EXHIBIT 4.5


                      FORM OF REGISTRATION RIGHTS AGREEMENT

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                                TABLE OF CONTENTS

1.  Introduction...............................................................2
    i.   Securities Purchase Agreement.........................................2
    ii.  Definition of Securities..............................................2
    iii. National Market Representation........................................2

2.  Registration under Securities Act, etc.....................................2
    a.   Mandatory Registration................................................2
         i.   Registration of Registrable Securities...........................2
         ii.  Registration Statement Form......................................2
         iii. Expenses.........................................................3
         iv.  Effective Registration Statement.................................3
         v.   Plan of Distribution.............................................3
    b.   Incidental Registration...............................................3
         i.   Right to Include Registrable Securities..........................3
         ii.  Priority in Incidental Registrations.............................4
    c.   Registration Procedures...............................................4
    d.   Underwritten Offerings................................................8
         i.   Incidental Underwritten Offerings................................8
         ii.  Holdback Agreements..............................................8
         iii. Participation in Underwritten Offerings..........................8
    e.   Preparation; Reasonable Investigation.................................9
    f.   Registration Default Fee..............................................9
    g.   Indemnification.......................................................9
         i.   Indemnification by the Company...................................9
         ii.  Indemnification by the Sellers..................................10
         iii. Notices of Claims, etc..........................................11
         iv.  Other Indemnification...........................................11
         v.   Indemnification Payments........................................11
         vi.  Contribution....................................................11

3.  Definitions...............................................................11

4.  Rule 144..................................................................11

5.  Amendments and Waivers....................................................11

6.  Nominees for Beneficial Owners............................................11

7.  Notices...................................................................11

8.  Assignment................................................................11


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9.  Descriptive Headings......................................................11

10. GOVERNING LAW.............................................................11

11. Counterparts..............................................................11

12. Entire Agreement..........................................................11

13. Severability..............................................................11

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                          REGISTRATION RIGHTS AGREEMENT

     REGISTRATION RIGHTS AGREEMENT (this "Agreement"),  dated as of February 28,
2000, among American International  Petroleum Corporation,  a Nevada corporation
(the "Company"), and GCA Strategic Investment Fund Limited (the "Fund").

     1. Introduction.

     i.  Securities  Purchase  Agreement.  The  Company  and the Fund have today
executed that certain Securities  Purchase  Agreement (the "Securities  Purchase
Agreement"),  pursuant to which the Company has agreed,  among other things,  to
issue an aggregate of  $1,850,000.00  (U.S.)  principal amount of Secured Bridge
Notes of the Company  (the  "Notes") to the Fund or its  successors,  assigns or
transferees (collectively, the "Holders"). In addition, pursuant to the terms of
the Securities Purchase Agreement and the transactions contemplated thereby, the
Company has issued to the Fund Common Stock Purchase Warrants exercisable for up
to an aggregate of _______ shares of the Company's common stock, $0.08 par value
per share (the "Common  Stock") (the  "Warrant  Shares").  The number of Warrant
Shares  is  subject  to  adjustment   upon  the   occurrence  of  stock  splits,
recapitalization and similar events occurring after the date hereof.

     ii.  Definition of Securities.  The Warrant Shares are collectively  herein
referred to as the "Securities."

     iii. National Market  Representation.  The Company  represents and warrants
that the Company's Common Stock is currently  eligible for trading on the Nasdaq
Stock  Market's  National  Market  ("National  Market") under the symbol "AIPN."
Certain  capitalized  terms  used in this  Agreement  are  defined  in Section 3
hereof; references to sections shall be to sections of this Agreement.

     2. Registration under Securities Act, etc.

     a. Mandatory Registration.

          i. Registration of Registrable Securities.  The Company will file with
     the Commission,  within thirty (30) days of the issue date of the Warrants,
     a  Registration  Statement on Form S-3 (the  "Registration  Statement")  to
     register the resale of the Common Shares  issuable upon the exercise of the
     Warrants.  The Company will use its best efforts to cause the  Registration
     Statement  to become  effective  within  ninety (90) days of the Issue Date
     (the"Effective Date").

          ii. Registration Statement Form.  Registrations under this Section 2.1
     shall be on Form S-3 or such  other  appropriate  registration  form of the
     Commission as shall permit the disposition of such  Registrable  Securities
     in accordance with the intended method or


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     methods of  disposition  specified  by the Fund;  provided,  however,  such
     intended method of deposition shall not include an underwritten offering of
     the Registrable Securities.

          iii.  Expenses.  The  Company  will pay all  Registration  Expenses in
     connection with any registration required by this Section 2.1.

          iv.  Effective   Registration   Statement.  A  registration  requested
     pursuant to this Section 2.1 shall not be deemed to have been  effected (i)
     unless a registration  statement with respect thereto has become  effective
     within the time period specified herein, provided that a registration which
     does not become effective after the Company filed a registration  statement
     with  respect  thereto  solely by reason of the  refusal  to proceed of any
     holder of  Registrable  Securities  (other than a refusal to proceed  based
     upon the advice of counsel in the form of a letter  signed by such  counsel
     and provided to the Company  relating to a disclosure  matter  unrelated to
     such holder)  shall be deemed to have been  effected by the Company  unless
     the holders of the  Registrable  Securities  shall have  elected to pay all
     Registration Expenses in connection with such registration,  (ii) if, after
     it has become  effective,  such  registration  becomes  subject to any stop
     order,  injunction  or other  order  or  extraordinary  requirement  of the
     Commission  or other  governmental  agency or court for any reason or (iii)
     if, after it has become effective, such registration ceases to be effective
     for more than an aggregate of ninety (90) days.

