Document:

EXHIBIT 4.3

                      FORM OF COMMON STOCK PURCHASE WARRANT

<PAGE>

THIS COMMON STOCK PURCHASE  WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING
THIS COMMON STOCK PURCHASE  WARRANT,  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  ("PURCHASE
AGREEMENT"),  DATED 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
LIMIT THE  EXERCISE  RIGHTS  OF THE  HOLDER  AND  SPECIFY  MANDATORY  REDEMPTION
OBLIGATIONS OF THE COMPANY.

                         ------------------------------

                          COMMON STOCK PURCHASE WARRANT

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Number of shares: 500,000                    Holder:

Strike Price: US$_____
Expiration: February 28, 2005

                            For identification only.
            The governing terms of this Warrant are set forth below.

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American  International   Petroleum  Corporation,   a  Nevada  corporation  (the
"Company"),  hereby certifies that, for value received, GCA Strategic Investment
Fund Limited or assigns,  is entitled,  subject to the terms set forth below, to
purchase from the Company at any time or from time to time after the date hereof
and  prior to the fifth  anniversary  hereof  (the  "Exercise  Period"),  at the
Purchase Price hereinafter set forth, Five Hundred Thousand  (500,000) shares of
the fully paid and  nonassessable  shares of Common  Stock of the  Company.  The
number and  character of such shares of Common Stock and the Purchase  Price are
subject to adjustment as provided herein.

     The purchase price per share of Common Stock issuable upon exercise of this
Warrant (the "Purchase  Price") shall initially be equal to USD$____;  provided,
however, that the Purchase Price shall be adjusted from time to time as provided
herein.

<PAGE>

     Capitalized terms used herein not otherwise defined shall have the meanings
ascribed thereto in the Purchase Agreement.  As used herein the following terms,
unless the context otherwise requires, have the following respective meanings:

          (a) The term "Company" shall include American International  Petroleum
     Corporation  and  any   corporation   that  shall  succeed  or  assume  the
     obligations of such corporation hereunder.

          (b) The term "Common Stock"  includes (a) the Company's  common stock,
     par value  $0.08 per  share,  (b) any other  capital  stock of any class or
     classes  (however  designated) of the Company,  authorized on or after such
     date, the Holders of which shall have the right,  without  limitation as to
     amount, either to all or to a share of the balance of current dividends and
     liquidating  dividends after the payment of dividends and  distributions on
     any  shares  entitled  to  preference,  and  the  Holders  of  which  shall
     ordinarily,  in the absence of  contingencies,  be entitled to vote for the
     election of a majority of directors  of the Company  (even though the right
     so to vote has been suspended by the happening of such a  contingency)  and
     (c) any other  securities  into  which or for  which any of the  securities
     described in (a) or (b) may be converted or exchanged pursuant to a plan of
     recapitalization, reorganization, merger, sale of assets or otherwise.

          (c) The term "Other Securities" refers to any stock (other than Common
     Stock) and other  securities of the Company or any other person  (corporate
     or otherwise) that the Holder of this warrant at any time shall be entitled
     to receive,  or shall have  received,  on the exercise of this Warrant,  in
     lieu of or in  addition  to  Common  Stock,  or that at any  time  shall be
     issuable  or shall have been issued in exchange  for or in  replacement  of
     Common Stock or Other Securities pursuant to Section 4 or otherwise.

     1.   Exercise of Warrant.

          1.1  Method of Exercise.

          (a) This warrant may be exercised in whole or in part (but not as to a
     fractional share of Common Stock), at any time and from time to time during
     the  Exercise  Period  by the  Holder  hereof  by  delivery  of a notice of
     exercise (a "Notice of Exercise") substantially in the form attached hereto
     as Exhibit A via facsimile to the Company.  Promptly  thereafter the Holder
     shall  surrender  this  Warrant  to the  Company at its  principal  office,
     accompanied  by payment of the Purchase  Price  multiplied by the number of
     shares of Common  Stock for which  this  Warrant  is being  exercised  (the
     "Exercise  Price").  Payment of the  Exercise  Price shall be made,  at the
     option of the  Holder,  (i) by check or bank draft  payable to the order of
     the Company, (ii) by wire transfer to the account of the Company,  (iii) in
     shares of  Common  Stock  having a Market  Value on the  Exercise  Date (as
     hereinafter  defined)  equal  to the  aggregate  Exercise  Price or (iv) by
     presentation  and  surrender  of this  Warrant to the Company for  cashless
     exercise (a  "Cashless  Exercise"),  which such  surrender  being  deemed a
     waiver of the

