American Note
THIS CONVERTIBLE
PROMISSORY NOTE HAS
NOT BEEN REGISTERED
UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR REGISTERED OR
QUALIFIED UNDER
ANY STATE SECURITIES
LAWS. THIS
CONVERTIBLE
PROMISSORY NOTE MAY
NOT BE SOLD,
OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OR
REGISTRATION OR
QUALIFICATION
UNDER SUCH STATE
SECURITIES
LAWS, UNLESS THE
PROPOSED TRANSACTION
DOES NOT REQUIRE SUCH
REGISTRATION
OR
QUALIFICATION.
CONVERTIBLE PROMISSORY NOTE
$3,000,000.00
Dallas, Texas
July 10, 2008
FOR VALUE RECEIVED,
the undersigned,
Implantable Vision, Inc., a Utah
corporation, and its successors and assigns ("Borrower"), promises
to pay to the
order of American Petroleum Corporation, a Texas corporation,, and its
successors and permitted assigns ("Holder"), the principal sum of Three
Million
Dollars
($3,000,000.00),
together with
simple interest from the date of
advancement on the principal balance hereof from time to time
remaining unpaid
at an interest rate equal to the U.S. prime rate as published in
the Wall Street
Journal Online plus
one percent (1%) per annum, determined on the date of this
Convertible Promissory Note (the "Note"), and adjusted on each
anniversary until
maturity (subject to
Section 2 of this Note), both principal and interest being
payable at the
address designated in Section 12, or at such other place as
Holder may from time to time designate in writing.
The principal of this
Note shall mature and be due and payable on July
10, 2010. All accrued and unpaid interest shall be due and payable
immediately
on maturity.
All past due principal
and accrued interest on this Note shall
bear
interest from
maturity (whether on demand, upon acceleration of maturity
following an Event of Default (as defined below) or otherwise)
until paid at the
lesser of (i) the rate of twelve percent (12%) per annum or (ii) the
highest
rate for which Borrower may legally contract under applicable law. All
payments
hereunder shall be payable in lawful money of the United States of
America which
shall be legal tender for public and private debts at the time of
payments.
1.
Conversion.
(a)
Conversion
Option. This Note shall be convertible at the option of
Holder hereof (the "Optional Conversion"), in whole or in part, in lieu of
and
in satisfaction of the
unpaid principal
hereunder,
into that number of
fully
paid and nonassessable
shares of Common
Stock (as defined in
Section 2) as is
equal to the
quotient of the unpaid principal divided by the applicable
Conversion Price (as
defined in Section 2). Upon any Optional Conversion, the
outstanding principal
due under this Note shall be reduced in full by an amount
equal to the number
of shares of Common Stock issued upon such conversion
multiplied by the applicable Conversion Price.
(b)
Conversion Procedures. If Holder is entitled to and
desires to convert this Note into Common Stock, it shall surrender this Note
to
Borrower at its principal executive offices, accompanied by proper
instruments
of transfer to Borrower or in blank, accompanied by irrevocable
written notice
to Borrower
that Holder
elects so to convert
this Note and the name
or names
(with address) in which a certificate or certificates for Common
Stock are to be
issued. Borrower
shall, as soon as practicable
after such written
notice and
compliance with any other conditions herein contained, deliver at
such office to
Holder, certificates
for the number of full
shares of Common Stock to which it
shall be entitled.
Such conversion shall
be deemed to have been made as of the
date of such surrender
of this Note,
and the person or
persons entitled to
receive Common Stock or other securities deliverable upon conversion shall be
treated for all purposes as the record holder or holders thereof on
such date.
(c)
Certain Adjustments.
The applicable Conversion Price and the number of
securities issuable
upon conversion of this Note shall be subject to adjustment
from time to time as follows:
<PAGE>
(i) In case Borrower shall at any time after the date
hereof (1) pay a dividend or make a distribution on its capital stock
that is paid or made in shares of stock of Borrower, (2) subdivide its
outstanding shares of
Common Stock into a greater number of shares or
(3) combine
its outstanding shares of Common Stock into a smaller
number of shares,
then in each such
case the applicable Conversion
Price in effect
immediately prior thereto and the securities issuable
shall be adjusted
retroactively
as provided below so that Holder
thereafter shall be
entitled to receive the number of shares of Common
Stock of Borrower
and other shares and rights to purchase stock or
other securities which Holder would have owned or have been
entitled to
receive after the
happening of any of the events described above had
this Note been
converted immediately
prior to the
happening of such
event or any record
date with respect thereto. In the event of the
redemption of any shares referred to in clause (1),
Holder shall have
the right to receive,
in lieu of any such shares or rights, any cash,
property or
securities
paid in respect of such redemption. An
adjustment made pursuant to this subsection (i) shall become
effective
immediately after
the record date in the case of a dividend or
distribution and shall become effective immediately after the
effective
date in the case of a subdivision or combination.
(ii) Whenever
the Conversion Price is adjusted as
provided above, Borrower shall compute the adjusted Conversion
Price in
accordance herewith
and mail to Holder a notice stating that the
Conversion Price has
been adjusted
and setting forth the adjusted
Conversion Price.
(iii) In the event
that at any time, as a
result of
any adjustment
made pursuant to this Section, Holder shall become
entitled to receive any shares of Borrower other than shares of Common
Stock or to receive
any other securities, the number of such other
shares or securities so receivable upon conversion of this Note shall
be subject to adjustment from time to time in a manner and
on terms as
nearly equivalent as
practicable to the provisions contained in these
provisions with respect to Common Stock.
(d) No Fractional
Shares. No fractional shares or scrip
representing
fractional shares of
Common Stock shall be issued upon conversion
of this Note. All
calculations
of the number of
shares of Common Stock
to be
issued upon conversion of this Note shall be rounded to the nearest
whole share.
(e) Reclassification, Consolidation, Merger or Sale of Assets.
In case of any
reclassification of
Common Stock, any consolidation of Borrower
with, or merger of Borrower into, any other person, any merger of
another person
into Borrower
(other
than
a merger which does not result in any
reclassification,
conversion, exchange or cancellation of outstanding shares of
Common Stock of Borrower), any sale or transfer of all or
substantially all
of
the assets of Borrower or any compulsory share exchange
pursuant to which
share
exchange the Common
Stock is converted
into other
securities,
cash or other
property, then
lawful provision shall be made as part of the
terms of such
transaction whereby
Holder shall have the right thereafter, during the period
this Note shall be
convertible hereunder,
to convert
this Note only into
the
kind and amount of
securities, cash and
other property
receivable
upon such
reclassification,
consolidation, merger,
sale, transfer or share exchange by a
holder of the number of shares of Common Stock of Borrower
into which this
Note
might have
been converted immediately prior to such reclassification,
consolidation, merger,
sale, transfer or share exchange assuming such holder of
Common Stock of Borrower (i) is not a p