          v.  Plan  of   Distribution.   The  Company  hereby  agrees  that  the
     Registration  Statement  shall  include  a  plan  of  distribution  section
     reasonable  acceptable  to the Fund and  substantially  in the form annexed
     hereto;  provided,  however,  such plan of  distribution  section  shall be
     modified by the Company so as to not  provide  for the  disposition  of the
     Registrable Securities on the basis of an underwritten offering.

     b. Incidental Registration.

          i. Right to Include Registrable Securities. If any time after the date
     hereof but before the third  anniversary  of the date  hereof,  the Company
     proposes to register any of its securities  under the Securities Act (other
     than by a registration  in connection with an acquisition in a manner which
     would not permit  registration  of  Registrable  Securities for sale to the
     public,  on Form S-8, or any successor  form  thereto,  on Form S-4, or any
     successor  form  thereto  and other than  pursuant to Section  2.1),  on an
     underwritten  basis (either  best-efforts  or  firm-commitment),  then, the
     Company  will each such time give prompt  written  notice to all Holders of
     its intention to do so and of such Holders'  rights under this Section 2.2.
     Upon the written  request of any such  Holder made within  twenty (20) days
     after the  receipt of any such  notice  (which  request  shall  specify the
     Registrable Securities intended to be disposed of by such Holder an and the
     intended method of disposition  thereof),  the Company will, subject to the
     terms of this Agreement,  effect the registration  under the Securities Act
     of the  Registrable  Securities,  to the  extent  requisite  to permit  the
     disposition (in accordance with the intended  methods thereof as aforesaid)
     of such  Registrable  Securities so to be registered,  by inclusion of


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     such Registrable  Securities in the registration statement which covers the
     securities which the Company proposes to register, provided that if, at any
     time after written  notice of its intention to register any  securities and
     prior  to  the  effective  date  of the  registration  statement  filed  in
     connection  with such  registration,  the Company  shall  determine for any
     reason either not to register or to delay  registration of such securities,
     the Company may, at its election, give written notice of such determination
     to each Holder and,  thereupon,  (i) in the case of a determination  not to
     register,  shall be relieved of this obligation to register any Registrable
     Securities  in  connection  with  such   registration  (but  not  from  its
     obligation  to pay the  Registration  Expenses  in  connection  therewith),
     without  prejudice,  however,  to the  rights of any  holder or  holders of
     Registrable  Securities entitled to do so to request that such registration
     be effected as a registration  under Section 2.1, and (ii) in the case of a
     determination to delay registering, shall be permitted to delay registering
     any Registrable Securities, for the same period as the delay in registering
     such other  securities.  No  registration  effected  under this Section 2.2
     shall relieve the Company of its obligation to effect any registration upon
     request  under  Section 2.1, nor shall any such  registration  hereunder be
     deemed to have been effected  pursuant to Section 2.1. The Company will pay
     all  Registration   Expenses  in  connection  with  each   registration  of
     Registrable  Securities  requested  pursuant to this Section 2.2. The right
     provided the Holders of the Registrable Securities pursuant to this Section
     shall be exercisable at their sole  discretion and will in no way limit any
     of the  Company's  obligations  to pay the  Securities  according  to their
     terms.

          ii. Priority in Incidental Registrations.  If the managing underwriter
     of the underwritten  offering contemplated by this Section 2.2 shall inform
     the Company  and  holders of the  Registrable  Securities  requesting  such
     registration  by  letter  of its  belief  that  the  number  of  securities
     requested to be included in such registration  exceeds the number which can
     be  sold  in  such  offering,   then  the  Company  will  include  in  such
     registration,  to the extent of the number  which the Company is so advised
     can be sold in such offering,  (i) first securities proposed by the Company
     to be sold for its own account, and (iii) second Registrable Securities and
     securities of other selling  security  holders  requested to be included in
     such  registration  pro rata on the  basis of the  number of shares of such
     securities  so  proposed  to be  sold  and  so  requested  to be  included;
     provided,  however,  the  holders  of  Registrable  Securities  shall  have
     priority to all shares  sought to be included by officers and  directors of
     the  Company  as  well  as  holders  of ten  percent  (10%)  or more of the
     Company's Common Stock.

     c.  Registration  Procedures.  If and  whenever  the Company is required to
effect the  registration of any Registrable  Securities under the Securities Act
as provided  in Section  2.1 and, as  applicable,  2.2,  the Company  shall,  as
expeditiously as possible:

          (1) prepare and file with the Commission the Registration Statement to
     effect such registration  (including such audited  financial  statements as
     may  be  required  by the  Securities  Act or  the  rules  and  regulations
     promulgated  thereunder)  and thereafter use its best efforts to cause such
     registration statement to be declared effective by the Commission,  as soon
     as practicable,  but in any event no later than the Required  Effectiveness
     Date (with respect to a  registration  pursuant to Section 2.1);  provided,
     however,  that before filing such registration


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     statement  or any  amendments  thereto,  the  Company  will  furnish to the
     counsel  selected by the holders of Registrable  Securities which are to be
     included in such registration,  copies of all such documents proposed to be
     filed;

          (2) with  respect to any  Registration  Statement  pursuant to Section
     2.1,  prepare and file with the Commission  such amendments and supplements
     to such  registration  statement  and  the  prospectus  used in  connection
     therewith as may be necessary to keep such registration statement effective
     and to comply with the provisions of the Securities Act with respect to the
     disposition  of all  Registrable  Securities  covered by such  registration
     statement,  until the  earlier to occur of six (6) years  after the date of
     this  Agreement(subject  to  the  right  of  the  Company  to  suspend  the
     effectiveness thereof for not more than 10 consecutive days or an aggregate
     of 30  days  in  such  six (6)  years  period)  or such  time as all of the
     securities which are the subject of such registration statement cease to be
     Registrable  Securities  (such  period,  in each  case,  the  "Registration
     Maintenance Period");