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<PAGE>

     Holder's obligation to pay all or any portion of the Exercise Price. In the
     event the Holder elects a Cashless  Exercise  (which such election shall be
     irrevocable)  the Holder  shall  exchange  this  Warrant for that number of
     shares of Common Stock  determined by  multiplying  the number of shares of
     Common Stock being exercised by a fraction, the numerator of which shall be
     the  difference  between the then current  Market Value of the Common Stock
     and the  Purchase  Price,  and the  denominator  of which shall be the then
     current  Market  Value of the Common  Stock.  If the amount of the  payment
     received by the Company is less than the Exercise Price, the Holder will be
     notified of the  deficiency  and shall make  payment in that amount  within
     five (5)  business  days.  In the event the payment  exceeds  the  Exercise
     Price,  the Company  will  promptly  refund the excess to the Holder.  Upon
     exercise,  the Holder  shall be entitled to  receive,  promptly  refund the
     excess to the  Holder.  Upon  exercise,  the Holder  shall be  entitled  to
     receive,  promptly after payment in full, one or more certificates,  issued
     in the  Holder's  name or in such name or names as the Holder  may  direct,
     subject to the limitations on transfer  contained herein, for the number of
     shares  of  Common  Stock so  purchased.  The  shares  of  Common  Stock so
     purchased  shall be deemed to be issued as of the close of  business on the
     date on which the Company shall have  received  from the Holder  payment in
     full of the Exercise Price (the "Exercise Date").

          (b)  Notwithstanding  anything to the contrary set forth herein,  upon
     exercise of all or a portion of this Warrant in  accordance  with the terms
     hereof,  the Holder  shall not be required  to  physically  surrender  this
     Warrant to the Company. Rather, records showing the amount so exercised and
     the date of exercise shall be maintained on a ledger  substantially  in the
     form of Annex B attached  hereto (a copy of which shall be delivered to the
     Company or transfer agent with each Notice of Exercise). It is specifically
     contemplated  that the Holder hereof shall act as the calculation agent for
     all   exercises  of  this   Warrant.   In  the  event  of  any  dispute  or
     discrepancies,  such records maintained by the Holders shall be controlling
     and  determinative  in the  absence of manifest  error.  The Holder and any
     assignee,  by acceptance of this  Warrant,  acknowledge  and agree that, by
     reason of the  provisions  of this  paragraph,  following  an exercise of a
     portion of this Warrant,  the number of shares of Common Stock  represented
     by this  Warrant will be the amount  indicated  on Annex B attached  hereto
     (which may be less than the amount stated on the face hereof).

          1.2  Regulation  D  Restrictions.  The Holder  hereof  represents  and
     warrants to the Company that it has acquired  this Warrant and  anticipates
     acquiring the shares of Common Stock  issuable upon exercise of the Warrant
     solely for its own account for  investment  purposes and not with a view to
     or for resale of such  securities  unless such  resale has been  registered
     with the Commission or an applicable  exemption is available  therefor.  At
     the time this Warrant is  exercised,  the Company may require the Holder to
     state in the Notice of Exercise such representations  concerning the Holder
     as are necessary or appropriate to assure compliance by the Holder with the
     Securities Act.

          1.3  Company  Acknowledgment.  The  Company  will,  at the time of the
     exercise of this Warrant, upon request of the Holder hereof, acknowledge in
     writing its continuing

                                       3

<PAGE>

     obligation to afford to such Holder the  registration  rights to which such
     Holder shall continue to be entitled after such exercise in accordance with
     the provisions of a  Registration  Rights  Agreement  dated the date hereof
     (the "Registration Rights Agreement"). If the Holder shall fail to make any
     such request,  such failure shall not affect the  continuing  obligation of
     the Company to afford such Holder any such rights.

          1.4 Limitation on Exercise.  Notwithstanding  the rights of the Holder
     to exercise  all or a portion of this  Warrant as  described  herein,  such
     exercise  rights  shall be  limited,  solely to the extent set forth in the
     Purchase  Agreement  as if such  provisions  were  specifically  set  forth
     herein.  In addition,  the number of shares of Common Stock  issuable  upon
     exercise of this  Warrant is subject to  reduction  as specified in Section
     10.3 of the Purchase Agreement.

