Document:

DEBENTURE
AND WARRANT PURCHASE AGREEMENT

    

    THIS
DEBENTURE AND WARRANT PURCHASE AGREEMENT (this “Agreement”), dated as of May
17, 2010 (“Effective
Date”), is entered into by and between American Petro-Hunter, Inc., a
Nevada corporation (the “Company”), and Maxum Overseas
Fund (the “Purchaser”).

    

    RECITAL

    

    WHEREAS, the Purchaser is
willing to acquire from the Company, and the Company is willing to issue to the
Purchaser, on the terms and subject to the conditions set forth herein, (i) a
Convertible Debenture in the aggregate principal amount of up to $1,500,000 (the
“Debenture”) on the
terms and conditions as set forth in the Debenture in the form attached hereto
as Exhibit A,
and (ii) one or more warrants to purchase shares of common stock of the Company
(the “Warrant”) on the
terms and conditions set forth in the Warrant in the form attached hereto as
Exhibit
B.

    

    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:

    

    AGREEMENT

    

    1.       Issuance and Receipt of the Debenture
and Warrant; Restatement of Prior Notes. The Company agrees to issue and
deliver the Debenture and Warrants to the Purchaser simultaneously with the
execution of this Agreement.  The issue date of each Warrant shall be
such date the Company first receives funds from the Purchaser under the
Debenture.  The Company and Purchaser each acknowledge and agree that
this Agreement, together with the Debenture and the Warrant (collectively, the
“Transaction
Documents”), amends and restates in their entirety any promissory notes
previously issued by the Company to the Purchaser, including, without
limitation, those notes dated April 19, 2010, April 27, 2010, April 29, 2010 and
May 3, 2010, and the Transaction Documents constitute the full and entire
understanding between the parties with respect to the subject matter
hereof.

     

    2.       Representations and Warranties of the
Company.  The Company represents, and warrants to, the
Purchaser as follows:

     

    (a)   Organization and Good Standing:
Certificate of Incorporation and Bylaws. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
state of its organization and has all requisite corporate power and authority to
carry on its business as now conducted and proposed to be
conducted.  The Company is duly qualified to conduct business as a
foreign corporation and is in good standing as a foreign corporation in all
jurisdictions where the properties owned, leased or operated by it are located
or where its business is conducted, except where the failure to so qualify or be
in good standing is not reasonably likely to have a material adverse effect on
the Company’s business, financial condition, results of operations, assets,
liabilities or prospects (a “Material Adverse
Effect”).

     

    (b)   Corporate
Power.  The Company has all requisite legal and corporate power
to enter into, execute, deliver and perform its obligations under the
Transaction Documents.  This Agreement is and, upon each of their
issuance, the Debenture and Warrant will be, valid and binding obligations of
the Company, enforceable in accordance with their terms, except to the extent
that such enforcement may be subject to applicable bankruptcy, insolvency,
reorganization, arrangement, moratorium, fraudulent conveyance or other laws or
court decisions relating to or affecting the rights of creditors generally, and
such enforcement may be limited by equitable principles of general
applicability.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (c)   Authorization.

     

    (i)         Corporate
Action.  All corporate and legal action on the part of the Company,
its officers, directors and stockholders necessary for the execution and
delivery of the Transaction Documents, and the performance of the Company’s
obligations hereunder and thereunder, has been taken.

     

    (ii)        No
Preemptive Rights.  No person has any right of first refusal or any
preemptive or similar rights in connection with the issuance of the Debenture or
the Warrant, or the shares of the Company issuable upon conversion of the
Debenture or the exercise of the Warrant (the “Conversion
Stock”).

     

    (d)   Noncontravention.  The
execution, delivery and performance of and compliance with the Transaction
Documents and the issuance of the Conversion Stock will not result in nor
constitute any breach, default or violation of (i) any agreement, contract,
lease, license, instrument or commitment (oral or written) to which the Company
is a party or is bound or (ii) any law, rule, regulation, statute or order
applicable to the Company or its properties, nor result in the creation of any
mortgage, pledge, lien, encumbrance or charge upon any of the properties or
assets of the Company, any of which breach, default or violation under clause
(i) or (ii), preceding, would have a Material Adverse Effect.

     

    (e)   Consents. No consent,
approval, order or authorization of, or designation, registration, declaration
or filing with, any federal, state, local or provincial or other governmental
authority or other person on the part of the Company is required in connection
with the valid execution and delivery of the Transaction Documents, or the
offer, or issuance of the Debenture, the Warrant or the Conversion Stock other
than, if required, filings or qualifications under applicable federal or state
securities laws.

     

    (f)    Offering.  In
reliance, in part, on the representations and warranties of the Purchaser in
Section 3 hereof, the offer and issuance of the Debenture and Warrant in
conformity with the terms of this Agreement and the issuance of the Conversion
Stock will not result in a violation of the requirements of Section 5 of the
Securities Act of 1933, as amended, (the “Securities Act”) or the
qualification or registration requirements of any applicable state securities
laws.

     

    (g)   Compliance with
Laws.  The Company is not (i) subject to the terms or
provisions of any material judgment, decree, order, writ or injunction or (ii)
in violation of any terms or provisions of any laws, rules, or regulations,
except where such violations do not and are not likely to have a Material
Adverse Effect.

     

    (h)   Compliance with Corporate Instruments
and Laws.  The Company is not in violation of any provisions of
its Articles of Incorporation or Bylaws as currently in effect.  The
Company is in compliance in all material respects with all applicable laws,
statutes, rules, and regulations of all governmental and regulatory authorities
which are applicable and the compliance with which is material to the Company or
its assets or business.  All licenses, franchises, permits and other
governmental authorizations held by the Company and which are material to its
business are valid and sufficient in all respects for the business presently
carried on by the Company.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    (i)    Use of
Proceeds.  The Company expects to use the net proceeds received
under this Agreement for general working capital purposes and possibly the
acquisition of assets and companies. The remaining proceeds received under this
Agreement will be used for the ongoing development of the Company’s oil and gas
projects, specifically in the near term on the Rooney Project in Kansas and the
North Oklahoma Project for drilling and completion costs, land leasing and for
general administration going forward. The Company has not reserved or allocated
specific amounts for these purposes. Accordingly, the Company’s management will
have broad discretion as to the application of such funds.

     

    (j)    Public Filings.

     

    (i)       The
Company has filed all reports required to be filed by Section 13 or 15 (d) of
the Securities Exchange Act of 1934, as amended, during the past twelve months
(the “Company SEC
Reports”). The Company SEC Reports, each as amended prior to the date
hereof, (i) have been prepared in all material respects in accordance with
the requirements of the Securities Act or the Securities Exchange Act of 1934,
as amended (the “Exchange
Act”), as the case may be, and the rules and regulations promulgated
thereunder, and (ii) did not, when filed as amended prior to the date
hereof, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading.

     

    (ii)      Each
of the consolidated financial statements (including, in each case, any notes
thereto) contained in or incorporated by reference into the Company SEC Reports
was prepared in accordance with U.S. Generally Accepted Accounting Principles
applied on a consistent basis throughout the periods indicated (except as may be
indicated in the notes thereto), complied in all material respects with
applicable accounting requirements and the rules and regulations of the
Securities and Exchange Commission (the “SEC”) and each fairly
presented, in all material respects, the consolidated financial position,
results of operations and cash flows of the Company of the dates thereof and for
the respective periods indicated therein except as otherwise noted therein
(subject, in the case of unaudited statements, to normal and recurring year end
adjustments).