          (3) furnish to each seller of Registrable  Securities  covered by such
     registration statement such number of conformed copies of such registration
     statement and of each such amendment and  supplement  thereto (in each case
     including all exhibits),  such number of copies of the prospectus contained
     in such registration  statement (including each preliminary  prospectus and
     any summary prospectus) and any other prospectus filed under Rule 424 under
     the Securities Act, in conformity  with the  requirements of the Securities
     Act, and such other documents, as such seller and underwriter,  if any, may
     reasonably  request  in  order  to  facilitate  the  public  sale or  other
     disposition of the Registrable Securities owned by such seller;

          (4) use its reasonable  efforts to register or qualify all Registrable
     Securities  and other  securities  covered by such  registration  statement
     under such  other  securities  laws or blue sky laws as any seller  thereof
     shall reasonably  request,  to keep such registrations or qualifications in
     effect for so long as such registration  statement  remains in effect,  and
     take any other  action  which may be  reasonably  necessary  to enable such
     seller  to  consummate  the  disposition  in  such   jurisdictions  of  the
     securities owned by such seller,  except that the Company shall not for any
     such  purpose be required to qualify  generally to do business as a foreign
     corporation  in  any  jurisdiction   wherein  it  would  not  but  for  the
     requirements of this subdivision (iv) be obligated to be so qualified or to
     consent to general service of process in any such jurisdiction;

          (5) use its best efforts to cause all Registrable  Securities  covered
     by such  registration  statement to be registered  with or approved by such
     other  governmental  agencies or  authorities as may be necessary to enable
     the  seller or  sellers  thereof  to  consummate  the  disposition  of such
     Registrable Securities;

          (6)  furnish  to  each  seller  of  Registrable  Securities  a  signed
     counterpart, addressed to such seller, and the underwriters, if any, of:


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               (A) an opinion of counsel for the  Company,  dated the  effective
          date of such registration statement (or, if such registration includes
          an  underwritten  public  offering,  an opinion  dated the date of the
          closing under the underwriting  agreement),reasonably  satisfactory in
          form and substance to such seller)  including  that the prospectus and
          any prospectus supplement forming a part of the Registration Statement
          does not  contain an untrue  statement  of a material  fact or omits a
          material fact  required to be stated  therein or necessary in order to
          make the statements therein, in light of the circumstances under which
          they were made, not misleading, and

               (B) a "comfort"  letter (or, in the case of any Person which does
          not satisfy the conditions for receipt of a "comfort" letter specified
          in Statement on Auditing Standards No. 72, an "agreed upon procedures"
          letter), dated the effective date of such registration statement (and,
          if such  registration  includes an  underwritten  public  offering,  a
          letter  of  like  kind  dated  the  date  of  the  closing  under  the
          underwriting agreement),  signed by the independent public accountants
          who have certified the Company's  financial statement included in such
          registration  statement,  covering substantially the same matters with
          respect to such  registration  statement (and the prospectus  included
          therein) and, in the case of the accountants'  letter, with respect to
          events  subsequent to the date of such  financial  statements,  as are
          customarily   covered  in  opinions   of   issuer's   counsel  and  in
          accountants'  letters  delivered to the  underwriters  in underwritten
          public  offerings of securities  (with, in the case of an "agreed upon
          procedures" letter, such modifications or deletions as may be required
          under Statement on Auditing  Standards No. 35) and, in the case of the
          accountants' letter, such other financial matters, and, in the case of
          the legal opinion,  such other legal  matters,  as such seller (or the
          underwriters, if any) may reasonably request;

          (7) notify the Sellers'  Representative  and its counsel  promptly and
     confirm  such advice in writing  promptly  after the Company has  knowledge
     thereof:

          (v) when the Registration Statement,  the prospectus or any prospectus
     supplement related thereto or post-effective  amendment to the Registration
     Statement has been filed,  and, with respect to the Registration  Statement
     or  any  post-effective   amendment  thereto,  when  the  same  has  become
     effective;

          (w) of any request by the  Commission for amendments or supplements to
     the Registration Statement or the prospectus or for additional information;

          (x) of the issuance by the Commission of any stop order suspending the
     effectiveness  of  the  Registration  Statement  or the  initiation  of any
     proceedings by an Person for that purpose; and

          (y) of the receipt by the Company of any notification  with respect to
     the suspension of the qualification of any Registrable  Securities for sale
     under the securities or blue sky laws of any jurisdiction or the initiation
     or threat of any proceeding for such purpose;


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          (8)  notify  each  seller of  Registrable  Securities  covered by such
     registration  statement,  at any time when a prospectus relating thereto is
     required to be delivered  under the Securities Act, upon discovery that, or
     upon the  happening  of any  event as a result  of  which,  the  prospectus
     included in such  registration  statement,  as then in effect,  includes an
     untrue  statement of a material  fact or omits to state any material  facts
     required to be stated therein or necessary to make the  statements  therein
     not misleading in the light of the circumstances then existing,  and at the
     request of any such  seller  promptly  prepare and furnish to such seller a
     reasonable  number of copies of a  supplement  to or an  amendment  of such
     prospectus  as may be necessary  so that,  as  thereafter  delivered to the
     purchasers of such securities,  such prospectus shall not include an untrue
     statement of a material  fact or omit to state a material  fact required to
     be  stated  therein  or  necessary  to  make  the  statements  therein  not
     misleading in the light of the circumstances then existing;