     2.  Delivery  of  Stock  Certificates,   etc.,  on  Exercise.  As  soon  as
practicable after the exercise of this Warrant, and in any event within five (5)
business days thereafter,  the Company at its expense  (including the payment by
it of any applicable issue,  stamp or transfer taxes) will cause to be issued in
the name of and delivered to the Holder thereof,  or, to the extent  permissible
hereunder,  to such other  person as such Holder may direct,  a  certificate  or
certificates  for the  number of fully paid and  nonassessable  shares of Common
Stock (or Other  Securities)  to which such  Holder  shall be  entitled  on such
exercise,  plus,  in lieu of any  fractional  share to which such  Holder  would
otherwise  be  entitled,  cash  equal to such  fraction  multiplied  by the then
applicable Purchase Price, together with any other stock or other securities and
property  (including  cash,  where  applicable) to which such Holder is entitled
upon such exercise pursuant to Section 1 or otherwise.

     3. Adjustment for  Extraordinary  Events.  The Purchase Price to be paid by
the Holder upon exercise of this Warrant,  and the  consideration to be received
upon  exercise  of this  Warrant,  shall be adjusted in case at any time or from
time to  time  pursuant  to  Article  XI of the  Purchase  Agreement  as if such
provisions were specifically set forth herein.

     4. No Impairment.  The Company will not, by amendment of its Certificate of
Incorporation or through any reorganization,  transfer of assets, consolidation,
merger, dissolution,  issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant,  but will at all times in good faith  assist in the carrying out of all
such  terms  and in the  taking  of  all  such  action  as may be  necessary  or
appropriate in order to protect the rights of the Holder of this warrant against
impairment.  Without  limiting the generality of the foregoing,  the Company (a)
will not  increase  the par  value of any  shares  of  stock  receivable  on the
exercise of this Warrant above the amount payable therefor on such exercise, (b)
will take all such action as may be necessary or  appropriate  in order that the
Company  may validly and  legally  issue fully paid and  unassessable  shares of
stock  on the  exercise  of this  Warrant,  and (c)  will  not  transfer  all or
substantially all of its properties and assets to any other person (corporate or
otherwise),  or  consolidate  with or merge into any other  person or permit any
such person to consolidate with or merge into the Company (if the Company is not
the  surviving  person),  unless such other  person  shall  expressly  assume in
writing and will be bound by all the terms of this Warrant.

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<PAGE>

     5.  Accountant's  Certificate  as to  Adjustments.  In  each  case  of  any
adjustment or readjustment  in the shares of Common Stock (or Other  Securities)
issuable on the  exercise  of this  Warrant,  the  Company at its  expense  will
promptly cause  independent  certified public  accountants of national  standing
selected by the Company to compute such adjustment or readjustment in accordance
with the terms of this  Warrant and  prepare a  certificate  setting  forth such
adjustment  or  readjustment  and  showing  in detail  the facts upon which such
adjustment  or  readjustment  is  based,   including  a  statement  of  (a)  the
consideration received or receivable by the Company for any additional shares of
Common Stock (or Other Securities)  issued or sold or deemed to have been issued
or sold,  (b) the  number  of shares  of  Common  Stock  (or  Other  Securities)
outstanding  or deemed to be  outstanding,  and (c) the  Purchase  Price and the
number of shares of Common Stock to be received  upon  exercise of this Warrant,
in effect immediately prior to such issue or sale and as adjusted and readjusted
as provided in this Warrant. The Company will forthwith mail a copy of each such
certificate to the Holder of this Warrant,  and will, on the written  request at
any  time  of the  Holder  of  this  Warrant,  furnish  to  such  Holder  a like
certificate  setting forth the Purchase  Price at the time in effect and showing
how it was calculated.

     6. Notices of Record Date, etc. In the event of

          (a) any taking by the  Company of a record of the Holders of any class
     or securities  for the purpose of determining  the Holders  thereof who are
     entitled to receive any  dividend  or other  distribution,  or any right to
     subscribe  for,  purchase or  otherwise  acquire any shares of stock of any
     class or any other  securities or property,  or to receive any other right,
     or

          (b) any capital reorganization of the Company, any reclassification or
     recapitalization of the capital stock of the Company or any transfer of all
     or  substantially  all the  assets of the  Company to or  consolidation  or
     merger of the Company with or into any other person, or