     

    3.       Representations and Warranties by the
Purchaser. The Purchaser represents, and warrants to, and covenants with,
the Company as follows:

     

    (a)   Investment. The Purchaser is
acquiring the Debenture, Warrant and Conversion Stock for the Purchaser’s own
account, and not directly or indirectly for the account of any other
person.  The Purchaser is acquiring the Debenture, Warrant and
Conversion Stock for investment and not with a view to distribution or resale
thereof except in compliance with Securities Act of 1933, as amended (the “Securities Act”) and any applicable state
law regulating securities.

     

    (b)   Registration of Debenture and
Conversion Stock.  The Purchaser must bear the economic risk of
investment for an indefinite period of time because the Debenture, Warrant and
Conversion Stock have not been registered under the Securities Act and therefore
cannot and will not be sold unless they are subsequently registered under the
Securities Act or an exemption from such registration is
available.  The Company has made no representations, warranties or
covenants whatsoever as to whether any exemption from the Securities Act,
including, without limitation, any exemption for limited sales in routine
brokers’ transactions pursuant to Rule 144 under the Securities Act will become
available. Transfer of the Debenture, Warrant and Conversion Stock have not been
registered or qualified under any applicable state law regulating securities and
therefore the Debenture, Warrant and Conversion Stock cannot and will not be
sold unless they are subsequently registered or qualified under any such act or
an exemption therefrom is available.  The Company has made no
representations, warranties or covenants whatsoever as to whether any exemption
from any such act will become available.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    (c)   Accredited Investor. The
Purchaser represents and warrants to, and covenants with, the Company that: (i)
the Purchaser is an “accredited investor” as defined in Rule 501 of Regulation D
under the Securities Act and the Purchaser is also knowledgeable, sophisticated
and experienced in making, and is qualified to make decisions with respect to
investments in securities presenting an investment decision like that involved
in the purchase of the Debenture, including investments in securities issued by
the Company and investments in comparable companies, and has requested,
received, reviewed and considered all information it deemed relevant in making
an informed decision to purchase the Debenture; and (ii) the Purchaser has had
the opportunity to review the risks identified on Annex I, attached
hereto.

     

    (d)   Access to
Information.  The Purchaser acknowledges that he has had access
to the Company SEC Reports.  The Purchaser further acknowledges that
the Company has made available to him the opportunity to ask questions of and
receive answers from the Company's officers and directors concerning the terms
and conditions of this Agreement and the business and financial condition of the
Company, and the Purchaser has received such information about the business and
financial condition of the Company and the terms and conditions of the Agreement
as he has requested.  The Purchaser understands that the Debenture,
Warrant and Conversion Stock are speculative investments, which involve a high
degree of risk of loss of the Purchaser’s entire investment.  Among
others, the undersigned has had the opportunity to review of the risks
identified under the caption “Risk Factors” in the Company SEC Reports and Annex I.

     

    (e)   Pre-Existing
Relationship.  The Purchaser further represents and warrants
that the Purchaser has such business or financial expertise as to be able to
protect the Purchaser’s own interests in connection with the purchase of the
Debenture, Warrant and Conversion Stock .

     

    (f)    Foreign
Matters.  The Purchaser acknowledges that no action has been or
will be taken in any jurisdiction outside the United States by the Company that
would permit an offering of the Debenture, or possession or distribution of
offering materials in connection with the issuance of the Debenture, in any
jurisdiction outside the United States where legal action by the Company for
that purpose is required.  Each Purchaser outside the United States
will comply with all applicable laws and regulations in each foreign
jurisdiction in purchasing this Debenture, Warrant and the Conversion
Stock.

     

    (g)   Compliance with
Laws.  Purchaser will not use any of the Conversion Stock to
cover any short position in the Common Stock of the Company if doing so would be
in violation of applicable securities laws.

     

    (h)   Legal and Tax
Advice.  The Purchaser understands that nothing in the Company
SEC Reports, this Agreement or any other materials presented to the Purchaser in
connection with the purchase of the Debenture, Warrant and Conversion Stock
constitutes legal, tax or investment advice.  The Purchaser has
consulted such legal, tax and investment advisors, as it, in its sole
discretion, has deemed necessary or appropriate in connection with its purchase
of the Debenture, Warrant and Conversion Stock.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    (f)  Prior
Notes.  The Purchaser acknowledges that the amounts set forth
on Attachment 1 to the Debenture represent all amounts owed by the Company to
Purchaser as of the date hereof, including any accrued and unpaid
interest.

     

    (g) Further
Assurances.  The Purchaser agrees and covenants that at any
time and from time to time it will promptly execute and deliver to the Company
such further instruments and documents and take such further action as the
Company may reasonably require in order to carry out the full intent and purpose
of this Agreement and to comply with state or federal securities laws or other regulatory
approvals.

     

    4.       Redemption Right. Upon the
applicable Repayment Date for the Initial Advance or any subsequent Draw Down
(each as defined in the Debenture), the Company shall have the right to
automatically convert any remaining outstanding principal balance and accrued
interest associated with such Initial Advance or subsequent Draw Down into
Conversion Stock at the rate of the then applicable Conversion Price (as defined
in the Debenture).

     

    5.       Indemnification.

     

    (a)   Company’s Indemnification of
Purchaser.  To the extent permitted by law, the Company shall
defend, indemnify and hold harmless the Purchaser from and against any and all
losses, claims, judgments, liabilities, demands, charges, suits, penalties,
costs or expenses, including court costs and attorneys’ fees resulting from any
claim, demand, suit, action or proceeding brought by any third party (“Claims and Liabilities”) with
respect to or arising from (i) the breach of any warranty or any inaccuracy
of any representation made by the Company in this Agreement, or (ii) the
breach of any covenant or agreement made by the Company in this
Agreement.

     

