Exhibit 10.1

NONE OF THE SECURITIES TO WHICH THIS PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT
(THE "AGREEMENT") RELATES HAVE BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR ANY STATE SECURITIES
LAW, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD IN THE UNITED STATES
OR TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT PURSUANT TO AN EXEMPTION FROM, OR
IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT
AND APPLICABLE STATE SECURITIES LAWS.

PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT
(U.S. Accredited Subscribers)

Personal and Confidential

TO: HEARTLAND OIL AND GAS CORP. (the "Company")
Suite 1500 - 885 West Georgia Street
Vancouver, British Columbia
Canada V6C 3E8

AND TO: C. K. Cooper & Company, Inc. (the "Agent")
18300 Von Karman Avenue, Suite 440
Irvine, California
USA 92612

Purchase of Securities

1. Subscription.

1.1 On the basis of the representations and warranties and subject to the terms
and conditions set forth herein, the undersigned (the "Subscriber") hereby
irrevocably subscribes for and agrees to purchase _______________ units (the
"Units") at a price per Unit of $3.20 (such subscription and agreement to
purchase being the "Subscription"), for an aggregate purchase price of
$_______________ (the "Subscription Price").

1.2 Each Unit will consist of one common share in the capital of the Company
(each, a "Share") and one common share purchase warrant (each, a "Warrant")
subject to adjustment. Each Warrant shall be transferable and shall entitle the
holder thereof to purchase one-half of one whole share of common stock in the
capital of the Company (each whole share being a "Warrant Share"), as presently
constituted, for a period of three years commencing from the Closing (as defined
hereafter), at a total price per Warrant Share of $3.84. Certificate(s)
representing the Warrants will be in the form attached as Exhibit A. The Shares,
Warrants and the Warrant Shares are referred to as the "Securities".

1.3 The Company hereby irrevocably agrees to sell, on the basis of the
representations and warranties and subject to the terms and conditions set forth
herein, to the Subscriber that number of Units set out above the Subscriber's
name on page 10, at the Subscription Price.

1.4 Subject to the terms hereof, the Subscription will be effective upon its
acceptance by the Company. The Subscriber acknowledges that the offering of
Units contemplated hereby is part of a private placement of Units having an
aggregate subscription level of up to $10,000,000 (the "Offering"). The Offering
is subject to a minimum aggregate subscription level of $5,000,000 and, at the
option of the Agent and the Company, may be expanded to $12,000,000.

2. Payment.

2.1 The Subscription Price must accompany this Subscription and shall be paid by
check drawn on a major bank in the United States, and made payable to "Comerica
Bank - HOGC Escrow Account" and delivered to the Agent. Alternatively, the
Subscription Price may be wired to Comerica Bank (the "Escrow Agent") pursuant
to wiring instructions that will be provided to the Subscriber upon request.

2.2 The Subscriber acknowledges and agrees that this Subscription Agreement, the
Subscription Price and any other documents delivered in connection herewith will
be held on behalf of the Company. In the event that this Subscription Agreement
is not accepted by the Company for whatever reason, which the Company expressly
reserves the right to do, within five business days of the delivery of an
executed Subscription Agreement by the Subscriber, this Subscription Agreement,
the Subscription Price (without interest thereon) and any other documents
delivered in connection herewith will be returned to the Subscriber at the
address of the Subscriber as set forth in this Subscription Agreement.

2.3 The Subscription Price shall be held in escrow by the Escrow Agent in
accordance with the terms and conditions of the escrow agreement (the "Escrow
Agreement") dated July 29, 2003 between the Company and the Escrow Agent.
Pursuant to the terms of the Escrow Agreement:

(a) the Subscription Price will be deposited into a non-interest bearing bank
account maintained by the Escrow Agent;

(b) on or before the Closing Date, upon the Agent and the Company notifying the
Escrow Agent that the offering has closed, the Subscription Price will be
released and disbursed to the Company; and

(c) in the event the Closing Date does not occur by August 26, 2003, or the
Subscriber's Subscription is not accepted by the Company, the Escrow Agent will
release and disburse the Subscription Price to the Subscriber.

3. Documents Required from Subscriber.

3.1 The Subscriber must complete, sign and return to the Company:

(a) an executed copy of this Subscription Agreement;

(b) a Prospective Investor Suitability Questionnaire in the form attached as
Exhibit B (the "US Questionnaire"); and

(c) a British Columbia Accredited Investor Questionnaire in the form attached as
Exhibit C (together with the US Questionnaire, the "Questionnaires").

3.2 The Subscriber shall complete, sign and return to the Company as soon as
possible, on request by the Company, any documents, questionnaires, notices and
undertakings as may be required by regulatory authorities and applicable law.

4. Closing.

4.1 Closing of the Offering (the "Closing") shall occur no later than August 26,
2003 or on such other date as may be mutually agreed to by the Agent and the
Company (the "Closing Date").

4.2 The Company may, at its discretion, elect to close the Offering in one or
more closings, in which event the Company may agree with one or more subscribers
(including the Subscriber hereunder) to complete delivery of the Shares and the
Warrants to such subscriber(s) against payment therefor at any time on or prior
to the Closing Date.

4.3 Closing Conditions. The obligations of the Subscriber and the Company
hereunder is subject to the satisfaction, at or prior to the Closing Date and
including but not limited to, the conditions set forth below:

(a) This Agreement shall be fully executed by all parties.

(b) The Subscriber shall have delivered the Subscription Price for the Units
which it is purchasing in accordance with Section 1.1 above.

(c) The representations and warranties of the parties herein shall be true and
correct in all material respects as of the date when made and as of the Closing
Date as though made at each such time (except for representations and warranties
specifically made as of a particular date which shall be true and correct in all
material respects as of the date when made).

(d) No litigation, statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by or in
any court or governmental authority of competent jurisdiction or any
self-regulatory organization having authority over the matters contemplated
hereby which prohibits the consummation of any of the transactions contemplated
by this Agreement.