          (c) any voluntary or involuntary dissolution,  liquidation or winding-
     up of the Company,

then and in each such event the  Company  will mail or cause to be mailed to the
Holder of this Warrant a notice specifying (i) the date on which any such record
is to be taken for the  purpose of such  dividend,  distribution  or right,  and
stating the amount and character of such dividend,  distribution  or right,  and
(ii)   the   date  on   which   any   such   reorganization,   reclassification,
recapitalization,  transfer, consolidation,  merger, dissolution, liquidation or
winding-up  is to take place,  and the time,  if any, as of which the Holders of
record of Common Stock (or Other Securities) shall be entitled to exchange their
shares of Common Stock (or Other Securities) for then and in each such event the
Company  will mail or cause to be mailed to the Holder of this  Warrant a notice
specifying  (i) the date on which any such record is to be taken for the purpose
of such dividend,  distribution or right, and stating the amount of character of
such  dividend,  distribution  or  right,  and (ii)  the date on which  any such
reorganization,  reclassification,  recapitalization,  transfer,  consolidation,
merger,  dissolution,  liquidation or winding-up is to take

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<PAGE>

place,  and the time,  if any, as of which the Holders of record of Common Stock
(or Other Securities) shall be entitled to exchange their shares of Common Stock
(or Other  Securities)  for  securities or other  property  deliverable  on such
reorganization,  reclassification,  recapitalization,  transfer,  consolidation,
merger,  dissolution,  liquidation or winding-up. Such notice shall be mailed at
least 20 days prior to the date  specified in such notice on which any action is
to be taken.

     7. Reservation of Stock, etc. Issuable on Exercise of Warrant.  The Company
will at all times reserve and keep  available,  solely for issuance and delivery
on the  exercise  of  this  Warrant,  all  shares  of  Common  Stock  (or  Other
Securities) from time to time issuable on the exercise of this Warrant.

     8. Exchange of Warrant.

          (a) On surrender for exchange of this Warrant,  properly  endorsed and
     in compliance with the  restrictions on transfer set forth in the legend on
     the face of this Warrant,  to the Company,  the Company at its expense will
     issue and deliver to or on the order of the Holder thereof a new Warrant of
     like  tenor,  in the name of such  Holder or as such  Holder (on payment by
     such Holder of any applicable  transfer  taxes) may direct,  calling in the
     aggregate  on the face or faces  thereof for the number of shares of Common
     Stock called for on the face of the Warrant so surrendered.

          (b) Upon  written  notice  from the  Purchasers  pursuant  to  Section
     2.5(b)(iii) of the Purchase  Agreement that the Purchasers  have elected to
     transfer amongst each other a portion of this Warrant, and on surrender for
     amendment and restatement of this Warrant,  the Company at its expense will
     issue and deliver to or on the order of the Holder thereof a new Warrant of
     like  tenor,  in the name of such Holder as the  Purchasers  (on payment by
     such Holder of any applicable  transfer  taxes) may direct,  calling in the
     aggregate  on the face or faces  thereof for the number of shares of Common
     Stock as set forth in such notice reflecting such transfer.

     9. Replacement of Warrant. On receipt of evidence  reasonably  satisfactory
to the Company of the loss,  theft,  destruction  or  mutilation of this Warrant
and, in the case of any such loss,  theft or  destruction  of this  Warrant,  on
delivery of an indemnity agreement or security  reasonably  satisfactory in form
and amount to the Company or, in the case of any such  mutilation,  on surrender
and  cancellation  of this Warrant,  the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.

     10. Remedies. The Company stipulates that the remedies at law of the Holder
of this Warrant in the event of any default or threatened default by the Company
in the  performance  of or compliance  with any of the terms of this Warrant are
not and will not be adequate,  and that such terms may be specifically  enforced
by a decree for the specific performance of any agreement contained herein or by
an injunction against a violation of any of the terms hereof or otherwise.

     11.  Negotiability,  etc.. This Warrant is issued upon the following terms,
to all of which each Holder or owner  hereof by the taking  hereof  consents and
agrees:

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<PAGE>

          (a)  title to this  Warrant  may be  transferred  by  endorsement  and
     delivery  in the  same  manner  as in the case of a  negotiable  instrument
     transferable by endorsement and delivery.

          (b) any person in  possession  of this  Warrant  properly  endorsed is
     authorized to represent  himself as absolute  owner hereof and is empowered
     to transfer  absolute title hereto by endorsement  and delivery hereof to a
     bona fide purchaser hereof for value;  each prior taker or owner waives and
     renounces  all of his  equities or rights in this  Warrant in favor of such
     bona  fide  purchaser,  and each such bona  fide  purchaser  shall  acquire
     absolute title hereto and to all rights represented hereby;

          (c) until this Warrant is transferred on the books of the Company, the
     Company may treat the registered Holder hereof as the absolute owner hereof
     for all purposes, notwithstanding any notice to the contrary; and

          (d)  notwithstanding   the  foregoing,   this  Warrant  may  be  sold,
     transferred  or  assigned  except  pursuant  to an  effective  registration
     statement  under the Securities Act or pursuant to an applicable  exemption
     therefrom.

