Document:

Exhibit 4.17

	

Exhibit
4.17 

EXHIBIT A 

SECURED BRIDGE NOTE

 

	

THE SECURITIES REPRESENTED
HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”). THE HOLDER HEREOF, BY PURCHASING
SUCH SECURITIES AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH SECURITIES MAY
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, OR (C) IF REGISTERED
UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS. IN ADDITION,
A SECURITIES PURCHASE AGREEMENT, DATED AS OF THE DATE HEREOF, A COPY OF WHICH
MAY BE OBTAINED FROM THE COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICE, CONTAINS
CERTAIN ADDITIONAL AGREEMENTS AMONG THE PARTIES, INCLUDING, WITHOUT LIMITATION,
PROVISIONS WHICH (A) SPECIFY VOLUNTARY AND MANDATORY REPAYMENT, PREPAYMENT AND
REDEMPTION RIGHTS AND OBLIGATIONS AND (B) SPECIFY EVENTS OF DEFAULT FOLLOWING
WHICH THE REMAINING BALANCE DUE AND OWING HEREUNDER MAY BE ACCELERATED. 

	No. 1 	$1,900,000.00

	

American International
Petroleum Corporation

12% SECURED BRIDGE NOTE 

     American
International Petroleum Corporation, a Nevada corporation (together with its
successors, the “Company”), for value received hereby promises to pay
to: 

GCA Strategic
Investment Fund Limited 

(the “Holder”)
and registered assigns, the principal sum of One Million Nine Hundred Thousand
Dollars ($1,900,000.00) plus accrued interest, or, if less, the principal amount
of this Note then outstanding, on the Maturity Date by wire transfer of
immediately available funds to the Holder in such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts, and to pay any interest on (i) the Maturity
Date, as hereafter defined, and (ii) the date the principal amount of the
Secured Bridge Note (the “Bridge Note”) shall be declared to be or
shall automatically become due and payable, on the principal sum hereof
outstanding in like coin or currency, at the rates per annum set forth below
from the date of this Bridge Note until payment in full of the principal sum
hereof has been made. 

     The
Bridge Note will bear interest, at a rate of 12% per annum, (the “Interest
Rate”), except on of an Event of Default, as hereafter defined, at which
time interest will accrue at the Interest Rate plus 2% per annum or, if less,
the maximum rate permitted by applicable law, and will be payable on demand
(“Default Interest”). Interest on this Bridge Note will be calculated
on the basis of a 360-day year of twelve 30-day months and shall begin to accrue
on the date hereof. All payments of principal and interest hereunder shall be
made for the benefit of the Holder pursuant to the terms of the Agreement
(hereafter defined). 

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     This
Bridge Note is secured by (i) a Pledge and Security Agreement of even date
herewith made by the Company and Holder creating a security interest in favor of
Holder in certain of the assets described in the Security Agreement (ii) a
mortgage of even date herewith in favor of Holder granting a security interest
in the St. Mark’s Refinery; and (iii) a mortgage of even date herewith in
favor of Holder granting a security interest in the barge, the Claudia G,
Official Number 515485 (collectively the “Collateral”). 

     This
Bridge Note is a duly authorized issuance of $1,900,000.00 aggregate principal
amount of Bridge Note of the Company issued pursuant to that certain Securities
Purchase Agreement dated as of the date hereof between the Company and the
Purchaser named herein, (the “Agreement”). The Agreement contains
certain additional agreements among the parties with respect to the terms of
this Bridge Note, including, without limitation, provisions which (A) specify
voluntary and mandatory repayment, prepayment and redemption rights and
obligations and (B) specify Events of Default following which the remaining
balance due and owing hereunder may be accelerated. All such provisions are an
integral part of this Bridge Note and are incorporated herein by reference. This
Bridge Note is transferable and assignable to one or more Persons, in accordance
with the limitations set forth in the Agreement. 

     The
Company shall keep a register (the “Register”) in which shall be
entered the names and addresses of the registered holder of this Bridge Note and
particulars of this Bridge Note held by such holder and of all transfers of this
Bridge Note. References to the Holder or “Holders” shall mean the
Person listed in the Register as registered holder of such Bridge Note. The
ownership of this Bridge Note shall be proven by the Register. 

     1.
Certain Terms Defined. All terms defined in the Agreement and not otherwise defined
herein shall have for purposes hereof the meanings provided for in the Agreement.  