5. Acknowledgements of Subscriber.

5.1 The Subscriber acknowledges and agrees that:

(a) none of the Securities have been registered under the 1933 Act, under any
state securities or "blue sky" laws of any state of the United States and,
unless so registered, may not be offered or sold except pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
1933 Act and in each case only in accordance with any applicable securities
laws;

(b) except as provided for in Section 9.1, the Subscriber acknowledges that the
Company has not undertaken, and will have no obligation, to register any of the
Securities under the 1933 Act;

(c) by completing the Questionnaires, the Subscriber is representing and
warranting that the Subscriber is an "Accredited Investor", as the term is
defined in Regulation D under the 1933 Act and in Multilateral Instrument 45-103
adopted by the British Columbia Securities Commission;

(d) the decision to execute this Agreement and purchase the Securities agreed to
be purchased hereunder has not been based upon any oral or written
representation as to fact or otherwise made by or on behalf of the Company or
the Agent, and such decision is based entirely upon a review of a Confidential
Private Placement Memorandum, dated July 29, 2003 (the "Memorandum") and
information (the receipt of which is hereby acknowledged) which has been filed
by the Company with the United States Securities and Exchange Commission ("SEC")
in compliance, or intended compliance, with applicable securities legislation,
including, specifically, a review of the Risk Factors which are attached as
Exhibit D (collectively, the "Public Record");

(e) although the Agent may have introduced the Subscriber to the Company, the
Subscriber and the Company acknowledge and agree with, and for the benefit of,
the Agent and the Company, as applicable (such acknowledgement and agreements to
survive the Closing) that:

(i) the Agent and its directors, officers, employees, agents and representatives
have no responsibility or liability of any nature whatsoever for the accuracy or
adequacy of the information contained in this Agreement, the Public Record or
any other publicly available information concerning the Company or as to whether
all information concerning the Company required to be disclosed by it or them
has generally been disclosed;

(ii) the Agent makes no representations or warranties herein with respect to the
Securities, and neither the Agent nor its directors, officers, employees, agents
or representatives shall have any liability with respect to the sale of the
Securities;

(iii) the Agent has not engaged in any independent investigation or verification
with respect to this Subscription or any such information; and

(iv) the Agent and the Company are entitled to rely on the representations and
warranties and the statements and answers of the Subscriber contained in this
Agreement and in the questionnaires and undertakings attached as schedules to
this Agreement, and the Subscriber will hold harmless each of the Agent and the
Company from any loss or damage it or they may suffer as a result of the
Subscriber's failure to correctly complete this Agreement or such questionnaires
and undertakings;

(f) by execution hereof the Subscriber has waived the need for the Company or
the Agent to communicate the Company's acceptance of the purchase of the
Securities pursuant to this Agreement;

(g) it will indemnify and hold harmless the Company and the Agent and, where
applicable, their respective directors, officers, employees, agents, advisors
and shareholders from and against any and all loss, liability, claim, damage and
expense whatsoever (including, but not limited to, any and all fees, costs and
expenses whatsoever reasonably incurred in investigating, preparing or defending
against any claim, lawsuit, administrative proceeding or investigation whether
commenced or threatened) arising out of or based upon any representation or
warranty of the Subscriber contained herein or in any document furnished by the
Subscriber to the Company or the Agent in connection herewith being untrue in
any material respect or any breach or failure by the Subscriber to comply with
any covenant or agreement made by the Subscriber to the Company or the Agent in
connection therewith; provided that the amount of such indemnification shall be
limited to the amount of the Subscription Price set forth in Section 1.1 hereof;

(h) the issuance and sale of the Securities to the Subscriber will not be
completed if the Subscription is otherwise fully subscribed, if acceptance would
be unlawful or if, in the discretion of the Company, acting reasonably,
acceptance is not in the best interests of the Company;

(i) it has been advised to consult its own legal, tax and other advisors with
respect to the merits and risks of an investment in the Securities and with
respect to applicable resale restrictions and it is solely responsible for
compliance with applicable resale restrictions;

(j) the Securities are not listed on any stock exchange or subject to quotation
except that currently certain market makers make market in the Shares of the
Company on the National Association of Securities Dealers Inc.'s OTC Bulletin
Board, and no representation has been made to the Subscriber that the Securities
will become listed on any other stock exchange or subject to quotation on any
other quotation system except that the Company has applied to list its shares of
common stock for trading on the American Stock Exchange ("AMEX") and for which
no assurances are provided that the Company's shares will become listed for
trading on AMEX;

(k) no securities commission or similar regulatory authority has reviewed or
passed on the merits of the Securities;

(l) there is no government or other insurance covering the Securities;

(m) there are risks associated with an investment in the Securities, as more
fully described in certain information forming part of the Public Record;

(n) the Company has advised the Subscriber that the Company is relying on an
exemption from the requirements to provide the Subscriber with a prospectus and
to sell the Securities through a person registered to sell securities under the
Securities Act (British Columbia) (the "B.C. Act") and, as a consequence of
acquiring the Securities pursuant to this exemption, certain protections, rights
and remedies provided by the B.C. Act, including statutory rights of rescission
or damages, will not be available to the Subscriber;

(o) the Subscriber and the Subscriber's advisor(s) have had a reasonable
opportunity to ask questions of and receive answers from the Company in
connection with the distribution of the Securities hereunder, and to obtain
additional information, to the extent possessed or obtainable without
unreasonable effort or expense, necessary to verify the accuracy of the
information about the Company;

(p) the books and records of the Company were available upon reasonable notice
for inspection, subject to certain confidentiality restrictions, by the
Subscriber during reasonable business hours at its principal place of business,
and all documents, records and books in connection with the distribution of the
Securities hereunder have been made available for inspection by the Subscriber,
the Subscriber's lawyer and/or advisor(s);

(q) in addition to resale restrictions imposed under U.S. securities laws, there
are additional restrictions on the Subscriber's ability to resell the Shares and
the Warrant Shares under the B.C. Act and Multilateral Instrument 45-102 adopted
by the British Columbia Securities Commission ("BCSC");

(r) the Company will refuse to register any transfer of the Shares or the
Warrant Shares not made pursuant to an effective registration statement under
the 1933 Act or pursuant to an available exemption from the registration
requirements of the 1933 Act;

(s) the statutory and regulatory basis for the exemption claimed for the offer
Securities, although in technical compliance with Regulation D, would not be
available if the offering is part of a plan or scheme to evade the registration
provisions of the 1933 Act;

(t) the Subscriber has been advised to consult the Subscriber's own legal, tax
and other advisors with respect to the merits and risks of an investment in the
Securities and with respect to applicable resale restrictions, and it is solely
responsible (and the Company is not in any way responsible) for compliance with:

(i) any applicable laws of the jurisdiction in which the Subscriber is resident
in connection with the distribution of the Securities hereunder, and

(ii) applicable resale restrictions; and

(u) this Agreement is not enforceable by the Subscriber unless it has been
accepted by the Company.

