident to any such registration, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by the
Company of the Securities Act or any rule or regulation thereunder applicable to
the Company in connection with any such registration and will reimburse each
such holder of Registrable Shares, each of its officers, directors and partners,
and each person controlling such holder of Registrable Shares, each such
underwriter and each person who controls any such underwriter, for any legal and
any other expenses as they are reasonably incurred in connection with
investigating and defending any such claim, loss, damage, liability or action,
provided, however, that the indemnity contained in this Section 5(a) shall not
apply to amounts paid in settlement of any such claim, loss, damage, liability
or action if such settlement is effected without the consent of the Company; and
provided further that the Company shall not be liable in any such case to the
extent that any such claim, loss, damage, liability or expense arises out of or
is based on any untrue statement or omission based upon written information
furnished to the Company by such holder of Registrable Shares or underwriter and
stated to be specifically for use therein. The foregoing indemnity agreement is
further subject to the condition that insofar as it relates to any untrue
statement, alleged untrue statement, omission or alleged omission made in a
preliminary prospectus, such indemnity agreement shall not inure to the benefit
of the foregoing indemnified parties if copies of a final prospectus correcting
the misstatement, or alleged misstatement, omission
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(American International Petroleum Corp.)
or alleged omission upon which such loss, liability, claim or damage is based is
timely delivered to such indemnified party and a copy thereof was not furnished
to the person asserting the loss, liability, claim or damage.
(b) Each holder of Registrable Shares will, if Registrable Shares held by
it are included in the securities as to which such registration is being
effected, indemnify the Company, each of its directors and officers and each
underwriter, if any, of the Company's securities covered by such a Registration
Statement, each person who controls the Company or such underwriter within the
meaning of the Securities Act and the rules and regulations thereunder, each
other such holder of Registrable Shares and each of its officers, directors and
partners, and each person controlling such holder of Registrable Shares, and
their respective counsel (collectively, the "Company, Underwriters and Counsel")
against all claims, losses, damages and liabilities (or actions, proceedings or
settlements in respect thereof) arising out of or based on any untrue statement
(or alleged untrue statement) of a material fact relating to such Holder
contained in any such registration statement, prospectus, offering circular or
other document, or any omission (or alleged omission) to state therein a
material fact required to be stated therein relating to such holder or necessary
to make the statements therein relating to such holder not misleading or any
violation by such holder of any rule or regulation promulgated under the
Securities Act applicable to such holder and relating to action or inaction
required of such holder in connection with any such registration; and will
reimburse the Company, such holders of Registrable Shares, directors, officers,
partners, persons, underwriters or control persons for any legal or any other
expense reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability or action, in each case to the extent, but
only to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) relating to such holder is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished to the
Company by such holder of Registrable Shares and stated to be specifically for
use therein; provided, however, that such indemnification obligations shall not
apply if the Company modifies or changes to a material extent written
information furnished by such Holder. Each holder of Registrable Shares will, if
Registrable Shares held by it are included in the securities as to which such
registration is being effected, indemnify the Company, Underwriters and Counsel
against all claims, losses, damages and liabilities (or actions, proceedings or
settlements in respect thereof), arising out of or based on any sale of
Registrable Shares made by such holder following receipt by such holder of
written notice from the Company, Underwriters or Counsel that the registration
statement filed with respect to such Registrable Shares contains an untrue
statement of material fact or omits to state a material fact necessary in order
to make the statements made therein, in light of the circumstances under which
they were made, not misleading.
(c) To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 5 to the fullest extent permitted by law; provided, however, that
(a) no contribution shall be made under circumstances where the maker would not
have been liable for indemnification under the fault standards set forth in
Section 5, (b) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section
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(American International Petroleum Corp.)
11(f) of the Securities Act) shall be entitled to contribution from any seller
of Registrable Shares who was not guilty of such fraudulent misrepresentation
and (c) contribution by any seller of Registrable Shares shall be limited in
amount to the net amount of proceeds received by such seller from the sale of
such Registrable Shares.