          (9) use its  best  efforts  to  obtain  the  withdrawal  of any  order
     suspending the effectiveness of the Registration  Statement at the earliest
     possible moment;

          (10)  otherwise  use its best  efforts to comply  with all  applicable
     rules and regulations of the Commission, and make available to its security
     holders, as soon as reasonably practicable,  an earnings statement covering
     the period of at least twelve  months,  but not more than eighteen  months,
     beginning  with the first full calendar  month after the effective  date of
     such  registration  statement,  which earnings  statement shall satisfy the
     provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;

          (11) enter  into such  agreements  and take such other  actions as the
     Sellers' Representative shall reasonably request in writing (at the expense
     of the requesting or benefiting sellers) in order to expedite or facilitate
     the disposition of such Registrable Securities; and

          (12) use its best efforts to list all Registrable  Securities  covered
     by such registration  statement on any securities  exchange on which any of
     the Registrable Securities are then listed.

     The Company may require each seller of  Registrable  Securities as to which
any  registration  is being  effected to furnish the  Company  such  information
regarding such seller and the distribution of such securities as the Company may
from time to time reasonably request in writing.

     The Company will not file any  registration  statement  pursuant to Section
2.1, or amendment thereto or any prospectus or any supplement thereto (including
such  documents  incorporated  by  reference  and proposed to be filed after the
initial   filing  of  the   Registration


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Statement)  to  which  the  Sellers'  Representative  shall  reasonably  object,
provided  that the Company may file such  documents in a form required by law or
upon the advice of its counsel.

     The  Company   represents  and  warrants  to  each  holder  of  Registrable
Securities   that  it  has  obtained  all   necessary   waivers,   consents  and
authorizations   necessary  to  execute  this   Agreement  and   consummate  the
transactions  contemplated  hereby  other  than such  waivers,  consents  and/or
authorizations specifically contemplated by the Securities Purchase Agreement.

     The Fund agrees  that,  upon  receipt of any notice from the Company of the
occurrence  of any event of the kind  described  in  subdivision  (viii) of this
Section 2.3,  the Fund will  forthwith  discontinue  the Fund's  disposition  of
Registrable  Securities pursuant to the Registration  Statement relating to such
Registrable   Securities   until  the  Fund's  receipt  of  the  copies  of  the
supplemented or amended  prospectus  contemplated by subdivision  (viii) of this
section 2.3 and, if so directed by the Company,  will deliver to the Company (at
the Company's expense) all copies, other than permanent file copies, then in the
Fund's  possession of the  prospectus  relating to such  Registrable  Securities
current at the time of receipt of such notice.

     d. Underwritten Offerings.

          i.  Incidental  Underwritten  Offerings.  If the  Company  at any time
     proposes to register  any of its  securities  under the  Securities  Act as
     contemplated by Section 2.2 and such securities are to be distributed by or
     through one or more  underwriters,  the Company  will,  if requested by any
     holder of Registrable  Securities as provided in Section 2.2 and subject to
     the provisions of Section 2.2(a), use its reasonable efforts to arrange for
     such  underwriters to include all the Registrable  Securities to be offered
     and sold by such holder  among the  securities  to be  distributed  by such
     underwriters.

          ii. Holdback Agreements. Subject to such other reasonable requirements
     as may be imposed by the  underwriter  as a  condition  of  inclusion  of a
     Fund's  Registrable  Securities in the  registration  statement,  each Fund
     agrees by  acquisition  of  Registrable  Securities,  if so required by the
     managing underwriter,  not to sell, make any short sale of, loan, grant any
     option for the purchase of,  effect any public sale or  distribution  of or
     otherwise dispose of, except as part of such underwritten registration, any
     equity  securities of the Company,  during such  reasonable  period of time
     requested  by the  underwriter;  provided  however,  such period  shall not
     exceed the 120 day period  commencing 30 days prior to the  commencement of
     such  underwritten  offering and ending 90 days following the completion of
     such underwritten offering.

          iii. Participation in Underwritten Offerings. No holder of Registrable
     Securities may participate in any  underwritten  offering under Section 2.2
     unless  such  holder  of  Registrable  Securities  (i)  agrees to sell such
     Person's securities on the basis provided in any underwriting  arrangements
     approved,  subject to the terms and conditions  hereof, by the holders of a
     majority of  Registrable  Securities  to be  included in such  underwritten
     offering and


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     (ii) completes and executes all questionnaires,  indemnities,  underwriting
     agreements  and other  documents  (other than powers of attorney)  required
     under  the terms of such  underwriting  arrangements.  Notwithstanding  the
     foregoing, no underwriting agreement (or other agreement in connection with
     such offering)  shall require any holder of Registrable  Securities to make
     an  representations  or warranties to or agreements with the Company or the
     underwriters  other than  representations  and  warranties  contained  in a
     writing  furnished  by  such  holder  expressly  for  use  in  the  related
     registration   statement  or  representations,   warranties  or  agreements
     regarding  such  holder,  such  holder's  Registrable  Securities  and such
     holder's  intended  method of  distribution  and any  other  representation
     required by law.

     e.   Preparation;   Reasonable   Investigation.   In  connection  with  the
preparation and filing of each  registration  statement under the Securities Act
pursuant to this  Agreement,  the Company  will give the holders of  Registrable
Securities  registered under such registration  statement,  and their respective
counsel and  accountants,  the  opportunity to participate in the preparation of
such registration statement,  each prospectus included therein or filed with the
Commission, and each amendment thereof or supplement thereto, and will give each
of them such access to its books and records and such  opportunities  to discuss
the  business  of the  Company  with its  officers  and the  independent  public
accountants  who have certified its financial  statements as shall be necessary,
in the  reasonable  opinion of such holders' and such  underwriters'  respective
counsel,  to  conduct a  reasonable  investigation  within  the  meaning  of the
Securities Act.