6. Representations, Warranties and Covenants of the Subscriber.

6.1 The Subscriber hereby represents and warrants to and covenants with the
Company and the Agent (which representations, warranties and covenants shall
survive the Closing) that:

(a) if the Subscriber is an individual or other entity, the Subscriber has the
legal capacity and competence to enter into and execute this Subscription and to
take all actions required pursuant hereto and, if the Subscriber is a
corporation, it is duly incorporated and validly subsisting under the laws of
its jurisdiction of incorporation and all necessary approvals by its directors,
shareholders and others have been obtained to authorize execution and
performance of this Subscription on behalf of the Subscriber;

(b) if the Subscriber is a corporation or other entity, the entering into of
this Subscription and the transactions contemplated hereby do not result in the
violation of any of the terms and provisions of any law applicable to, or the
constituent documents of, the Subscriber or of any agreement, written or oral,
to which the Subscriber may be a party or by which the Subscriber is or may be
bound;

(c) the Subscriber has duly executed and delivered this Subscription Agreement
and it constitutes a valid and binding agreement of the Subscriber enforceable
against the Subscriber;

(d) the Subscriber has the requisite knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of the
investment in the Securities and the Company, and the Subscriber is providing
evidence of such knowledge and experience in these matters through the
information requested in the Questionnaires;

(e) all information contained in the Questionnaires is complete and accurate and
may be relied upon by the Company;

(f) the Subscriber is resident in the jurisdiction set out under the heading
"Name and Address of Subscriber" on the signature page of this Subscription
Agreement;

(g) the Subscriber is acquiring the Securities for investment purposes only and
not with a view to resale or distribution and, in particular, it has no
intention to distribute either directly or indirectly any of the Securities in
the United States or to U.S. Persons, other than pursuant to an effective
registration statement providing for the resale of the Securities;

(h) the Subscriber is acquiring the Securities as principal for the Subscriber's
own account (except for the circumstances outlined in paragraph 6.1(j)), for
investment purposes only, and not with a view to, or for, resale, distribution
or fractionalisation thereof, in whole or in part, and no other person has a
direct or indirect beneficial interest in such Securities;

(i) the Subscriber is not an underwriter of, or dealer in, the common shares of
the Company, nor is the Subscriber participating, pursuant to a contractual
agreement or otherwise, in the distribution of the Securities;

(j) if the Subscriber is acquiring the Securities as a fiduciary or agent for
one or more investor accounts:

(i) the Subscriber has sole investment discretion with respect to each such
account and it has full power to make the foregoing acknowledgements,
representations and agreements on behalf of such account, and

(ii) the investor accounts for which the Subscriber acts as a fiduciary or agent
satisfy the definition of an "Accredited Investor", as the term is defined in
Regulation D under the 1933 Act and in Multilateral Instrument 45-103 adopted by
the BCSC;

(k) the Subscriber is not aware of any advertisement of any of the Securities;
and

(l) no person has made to the Subscriber any written or oral representations:

(i) that any person will resell or repurchase any of the Securities;

(ii) that any person will refund the purchase price of any of the Securities;

(iii) as to the future price or value of any of the Securities; or

(iv) that any of the Securities will be listed and posted for trading on any
stock exchange or automated dealer quotation system or that application has been
made to list and post any of the Securities of the Company on any stock exchange
or automated dealer quotation system, except that currently certain market
makers make market in the common shares of the Company on the OTC Bulletin
Board.

6.2 In this Subscription, the term "U.S. Person" shall have the meaning ascribed
thereto in Regulation S and for the purpose of the Subscription includes any
person in the United States.

7. British Columbia Resale Restrictions.

7.1 The Subscriber acknowledges that the Securities are subject to resale
restrictions in British Columbia and may not be traded in British Columbia
except as permitted by the B.C. Act and the rules made thereunder.

7.2 Pursuant to Multilateral Instrument 45-102, as adopted by the BCSC, a
subsequent trade in the Shares or the Warrant Shares will be a distribution
subject to the prospectus and registration requirements of applicable Canadian
securities legislation (including the B.C. Act) unless certain conditions are
met, which conditions include a hold period (the "Canadian Hold Period") that
shall have elapsed from the date on which the Securities were issued to the
Subscriber and, during the currency of the Canadian Hold Period, any certificate
representing the Securities is to be imprinted with a restrictive legend (the
"Canadian Legend").

7.3 By executing and delivering this Agreement, the Subscriber will have
directed the Company not to include the Canadian Legend on any certificates
representing the Shares or the Warrant Shares to be issued to the Subscriber.

7.4 As a consequence, the Subscriber will not be able to rely on the resale
provisions of Multilateral Instrument 45-102, and any subsequent trade in the
Shares or the Warrant Shares during or after the Canadian Hold Period will be a
distribution subject to the prospectus and registration requirements of Canadian
securities legislation, to the extent that the trade is at that time subject to
any such Canadian securities legislation.

8. Legending of Subject Securities.

8.1 The Subscriber hereby acknowledges that that upon the issuance thereof, and
until such time as the same is no longer required under the applicable
securities laws and regulations, the certificates representing any of the
Securities will bear a legend in substantially the following form:

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE AND HAVE BEEN ISSUED IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS.

The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of any Security upon which it is
stamped, if, unless otherwise required by applicable state securities laws, (a)
such Security is registered for sale under an effective registration statement
filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 without
any restriction as to the number of securities as of a particular date that can
then be immediately sold, or (b) such holder provides the Company with an
opinion of counsel, in form, substance and scope customary for opinions of
counsel in comparable transactions, to the effect that a public sale or transfer
of such Security may be made without registration under the 1933 Act and such
sale or transfer is effected or (c) such holder provides the Company with
reasonable assurances that such Security can be sold pursuant to Rule 144. The
Subscriber agrees to sell all Securities, including those represented by a
certificate(s) from which the legend has been removed, in compliance with
applicable prospectus delivery requirements, if any.

Whenever a certificate may be issued without a legend in accordance with this
Section 8.1, unless otherwise instructed in writing by the Subscriber, the
Company (through the Transfer Agent or otherwise) shall electronically deliver
the Shares (whether such shares are Escrow Shares or otherwise) to the
Subscribers by causing the Transfer Agent to credit the account of the
Subscriber's prime broker, as designated by such Subscriber, with the Depository
Trust Corporation through its Deposit Withdrawal Agent Commission system ("DWAC
Transfer") (or if DWAC Transfer is not available or the Subscriber requests in
writing otherwise, causing the Transfer Agent to deliver duly executed
certificates for such Purchased Shares, which certificates shall be free of any
restrictive legend).

8.2 The Subscriber hereby acknowledges and agrees to the Company making a
notation on its records or giving instructions to the registrar and transfer
agent of the Company in order to implement the restrictions on transfer set
forth and described in this Subscription Agreement.

9. Registration Rights.

9.1 Registration Procedures and Other Matters.

(a) The Company shall:

(i) as soon as possible but in any event not later than the 60th day after the
Closing Date (or, if such day is a Saturday, Sunday or holiday, then by the next
succeeding business day), file a registration statement on Form S-3 (or, if Form
S-3 is not then available, on such form of registration statement as is then
available to effect a registration of the Shares and Warrant Shares) to enable
the resale of the Shares and the Warrant Shares by the Subscribers from time to
time (the "Registration Statement");

(ii) use commercially reasonable efforts to cause a Registration Statement to be
declared effective by the SEC as soon as possible, but in any event not later
than the earlier of (a) the 120th day following the Closing Date, and (b) the
fifth trading day following the date on which the Company is notified by the SEC
that the Registration Statement will not be reviewed or is no longer subject to
further review and comments;