     12. Registration Rights. The Company is obligated to register the shares of
Common Stock issuable upon exercise of this Warrant in accordance with the terms
of the Registration Rights Agreement.

     13. Notices, etc.. All notices and other communications from the Company to
the  Holder  of this  Warrant  shall be  mailed  by first  class  registered  or
certified mail,  postage prepaid,  at such address as may have been furnished to
the Company in writing by such Holder or, until any such Holder furnishes to the
Company  any  address,  then to, and at the  address of, the last Holder of this
Warrant who has so furnished an address to the Company.

     14. Miscellaneous. This Warrant and any term hereof may be changed, waived,
discharged  or terminated  only by an instrument in writing  signed by the party
against which  enforcement of such change,  waiver,  discharge or termination is
sought.  This Warrant  shall be construed  and enforced in  accordance  with and
governed by the  internal  laws of the State of New York.  The  headings in this
Warrant are for the purposes of reference only, and shall not limit or otherwise
affect  any of the terms  hereof.  The  invalidity  or  unenforceability  of any
provision  hereof shall in no way affect the validity or  enforceability  of any
other provision.

                            [Signature Page Follows]

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<PAGE>

     DATED as of February __, 2000.

                                        AMERICAN INTERNATIONAL
                                        PETROLEUM CORPORATION

                                        By: ____________________________
                                        Name: __________________________
                                        Title: _________________________

[Corporate Seal]

Attest:

By: ______________________
         Secretary

                                       8

<PAGE>

                                    EXHIBIT A

                        FORM OF NOTICE EXERCISE - WARRANT
                       (To be executed only upon exercise
                      of the Warrant in whole or in part)

To ____________________________________________

     The  undersigned  registered  Holder of the  accompanying  Warrant,  hereby
exercises  such  Warrant or  portion  thereof  for,  and  purchases  thereunder,
__________(1)  shares of Common Stock (as defined in such  Warrant) and herewith
makes payment  therefor in the amount and manner set forth below, as of the date
written below. The undersigned requests that the certificates for such shares of
Common Stock be issued in the name of, and delivered to, whose address is _____.

     The Exercise Price is paid as follows:

     [_]  Bank draft payable to the Company in the amount of $_____________.

     [_]  Wire  transfer  to  the  account  of the  Company  in  the  amount  of
          $___________.

     [_]  Delivery of __________________  previously held shares of Common Stock
          having an aggregate Market Price of $_____________.

     [_]  Cashless  exercise.  Surrender of ___________ shares purchasable under
          this  Warrant  for such  shares of Common  Stock  issuable in exchange
          therefor pursuant to the Cashless Exercise  provisions of the Warrant,
          as provided in Section 1.1(iv) thereto.

     Upon  exercise  pursuant to this Notice of Exercise,  the Holder will be in
compliance  with the  Limitation  on  Exercise  (as  defined  in the  Securities
Purchase Agreement pursuant to which this Warrant was issued).

Date: ________________                  _______________________________________
                                        (Name must conform to name of Holder as
                                        specified on the face of the Warrant)

                                        By: ___________________________________
                                        Name: _________________________________
                                        Title: ________________________________

                                        Address of Holder:  ___________________
                                                            ___________________

Date of exercise: _____________________

----------
     (1)  Insert  the  number  of  shares  of  Common  Stock  as  to  which  the
accompanying  Warrant is being exercised.  In the case of a partial exercise,  a
new  Warrant  or  Warrants  will  be  issued  and  delivered,  representing  the
unexercised portion of the accompanying  Warrant, to the Holder surrendering the
same.

<PAGE>

                                     ANNEX B

                             WARRANT EXERCISE LEDGER

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               Original Number of        Warrants        Exercise Price        New Balance           Issuer             Holder
   Date             Warrants            Exercised            Paid              of Warrants          Initials           Initials
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<S>            <C>                      <C>              <C>                   <C>                  <C>                <C>

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</TABLE>EXHIBIT 4.5

                      FORM OF REGISTRATION RIGHTS AGREEMENT

<PAGE>

                                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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<PAGE>

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

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

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

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

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

                                       ii

<PAGE>

                          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

                                       1

<PAGE>

     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

                                       2

<PAGE>

     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

                                       3

<PAGE>

     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:

                                       4

<PAGE>

               (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;

                                       5

<PAGE>

          (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

                                       6

<PAGE>

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

                                       7

<PAGE>

     (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

                                       8

<PAGE>

     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

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