     f. Registration Default Fee. If the Registration  Statement contemplated in
Section 2.1 is (x) not declared effective by the Required  Effectiveness Date or
(y)  such  effectiveness  is not  maintained  for the  Registration  Maintenance
Period,  then the  Company  shall  pay to the Fund the  applicable  Default  Fee
specified in Section 10.4 of the Securities Purchase Agreement.

     g. Indemnification.

          i. Indemnification by the Company. In the event of any registration of
     any securities of the Company under the  Securities  Act, the Company will,
     and hereby  does agree to  indemnify  and hold  harmless  the holder of any
     Registrable  Securities  covered  by  such  registration   statement,   its
     directors  and  officers,   each  other  Person  who   participates  as  an
     underwriter  in the  offering  or sale of such  securities  and each  other
     Person, if any, who controls such holder or any such underwriter within the
     meaning of the  Securities  Act  against  any  losses,  claims,  damages or
     liabilities, joint or several, to which such holder or any such director or
     officer or underwriter  or controlling  person may become subject under the
     Securities  Act or otherwise,  insofar as such losses,  claims,  damages or
     liabilities (or actions or proceedings, whether commenced or threatened, in
     respect  thereof)  arise out of or are based upon any untrue  statement  or
     alleged untrue statement of any material fact contained in any registration
     statement under which such securities were registered  under the Securities
     Act, any preliminary  prospectus,  final  prospectus or summary  prospectus
     contained therein,  or any


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     amendment or  supplement  thereto,  or any omission or alleged  omission to
     state therein a material fact required to be stated therein or necessary to
     make the statements therein not misleading,  and the Company will reimburse
     such holder and each such director,  officer,  underwriter  and controlling
     person for any legal or any other expenses  reasonably  incurred by them in
     connection with investigating or defending any such loss, claim, liability,
     action or proceeding,  provided that the Company shall not be liable in any
     such case to the extent that any such loss, claim, damage,  liability,  (or
     action or  proceeding  in respect  thereof) or expense  arises out of or is
     based upon an untrue  statement or alleged untrue  statement or omission or
     alleged omission made in such registration statement,  any such preliminary
     prospectus, final prospectus,  summary prospectus,  amendment or supplement
     in reliance upon and in conformity  with written  information  furnished to
     the Company by such holder or underwriter stating that it is for use in the
     preparation  thereof and,  provided  further that the Company  shall not be
     liable to any Person who  participates as an underwriter in the offering or
     sale of Registrable Securities or to any other Person, if any, who controls
     such underwriter within the meaning of the Securities Act, in any such case
     to the extent that any such loss,  claim,  damage,  liability (or action or
     proceeding  in  respect  thereof)  or expense  arises out of such  Person's
     failure to send or give a copy of the final prospectus,  as the same may be
     then  supplemented  or amended,  within the time required by the Securities
     Act to the Person asserting the existence of an untrue statement or alleged
     untrue statement or omission or alleged omission at or prior to the written
     confirmation  of the sale of Registrable  Securities to such Person if such
     statement  or  omission  was  corrected  in  such  final  prospectus  or an
     amendment or supplement thereto.  Such indemnity shall remain in full force
     and effect  regardless  of any  investigation  made by or on behalf of such
     holder or any such director, officer, underwriter or controlling person and
     shall survive the transfer of such securities by such holder.

          ii.  Indemnification  by the Sellers.  The Company may  require,  as a
     condition to  including  any  Registrable  Securities  in any  registration
     statement filed pursuant to this Agreement, the Company shall have received
     an  undertaking  satisfactory  to it from the  prospective  seller  of such
     Registrable Securities,  to indemnify and hold harmless (in the same manner
     and to the same extent as set forth in subdivision (a) of this Section 2.7)
     the Company,  each director of the Company, each officer of the Company and
     each other Person,  if any, who controls the Company  within the meaning of
     the Securities  Act, with respect to any statement or alleged  statement in
     or omission  or alleged  omission  from such  registration  statement,  any
     preliminary  prospectus,  final prospectus or summary prospectus  contained
     therein,  or any  amendment or  supplement  thereto,  if such  statement or
     alleged statement or omission or alleged omission was made in reliance upon
     and in conformity with written information furnished to the Company through
     an instrument duly executed by such seller specifically  stating that it is
     for use in the  preparation  of such  registration  statement,  preliminary
     prospectus, final prospectus, summary prospectus,  amendment or supplement.
     Any such indemnity shall remain in full force and effect, regardless of any
     investigation  made by or on behalf of the  Company  or any such  director,
     officer  or  controlling  person and shall  survive  the  transfer  of such
     securities by such seller.