(iii) use commercially reasonable efforts to prepare and file with the SEC such
amendments and supplements to the Registration Statement and the prospectus used
in connection therewith (the "Prospectus") as may be necessary to keep the
Registration Statement continuously current, effective and free from any
material misstatement or omission to state a material fact for a period not
exceeding, with respect to the Subscriber's Shares and Warrant Shares purchased
hereunder from the date it is first declared effective until, the earlier of (A)
two years from the date of the final exercise of all of the Warrants, (B) the
date on which the Subscriber may sell all Shares and Warrant Shares then held by
the Subscriber pursuant to Rule 144 without any restriction as to the number of
securities as of a particular date that can then be immediately sold, or (C) the
public sale of all of the Shares and the Warrant Shares (such period, the
"Effectiveness Period");

(iv) if (A) the Registration Statement is not filed on or prior to the date of
filing required pursuant to Section 9.1(a)(i), (B) the Registration Statement is
not declared effective on or prior to the date required by Section 9.1(a)(ii),
or (C) notwithstanding Section 9.2, after the date first declared effective by
the SEC and prior to the expiration of the Effectiveness Period, the
Registration Statement ceases to be effective and available to each Subscriber
as to its Shares and Warrant Shares (whether pursuant to Section 9.2(c), or
otherwise) without being succeeded within 20 trading days by an effective
amendment thereto or by a subsequent registration statement filed with and
declared effective by the SEC, (any such failure being referred to as an "Event"
and the date of such failure being the "Event Date"), then, in addition to any
other rights available to the Subscriber under this Agreement or applicable law:
(w) on the failure by the Company to comply with the Event required pursuant to
Section 9.1(a)(i) the Company shall pay to the Subscriber an amount in cash, as
liquidated damages and not as a penalty, equal to one percent of the
Subscription Price paid by the Subscriber and on each monthly anniversary of
such Event Date (if the Event has not been cured by such date) until the
applicable Event is cured, the Company shall pay to the Subscriber a further
amount in cash, as liquidated damages and not as a penalty, equal to one percent
of the Subscription Price paid by the Subscriber; (x) on the failure by the
Company to comply with the Event required pursuant to Section 9.1(a)(ii) or the
occurrence of the Event set forth in Section 9.1(a)(iv)(C) and on each monthly
anniversary of such Event Dates (if the Event has not been cured by such date)
until the applicable Event is cured, an amount shall accrue and be payable by
the Company to the Subscriber, as liquidated damages and not as a penalty, equal
to one percent of the Subscription Price paid by the Subscriber; (y) provided
however that if the foregoing Events set forth in (x) is cured by the Company
within 90 days of the applicable Event Date, all liquidated damages that have
accrued and are due and owing by the Company to the Subscriber shall be payable
in Units (to be registered in accordance with the terms of this Agreement), as
liquidated damages and not as a penalty; and (z) if an Event is not cured within
90 days of the applicable Event Date, all liquidated damages that have accrued
and are owed and continue to accrue to the Subscriber shall be paid in cash, and
any liquidated damages that accrue after one year from the Closing Date shall
not exceed six percent of the Subscription Price paid by the Subscriber. The
liquidated damages pursuant to the terms hereof shall apply on a pro rata basis
for any portion of a month prior to the cure of an Event;

(v) furnish to the Subscriber with respect to the Shares and the Warrant Shares
registered under the Registration Statement such number of copies of the
Registration Statement, Prospectuses and Preliminary Prospectuses in conformity
with the requirements of the 1933 Act and such other documents as the Subscriber
may reasonably request in writing, in order to facilitate the public sale or
other disposition of all or any of the Shares or Warrant Shares by the
Subscriber; provided, however, that the obligation of the Company to deliver
copies of Prospectuses or Preliminary Prospectuses to the Subscriber shall be
subject to the receipt by the Company of reasonable assurances from the
Subscriber that the Subscriber will comply with the applicable provisions of the
1933 Act and of such other securities or blue sky laws as may be applicable in
connection with any use of such Prospectuses or Preliminary Prospectuses;

(vi) file documents required of the Company for blue sky clearance in states
specified in writing by the Subscriber and use its commercially reasonable
efforts to maintain such blue sky qualifications during the period the Company
is required to maintain the effectiveness of the Registration Statement pursuant
to Section 9.1(c); provided, however, that the Company shall not be required to
qualify to do business or consent to service of process in any jurisdiction in
which it is not now so qualified or has not so consented;

(vii) bear all expenses in connection with the procedures in paragraph (i)
through (vi) of this Section 9.1 (other than any underwriting discounts or
commissions, brokers' fees and similar selling expenses, and any other fees or
expenses incurred by the Subscriber, including attorneys' fees); and

(viii) advise the Subscriber in writing promptly after it shall receive notice
or obtain knowledge of the issuance of any stop order by the SEC delaying or
suspending the effectiveness of the Registration Statement or of the initiation
or threat of any proceeding for that purpose; and it will promptly use its
commercially reasonable efforts to prevent the issuance of any stop order or to
obtain its withdrawal at the earliest possible moment if such stop order should
be issued.

(b) Notwithstanding anything to the contrary herein, the Registration Statement
shall cover only the Shares and the Warrant Shares and such other securities
issued by the Company subject to registration rights. In no event at any time
before the Registration Statement becomes effective with respect to the Shares
shall the Company publicly announce or file any other registration statement,
other than registrations on Form S-8 or registrations for other securities
issued by the Company subject to registration rights, without the prior written
consent of 66-2/3% in interest of the Subscribers.

9.2 Transfer of Shares After Registration; Suspension.

(a) The Subscriber agrees that it will not effect any disposition of the
Securities or its right to purchase the Securities that would constitute a
"sale" within the meaning of the 1933 Act, except as contemplated in the
Registration Statement referred to in Section 9.1 and as described below or as
otherwise permitted by law, and that it will promptly notify the Company of any
material changes in the information set forth in the Registration Statement
regarding the Subscriber or its plan of distribution.

(b) Except in the event that paragraph (c) below applies, the Company shall (i)
if deemed necessary by the Company, prepare and file from time to time with the
SEC a post-effective amendment to the Registration Statement or a supplement to
the related Prospectus or a supplement or amendment to any document incorporated
therein by reference or file any other required document so that such
Registration Statement will not contain 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, and so that, as thereafter delivered
to purchasers of the Shares and Warrant Shares being sold thereunder, such
Prospectus will not contain 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, in light of the circumstances under which they were made,
not misleading; (ii) provide the Subscriber copies of any documents filed
pursuant to Section 9.2(b)(i) as the Subscriber may reasonably request; and
(iii) inform each Subscriber that the Company has complied with its obligations
in Section 9.2(b)(i) (or that, if the Company has filed a post-effective
amendment to the Registration Statement which has not yet been declared
effective, the Company will notify the Subscriber to that effect, will use its
commercially reasonable efforts to secure the effectiveness of such
post-effective amendment as promptly as possible and will promptly notify the
Subscriber pursuant to Section 9.2(b)(i) hereof when the amendment has become
effective).