(d) Each party entitled to indemnification under this Section 5 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld or delayed), and the Indemnified Party may participate
in such defense at such Indemnified Party's expense. No Indemnifying Party, in
the defense of any such claim or litigation, shall except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation. Each Indemnified Party shall
furnish such information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be reasonably
required in connection with defense of such claim and litigation resulting
therefrom.
6. Agreements of Holders of Registrable Shares. Each holder of Registrable
Shares shall promptly furnish to the Company such information regarding such
holder of Registrable Shares and the distribution proposed by such holder of
Registrable Shares as the Company may reasonably request in writing and as shall
be reasonably required in connection with any registration referred to in this
Agreement.
7. Reports under Exchange Act. With a view to making available to the
Investors the benefits of Rule 144 promulgated under the Securities Act or any
other similar rule or regulation of the Commission that may at any time permit
the Investors to sell securities of the Company to the public without
registration and without imposing restrictions arising under the federal
securities laws on the purchases thereof ("Rule 144") the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144;
(b) file with the Commission in a timely manner, all reports and
other documents required of the Company under the Securities Act and the
Exchange Act; and
(c) furnish to each Investor so long as such Investor owns
Registrable Shares, promptly upon request, (i) a written statement by the
Company as to whether it has complied with the reporting requirements of
Rule 144, the Securities Act and the Exchange Act, (ii) a copy of the most
recent annual or quarterly report of the Company and such other reports
and documents so filed by the Company and (iii) such other information as
may be reasonably
REGISTRATION RIGHTS AGREEMENT - Page 11
(American International Petroleum Corp.)
requested to permit the Investors to sell such securities pursuant to Rule
144 without registration.
8. Miscellaneous.
A. Governing Law. This agreement shall be governed by and construed
in accordance with the laws of the State of Nevada without giving effect to
conflict of laws of such jurisdiction.
B. Successors and Assigns. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
C. Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subject
matter hereof.
D. Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by first-class mail,
postage prepaid, or delivered by hand or by messenger or courier delivery
service, addressed (a) if to an Investor
at___________________________________________________________or at such other
address as such Investor shall have furnished to the Company in writing, or (b)
if to the Company at 444 Madison Ave, Ste 3202, New York, Ny, 10022, Fax
212/688-6657 or at such other address as the Company shall have furnished to
each Investor and each such other holder in writing.
E. Delays or Omissions. No delay or omission to exercise any right,
power or remedy accruing to any holder of any Registrable Shares, upon any
breach or default of the Company under this Agreement, shall impair any such
right, power or remedy of such holder nor shall it be construed to be a waiver
of any such breach or default, or an acquiescence therein, or of or in any
similar breach or default thereunder occurring, nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any holder of any breach or default under this
Agreement, or any waiver on the part of any party of any provisions of
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
this Agreement, or by law or otherwise afforded to any holder, shall be
cumulative and not alternative.
F. Counterparts. This agreement may be executed in any number of
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
REGISTRATION RIGHTS AGREEMENT - Page 12
(American International Petroleum Corp.)
G. Severability. In the case any provision of this Agreement shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
H. Amendments. The provisions of this Agreement may be amended at
any time and from time to time, and particular provisions of this Agreement may
be waived, with and only with an agreement or consent in writing signed by the
Company and by the Investors currently holding fifty percent (50%) of the
Registrable Shares as of the date of such amendment or waiver.
[Signature page follows]
REGISTRATION RIGHTS AGREEMENT - Page 13
(American International Petroleum Corp.)
The foregoing Registration Rights Agreement is hereby executed as of the
date first above written.
COMPANY:
AMERICAN INTERNATIONAL
PETROLEUM CORPORATION
By:
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Title:
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INVESTOR:
By:
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Title:
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By:
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Title:
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By:
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Title:
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REGISTRATION RIGHTS AGREEMENT - Page 14
(American International Petroleum Corp.)