LIEN TERMINATION AGREEMENT

 

This LIEN TERMINATION AGREEMENT (this “Agreement”) is made as of July 3, 2012
(“Effective Date”) by and between Maxum Overseas Fund (the “Secured Party”) and
American Petro-Hunter, Inc., a Nevada corporation (the “Company” and
collectively with the Secured Party, the “Parties”).

 

RECITAL

 

A.           The Company and the Secured Party are parties to that certain
Security Agreement, dated May 4, 2011 (the “Security Agreement”), pursuant to
which the Company granted a security interest in certain Collateral (as defined
in the Security Agreement) of the Company to the Secured Party (the “Security
Interest”).

 

B.           The Company and the Secured Party are parties to that certain
Amended and Restated Convertible Debenture, dated May 4, 2011, as amended (the
“Convertible Debenture”), pursuant to which the Secured Party has the right to
convert the outstanding principal balance and interest under the Convertible
Debenture into shares of the Company’s common stock (“Common Stock”) at $0.25
per share (the “Conversion Price”).

 

C.           Between December 1, 2011 and July 3, 2012, the remaining
outstanding principal balance and interest of the Convertible Debenture (“Total
Debt Amount”) was converted by Secured Party into Common Stock (the “Debt
Conversions”).

 

D.           In connection with a proposed debt financing of the Company by ASYM
Energy Partners LLC (“ASYM”), Secured Party agreed to undertake the Debt
Conversions and the Parties have agreed to terminate the Security Agreement and
the Security Interest contemplated thereby in exchange for the grant to the
Secured Party of certain antidilution protections for the Debt Conversions (the
“Conversion Price Adjustments”).

 

E.           In connection with each distribution pursuant to the proposed ASYM
debt financing, the Company will issue a warrant to ASYM (the “ASYM Warrants”),
the exercise price of which will be determined based upon certain financial
measurements agreed to between ASYM and the Company.

 

F.           The Conversion Price Adjustments for the Debt Conversions will be
based upon the exercise price of the ASYM Warrants.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing, and the representations,
warranties, covenants and conditions set forth below, the Parties hereto,
intending to be legally bound, hereby agree as follows:

 

1.          Security INTEREST.

 

1.1           Termination of Security Interest. In consideration of the
covenants and agreements set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Parties hereby agree that the Security Interest is hereby terminated and the
Security Agreement and any references to the Security Interest in any other
documents between the Parties shall be of no further force or effect.

 

1.2           Termination Statement. Simultaneously with the execution of this
Agreement, Secured Party will file a UCC-3 Termination Statement prepared by the
Company to indicate the termination of the Security Interest contemplated
hereby, in any jurisdiction where the Security Interest had been recorded.

 

 

 

 

1.3           Further Assurances. The Secured Party will execute and deliver
such other documents as may be reasonably necessary and requested by the Company
to release the Collateral from the Security Interest.

 

2.          Representations and Warranties of the SECURED PARTY. The Secured
Party hereby represents and warrants to the Company that the statements
contained in the following paragraphs of this Section 2 are all true and correct
as of the date hereof.

 

2.1           Title. The Secured Party owns all right, title and interest in and
to the Security Interest and has not transferred, pledged or encumbered in any
way such Security Interest.

 

2.2           Authority. The Secured Party has full power and authority to
execute this Agreement and carry out the transactions and agreements
contemplated hereby.

 

2.3           Interest. After giving effect to the termination contemplated in
Section 1 above, the Secured Party will have no further security interest, lien
or encumbrance upon any assets of the Company.

 

3.          ANTi-DILUTION PROTECTION.

 

3.1           ASYM Warrant Exercise Price. The exercise price (“Warrant Exercise
Price”) of the ASYM warrants issuable from time to time shall be equal to the
lower of: (i) $0.20 per share, (ii) 85% of the volume weighted average price per
share (VWAP) of Common Stock for the fifteen (15) days preceding the issuance of
any loan to the Company by ASYM, or (iii) the trailing 90-day net average daily
oil production of the Company multiplied by $40,000, the product of which is
reduced by the Company’s debt and any obligations, thereafter divided by the
Company’s fully diluted number of shares of Common Stock outstanding.