(c) Subject to paragraph (d) below, in the event of: (i) any request by the SEC
or any other federal or state governmental authority during the period of
effectiveness of the Registration Statement for amendments or supplements to a
Registration Statement or related Prospectus or for additional information; (ii)
the issuance by the SEC or any other federal or state governmental authority of
any stop order suspending the effectiveness of a Registration Statement or the
initiation of any proceedings for that purpose; (iii) the receipt by the Company
of any notification with respect to the suspension of the qualification or
exemption from qualification of any of the Shares for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose; or (iv) any
event or circumstance which, upon the advice of its counsel, necessitates the
making of any changes in the Registration Statement or Prospectus, or any
document incorporated or deemed to be incorporated therein by reference, so
that, in the case of the Registration Statement, it will not contain any untrue
statement of a material fact or any omission to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and that in the case of the Prospectus, it will not contain any untrue statement
of a material fact or any omission to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; then the Company shall
deliver a certificate in writing to the Subscriber (the "Suspension Notice") to
the effect of the foregoing and, upon receipt of such Suspension Notice, the
Subscriber will refrain from selling any Shares and Warrant Shares pursuant to
the Registration Statement (a "Suspension") until the Subscriber's receipt of
copies of a supplemented or amended Prospectus prepared and filed by the
Company, or until it is advised in writing by the Company that the current
Prospectus may be used, and has received copies of any additional or
supplemental filings that are incorporated or deemed incorporated by reference
in any such Prospectus. In the event of any Suspension, the Company will use its
commercially reasonable efforts to cause the use of the Prospectus so suspended
to be resumed as soon as reasonably practicable within 20 trading days after the
delivery of a Suspension Notice to the Subscriber.

(d) Notwithstanding the foregoing paragraphs of this Section 9.2, the Subscriber
shall not be prohibited from selling Shares under the Registration Statement as
a result of Suspensions on more than two occasions of not more than 20 trading
days each in any twelve month period.

(e) Provided that a Suspension is not then in effect, the Subscriber may sell
the Shares and the Warrant Shares under the Registration Statement, provided
that it arranges for delivery of a current Prospectus to the transferee of such
Shares or Warrant Shares, as applicable. The Company shall provide such number
of current Prospectuses to the Subscriber as the Subscriber may reasonably
request, and shall supply copies to any other parties reasonably requiring such
Prospectuses.

9.3 Indemnification.

(a) The Company agrees to indemnify and hold harmless the Subscriber and the
officers, directors, agents and employees of the Subscriber, to the fullest
extent permitted by applicable law from and against any losses, claims, damages
or liabilities to which any such person(s) may become subject (under the 1933
Act or otherwise) insofar as such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arise out of, or are based upon (i)
any Untrue Statement (defined below), or (ii) any failure by the Company to
fulfill any undertaking included in the Registration Statement, as amended or
supplemented from time to time, which indemnification will include reimbursement
for any reasonable legal or other expenses reasonably incurred in investigating,
defending or preparing to defend any such action, proceeding or claim, or
preparing to defend any such action, proceeding or claim, provided, however,
that the Company shall not be liable in any such case to the extent that such
loss, claim, damage or liability arises out of, or is based upon, an Untrue
Statement made in reliance upon and in conformity with written information
furnished to the Company by or on behalf of the Subscriber specifically for use
in preparation of the Registration Statement, as amended or supplemented from
time to time (including, without limitation, information set forth in the
Investor Questionnaire), or the failure of the Subscriber to comply with its
covenants and agreements contained in Section 9.2 hereof respecting sale of the
Shares or Warrant Shares or any statement or omission in any Prospectus that is
corrected in any subsequent Prospectus that was delivered to the Subscriber
prior to the pertinent sale or sales by the Subscriber. The Company shall
reimburse the Subscriber for the indemnifiable amounts provided for herein on
demand as such expenses are incurred. Notwithstanding the foregoing, the
Company's aggregate obligation to indemnify the Subscriber and such officers,
directors and controlling persons shall be limited to the amount of the
Subscription Price received by the Company from the Subscriber.

(b) The Subscriber agrees to indemnify and hold harmless the Company (and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act, each officer of the Company who signs the Registration Statement and
each director of the Company) from and against any losses, claims, damages or
liabilities to which the Company (or any such officer, director or controlling
person) may become subject (under the 1933 Act or otherwise), insofar as such
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) arise out of, or are based upon, (i) any Untrue Statement if such
Untrue Statement was made in reliance upon and in conformity with written
information furnished by or on behalf of the Subscriber specifically for use in
preparation of the Registration Statement, as amended or supplemented from time
to time (including, without limitation, information set forth in the Investor
Questionnaire), or (ii) the failure of the Subscriber to comply with its
covenants and agreements contained in Section 9.2 hereof respecting sale of the
Shares or Warrant Shares or any statement or omission in any Prospectus that is
corrected in any subsequent Prospectus that was delivered to the Subscriber
prior to the pertinent sale or sales by the Subscriber; and the Subscriber will
reimburse the Company or such officer, director or controlling person, as the
case may be, for any reasonable legal or other expenses reasonably incurred in
investigating, defending or preparing to defend any such action, proceeding or
claim. The Subscriber shall reimburse the Company or such officer, director or
controlling person, as the case may be, for the indemnifiable amounts provided
for herein on demand as such expenses are incurred. Notwithstanding the
foregoing, the Subscriber's aggregate obligation to indemnify the Company and
such officers, directors and controlling persons shall be limited to the amount
received by the Subscriber from the sale of Shares or Warrant Shares that are
the subject of such loss.

(c) Promptly after receipt by any indemnified person of a notice of a claim or
the beginning of any action in respect of which indemnity is to be sought
against an indemnifying person pursuant to this Section 9.3, such indemnified
person shall notify the indemnifying person in writing of such claim or of the
commencement of such action, but the omission to so notify the indemnifying
person will not relieve it from any liability which it may have to any
indemnified person under this Section 9.3 (except to the extent that such
omission materially and adversely affects the indemnifying person's ability to
defend such action) or from any liability otherwise than under this Section 9.3.
Subject to the provisions hereinafter stated, in case any such action shall be
brought against an indemnified person, the indemnifying person shall be entitled
to participate therein, and, to the extent that it shall elect by written notice
delivered to the indemnified person promptly after receiving the aforesaid
notice from such indemnified person, shall be entitled to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified person. After
notice from the indemnifying person to such indemnified person of its election
to assume the defense thereof, such indemnifying person shall not be liable to
such indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof, provided, however,
that if there exists or shall exist a conflict of interest that would make it
inappropriate, in the opinion of counsel to the indemnified person, for the same
counsel to represent both the indemnified person and such indemnifying person or
any affiliate or associate thereof, the indemnified person shall be entitled to
retain its own counsel at the expense of such indemnifying person; provided,
however, that no indemnifying person shall be responsible for the fees and
expenses of more than one separate counsel (together with appropriate local
counsel) for all indemnified parties. In no event shall any indemnifying person
be liable in respect of any amounts paid in settlement of any action unless the
indemnifying person shall have approved the terms of such settlement; provided
that such consent shall not be unreasonably withheld or delayed. No indemnifying
person shall, without the prior written consent of the indemnified person,
effect any settlement of any pending or threatened proceeding in respect of
which any indemnified person is or could have been a party and indemnification
could have been sought hereunder by such indemnified person, unless such
settlement includes an unconditional release of such indemnified person from all
liability on claims that are the subject matter of such proceeding.