                                       9

<PAGE>


          iii. Notices of Claims,  etc. Promptly after receipt by an indemnified
     party of notice of the commencement of any action or proceeding involving a
     claim referred to in the preceding  subdivisions  of this Section 2.7, such
     indemnified party will, if a claim in respect thereof is to be made against
     an  indemnifying   party,   give  written  notice  to  the  latter  of  the
     commencement  of such action,  provided that the failure of any indemnified
     party to give notice as provided herein shall not relieve the  indemnifying
     party of its obligations  under the preceding  subdivisions of this Section
     2.7,  except  to  the  extent  that  the  indemnifying  party  is  actually
     prejudiced  by such  failure  to give  notice.  In case any such  action is
     brought against an indemnified  party,  unless in such indemnified  party's
     reasonable  judgment a conflict of interest  between such  indemnified  and
     indemnifying  parties may exist in respect of such claim,  the indemnifying
     party  shall be  entitled  to  participate  in and to  assume  the  defense
     thereof,  jointly with any other indemnifying party similarly notified,  to
     the extent that the  indemnifying  party may wish, with counsel  reasonably
     satisfactory  to  such  indemnified   party,  and  after  notice  from  the
     indemnifying  party to such indemnified  party of its election so to assume
     the defense  thereof,  the  indemnifying  party shall not be liable to such
     indemnified party for any legal or other expenses  subsequently incurred by
     the latter in connection  with the defense  thereof  other than  reasonable
     costs of investigation. No indemnifying party shall, without the consent of
     the indemnified  party,  consent to entry of any judgment or enter into any
     settlement  of any such action  which does not include as an  unconditional
     term thereof the giving by the  claimant or  plaintiff to such  indemnified
     party of a release from all liability, or a covenant not to sue, in respect
     to such claim or litigation. No indemnified party shall consent to entry of
     any judgment or enter into any settlement of any such action the defense of
     which has been assumed by an indemnifying party without the consent of such
     indemnifying party.

          iv. Other Indemnification.  Indemnification  similar to that specified
     in the  preceding  subdivisions  of  this  Section  2.7  (with  appropriate
     modifications) shall be given by the Company and each seller of Registrable
     Securities (but only if and to the extent required pursuant to the terms of
     2.7(b)) with respect to any required registration or other qualification of
     securities under any Federal or state law or regulation of any governmental
     authority, other than the Securities Act.

          v.  Indemnification  Payments.  The  indemnification  required by this
     Section 2.7 shall be made by periodic payments of the amount thereof during
     the course of the investigation or defense,  as and when bills are received
     or expense, loss, damage or liability is incurred.

          vi. Contribution. If the indemnification provided for in the preceding
     subdivision of this Section 2.7 is  unavailable to an indemnified  party in
     respect of any  expense,  loss,  claim,  damage or  liability  referred  to
     therein,  then  each  indemnifying  party,  in  lieu of  indemnifying  such
     indemnified  party,  shall contribute to the amount paid or payable by such
     indemnified  party as a result  of such  expense,  loss,  claim,  damage or
     liability (i) in such  proportion as is appropriate to reflect the relative
     benefits  received  by the  Company  on the  one  hand  and the  holder  or
     underwriter,  as the case may be, on the other from the distribution of the


                                       10

<PAGE>


     Registrable  Securities  or (ii) if the  allocation  provided by clause (i)
     above  is not  permitted  by  applicable  law,  in  such  proportion  as is
     appropriate to reflect not only the relative benefits referred to in clause
     (i) above but also the relative fault of the Company on the one hand and of
     the holder or  underwriter,  as the case may be, on the other in connection
     with the  statements or omissions  which  resulted in such  expense,  loss,
     damage   or   liability,   as  well  as  any   other   relevant   equitable
     considerations.  The relative  benefits  received by the Company on the one
     hand and the  holder  or  underwriter,  as the case may be, on the other in
     connection with the  distribution of the  Registrable  Securities  shall be
     deemed to be in the same  proportion as the total net proceeds  received by
     the Company  from the initial  sale of the  Registrable  Securities  by the
     Company to the purchasers bear to the gain, if any, realized by all selling
     holders  participating in such offering or the  underwriting  discounts and
     commissions  received by the underwriter,  as the case may be. The relative
     fault of the Company on the one hand and of the holder or  underwriter,  as
     the case may be, on the other shall be  determined  by reference  to, among
     other things,  whether the untrue or alleged untrue statement of a material
     fact or omission to state a material fact relates to  information  supplied
     by the  Company,  by the  holder  or by the  underwriter  and the  parties'
     relative intent, knowledge,  access to information supplied by the Company,
     by the  holder or by the  underwriter  and the  parties'  relative  intent,
     knowledge, access to information and opportunity to correct or prevent such
     statement or omission,  provided that the foregoing  contribution agreement
     shall not inure to the benefit of any indemnified party if  indemnification
     would be unavailable to such indemnified  party by reason of the provisions
     contained in the first sentence of subdivision (a) of this Section 2.7, and
     in no event shall the  obligation of any  indemnifying  party to contribute
     under this subdivision (f) exceed the amount that such  indemnifying  party
     would  have  been  obligated  to  pay  by  way  of  indemnification  if the
     indemnification provided for under subdivisions (b) of this Section 2.7 had
     been available under the circumstances.

     The Company and the holders of Registrable  Securities  agree that it would
not be just and equitable if contribution  pursuant to this subdivision (f) were
determined by pro rata allocation (even if the holders and any underwriters were
treated as one entity for such  purpose)  or by any other  method of  allocation
that does not take account of the  equitable  considerations  referred to in the
immediately  preceding  paragraph.  The amount paid or payable by an indemnified
party as a result of the losses,  claims, damages and liabilities referred to in
the immediately  preceding paragraph shall be deemed to include,  subject to the
limitations  set forth in the  preceding  sentence and  subdivision  (c) of this
Section 2.7, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.