    (b)   Purchaser’s Indemnification of
Company.  To the extent permitted by law, the Purchaser shall
defend, indemnify and hold harmless the Company from and against any and all
Claims and Liabilities with respect to or arising from (i) the breach of
any warranty or any inaccuracy of any representation made by the Purchaser in
this Agreement, or (ii) the breach of any covenant or agreement made by the
Purchaser in this Agreement.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    (c)   Claims
Procedure.  Promptly after the receipt by any indemnified party
(the “Indemnitee”) of
notice of the commencement of any action or proceeding against such Indemnitee,
such Indemnitee shall, if a claim with respect thereto is or may be made against
any indemnifying party (the “Indemnifying Party”) pursuant
to this Section 5, give such Indemnifying Party written notice of the
commencement of such action or proceeding and give such Indemnifying Party a
copy of such claim and/or process and all legal pleadings in connection
therewith.  The failure to give such notice shall not relieve any
Indemnifying Party of any of its indemnification obligations contained in this
Section 5, except where, and solely to the extent that, such failure actually
and materially prejudices the rights of such Indemnifying Party.  Such
Indemnifying Party shall have, upon request within thirty (30) days after
receipt of such notice, but not in any event after the settlement or compromise
of such claim, the right to defend, at its own expense and by its own counsel
reasonably acceptable to the Indemnitee, any such matter involving the asserted
liability of the Indemnitee; provided, however, that if the Indemnitee
determines that there is a reasonable probability that a claim may materially
and adversely affect it, other than solely as a result of money payments
required to be reimbursed in full by such Indemnifying Party under this Section
5 or if a conflict of interest exists between Indemnitee and the Indemnifying
Party, the Indemnitee shall have the right to defend, compromise or settle such
claim or suit; and, provided, further, that such settlement or compromise shall
not, unless consented to in writing by such Indemnifying Party, which shall not
be unreasonably withheld, be conclusive as to the liability of such Indemnifying
Party to the Indemnitee.  In any event, the Indemnitee, such
Indemnifying Party and its counsel shall cooperate in the defense against, or
compromise of, any such asserted liability, and in cases where the Indemnifying
Party shall have assumed the defense, the Indemnitee shall have the right to
participate in the defense of such asserted liability at the Indemnitee’s own
expense.  In the event that such Indemnifying Party shall decline to
participate in or assume the defense of such action, prior to paying or settling
any claim against which such Indemnifying Party is, or may be, obligated under
this Section 5 to indemnify an Indemnitee, the Indemnitee shall first supply
such Indemnifying Party with a copy of a final court judgment or decree holding
the Indemnitee liable on such claim or, failing such judgment or decree, the
terms and conditions of the settlement or compromise of such
claim.  An Indemnitee’s failure to supply such final court judgment or
decree or the terms and conditions of a settlement or compromise to such
Indemnifying Party shall not relieve such Indemnifying Party of any of its
indemnification obligations contained in this Section 5, except where, and
solely to the extent that, such failure actually and materially prejudices the
rights of such Indemnifying Party.  If the Indemnifying Party is
defending the claim as set forth above, the Indemnifying Party shall have the
right to settle the claim only with the consent of the Indemnitee.

     

    (d)   Exclusive
Remedy.  Each of the parties hereto acknowledges and agrees
that, from and after the Effective Date, its sole and exclusive monetary remedy
with respect to any and all claims relating to the subject matter of this
Agreement shall be pursuant to the indemnification provisions set forth in this
Section 5, except that nothing in this Agreement shall be deemed to constitute a
waiver of any injunctive or other equitable remedies or any tort claims of, or
causes of action arising from, intentionally fraudulent misrepresentation,
willful breach or deceit.

     

    6.       Confidentiality.  The
Purchaser represents to the Company that, at all times during the Company’s
offering of the Debenture, the Purchaser has maintained in confidence all
non-public information regarding the Company received by the Purchaser from the
Company or its agents, and covenants that it will continue to maintain in
confidence such information and shall not use such information for any purpose
other than to evaluate the purchase of the Debenture until such information (a)
becomes generally publicly available other than through a violation of this
provision by the Purchaser or his agents or (b) is required to be disclosed in
legal proceedings (such as by deposition, interrogatory, request for documents,
subpoena, civil investigation demand, filing with any governmental authority or
similar process), provided, however, that before making any use or disclosure in
reliance on this subparagraph (b) the Purchaser shall give the Company at least
fifteen (15) days prior written notice (or such shorter period as required by
law) specifying the circumstances giving rise thereto and will furnish only that
portion of the non-public information which is legally required and will
exercise his best efforts to obtain reliable assurance that confidential
treatment will be accorded any non-public information so furnished.

     

    7.       Finder’s Fee.  The
Company agrees to pay a finder’s fee of five percent (5%) of the principal
amount of the Debenture, to be paid proportionally upon the Initial Advance and
any subsequent Draw Down (each as defined in the Debenture).

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    8.       Miscellaneous.

     

    (a)   Waivers and
Amendments.  Any provision of this Agreement may be amended,
waived or modified upon the written consent of the Company and the
Purchaser.

     

    (b)   Governing Law.  This
Agreement and all actions arising out of or in connection with this Agreement
shall be governed by and construed in accordance with the laws of the State of
Nevada, without regard to the conflict of laws provisions of the State of Nevada
or of any other state.

     

    (c)   Entire
Agreement.  This Agreement, together with the Exhibits hereto,
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and thereof.

     

    (d)   Notices.  All
notices, requests and other communications hereunder shall be in writing and
shall be deemed to have been duly given at the time of receipt if delivered by
hand or by facsimile transmission or three (3) days after being mailed,
registered or certified mail, return receipt requested, with postage prepaid to
the applicable parties hereto at the address stated on the signature page hereto
or if any party shall have designated a different address or facsimile number by
notice to the other party given as provided above, then to the last address or
facsimile number so designated.

     

    (e)   Validity.  If any
provision of this Agreement shall be judicially determined to be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions thereof shall not in any way be affected or impaired
thereby.

     

    (f)    Counterparts.  This
Agreement may be executed in any number of counterparts, and a party’s delivery
of a signed counterpart by facsimile transmission shall constitute that party’s
due execution of this Agreement.

     

    [Signature
Page Follows]

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, the
parties have executed and delivered this Agreement as of the date and year first
written above.

     

    
      
        
          
            	
                    AMERICAN
      PETRO-HUNTER, INC.

                  
	 
      
	
                    By:

                  	 
      
	
                    Name:
      Robert McIntosh

                  
	
                    Title:
      Chief Executive Officer

                  
	 
      
	
                    MAXUM
      OVERSEAS FUND

                  
	 
      
	
                    By:

                  	 
      
	
                    Name:
      Kenneth Taves

                  
	
                    Title:
      Portfolio Manager

                  

          

        

      

    

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    EXHIBIT
A

    FORM OF CONVERTIBLE
DEBENTURE

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
B

    FORM OF
WARRANT

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ANNEX
I

    RISK
FACTORS

     

    The risks described below are the ones
the Company believes are the most important for the Purchaser to consider,
although these risks are not the only ones that the Company faces. If events
anticipated by any of the following risks actually occur, the Company’s
business, operating results or financial condition could suffer and the trading
price of the Company’s common stock could decline.  As used below,
“we,” “us” and “our” refer to American Petro-Hunter Inc., which is also
sometimes referred to as the “Company.”

     

    Risks Relating to Our
Business

     

    The
duration or severity of the current global economic downturn and disruptions in
the financial markets, and their impact on our Company, are
uncertain.

     

    The oil
and gas industry generally is highly cyclical, with prices subject to worldwide
market forces of supply and demand and other influences.  The recent
global economic downturn, coupled with the global financial and credit market
disruptions, have had a historic negative impact on the oil and gas
industry.  These events have contributed to an unprecedented decline
in crude oil and natural gas prices, weak end markets, a sharp drop in demand,
increased global inventories, and higher costs of borrowing and/or diminished
credit availability.  While we believe that the long-term prospects
for oil and gas remain bright, we are unable to predict the duration or severity
of the current global economic and financial crisis.  There can be no
assurance that any actions we may take in response to further deterioration in
economic and financial conditions will be sufficient.  A protracted
continuation or worsening of the global economic downturn or disruptions in the
financial markets could have a material adverse effect on our business,
financial condition or results of operations.

     

     We
have a history of losses which may continue, which may negatively impact our
ability to achieve our business objectives.