(d) If the indemnification provided for in this Section 9.3 is unavailable to or
insufficient to hold harmless an indemnified person under subsection (a) or (b)
above in respect of any losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) referred to therein, then each indemnifying
person shall contribute to the amount paid or payable by such indemnified person
as a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect the relative
fault of the Company on the one hand and the Subscriber, as well as any other
Subscribers under such Registration Statement on the other in connection with
the statements or omissions or other matters which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative fault shall be determined
by reference to, among other things, in the case of an Untrue Statement, whether
the Untrue Statement relates to information supplied by the Company on the one
hand or the Subscriber on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such Untrue
Statement. The Company and the Subscriber agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined by pro
rata allocation (even if the Subscriber and other subscribers were treated as
one entity for such purpose) or by any other method of allocation which does not
take into account the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified person as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified person in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), the Subscriber shall not be required to
contribute any amount in excess of the amount by which the net amount received
by the Subscriber from any and all sales of the Securities to which such loss
relates exceeds the amount of any damages which such Subscriber has otherwise
been required to pay by reason of such Untrue Statement. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Subscriber's obligations in this
subsection to contribute shall be in proportion to its sale of Securities to
which such loss relates and shall not be joint with any other Subscribers.

(e) The parties to this Agreement hereby acknowledge that they are sophisticated
business persons who were represented by counsel during the negotiations
regarding the provisions hereof including, without limitation, the provisions of
this Section 9.3, and are fully informed regarding said provisions. They further
acknowledge that the provisions of this Section 9.3 fairly allocate the risks in
light of the ability of the parties to investigate the Company and its business
in order to assure that adequate disclosure is made in the Registration
Statement as required by the 1933 Act and the Securities Exchange Act of 1934,
as amended (the "1934 Act"). The parties are advised that federal or state
public policy as interpreted by the courts in certain jurisdictions may be
contrary to certain of the provisions of this Section 9.3, and the parties
hereto hereby expressly waive and relinquish any right or ability to assert such
public policy as a defense to a claim under this Section 9.3 and further agree
not to attempt to assert any such defense.

(f) For the purpose of this Section 9.3:

(i) the term "Registration Statement" shall include the Prospectus in the form
first filed with the SEC pursuant to Rule 424(b) of the 1933 Act or filed as
part of the Registration Statement at the time of effectiveness if no Rule
424(b) filing is required, and any exhibit, supplement or amendment included in
or relating to the Registration Statement referred to in Section 9.1; and

(ii) the term "Untrue Statement" means any untrue statement or alleged untrue
statement, or any omission or alleged omission to state in the Registration
Statement, as amended or supplemented from time to time, a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.

9.4 Information Available. So long as the Registration Statement is effective
covering the resale of Shares and Warrant Shares owned by the Subscriber, the
Company will, at Subscriber's written request, furnish to the Subscriber:

(a) as soon as practicable after it is available, one copy of (i) its Annual
Report to Shareholders (which Annual Report shall contain financial statements
audited in accordance with generally accepted accounting principles by a
national firm of certified public accountants), (ii) its Annual Report on Form
10-KSB and (iii) its Quarterly Reports on Form 10-QSB (the foregoing, in each
case, excluding exhibits);

(b) any and all exhibits to the reports set forth in Section 9.4(a) as filed
with the SEC and all other information that is made available to shareholders;
and

(c) an adequate number of copies of the Prospectuses to supply to any other
party requiring such Prospectuses.

10. Rights of First Refusal.

10.1 Subject to the prior right of first refusal of existing security holders of
the Company, until the close of business on December 31, 2003, if the Company
offers for sale any of its common stock or any other securities convertible into
common stock ("Future 2003 Offering"), the Subscriber will have the pro rata
right to purchase an amount of each such Future 2003 Offering determined by
multiplying the amount of such Future 2003 Offering by a fraction the numerator
of which is the dollar amount Subscriber invests in this offering and the
denominator of which is the total dollar amount of Units purchased in this
Offering, for a period of ten days from the date the Subscriber receives notice
of the Future 2003 Offering (the "RFR Notice").

10.2 If the Company does not receive written notice from the Subscriber within
ten days from the date the Subscriber receives the RFR Notice (the "Election
Period") that it is electing to exercise its right to participate in such Future
2003 Offering, the Company shall have the right to close such Subscriber's
portion of the Future 2003 Offering on the scheduled closing date with a third
party or parties; provided that all of the material terms and conditions of the
closing are the same as those provided to the Subscriber in the RFR Notice. If
the closing of the proposed Future 2003 Offering does not occur within 30 days
of the expiration of the Election Period, any closing of the contemplated Future
2003 Offering or any other Future 2003 Offering shall be subject to all of the
provisions of this Section 10.1, including, without limitation, the delivery of
a new RFR Notice

11. Representations and Warranties of the Company.

11.1 The Company acknowledges and agrees that the Subscriber is entitled to rely
upon the representations and warranties of the Company contained in this
Agreement and the Memorandum and further acknowledges that the Subscriber will
be relying upon such representations and warranties in purchasing the
Securities.

11.2 The Company warrants that the Public Record fairly represents the status of
the Company as at the dates indicated in the Public Record.

11.3 The Company has prepared the Memorandum and, to the Company's knowledge,
the Memorandum does not contain an untrue statement of any material fact or omit
to state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading.

11.4 The performance of this Agreement and the consummation of the transactions
herein contemplated will not result in a material breach or violation of any of
the terms and provisions of, or constitute an event of default under, the
Company's articles of incorporation or bylaws, or any statute, indenture,
mortgage or other agreement or instrument to which the Company is a party or by
which it is bound, or any law, order, rule or regulation applicable to the
Company or its affiliates or directed to the Company or its affiliates by any
court, governmental agency or body having jurisdiction over it or its affiliates
or any of its properties; and no other consent, approval, authorization or
action is required for the consummation of the transactions herein contemplated
other than such as have been obtained.

11.5 The Securities to be issued will conform in all material respects to all
statements concerning the same contained in the Memorandum, and the Securities,
when issued upon payment of the consideration therefor, will be duly authorized,
validly and legally issued, fully paid and non-assessable, except as set forth
in the Memorandum.

11.6 The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Nevada with full
power and authority to own its properties and conduct its business as described
in the Memorandum, and it has all such power and authority to enter into this
Agreement and to carry out the provisions and conditions hereof.

11.7 This Agreement has been duly and validly authorized, and when executed and
delivered by the Company will be the legal, valid and binding agreement of the
Company enforceable in accordance with its terms, except as the same may be
limited by bankruptcy, insolvency, fraudulent transfer, reorganization, and
other similar laws affecting the rights of creditors, or by general principles
of equity and except as rights to indemnify and contribution may be limited by
applicable law. All actions required to be taken on the part of the Company to
authorize and effect the issuance of the Securities have been or will be taken
prior to each Closing.

