Exhibit 4.7
January 22, 1999
American International Petroleum Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
Chairman and Chief Executive Officer
Re: Amendment to Certain Terms of Prior Agreements
Dear ▇▇. ▇▇▇▇▇:
HW Partners, L.P. ("HW Partners"), as the investment advisor to certain
investment funds (collectively, the "Funds") which owns certain securities of
American International Petroleum Corporation (the "Company"), and the Company
hereby agree as follows:
1. Reference. Reference is hereby made to that certain Securities Purchase
Agreement dated as of April 21, 1998 by and among the Company and certain of the
Funds (the "April Agreement"). Capitalized terms used herein and not otherwise
defined shall have meanings ascribed thereto in the April Agreement.
2. Financings. The definition of Financings is hereby amended, as of the
date hereof, by deleting therefrom the exception for "other than Permitted
Financings" at the end of such definition. The Company and the Funds hereby
amend the mandatory prepayment provisions specified in Section 3.4 of the April
Agreement upon the consummation of one or more Financings such that (i) the
Company shall be authorized to retain 100% of the Net Cash Proceeds not to
exceed an aggregate of $1.8 million attributable to all Financings consummated
on or before May 31, 1999 (the "Initial Basket"), (ii) the aggregate Net Cash
Proceeds in excess of the Initial Basket from all Financings consummated on or
before May 31, 1999 shall be used as follows: a minimum 20% of such aggregate
Net Cash Proceeds shall be used to repay the Convertible Notes at the applicable
Formula Price and (iii) 100% of the aggregate Net Cash Proceeds from all
Financings consummated after May 31, 1999 shall be used to repay the Convertible
Notes at the applicable Formula Price.
3. Equity Agreement Warrants. The 1,595,978 Closing Warrants issued to the
Funds in connection with the execution of the Equity Agreement are hereby fully
vested and shall remain issued and outstanding to the Funds.
4. Exercise Price of Warrants. The Exercise price of all common stock
purchase warrants previously issued to the Funds, including, without limitation,
(i) the common stock purchase warrants issued in connection with all financing
transactions preceding the April Agreement, and (ii) the common stock purchase
warrants issued in connection with the April Agreement and Equity Agreement, is
hereby reset at two dollars ($2.00) per share (subject to the remaining
provisions contained therein for adjustments based upon stock splits,
reorganizations and related events).
5. Registration Statement. The Company is in the process of filing with the
Commission an additional Registration Statement covering shares of Common Stock
issuable upon conversion of the Convertible Notes (or as interest thereon). Such
Registration Statement shall be filed with the
commission consistent with the terms of the Registration Rights Agreement;
provided, (i) the Company shall register thereunder a minimum of 8.5 million
shares issuable upon conversion of (or interest under) the Convertible Notes,
and (ii) the Registrable Securities to be included within such Registration
Statement shall include all common stock purchase warrants previously issued by
the Company to the Funds and not previously registered under effective
registration statements, including, without limitation, the 1,595,978 Closing
Warrants. Further, either in connection with such Registration Statement or as
an amendment to any existing registration statements, the Company shall, to the
extent required by applicable law, reflect the revised exercise price of all
common stock purchase warrants as set forth herein. In addition, for purposes of
this Registration Statement, the Required Effectiveness Date shall be April 30,
1999, and the failure of the Registration Statement to be declared by the
Required Effectiveness Date shall result in the Company paying to the Funds the
Default Fee specified in the April Agreement.
6. Binding Agreement. Upon execution of this letter by the Company and HW
Partners, this letter will represent the legally binding agreement of the
Company and the Funds (by virtue of the signature of HW Partners on behalf of
the Funds as their investment advisor). Except as modified herein, all terms
of the April Agreement, and the remaining agreements between the Company and the
Funds, shall remain unaltered and in full force and effect. The Company and the
Funds shall, to the extent deemed necessary by the Funds, use reasonable good
faith efforts in preparing a more definitive document specifying the terms set
forth herein; provided, the failure of either party to execute any such more
definitive agreement shall in no way alleviate the binding nature of this
letter.
American International Petroleum Corporation
January 22, 1999
Page 3
Very truly yours,
HW PARTNERS, L.P.,
On behalf of the Funds
By: /s/HW FINANCE, L.L.C.,
Its general partner
ACKNOWLEDGED AND AGREED:
/s/AMERICAN INTERNATIONAL PETROLEUM CORPORATION