     

    We have
incurred net losses and other comprehensive losses of $5,284,172 for the period
from January 24, 1996 (inception) to December 31, 2009.  We cannot be
assured that we can achieve or sustain profitability on a quarterly or annual
basis in the future.  Our operations are subject to the risks and
competition inherent in the establishment of a business
enterprise.  There can be no assurance that future operations will be
profitable.  We may not achieve our business objectives and the
failure to achieve such goals would have an adverse impact on us.

     

     If
we are unable to obtain additional funding our business operations will be
harmed and if we do obtain additional financing our then existing shareholders
may suffer substantial dilution.

     

    We will
require additional funds to initiate our oil and gas exploration activities, and
to take advantage of any available business
opportunities.  Historically, we have financed our expenditures
primarily with proceeds from the sale of debt and equity securities, and bridge
loans from our officers and stockholders.  In order to meet our
obligations or acquire an operating business, we will have to raise additional
funds.  Obtaining additional financing will be subject to market
conditions, industry trends, investor sentiment and investor acceptance of our
business plan and management.  These factors may make the timing,
amount, terms and conditions of additional financing unattractive or unavailable
to us.  If we are not successful in achieving financing in the amount
necessary to further our operations, implementation of our business plan may
fail or be delayed.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Our
independent auditors have expressed substantial doubt about our ability to
continue as a going concern, which may hinder our ability to obtain future
financing.

     

     In their report dated
March 26, 2010, our independent auditors stated that our financial statements
for the fiscal year ended December 31, 2009 were prepared assuming that we would
continue as a going concern.  Our ability to continue as a going
concern is an issue raised as a result of recurring losses from
operations.  We continue to experience net operating
losses.  Our ability to continue as a going concern is subject to our
ability to obtain necessary funding from outside sources, including obtaining
additional funding from the sale of our securities.  Our continued net
operating losses increase the difficulty in meeting such goals and there can be
no assurances that such methods will prove successful.

     

    We
have a limited operating history and if we are not successful in growing our
business, then we may have to scale back or even cease our ongoing business
operations.

     

               We
have yet to generate positive earnings from our current business strategy and
there can be no assurance that we will ever operate profitably.  Our
Company has a limited operating history in the business of oil and gas
exploration and must be considered in the development stage.  Our
success significantly depends on successful acquisition and subsequent
exploration activities.  Our operations will be subject to all the
risks inherent in the establishment of a developing enterprise and the
uncertainties arising from the absence of a significant operating
history.  We may be unable to locate recoverable reserves or operate
on a profitable basis.  We are in the development stage and potential
investors should be aware of the difficulties normally encountered by
enterprises in the development stage.  If our business plan is not
successful, and we are not able to operate profitably, investors may lose some
or all of their investment in our Company.

     

    We
are subject to new corporate governance and internal control reporting
requirements, and our costs related to compliance with, or our failure to comply
with existing and future requirements, could adversely affect our
business.

     

    We may
face new corporate governance requirements under the Sarbanes-Oxley Act of 2002,
as well as new rules and regulations subsequently adopted by the SEC and the
Public Company Accounting Oversight Board. These laws, rules and regulations
continue to evolve and may become increasingly stringent in the
future.  We are required to evaluate our internal control over
financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002
(“Section 404 “).  We are a non-accelerated filer as defined in Rule
12b-2 under the Securities Exchange Act of 1934, as amended.  Section
404 requires us to include an internal control report with our Annual Report on
Form 10-K.  That report must include management’s assessment of the
effectiveness of our internal control over financial reporting as of the end of
the fiscal year.  This report must also include disclosure of any
material weaknesses in internal control over financial reporting that we have
identified.  Failure to comply, or any adverse results from such
evaluation could result in a loss of investor confidence in our financial
reports and have an adverse effect on the trading price of our
securities.  Furthermore, an attestation report on our internal
controls from our independent registered public accounting firm is required as
part of our annual report for the fiscal year ending December 31,
2009.  We strive to continuously evaluate and improve our control
structure to help ensure that we comply with Section 404 of the Sarbanes-Oxley
Act.  The financial cost of compliance with these laws, rules and
regulations is expected to remain substantial.  We cannot assure you
that we will be able to fully comply with these laws, rules and regulations that
address corporate governance, internal control reporting and similar
matters.  Failure to comply with these laws, rules and regulations
could materially adversely affect our reputation, financial condition and the
value of our securities.

     

    
      
         

      

      
        A-2

        
          

        

      

      
         

      

    

     

    Risks
Related to our Oil and Gas Exploration

     

    Our
future operating revenue is dependent upon the performance of our
properties.

     

    Our
future operating revenue depends upon our ability to profitably operate our
existing properties by drilling and completing wells that produce commercial
quantities of oil and gas and our ability to expand our operations through the
successful implementation of our plans to explore, acquire and develop
additional properties. The successful development of oil and gas properties
requires an assessment of potential recoverable reserves, future oil and gas
prices, operating costs, potential environmental and other liabilities and other
factors.  Such assessments are necessarily inexact.  No
assurance can be given that we can produce sufficient revenue to operate our
existing properties or acquire additional oil and gas producing properties and
leases.  We may not discover or successfully produce any recoverable
reserves in the future, or we may not be able to make a profit from the reserves
that we may discover.  In the event that we are unable to produce
sufficient operating revenue to fund our future operations, we will be forced to
seek additional, third-party funding, if such funding can be
obtained.  Such options would possibly include debt financing, sale of
equity interests in our Company, joint venture arrangements, or the sale of oil
and gas interests.  If we are unable to secure such financing on a
timely basis, we could be required to delay or scale back our
operations.  If such unavailability of funds continued for an extended
period of time, this could result in the termination of our operations and the
loss of an investor’s entire investment.

     

    We
own rights to oil properties that have not yet been developed.

     

    We own
rights to oil and gas properties that have limited or no
development.  There are no guarantees that our properties will be
developed profitably or that the potential oil and gas resources on the property
will produce as expected if they are developed.

     

    Title
to the properties in which we have an interest may be impaired by title
defects.

     

    Our
general policy is to obtain title opinions on significant properties that we
drill or acquire.  However, there is no assurance that we will not
suffer a monetary loss from title defects or title
failure.  Additionally, undeveloped acreage has greater risk of title
defects than developed acreage.  Generally, under the terms of the
operating agreements affecting our properties, any monetary loss is to be borne
by all parties to any such agreement in proportion to their interests in such
property.  If there are any title defects or defects in assignment of
leasehold rights in properties in which we hold an interest, we will suffer a
financial loss.

     

    We
are subject to risks arising from the failure to fully identify potential
problems related to acquired reserves or to properly estimate those
reserves.

     

    Although
we perform a review of the acquired properties that we believe is consistent
with industry practices, such reviews are inherently incomplete.  It
generally is not feasible to review in depth every individual property involved
in each acquisition.  Ordinarily, we will focus our review efforts on
the higher-value properties and will sample the remainder, and depend on the
representations of previous owners.  However, even a detailed review
of records and properties may not necessarily reveal existing or potential
problems, nor will it permit a buyer to become sufficiently familiar with the
properties to assess fully their deficiencies and
potential.  Inspections may not always be performed on every well, and
environmental problems, such as ground water contamination, are not necessarily
observable even when an inspection is undertaken.  Even when problems
are identified, we often assume certain environmental and other risks and
liabilities in connection with acquired properties.  There are
numerous uncertainties inherent in estimating quantities of proved oil reserves
and actual future production rates and associated costs with respect to acquired
properties, and actual results may vary substantially from those assumed in the
estimates.