11.8 The Company's authorized capital stock is as set forth in the SEC Reports
(as defined below).

11.9 The Company has filed all required forms, reports and other documents with
the SEC, all of which, to the Company's knowledge, complied when filed, in all
material respects, with all applicable requirements of the 1933 Act and the 1934
Act. The Company has heretofore made available to the Subscriber complete and
correct copies of:

(a) its Annual Report on Form 10-KSB for the fiscal year ended December 31,
2002; and

(b) its Quarterly Report on Form 10-QSB for the interim period ended March 31,
2003

(collectively, the "SEC Reports"). As of their respective dates, to the
Company's knowledge, the SEC Reports (including all exhibits and schedules
thereto and documents incorporated by reference therein) did not contain any
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, in light of the
circumstances under which they were made, not misleading. To the best of the
Company's knowledge, the audited consolidated financial statements and the
unaudited consolidated interim financial statements of the Company and its
subsidiaries included or incorporated by reference in the SEC Reports were
prepared in accordance with generally accepted accounting principles applied on
a consistent basis during the periods involved (except as may be otherwise
indicated in the notes thereto), and fairly present in all material respects the
financial position of the Company, consolidated results of its operations and
changes in financial position for the periods then ended (subject, in the case
of any unaudited interim financial statements, for the absence of all required
footnotes and to year-end adjustments).

11.10 Except as set forth in the SEC Reports or the Memorandum, since March 31,
2003:

(a) there has not been any material adverse change in the business or assets of
the Company and its subsidiary taken as a whole;

(b) neither the Company nor its subsidiary has:

(i) incurred any liability, except normal trade or business liabilities incurred
in the ordinary course of business in a manner and amount consistent with past
practice;

(ii) mortgaged, pledged or subjected to, or permitted the imposition of, any
lien upon any of the Securities;

(iii) entered into any commitment or transaction (including, without limitation,
any capital expenditure) not in the ordinary course of business in a manner and
amount consistent with past practice;

(iv) disposed of, or permitted to lapse, any rights to use its intellectual
property;

(v) granted any material increase in the compensation of any officer or
employee, including without limitation, any such increase pursuant to any bonus,
pension, profit-sharing or other plan or commitment;

(vi) transferred or agreed to transfer any of its assets other than in the
ordinary course of business;

(vii) waived, compromised or cancelled any material right, or cancelled or
compromised any material claim or liability, related to the Company's business;

(viii) terminated, discontinued, closed or disposed of any plant, facility, or
business operation related to its business;

(ix) introduced any material change with respect to the operation of its
businesses or changed in any material respect its accounting methods or
practices;

(x) amended its certificate of incorporation, bylaws or other applicable
organizational documents, except as required for issuance of the Securities; or

(xi) entered into or agreed (whether in writing or otherwise) to enter into any
agreement or other arrangement to take any action referred to in this paragraph
11.10(b); and

(c) the Company and its subsidiary have conducted their businesses, in all
material respects, in the ordinary course of business in a manner consistent
with past practice.

11.11 Other than those disclosed in the SEC Reports or the Memorandum, there are
no actions, suits or proceedings pending, or to the knowledge of the Company,
threatened against, by or affecting the Company or any of its subsidiaries, or
any of its properties, in any court or before any governmental agency, which
would materially and adversely affect the condition or operations, financial or
otherwise, of the Company and its subsidiary taken as a whole, and neither the
Company nor its subsidiary is subject to any order, write, judgment, injunction
or decree which materially and adversely affects its financial condition or
business.

11.12 The Company will make available to the undersigned at a reasonable time
prior to the date of the Closing the opportunity to ask questions and receive
answers concerning the terms and conditions of the Offering and to obtain any
additional information (to the extent the Company possesses or is able to
acquire such information without unreasonable effort or expense) necessary to
verify the accuracy of information included in the Memorandum.

11.13 The representations and warranties of the Company in this Agreement shall
be true and correct on and as of the date of the Closing.

11.14 Except as set forth in the Public Record, none of the officers or
directors of the Company and, to the knowledge of the Company, none of the
employees of the Company is presently a party to any transaction with the
Company or any subsidiary (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner.

11.15 The Company and its subsidiary maintain a system of internal accounting
controls sufficient to provide reasonable assurance that:

(a) transactions are executed in accordance with management's general or
specific authorizations;

(b) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability;

(c) access to assets is permitted only in accordance with management's general
or specific authorization; and

(d) the recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to any
differences.

11.16 Assuming the accuracy of the Subscriber's representations and warranties
set forth in this Agreement, no registration under the 1933 Act is required for
the offer and sale of the Securities by the Company to the Subscriber as
contemplated hereby in reliance upon Rule 506 under the 1933 Act. The issuance
and sale of the Securities hereunder does not contravene the rules and
regulations of any stock exchange or quotation system, and no shareholder
approval is required for the Company to fulfill its obligations under this
Agreement, including issuing and delivering to the Subscriber the Securities
sold pursuant to this Agreement.

11.17 The Company will indemnify and hold the Subscriber and its directors,
officers, shareholders, partners, employees and agents (each, a "Purchaser
Party") harmless from any and all losses, liabilities, obligations, claims,
contingencies, damages, costs and expenses, including all judgments, amounts
paid in settlements, court costs and reasonable attorneys' fees and costs of
investigation (collectively, "Losses"") that any such Purchaser Party may suffer
or incur as a result of or relating to:

(a) any misrepresentation, breach or inaccuracy, or any allegation by a third
party that, if true, would constitute a breach or inaccuracy, of any of the
representations, warranties, covenants or agreements made by the Company in this
Agreement or in the other documents; or

(b) any cause of action, suit or claim brought or made against such Purchaser
Party and arising out of or resulting from the execution, delivery, performance
or enforcement of this Agreement. The Company will reimburse such Subscriber for
its reasonable legal and other expenses (including the cost of any
investigation, preparation and travel in connection therewith) incurred in
connection therewith, as such expenses are incurred.

11.18 The Company shall use the net proceeds from the sale of the Securities
hereunder for working capital purposes and not for the satisfaction of any
portion of the Company's debt (other than payment of trade payables in the
ordinary course of the Company's business and prior practices), to redeem any
Company equity or equity-equivalent securities or to settle any outstanding
litigation.

11.19 Based on the financial condition of the Company as of the Closing:

(a) the Company's fair saleable value of its assets exceeds the amount that will
be required to be paid on or in respect of the Company's existing debts and
other liabilities (including known contingent liabilities) as they mature;

(b) the Company's assets do not constitute unreasonably small capital to carry
on its business for the current fiscal year as now conducted and as proposed to
be conducted including its capital needs taking into account the particular
capital requirements of the business conducted by the Company, and projected
capital requirements and capital availability thereof; and

(c) the current cash flow of the Company, together with the proceeds of the
Company would receive, were it to liquidate all of its assets, after taking into
account all anticipated uses of the cash, would be sufficient to pay all amounts
on or in respect of its debt when such amounts are required to be paid.