     Notwithstanding  the  provisions  of this  subdivision  (f),  no  holder of
Registrable Securities or underwriter shall be required to contribute any amount
in excess of the  amount  by which (i) in the case of any such  holder,  the net
proceeds received by such holder from the sale of Registrable Securities or (ii)
in the  case of an  underwriter,  the  total  price  at  which  the  Registrable
Securities  purchased  by it and  distributed  to the public were offered to the
public exceeds,  in any such case, the amount of any damages that such holder or
underwriter  has  otherwise  been  required  to pay


                                       11

<PAGE>


by reason of such  untrue or allege  untrue  statement  or  omission.  No Person
guilty of fraudulent  misrepresentation  (within the meaning of Section 11(f) of
the Securities  Act) shall be entitled to  contribution  from any person who was
not guilty of such fraudulent misrepresentation.

     3. Definitions.  As used herein, unless the context otherwise requires, the
following terms have the following respective meanings:

          "Agreement": As defined in Section 1.

          "Commission":  The  Securities  and Exchange  Commission  or any other
     Federal agency at the time administering the Securities Act.

          "Common Stock": As defined in Section 1.

          "Company": As defined in the introductory paragraph of this Agreement.

          "Conversion Shares": As defined in Section 1.

          "Exchange Act": The Securities  Exchange Act of 1934, as amended,  and
     the rules and regulations of the Commission thereunder.

          "National Market": As defined in Section 1.

          "Notes":  As defined in Section 1, such term to include any securities
     issued in substitution of or in addition to such Notes.

          "Person":  A  corporation,  association,  partnership,   organization,
     business,  individual,  governmental or political  subdivision thereof or a
     governmental agency.

          "Registrable Securities":  The Securities and any securities issued or
     issuable with respect to such  Securities by way of stock dividend or stock
     split or in  connection  with a  combination  of shares,  recapitalization,
     merger,  consolidation or other  reorganization  or otherwise.  Once issued
     such  securities  shall  cease  to be  Registrable  Securities  when  (a) a
     registration  statement with respect to the sale of such  securities  shall
     have become  effective under the Securities Act and such  securities  shall
     have been disposed of in accordance with such registration  statement,  (b)
     they shall have been distributed to the public pursuant to Rule 144 (or any
     successor  provision)  under the  Securities  Act, (c) they shall have been
     otherwise  transferred,  new  certificates  for them not  bearing  a legend
     restricting  further  transfer shall have been delivered by the Company and
     subsequent   disposition  of  them  shall  not  require   registration   or
     qualification  of them under the  Securities  Act or any similar  state law
     then in force,  (d) they shall have  ceased to be  outstanding,  (e) on the
     expiration of the applicable Registration Maintenance Period or (f) any and
     all legends  restricting  transfer  thereof have been removed in accordance
     with the provisions of Rule 144(k) (or any successor  provision)  under the
     Securities Act.


                                       12

<PAGE>


          "Registration  Expenses":  All  expenses  incident  to  the  Company's
     performance  of or  compliance  with  this  Agreement,  including,  without
     limitation, all registration,  filing and NASD fees, all stock exchange and
     National  Market  listing  fees,  all fees and expenses of  complying  with
     securities or blue sky laws, all word processing,  duplicating and printing
     expenses,  messenger and delivery  expenses,  the fees and disbursements of
     counsel  for  the  Company  and  of  its  independent  public  accountants,
     including  the  expenses of any special  audits or "cold  comfort"  letters
     required by or incident to such performance and compliance,  the reasonable
     fees and  disbursements  of not  more  than  one law  firm  (not to  exceed
     $25,000)  retained  by the  holder  or  holders  of  more  than  50% of the
     Registrable  Securities,  premiums and other costs of policies of insurance
     of the Company  against  liabilities  arising out of the public offering of
     the Registrable  Securities being registered and any fees and disbursements
     of underwriters  customarily paid by issuers or sellers of securities,  but
     excluding  underwriting  discounts and  commissions  and transfer taxes, if
     any, provided that, in any case where  Registration  Expenses are not to be
     borne by the Company,  such expenses shall not include  salaries of Company
     personnel  or general  overhead  expenses of the  Company,  auditing  fees,
     premiums or other  expenses  relating to  liability  insurance  required by
     underwriters  of the  Company  or other  expenses  for the  preparation  of
     financial  statements or other data normally prepared by the Company in the
     ordinary course of its business or which the Company would have incurred in
     any event.

          "Registration Maintenance Period": As defined in Section 2.3.

          "Required Effectiveness Date": As defined in Section 2.1.

          "Securities  Act":  The  Securities  Act of 1933, as amended,  and the
     rules and regulations of the Commission thereunder.

          "Securities Purchase Agreement": As defined in Section 1.

          "Sellers'  Representative":  Global  Capital  Advisors,  Ltd.  or such
     Person designated by Global Capital Advisors, Ltd.

     4. Rule 144. The Company shall timely file the reports required to be filed
by it under the  Securities  Act and the Exchange Act (including but not limited
to the reports  under  Sections 13 and 15(d) o the  Exchange  Act referred to in
subparagraph (c) of Rule 144 adopted by the Commission under the Securities Act)
and the rules and regulations  adopted by the Commission  thereunder (or, if the
Company is not  required  to file such  reports,  will,  upon the request of any
holder of Registrable Securities, make publicly available other information) and
will take such  further  action as any  holder  of  Registrable  Securities  may
reasonably request,  all to the extent required from time to time to enable such
holder to sell Registrable  Securities without registration under the Securities
Act within the limitation of the  exemptions  provided by (a) Rule 144 under the
Securities  Act,  as such  Rule may be  amended  from  time to time,  or (b) any
similar rule or regulation hereafter adopted by the Commission. Upon the request
of any


                                       13

<PAGE>


holder of  Registrable  Securities,  the Company  will  deliver to such holder a
written  statement as to whether it has complied with the  requirements  of this
Section 4.