     

    
      
         

      

      
        A-3

        
          

        

      

      
         

      

    

     

    If
we are unable to successfully recruit qualified managerial and field personnel
having experience in oil and gas exploration, we may not be able to execute on
our business plan.

     

    In order
to successfully implement and manage our business plan, we will be dependent
upon, among other things, successfully recruiting qualified managerial and field
personnel having experience in the oil and gas exploration
business.  Competition for qualified individuals is
intense.  There can be no assurance that we will be able to find,
attract and retain existing employees or that we will be able to find, attract
and retain qualified personnel on acceptable terms.

     

    Even
if we are able to discover and produce oil or natural gas, the potential
profitability of oil and gas ventures depends upon factors beyond the control of
our Company.

     

    The
potential profitability of oil and gas properties is dependent upon many factors
beyond our control.  For instance, world prices and markets for oil
and gas are unpredictable, highly volatile, potentially subject to governmental
fixing, pegging, controls or any combination of these and other factors, and
respond to changes in domestic, international, political, social and economic
environments.  Additionally, due to worldwide economic uncertainty,
the availability and cost of funds for production and other expenses have become
increasingly difficult, if not impossible, to project.  These changes
and events may materially affect our future financial performance. These factors
cannot be accurately predicted and the combination of these factors may result
in our Company not receiving an adequate return on invested
capital.

     

    Drilling
for oil and gas involves inherent risks that may adversely affect our future
results of operations and financial condition.

     

    Drilling
for oil and gas involves numerous risks, including the risk that we will not
encounter commercially productive oil and gas reservoirs.  The wells
we drill or participate in may not be productive and we may not recover all or
any portion of our investment in those wells.  The seismic data and
other technologies we use do not allow us to know conclusively prior to drilling
a well that crude or natural gas is present or may be produced economically. The
costs of drilling, completing and operating wells are often uncertain, and
drilling operations may be curtailed, delayed or canceled as a result of a
variety of factors including, but not limited to:

     

    
      	
               
      

            	
              ·

            	
              unexpected
      drilling conditions;

            

    

     

    
      	
               
      

            	
              ·

            	
              pressure
      or irregularities in formations;

            

    

     

    
      	
               
      

            	
              ·

            	
              equipment
      failures or accidents;

            

    

     

    
      	
               
      

            	
              ·

            	
              mechanical
      difficulties, such as lost or stuck oil field drilling and service
      tools;

            

    

     

    
      	
               
      

            	
              ·

            	
              fires,
      explosions, blowouts and surface
cratering;

            

    

     

    
      	
               
      

            	
              ·

            	
              uncontrollable
      flows of oil and formation water;

            

    

     

    
      	
               
      

            	
              ·

            	
              environmental
      hazards, such as oil spills, pipeline ruptures and discharges of toxic
      gases;

            

    

     

    
      	
               
      

            	
              ·

            	
              other
      adverse weather conditions; and

            

    

     

    
      	
               
      

            	
              ·

            	
              increase
      in the cost of, or shortages or delays in the availability of, drilling
      rigs and equipment.

            

    

     

    Certain
future drilling activities may not be successful and, if unsuccessful, this
failure could have an adverse effect on our future results of operations and
financial condition.  While all drilling, whether developmental or
exploratory, involves these risks, exploratory drilling involves greater risks
of dry holes or failure to find commercial quantities of
hydrocarbons.

     

    
      
         

      

      
        A-4

        
          

        

      

      
         

      

    

     

     Our
oil and gas operations involve substantial costs and are subject to various
economic risks.

     

    Our oil
and gas operations are subject to the economic risks typically associated with
exploration, development and production activities, including the necessity of
significant expenditures to locate and acquire producing properties and to drill
exploratory wells.  The cost and length of time necessary to produce
any reserves may be such that it will not be economically viable.  In
conducting exploration and development activities, the presence of unanticipated
pressure or irregularities in formations, miscalculations or accidents may cause
our exploration, development and production activities to be
unsuccessful.  In addition, the cost and timing of drilling,
completing and operating wells is often uncertain.  We also face the
risk that the oil and gas reserves may be less than anticipated, that we will
not have sufficient funds to successfully drill on the property, that we will
not be able to market the oil and gas due to a lack of a market and that
fluctuations in the prices of oil will make development of those leases
uneconomical.  This could result in a total loss of our
investment.

     

    A
substantial or extended decline in oil and gas prices may adversely affect our
business, financial condition, cash flow, liquidity or results of operations as
well as our ability to meet our capital expenditure obligations and financial
commitments to implement our business plan.

     

    Any
revenues, cash flow, profitability and future rate of growth we achieve will be
greatly dependent upon prevailing prices for oil and gas.  Our ability
to maintain or increase our borrowing capacity and to obtain additional capital
on attractive terms is also expected to be dependent on oil and gas
prices.  Historically, oil and gas prices and markets have been
volatile and are likely to continue to be volatile in the
future.  Prices for oil and gas are subject to potentially wide
fluctuations in response to relatively minor changes in supply of and demand for
oil and gas, market uncertainty, and a variety of additional factors beyond our
control.  Those factors include:

     

    
      	
               
      

            	
              ·

            	
              the
      domestic and foreign supply of oil and natural
  gas;

            

    

     

    
      	
               
      

            	
              ·

            	
              the
      ability of members of the Organization of Petroleum Exporting Countries
      and other producing countries to agree upon and maintain oil prices and
      production levels;

            

    

     

    
      	
               
      

            	
              ·

            	
              political
      instability, armed conflict or terrorist attacks, whether or not in oil or
      natural gas producing regions;

            

    

     

    
      	
               
      

            	
              ·

            	
              the
      level of consumer product demand;

            

    

     

    
      	
               
      

            	
              ·

            	
              the
      growth of consumer product demand in emerging markets, such as China and
      India;

            

    

     

    
      	
               
      

            	
              ·

            	
              weather
      conditions, including hurricanes and other natural occurrences that affect
      the supply and/or demand of oil and natural
gas;

            

    

     

    
      	
               
      

            	
              ·

            	
              domestic
      and foreign governmental regulations and other
  actions;

            

    

     

    
      	
               
      

            	
              ·

            	
              the
      price and availability of alternative
fuels;

            

    

     

    
      	
               
      

            	
              ·

            	
              the
      price of foreign imports;

            

    

     

    
      	
               
      

            	
              ·

            	
              the
      availability of liquid natural gas imports;
and

            

    

     

    
      
         

      

      
        A-5

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              ·

            	
              worldwide
      economic conditions.

            

    

     

    These
external factors and the volatile nature of the energy markets make it difficult
to estimate future prices of oil and natural gas.  Lower oil and
natural gas prices may not only decrease our revenues on a per unit basis, but
may also reduce the amount of oil we can produce economically, if
any.  A substantial or extended decline in oil and natural gas prices
may materially affect our future business, financial condition, results of
operations, liquidity and borrowing capacity.  While our revenues may
increase if prevailing oil and gas prices increase significantly, exploration
and production costs and acquisition costs for additional properties and
reserves may also increase.