 

3.2           Additional Share Issuance. In the event the Warrant Exercise Price
for any ASYM Warrant issued in connection with a loan from ASYM is less than the
Conversion Price , the Company will issue to Secured Party additional shares of
Common Stock in an amount equal to (“Adjustment Shares”): [(Total Debt
Amount/Warrant Exercise Price) less (Total Debt Amount/Conversion Price)] minus
any Adjustment Shares previously issued to Secured Party hereunder. By way of
example only,

 

If the Warrant Exercise Price is $0.20 in connection with the first loan from
ASYM and the Total Debt Amount of $1,000,000, then the Adjustment Shares will
equal: [($1,000,000/$0.20) - ($1,000,000/$0.25)] - 0 = 1,000,000 shares.

 

If the Warrant Exercise Price is $0.15 in connection with the second loan from
ASYM, then the Adjustment Shares will equal: [($1,000,000/$0.15) -
($1,000,000/$0.25)] - 1,000,000 = 1,666,667 shares.

 

If the Warrant Exercise Price is $0.20 in connection with the third loan from
ASYM, then the Adjustment Shares will equal: [($1,000,000/$0.20) -
($1,000,000/$0.25)] - 2,666,667 = 0 shares.

 

3.3           Rights. Any Common Stock issued to Secured Party pursuant to
Section 3.2 above shall have the same rights, preferences and privileges and be
subject to the same restrictions on transfer as those shares issued in the
applicable Debt Conversion.

 

3.4           Subsequent Warrant Issuances. For the avoidance of doubt, the
issuance of shares to Secured Party pursuant to Section 3.2 shall not preclude
the issuance of additional shares of Common Stock in the event the Warrant
Exercise Price for any subsequent ASYM Warrant is lower than the Warrant
Exercise Price for the previous ASYM Warrant(s).

 

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4.          GENERAL PROVISIONS.

 

4.1           Survival of Warranties. The representations, warranties and
covenants of the Secured Party contained in or made pursuant to this Agreement
shall survive the execution and delivery of this Agreement and shall in no way
be affected by any investigation of the subject matter thereof made by or on
behalf of the Company.

 

4.2           Successors and Assigns. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective successors and
assigns of the Parties.

 

4.3           Governing Law. This Agreement shall be governed by and construed
under the internal laws of the State of Nevada as applied to agreements among
Nevada residents entered into and to be performed entirely within Nevada,
without reference to principles of conflict of laws or choice of laws and, to
the extent applicable, by federal law.

 

4.4           Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

 

4.5           Headings. The headings and captions used in this Agreement are
used only for convenience and are not to be considered in construing or
interpreting this Agreement. All references in this Agreement to sections,
paragraphs, exhibits and schedules shall, unless otherwise provided, refer to
sections and paragraphs hereof and exhibits and schedules attached hereto, all
of which exhibits and schedules are incorporated herein by this reference.

 

4.6           Severability. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, such provision(s) shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision(s) were so excluded and shall be enforceable in accordance with
its terms, provided however that the Conversion Price Adjustments contemplated
in Section 3 hereof and the termination of the Security Interest contemplated in
Section 1 are contingent upon each other.

 

4.7           Further Assurances. From and after the date of this Agreement,
upon the request of the Secured Party or the Company, the Company and the
Secured Party shall execute and deliver such instruments, documents or other
writings as may be reasonably necessary or desirable to confirm and carry out
and to effectuate fully the intent and purposes of this Agreement.

 

4.8           Waiver and Amendment. Any of the terms and provisions of this
Agreement may be waived at any time by the Party that is entitled to the benefit
thereof, but only by a written instrument executed by such Party. This Agreement
may be amended only by an agreement in writing executed by the Parties.

 

4.9           Delay or Omission. No delay or omission to exercise any right,
power or remedy accruing to any Party hereto shall impair any such right, power
or remedy of such Party nor be construed to be a waiver of any such right, power
or remedy nor constitute any course of dealing or performance hereunder.

 

[SIGNATURE PAGE IMMEDIATELY FOLLOWS]

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed and
delivered as of the date first above written.

 

SECURED PARTY:

 

Maxum Overseas Fund       By:         Name: Kenneth Taves       Title: Portfolio
Manager  

 

COMPANY:

 

American Petro-Hunter, Inc.

a Nevada corporation

 

By:       Robert McIntosh     Chief Executive Officer  

 

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