     5.  Amendments  and Waivers.  This Agreement may be amended and the Company
may take  any  action  herein  prohibited,  or omit to  perform  any act  herein
required to be  performed  by it, only if the Company  shall have  obtained  the
written consent to such  amendment,  action or omission to act, of the holder or
holders  of the  sum of  the  51% or  more  of  the  shares  of (i)  Registrable
Securities issued at such time, plus (ii) Registrable  Securities  issuable upon
exercise or conversion of the Securities then constituting derivative securities
(if such Securities were not fully exchanged or converted in full as of the date
such consent if sought).  Each holder of any Registrable  Securities at the time
or  thereafter  outstanding  shall be bound by any  consent  authorized  by this
Section 5, whether or not such Registrable  Securities shall have been marked to
indicate such consent.

     6.  Nominees  for  Beneficial  Owners.  In the event  that any  Registrable
Securities  are  held  by a  nominee  for  the  beneficial  owner  thereof,  the
beneficial owner thereof may, at its election,  be treated as the holder of such
Registrable Securities for purposes of any request or other action by any holder
or  holders  of  Registrable  Securities  pursuant  to  this  Agreement  or  any
determination  of any number of percentage of shares of  Registrable  Securities
held by an holder or  holders of  Registrable  Securities  contemplated  by this
Agreement.  If the beneficial owner of any Registrable Securities so elects, the
Company may require  assurances  reasonably  satisfactory  to it of such owner's
beneficial ownership or such Registrable Securities.

     7. Notices.  Except as otherwise  provided in this Agreement,  all notices,
requests and other  communications to any Person provided for hereunder shall be
in writing and shall be given to such  Person (a) in the case of a party  hereto
other than the  Company,  addressed to such party in the manner set forth in the
Securities  Purchase Agreement or at such other address as such party shall have
furnished  to the Company in writing,  or (b) in the case of any other holder of
Registrable Securities,  at the address that such holder shall have furnished to
the Company in writing,  or,  until any such other  holder so  furnishes  to the
Company  an  address,  then to and at the  address  of the last  holder  of such
Registrable  Securities  who has furnished an address to the Company,  or (c) in
the case of the Company,  at the address set forth on the signature page hereto,
to the attention of its President, or at such other address, or to the attention
of such other  officer,  as the Company  shall have  furnished to each holder of
Registrable  Securities at the time  outstanding.  Each such notice,  request or
other communication shall be effective (i) if given by mail, 72 hours after such
communication  is  deposited  in the mails with  first  class  postage  prepaid,
addressed as aforesaid or (ii) if given by any other means  (including,  without
limitation,  by fax or air  courier),  when  delivered at the address  specified
above,  provided  that any such notice,  request or  communication  shall not be
effective until received.

     8.  Assignment.  This  Agreement  shall be  binding  upon and  inure to the
benefit of and be enforceable by the parties hereto. In addition, and whether or
not any  express  assignment  shall  have  been  made,  the  provisions  of this
Agreement which are for the benefit of the parties


                                       14

<PAGE>


hereto other than the Company  shall also be for the benefit of and  enforceable
by any subsequent holder of any Registrable  Securities.  Each of the Holders of
the Registrable  Securities  agrees, by accepting any portion of the Registrable
Securities after the date hereof, to the provisions of this Agreement including,
without limitation,  appointment of the Sellers' Representative to act on behalf
of such Holder  pursuant to the terms hereof which such actions shall be made in
the good faith discretion of the Sellers'  Representative  and be binding on all
persons for all purposes.

     9. Descriptive  Headings.  The descriptive headings of the several sections
and  paragraphs of this  Agreement are inserted for reference only and shall not
limit or otherwise affect the meaning hereof.

     10.  GOVERNING  LAW.  THIS  AGREEMENT  SHALL BE  CONSTRUED  AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS OF
THE STATE OF NEW YORK WITHOUT REFERENCE TO THE PRINCIPLES OF CONFLICTS OF LAWS.

     11.  Counterparts.  This  Agreement may be executed by facsimile and may be
signed  simultaneously  in any number of  counterparts,  each of which  shall be
deemed an original,  but all such counterparts shall together constitute one and
the same instrument.

     12. Entire  Agreement.  This  Agreement  embodies the entire  agreement and
understanding  between the Company and each other party  hereto  relating to the
subject  matter hereof and supersedes  all prior  agreements and  understandings
relating to such subject matter.

     13. Severability. If any provision of this Agreement, or the application of
such  provisions  to any  Person or  circumstance,  shall be held  invalid,  the
remainder of this Agreement,  or the application of such provision to Persons or
circumstances  other  than  those  to  which it is held  invalid,  shall  not be
affected thereby.


                            [Signature Page Follows]


                                       15

<PAGE>


     IN WITNESS  WHEREOF,  the parties have caused this Agreement to be executed
and delivered by their respective  officers  thereunto duly authorized as of the
date first above written.


                                        AMERICAN INTERNATIONAL PETROLEUM
                                        CORPORATION


                                        By: __________________________________
                                        Name: ________________________________
                                        Title: _______________________________

                                        Address:  444 Madison Avenue
                                                  New York, New York 10022

                                        Telephone: (212) 688-3333
                                        Fax:   (212) 6886657
                                        Attn:  Denis J. Fitzpatrick



                                        GCA STRATEGIC INVESTMENT FUND
                                        LIMITED


                                        By: __________________________________
                                        Name:  Lewis N. Lester
                                        Title: Director

                                        Address:  Mechanics Building
                                                  12 Church Street
                                                  Hamilton HM II
                                                  Bermuda

                                        Telephone: (678) 947-0028
                                        Fax:  (678) 947-6499
                                        Attn: Lewis N. Lester


                                       16