     

    Competition
in the oil and gas industry is highly competitive and there is no assurance that
we will be successful in acquiring viable leases.

     

    The oil
and gas industry is intensely competitive.  We compete with numerous
individuals and companies, including many major oil and gas companies which have
substantially greater technical, financial and operational resources and
staffs.  Accordingly, there is a high degree of competition for
desirable oil and gas leases, suitable properties for drilling operations and
necessary drilling equipment, as well as for access to funds.  We
cannot predict if the necessary funds can be raised or that any projected work
will be completed.

     

    Oil
and gas operations are subject to comprehensive regulation which may cause
substantial delays or require capital outlays in excess of those anticipated
causing an adverse effect on our Company.

     

    Oil and
gas operations are subject to country-specific federal, state, and local laws
relating to the protection of the environment, including laws regulating removal
of natural resources from the ground and the discharge of materials into the
environment.  Oil and gas operations are also subject to
country-specific federal, state, and local laws and regulations which seek to
maintain health and safety standards by regulating the design and use of
drilling methods and equipment.  Various permits from governmental
bodies are required for drilling operations to be conducted and no assurance can
be given that such permits will be received.  Environmental standards
imposed by federal, state, provincial, or local authorities may be changed and
any such changes may have material adverse effects on our
activities.  Moreover, compliance with such laws may cause substantial
delays or require capital outlays in excess of those anticipated, thus causing
an adverse effect on us.  Additionally, we may be subject to liability
for pollution or other environmental damages.  To date, we have not
been required to spend any material amount on compliance with environmental
regulations.  However, we may be required to do so in the future and
this may affect our ability to expand or maintain our operations.

     

    The
unavailability or high cost of drilling rigs, equipment, supplies, personnel and
oil field services could adversely affect our ability to execute our exploration
and development plans on a timely basis and within our budget.

     

    Our
industry is cyclical and, from time to time, there is a shortage of drilling
rigs, equipment, supplies or qualified personnel.  During these
periods, the costs and delivery times of rigs, equipment and supplies are
substantially greater.  In addition, the demand for, and wage rates
of, qualified drilling rig crews rise as the number of active rigs in service
increases.  As a result of increasing levels of exploration and
production in response to strong prices of oil and natural gas, the demand for
oilfield services and equipment has risen, and the costs of these services and
equipment are increasing.  If the unavailability or high cost of
drilling rigs, equipment, supplies or qualified personnel were particularly
severe in areas where we operate, we could be materially and adversely
affected.

     

    
      
         

      

      
        A-6

        
          

        

      

      
         

      

    

     

     We
depend on the skill, ability and decisions of third party operators to a
significant extent.

     

    The
success of the drilling, development and production of the oil properties in
which we have or expect to have a working interest is substantially dependent
upon the decisions of such third-party operators and their diligence to comply
with various laws, rules and regulations affecting such
properties.  The failure of any third-party operator to make
decisions, perform their services, discharge their obligations, deal with
regulatory agencies, and comply with laws, rules and regulations, including
environmental laws and regulations in a proper manner with respect to properties
in which we have an interest could result in material adverse consequences to
our interest in such properties, including substantial penalties and compliance
costs.  Such adverse consequences could result in substantial
liabilities to us or reduce the value of our properties, which could negatively
affect our results of operations.

     

     Exploration
and production activities are subject to certain environmental regulations which
may prevent or delay the commencement or continuation of our
operations.

     

    In
general, our future exploration and production activities are subject to certain
country-specific federal, state and local laws and regulations relating to
environmental quality and pollution control.  Such laws and
regulations increase the costs of these activities and may prevent or delay the
commencement or continuation of a given operation.  Compliance with
these laws and regulations has not had a material effect on our operations or
financial condition to date.  Specifically, we will be subject to
legislation regarding emissions into the environment, water discharges and
storage and disposition of hazardous wastes.  In addition, legislation
has been enacted which requires well and facility sites to be abandoned and
reclaimed to the satisfaction of U.S. state authorities.  However,
such laws and regulations are frequently changed and we are unable to predict
the ultimate cost of compliance. Generally, environmental requirements do not
appear to affect us any differently or to any greater or lesser extent than
other companies in the industry.  We believe that our current
operations comply, in all material respects, with all applicable environmental
regulations.

     

    Risks
Related to our Common Stock

     

    Our
common stock may be subject to the penny stock rules which may make it more
difficult to sell our common stock.

     

    The
Securities and Exchange Commission has adopted regulations which generally
define a “penny stock” to be any equity security that has a market price, as
defined, less than $5.00 per share or an exercise price of less than $5.00 per
share, subject to certain exceptions.  Our securities may be covered
by the penny stock rules, which impose additional sales practice requirements on
broker-dealers who sell to persons other than established customers and
accredited investors such as, institutions with assets in excess of $5,000,000
or an individual with net worth in excess of $1,000,000 or annual income
exceeding $200,000 or $300,000 jointly with his or her spouse.  For
transactions covered by this rule, the broker-dealers must make a special
suitability determination for the purchase and receive the purchaser’s written
agreement of the transaction prior to the sale.  Consequently, the
rule may affect the ability of broker-dealers to sell our securities and also
affect the ability of our stockholders to sell their shares in the secondary
market.

     

    Our
management and stockholders may lose control of the Company as a result of a
merger or acquisition.

     

    We may
consider an acquisition in which we would issue as consideration for the
business opportunity to be acquired an amount of our authorized but unissued
common stock that would, upon issuance, represent the great majority of the
voting power and equity of the Company.  As a result, the acquiring
company’s stockholders and management would control the Company, and our current
management may be replaced by persons unknown at this time.  Such a
merger would result in a greatly reduced percentage of ownership of the Company
by its current stockholders.

     

    
      
         

      

      
        A-7

        
          

        

      

      
         

      

    

     

    We
have historically not paid dividends and do not intend to pay
dividends.

     

    We have
historically not paid dividends to our stockholders and management does not
anticipate paying any cash dividends on our common stock to our stockholders for
the foreseeable future.  We intend to retain future earnings, if any,
for use in the operation and expansion of our business.

     

    A
limited public trading market exists for our common stock, which makes it more
difficult for our stockholders to sell their common stock in the public
markets.

     

    Although
our common stock is quoted on the OTCBB under the symbol “AAPH,” there is a
limited public market for our common stock.  No assurance can be given
that an active market will develop or that a stockholder will ever be able to
liquidate its shares of common stock without considerable delay, if at
all.  Many brokerage firms may not be willing to effect transactions
in the securities.  Even if a purchaser finds a broker willing to
effect a transaction in these securities, the combination of brokerage
commissions, state transfer taxes, if any, and any other selling costs may
exceed the selling price.  Furthermore, our stock price may be
impacted by factors that are unrelated or disproportionate to our operating
performance.  These market fluctuations, as well as general economic,
political and market conditions, such as recessions, interest rates or
international currency fluctuations may adversely affect the market price and
liquidity of our common stock.

