Stock Purchase Warrant 12/12/2002

EXHIBIT 10.40


THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR APPLICABLE STATE LAW, AND NO INTEREST IN SAID SECURITIES MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (i) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS COVERING ANY SUCH TRANSACTION INVOLVING SAID SECURITIES, (ii) THE COMPANY RECEIVES AN OPINION OF LEGAL COUNSEL FOR THE HOLDER OF SAID SECURITIES SATISFACTORY TO THE COMPANY STATING THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION, OR (iii) THE COMPANY OTHERWISE SATISFIES ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION.


STOCK PURCHASE WARRANT


to Purchase up to


1,000,000 Shares of Common Stock


of


AVIVA PETROLEUM INC.


Void after December 12, 2004


This is to certify that, for value received and subject to the terms and conditions set forth below, the Warrantholder (hereinafter defined) is entitled to purchase, and the Company promises and agrees to sell and issue to the Warrantholder, at any time on or after the date of this Warrant and on or before December 12, 2004 up to 1,000,000 Shares (hereinafter defined) at the Exercise Price (hereinafter defined).

This Stock Purchase Warrant is issued subject to the following terms and conditions.

1. Definitions of Certain Terms . Except as may be otherwise clearly required by the context, the following terms have the following meanings:

(a) " Common Stock" means the common stock, without par value, of the Company.

(b) " Company" means Aviva Petroleum Inc., a Texas corporation, and any successor thereto.


(c) " Exercise Price" means the price at which the Warrantholder may purchase one Share (or Securities obtainable in lieu of one Share) upon exercise of Warrants as determined from time to time pursuant to the provisions hereof. The initial Exercise Price is $0.07 per Share.


(d) " Expiration Time" means 5 p.m. central standard time on December 12, 2004.


(e) " Securities" means the securities obtained or obtainable upon exercise of the Warrant or securities obtained or obtainable upon exercise, exchange, or conversion of such securities.


(f) " Share" shall mean one share of Common Stock for which the Warrant is initially exercisable.


(g) " Warrant Certificate" means a certificate evidencing the Warrant.


(h) " Warrantholder" means a record holder of the Warrant or Securities. The initial Warrantholder is Ronald Suttill.


(i) " Warrant" means the warrant evidenced by this Warrant Certificate or any certificate obtained upon transfer or partial exercise of the Warrant evidenced by any such Warrant Certificate.


2. Exercise of Warrant . All or any part of the Warrant may be exercised commencing on the date of this Warrant and ending at the Expiration Time by surrendering this Warrant Certificate, together with appropriate instructions, duly executed by the Warrantholder or by his duly authorized attorney, at the office of the Company, 8235 Douglas Avenue, Suite 400, Dallas, Texas 75225, or at such other office or agency as the Company may designate. Upon receipt of notice of exercise, the Company shall immediately prepare, or instruct its transfer agent to prepare, certificates for the Securities to be received by the Warrantholder upon


1

completion of the Warrant exercise. When such certificates are prepared, the Company shall notify the Warrantholder and deliver such certificates to the Warrantholder or in accordance with the Warrantholder' s instructions immediately upon payment in full by the Warrantholder, in lawful money of the United States, of the Exercise Price payable with respect to the Securities being purchased.


If fewer than all the Securities purchasable under the Warrant are purchased, the Company will, upon such partial exercise, execute and deliver to the Warrantholder a new Warrant Certificate (dated the date hereof), in form and tenor similar to this Warrant Certificate, evidencing that portion of the Warrant not exercised. The Securities to be obtained on exercise of the Warrant will be deemed to have been issued, and any person exercising the Warrants will be deemed to have become a holder of record of those Securities, as of the date of the payment of the Exercise Price.

3. Adjustments in Certain Events . The number, class, and price of Securities for which this Warrant Certificate may be exercised are subject to adjustment from time to time upon the happening of certain events as follows:

(a) If the o ...