     2.
Covenants. Unless the Majority Holders otherwise consent in writing, the Company
covenants and agrees to observe and perform each of its covenants, obligations and
undertakings contained in the Agreement, which obligations and undertakings are expressly
assumed herein by the Company and made for the benefit of the holder hereof.  

     3.
 Payment of Principal. The Company shall repay the remaining unpaid balance of
this Bridge Note, plus accrued interest, if any, on March 18, 2003 (the “Maturity
Date”). The Company may, and shall be obligated to, prepay all or a portion of this
Bridge Note on the terms specified in the Agreement.  

     4.
 Ranking.This Bridge Note shall be junior in right of payment (but not with
respect to the rights in the Collateral) to the Company’s 5% Secured Convertible
Debentures due February 18, 2004. This Bridge Note shall rank senior in respect to any
other indebtedness of the Company outstanding as of the date hereof or incurred hereafter
other than indebtedness to Holder or its affiliates, which will rank pari passu with this
Bridge Note.  

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     5.
 Miscellaneous. This Bridge Note shall be deemed to be a contract
made under the laws of the State of New York, and for all purposes shall be
governed by and construed in accordance with the laws of said State. The parties
hereto, including all guarantors or endorsers, hereby waive presentment, demand,
notice, protest and all other demands and notices in connection with the
delivery, acceptance, performance and enforcement of this Bridge Note, except as
specifically provided herein, and asset to extensions of the time of payment, or
forbearance or other indulgence without notice. The Company hereby submits to
the exclusive jurisdiction of the United States District Courts of New York and
of any New York state court sitting in New York for purposes of all legal
proceedings arising out of or relating to this Bridge Note. The Company
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum. The Company hereby irrevocably
waives any and all right to trial by jury in any legal proceeding arising out of
or relating to this Bridge Note. 

     The
Holder of this Bridge Note by acceptance of this Bridge Note agrees to be bound
by the provisions of this Bridge Note, which are expressly binding on such
Holder. 

Signature Page Follows 

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IN WITNESS WHEREOF, the
Company has caused this instrument to be duly executed.  

Dated: June ___, 2002 

			AMERICAN INTERNATIONAL

      PETROLEUM CORPORATION

      

      

      By:_______________________

      Name: Denis J. Fitzpatrick

      Title: Chief Financial Officer

	

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ANNEX A

REPAYMENT
LEDGER

	
      

    
	Date	Principal
      Balance	Interest
      Paid	Principal
      Paid	New
      Principal Balance	Issuer
      Initials	Holder
      Initials
	
      

    
	 	 	 	 	 	 	 
	
      

    
	 	 	 	 	 	 	 
	
      

    
	 	 	 	 	 	 	 
	
      

    
	 	 	 	 	 	 	 
	
      

    
	 	 	 	 	 	 	 
	
      

    
	 	 	 	 	 	 	 
	
      

    
	 	 	 	 	 	 	 
	
      

    
	 	 	 	 	 	 	 
	
      

    
	 	 	 	 	 	 	 
	
      

    
	 	 	 	 	 	 	 
	
      

    

	

 

	

FULL NAME AND ADDRESS OF
SUBSCRIBER FOR REGISTRATION PURPOSES:

NAME: 

ADDRESS: 

TEL NO: 

FAX NO: 

CONTACT
NAME: 

DELIVERY
INSTRUCTIONS (IF DIFFERENT FROM REGISTRATION NAME):

NAME: 

ADDRESS: 

TEL NO: 

FAX NO: 

CONTACT
NAME: 

SPECIAL INSTRUCTIONS:__________________________________Exhibit 4.18

	

Exhibit
4.18    

EXHIBIT C   

FORM OF
REGISTRATION RIGHTS AGREEMENT

 

	

REGISTRATION
RIGHTS AGREEMENT

     REGISTRATION
RIGHTS AGREEMENT (this “Agreement”), dated as of June ___, 2002,
among American International Petroleum Corporation, a Nevada corporation (the
“Company”), GCA Strategic Investment Fund Limited (the
“Fund”) and Colony Park Financial, LLC (“Colony Park”). 

     1.
Introduction.    

          1.1.
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 a $1,900,000.00 (U.S.) principal
amount Secured Bridge Note of the Company (the “Note”) 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 3,600,000 shares of the Company’s common stock, $0.08 par value per share
(the “Common Stock”). In addition, the Company has issued to Colony Park warrants to
purchase 1,050,000 shares of Common Stock (together with the Fund’s warrants, 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.    