    
      
         

      

      
        A-8THIS
DEBENTURE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933.  THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, OR AN OPINION OF COUNSEL SATISFACTORY TO THE BORROWER THAT REGISTRATION IS
NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH
ACT.

     

    American
Petro-Hunter, Inc.

     

    CONVERTIBLE
DEBENTURE

     

    
      
        	
                May
      17, 2010

              	
                Up
      to $1,500,000

              

      

    

    
       

    

    American
Petro-Hunter, Inc., a Nevada corporation (the “Company”), for value received,
promises to pay to the order of Maxum Overseas Fund (the “Holder”), the aggregate
principal balance of all amounts advanced by the Holder to the Company (the
“Principal”) under this
Convertible Debenture (the “Debenture”) as evidenced by
the Ledger of Advances and Prepayments, attached hereto as Attachment 1 (the
“Ledger”), plus simple
interest thereon to be paid monthly in arrears from the date set forth opposite
such advances on the Ledger at an annual interest rate equal to ten percent
(10%).  Interest shall be computed on the basis of a year of 365 days
for the actual number of days elapsed.  Any remaining principal and
interest will be payable at the principal office of the Company or by mail to
the registered address of the Holder on or before the applicable “Repayment Date” (as defined
below) except that no payment will be required to the extent that such principal
and interest are or have been paid, converted or exchanged pursuant to the terms
hereof or under the Agreement (as defined below).

     

    This
Debenture is issued by the Company in connection with that certain Debenture and
Warrant Purchase Agreement dated as of even date herewith (the “Agreement”).  This
Debenture incorporates by reference all the terms of the
Agreement.  The following is a statement of the rights of the Holder
and the conditions to which this Debenture is subject, and to which the Holder,
by the acceptance of this Debenture, agrees:

     

    1.           Definitions.  As
used in this Debenture, the following terms, unless the context otherwise
requires, have the following meanings:

     

    1.1           “Company” will mean American
Petro-Hunter, Inc. and will include any corporation, partnership, limited
liability company or other entity that will succeed to or assume the obligations
of the Company under this Debenture.

     

    1.2           “Holder” will mean any person
who will at the time be the registered holder of this Debenture.

     

    Capitalized
terms not otherwise defined herein shall have the meaning ascribed to them in
the Agreement

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    2.           Draw Downs.  As set
forth on the Ledger, as of the date hereof Holder has loaned to the Company an
aggregate principal amount of $494,000 (the “Initial
Advance”).  The Holder agrees to immediately lend such
additional cash amounts to the Company as the Company may request from time to
time (each a “Draw
Down”), up to an aggregate principal amount of $1,500,000 (including the
Initial Advance) (the “Full
Commitment Amount”); provided however, that the Holder shall not be
obligated to advance any Draw Down request for an amount less than
$100,000.  All Draw Downs made on account of principal hereof shall be
recorded on the Ledger and signed by Holder and the Company where indicated;
provided however, that the failure of the Holder to sign the Ledger shall have
no effect on the Holder’s obligation to advance any Draw Down.  The
applicable Repayment Date for each Draw Down and for the Initial Advance shall
be the one year anniversary of the date such funds are initially advanced to the
Company as indicated on the Ledger.  Simultaneously with the receipt
of any Draw Down funds, the Company shall issue to the Holder a Warrant to
purchase an amount of shares of Common Stock of the Company equal to the amount
of such Draw Down divided by the then applicable Conversion Price (as defined
below) and otherwise on the terms and conditions set forth in the
Warrant.

     

    3.           Conversion

     

    3.1             Conversion at Holder’s
Election.  At any time prior to the Repayment Date, Holder at
its option and upon prior written notice to the Company, may convert in whole or
in part the then outstanding Principal and accrued but unpaid interest thereon
(the “Debt”) into shares
of common stock of the Company at the then applicable Conversion Price (as
defined below).  The “Conversion Price” shall
initially be $0.90, but shall be subject to adjustment as set forth in Sections 3.3 and
3.4 below and
for any stock dividends, combinations, splits, recapitalizations and the like
after the date hereof.  The form of this Debenture need not be changed
because of any adjustment in the Conversion Price or in the number of shares of
common stock issuable upon its conversion.  Notwithstanding the
foregoing, the number of shares of Company common stock that may be acquired by
the Holder upon any conversion of the Debt shall be limited to the extent
necessary to ensure that, following such conversion, the total number of shares
of Company common stock then beneficially owned by the Holder and its affiliates
and any other persons whose beneficial ownership of Company common stock would
be aggregated with the Holder’s for purposes of Section 13(d) of the Exchange
Act, does not exceed 4.999% of the total number of issued and outstanding shares
of Company common stock (including for such purpose the shares of Company common
stock issuable upon such conversion).  For such purposes, beneficial
ownership shall be determined in accordance with Section 13(d) of the Exchange
Act and the rules and regulations thereunder.  Notwithstanding the
foregoing, the Holder may waive such limitation on conversion contained in this
Section 3.1 or
increase or decrease such limitation percentage to any other percentage as
specified in a written notice to the Company.

     

    3.2           Conversion at Company’s
Election.  At any time prior to the Repayment Date, if the
trailing Volume Weighted Average Price (as calculated based upon the price and
volume quotes reported by NASDAQ over the previous five (5) trading days) of the
Company’s common stock exceeds $1.50 per share (as adjusted for any stock
dividends, combinations, splits, recapitalizations and the like after the date
hereof), the Company may at its option convert in whole or in part the Debt into
shares of common stock of the Company at the then applicable Conversion
Price.  The Company will provide prior written notice to the Holder of
its election to convert the Debt.  Notwithstanding the foregoing, the
amount of Debt which the Company may elect to convert shall be limited to the
extent necessary to ensure that, following such conversion, the total number of
shares of Company common stock then beneficially owned by the Holder and its
affiliates and any other persons whose beneficial ownership of Company common
stock would be aggregated with the Holder’s for purposes of Section 13(d) of the
Exchange Act, does not exceed 4.999% of the total number of issued and
outstanding shares of Company common stock (including for such purpose the
shares of Company common stock issuable upon such conversion).  For
such purposes, beneficial ownership shall be determined in accordance with
Section 13(d) of the Exchange Act and the rules and regulations
thereunder.  Notwithstanding the foregoing, the Holder may waive such
limitation on conversion contained in this Section 3.2 or
increase or decrease such limitation percentage to any other percentage as
specified in a written notice to the Company.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    3.3           Adjustments to Conversion
Price.  In the event that any warrant outstanding as of the
Effective Date to purchase Common Stock of the Company previously issued by the
Company is exercised by the holder thereof for a price less than the then
applicable Conversion Price (the “Warrant Exercise Price”), the
Conversion Price will be reduced to the Warrant Exercise Price.  Upon
an exchange pursuant to Section 3.4 below, the Conversion Price for any Debt
that remains outstanding or which may be subsequently owed hereunder shall be
adjusted to equal the price at which the notes received in such exchange may be
converted into Common Stock of the Company, and the exercise price of any
outstanding Warrants shall be correspondingly adjusted.

     

    3.4           Exchange in Future
Financing.  If within eighteen (18) months of the date hereof
the Company completes a financing (other than the Draw Downs) yielding aggregate
gross proceeds or borrowings to the Company of at least twenty five thousand
dollars ($25,000) (excluding any proceeds or borrowings associated with the
exchange contemplated hereby) (the “Qualified Financing”), the
Holder may elect to exchange the Debt and/or the shares issuable or issued upon
conversion thereof (the “Conversion Shares”)
simultaneously with the initial closing of such Qualified Financing as
follows:

     

    (a)  In
the event of a debt Qualified Financing, the Holder may at its option exchange
in whole or in part the Debt for a promissory note (or other evidence of
indebtedness) in the same form and with the same terms and conditions as those
issued in such Qualified Financing and in a principal amount equal to the then
outstanding Debt, as if such Debt amount had been directly invested in such
Qualified Financing.

     

    (b)  In
the event of an equity Qualified Financing, the Holder may at its option
exchange in whole or in part the Conversion Shares for shares of stock of the
same class and series and with the same rights, preferences and privileges as
those issued in such Qualified Financing and in an amount equal to the number of
such Conversion Shares held by the Holder (assuming on an as-converted basis)
multiplied by the Conversion Price which was applicable to such shares at the
time of their conversion or as adjusted herein, divided by the price per share
paid by the other investors in such Qualified Financing.

     

    To the
extent the other participants in the Qualified Financing are required to execute
or deliver any other documents or meet any qualifications as a condition to
their investment, the Holder’s exchange shall be subject to the same
requirements and qualifications.  The Holder will be solely
responsible for any tax consequences resulting to the Holder from such
exchange.

     

    3.5           Surrender of
Debenture.  In the event of any conversion or exchange, the
Holder will surrender the original copy of this Debenture and the original stock
certificate for any Conversion Shares, if applicable, for conversion or exchange
at the principal office of the Company at the time of such
closing.  Holder agrees to execute all necessary documents in
connection with the conversion or exchange of this Debenture, including, in the
case of a conversion, a definitive stock purchase agreement.  If upon
such conversion or exchange of this Debenture a fraction of a share would
result, then the Company will round up to the nearest whole share.

     

    3.6           Partial Conversion or
Exchange.  All rights with respect to such portion of this
Debenture converted pursuant to Section 3.1, 3.2 or the Agreement
or exchanged pursuant to Section 3.4 shall
terminate upon issuance of the Conversion Shares or the closing of the Qualified
Financing.  Notwithstanding the foregoing, the Holder agrees to
surrender this Debenture and any Conversion Shares, if applicable, to the
Company for cancellation as to that portion of the Debenture or Conversion
Shares that the Holder elects to convert or exchange as soon as possible
following such conversion or exchange, and the Company shall execute and deliver
a new Debenture and new stock certificate, if applicable, upon the same terms
and conditions set forth herein, dated the date hereof, evidencing the right of
the Holder to the balance of the principal, the right of the Company to future
Draw Downs (to the extent the Company has drawn down less than the Full
Commitment Amount), and Conversion Shares that were not converted or exchanged
(and accrued but unpaid interest thereon, as applicable).

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    4.           Issuance of
Consideration.  As soon as practicable after conversion of this
Debenture pursuant to Section 3 or the
Agreement and receipt of the original Debenture and related documents, but in
not event later than five (5) business days, the Company at its expense will
cause to be issued in the name of and delivered to the Holder, a certificate or
certificates for the number of shares of securities to which the Holder will be
entitled on such conversion (bearing such legends as may be required by
applicable state and federal securities laws in the opinion of legal counsel for
the Company), together with any other securities and property, if any, to which
the Holder is entitled on such conversion under the terms of this
Debenture.  Any securities issuable in connection with a Qualified
Financing exchange shall be issued pursuant to the terms of such Qualified
Financing.

     

    5.           Adjustment for Reorganization,
Consolidation, Merger.  In the event (a) of any
reorganization of the Company, (b) the Company consolidates with or merges
into another entity, (c) the Company sells all or substantially all of its
assets to another entity and then distributes the proceeds to its shareholders,
or (d) the Company issues or otherwise sells securities representing more
than 50% of the voting power of the Company in a single or series of related
transactions immediately after giving effect to such transaction or series of
related transaction (each of such events shall be referred to herein as a “Liquidation Event”), then,
and in each such case, the Holder, upon the conversion of this Debenture at any
time after the consummation of any Liquidation Event shall be entitled to
receive, in lieu of the stock or other securities and property receivable upon
the conversion of this Debenture prior to such consummation, the stock or other
securities or property to which the Holder would have been entitled upon the
consummation of such Liquidation Event if the Holder had converted this
Debenture immediately prior thereto, all subject to further adjustment as
provided in this Debenture, and the successor or purchasing entity in a
Liquidation Event (if other than the Company) shall duly execute and deliver to
the Holder a supplement hereto acknowledging such entity’s obligations under
this Debenture.

     

    6.           Defaults.  Holder
may declare the entire unpaid principal and accrued interest on this Debenture
due and payable within five (5) business days, by a notice in writing sent by
certified mail to the Company if the Company defaults in the payment of
principal of the Debenture or accrued interest thereon when due and such default
is not cured by the Company within thirty (30) days.

     

    7.           Prepayment.  At any
time prior to the Repayment Date the Company may prepay, in whole or in part,
the Debt in full satisfaction and accord of the Company’s obligations under this
Debenture.  Any prepayment shall be credited first to accrued but
unpaid interest and the balance to principal, and interest shall cease to accrue
on the amount of principal so paid.  All prepayments shall be recorded
on the Ledger and signed by Holder and the Company where indicated; provided
however, that the failure of the Holder to sign the Ledger shall have no effect
on the Company’s right to prepay.

     

    8.           Miscellaneous.

     

    8.1           Waiver and
Amendment.  Any provision of this Debenture may be amended,
waived or modified only upon the written consent of the Company and the
Holder.

     

    8.2           Restrictions on
Transfer.  This Debenture may only be transferred in compliance
with applicable state and federal laws.  All rights and obligations of
the Company and the Holder will be binding upon and benefit the successors,
assigns, heirs, and administrators of the parties.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    8.3           No
Assignment.  Holder may not transfer or assign all or any part
of this Debenture except upon prior written notice to the Company and with the
Company’s prior written consent, which consent shall not be unreasonably
withheld.

     

    8.4           Governing Law.  This
Debenture will be governed by the laws of the State of Nevada applicable to
contracts between Nevada residents wholly to be performed in Nevada.

     

    
      
        
           

        

        
          5

          
            

          

        

        
           

        

      

    

     

    IN
WITNESS WHEREOF, the Company has caused this Debenture to be issued as of the
date first above written.

     

    
      
        
          	
                  American
      Petro-Hunter, Inc.

                
	
                  a
      Nevada corporation

                
	 
      	 
      
	
                  By:

                	
                   

                
	 
      	
                  Robert
      McIntosh

                
	 
      	
                  Chief
      Executive Officer

                

        

      

    

     

    
      
        
          
            
              	
                      Agreed
      and Accepted by the Holder:

                    
	 
      
	
                      Maxum
      Overseas Fund

                    
	 
      
	
                      By:

                    	  
      
	 
	
                      Name:
      Kenneth Taves

                    
	 
	
                      Title:
      Portfolio
Manager

                    

            

          

        

      

    

     

    
      
         

      

      
        6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00174-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00174-of-00352.parquet"}]]