          1.2.
Definition of Securities. The Warrant Shares are collectively herein referred to as the
“Securities.”    

          1.3.
Bulletin Board Representation. The Company represents and warrants that the Company’s
Common Stock is currently eligible for trading on the Over the Counter Bulletin Board
operated by the NASD (“Bulletin Board”) 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.    

          2.1.
Mandatory Registration.    

               a.
Registration of Registrable Securities. The Company will file with the Commission, within
thirty (30) days following the date hereof, a Registration Statement on Form S-1 (the
“Registration Statement”) to register the resale of the Registrable Securities.
The Company will use its best efforts to cause the Registration Statement to become
effective within ninety (90) days of the date hereof (the “Required Effectiveness
Date”).    

          
     b.
Registration Statement Form. Registrations under this Section 2.1 shall be on Form S-1
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
methods of disposition specified by the Fund; provided, however, such intended method of
deposition shall not include an underwritten offering of the Registrable Securities.  

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

          
     d.
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.    

          
     e.
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.    

          2.2.
Incidental Registration.    

          
     a.
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
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.    

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     b.
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.    

     
     2.3.
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 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;  

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     (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 three (3) 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 three (3) 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: 

          
          (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  

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          (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: 

          
          (A)
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;  

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

          
          (C)
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 

          
          (D)
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;  

          
     (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;  

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     (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 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. 

6 

	

     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. 

     
     2.4.
Underwritten Offerings.    

          
     a.
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.    

          
     b.
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.    

          
     c.
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 (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.    

7 

	

     
     2.5.
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.    

     
     2.6.
Registration Default Fee. If the Registration Statement contemplated in Section 2.1 is
(x) not filed by the required filing date or 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.    

     
     2.7.
Indemnification.    

          
     a.
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 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.    

8 

	

          
     b.
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.    

          
     c.
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.    

9 

	

          
     d.
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.    

          
     e.
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.    

          
     f.
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 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.    

10 

	

     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 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.   

     
     “Bulletin
Board”: As defined in Section 1.   

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

11 

	

     
     “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 there under.   

     
     “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.   

     
     “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 Bulletin Board 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.   

12 

	

     
     “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, LLC or such Person designated by Global Capital
Advisors, LLC   

     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 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. 

13 

	

     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 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.   

14 

	

     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 

	

     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: 2950 North
      Loop West

                        Suite
      1000

                        Houston,
      TX 77092
	      	
		Telephone: (713) 802-0087

      Fax: (713) 682-7278

      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
	      	
	      	 
	      	COLONY PARK FINANCIAL,
      LLC
	      	
		By:________________________

      Name: Lewis N. Lester

      Title:_______________________
	      	
		Address: 106 Colony
      Park Drive

                        Suite
      900

                        Cumming,
      GA 30040

	

16 

	

TABLE OF CONTENTS

	1.
      Introduction	1
	    1.1
      Securities Purchase Agreement	1
	    1.2 Definition
      of Securities	1
	    1.3
      Bulletin Board Representation	1
	     	 
	2.
      Registration under Securities Act, etc.	1
	    2.1
      Mandatory Registration	1
	          
      a.  Registration of Registrable Securities	1
	           b.
       Registration Statement Form	1
	           c.
       Expenses	2
	           d.
       Effective Registration Statement	2
	           e.
       Plan of Distribution	2
	    2.2
      Incidental Registration	2
	           a.
       Right to Include Registrable Securities	2
	           b.
       Priority in Incidental Registrations	3
	    2.3
      Registration Procedures	3
	    2.4
      Underwritten Offerings	7
	           a.
       Incidental Underwritten Offerings	7
	           b.
       Holdback Agreements	7
	           c.
       Participation in Underwritten Offerings	7
	    2.5
      Preparation; Reasonable Investigation	8
	    2.6
      Registration Default Fee	8
	    2.7
      Indemnification	8
	           a.
       Indemnification by the Company	8
	           b.
       Indemnification by the Sellers	9
	           c.
       Notices of Claims, etc.	9
	           d.
       Other Indemnification	10
	           e.
       Indemnification Payments	10
	           f.
       Contribution	10
	     	 
	3.
      Definitions	11
	     	 
	4.
      Rule 144	13
	     	 
	5.
      Amendments and Waivers	13
	     	 
	6.
      Nominees for Beneficial Owners	13
	     	 
	7.
      Notices	14
	     	 
	8.
      Assignment	14
	     	 
	9.
      Descriptive Headings	14
	     	 
	10.
      GOVERNING LAW	14
	     	 
	11.
      Counterparts	14
	     	 
	12.
      Entire Agreement	15
	     	 
	13.
      Severability	15

	

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