The Company does not intend to incur debts beyond its ability to pay such debts
as they mature (taking into account the timing and amounts of cash to be payable
on or in respect of its debt).

11.20 The Company understands and acknowledges the potentially dilutive effect
to the Common Stock upon the issuance of the Securities. The Company's directors
and executive officers have studied and fully understand the nature of the
securities being sold hereunder. The Company further acknowledges that its
obligation to issue the Securities in accordance with this Agreement is absolute
and unconditional regardless of the dilutive effect that such issuance may have
on the ownership interests of other stockholders of the Company. Taking the
foregoing into account, the Company's Board of Directors has determined, in its
good faith business judgment, that the issuance of the Securities hereunder and
the consummation of the transactions contemplated hereby and thereby are in the
best interest of the Company and its stockholders.

11.21 The issuance of the Securities to the Subscribers will not be integrated
with any other issuance of the Company's securities (past, current or future)
for purposes of any stockholder approval provisions (under the rules of the
over-the-counter bulletin board or otherwise) applicable to the Company or its
securities.

11.22 The Company and its Board of Directors have taken all necessary action, if
any, in order to render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company's articles of
incorporation (or similar charter documents) or the laws of its state of
incorporation that is or could become applicable to the Subscribers as a result
of the Subscribers and the Company fulfilling their obligations or exercising
their rights under this Agreement, including, without limitation, as a result of
the Company's issuance of the Securities and the Subscribers' ownership of the
Securities.

11.23 The Company and each of its Subsidiaries is in possession of all
franchises, grants, authorizations, licenses, permits, easements, variances,
exemptions, consents, certificates, approvals and orders necessary to own, lease
and operate its properties and to carry on its business as it is now being
conducted (collectively, the "Company Permits") except in such instances where
the failure to possess such Company Permits would not, either individually or in
the aggregate, have a Material Adverse Effect, and there is no action pending
or, to the knowledge of the Company, threatened regarding suspension or
cancellation of any of the Company Permits, the suspension or cancellation of
which would not, either individually or in the aggregate, have a Material
Adverse Effect. Neither the Company nor any of its Subsidiaries is in conflict
with, or in default or violation of, any of the Company Permits, except for any
such conflicts, defaults or violations which, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect. Since March
31, 2003, neither the Company nor any of its Subsidiaries has received any
notification with respect to possible conflicts, defaults or violations of
applicable laws, except for notices relating to possible conflicts, defaults or
violations, which conflicts, defaults or violations would not have a Material
Adverse Effect.

11.24 Except as set forth in as set forth in the SEC Reports, there are, to the
Company's knowledge, with respect to the Company or any of its Subsidiaries or
any predecessor of the Company, no past or present violations of Environmental
Laws (as defined below), releases of any material into the environment, actions,
activities, circumstances, conditions, events, incidents, or contractual
obligations which may give rise to any common law environmental liability or any
liability under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 or similar federal, state, local or foreign laws and
neither the Company nor any of its Subsidiaries has received any notice with
respect to any of the foregoing, nor is any action pending or, to the Company's
knowledge, threatened in connection with any of the foregoing. The term
"Environmental Laws" means all federal, state, local or foreign laws relating to
pollution or protection of human health or the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or subsurface
strata), including, without limitation, laws relating to emissions, discharges,
releases or threatened releases of chemicals, pollutants contaminants, or toxic
or hazardous substances or wastes (collectively, "Hazardous Materials") into the
environment, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all authorizations, codes, decrees, demands or demand letters,
injunctions, judgments, licenses, notices or notice letters, orders, permits,
plans or regulations issued, entered, promulgated or approved thereunder.

11.25 The Company and its Subsidiaries have good and marketable title in fee
simple to all real property and good and marketable title to all personal
property owned by them which is material to the business of the Company and its
Subsidiaries, in each case free and clear of all liens, encumbrances and defects
except such as would not have a Material Adverse Effect. Any real property and
facilities held under lease by the Company and its Subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions as would not
have a Material Adverse Effect.

11.26 The Company and each of its Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as management of the Company believes to be prudent and customary in the
businesses in which the Company and its Subsidiaries are engaged. Neither the
Company nor any Subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have a Material Adverse Effect.

11.27 Neither the Company, nor any of its Subsidiaries, nor any director,
officer, agent, employee or other person acting on behalf of the Company or any
Subsidiary has, in the course of his actions for, or on behalf of, the Company,
used any corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expenses relating to political activity; made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; violated or is in violation of any provision of
the U.S. Foreign Corrupt Practices Act of 1977; or made any bribe, rebate,
payoff, influence payment, kickback or other unlawful payment to any foreign or
domestic government official or employee.

12. Covenants.

12.1 The Company agrees to file a Form D with respect to the Securities as
required under Regulation D and to provide a copy thereof to each Subscriber
promptly after such filing. The Company shall, on or before the Closing Date,
take such action as the Company shall reasonably determine is necessary to
qualify the Securities for sale to the Subscriber pursuant to this Agreement
under applicable securities or "blue sky" laws of the states of the United
States (or to obtain an exemption from such qualification), and shall provide
evidence of any such action so taken to the Subscriber on or prior to the
Closing Date.

12.2 The Company's Common Stock is registered under Section 12(g) of the 1934
Act. So long as the Subscriber beneficially owns any of the Securities, the
Company shall timely file all reports required to be filed with the SEC pursuant
to the 1934 Act, and the Company shall not terminate its status as an issuer
required to file reports under the 1934 Act even if the 1934 Act or the rules
and regulations thereunder would permit such termination.

12.3 The Company shall issue a press release describing the material terms of
the transactions contemplated hereby (the "Press Release") immediately upon
Closing; provided, however, that if Closing occurs after 4:00 P.M. Eastern Time
on any Trading Day, the Company shall issue the Press Release no later than 9:00
A.M. Eastern Time on the first Trading Day following the Closing Date. The
Company shall also file with the SEC a Current Report on Form 8-K describing the
material terms of the transactions contemplated hereby (and attaching as
exhibits thereto this Agreement and the Warrants) as soon as practicable
following the date of execution of this Agreement but in no event more than two
(2) Trading Days following the date of execution of this Agreement. "Trading
Day" means any day during which the Company's shares are listed or quoted for
trading.

12.4 The Company shall use commercially reasonable efforts to secure the listing
of the Shares and Warrant Shares upon each national securities exchange or
automated quotation system, if any, upon which shares of Common Stock are then
listed (subject to official notice of issuance) and, so long as any of the
Subscribers owns any of the Securities, shall maintain, so long as any other
shares of Common Stock shall be so listed, such listing of all Shares issuable
pursuant to this Agreement and Warrant Shares issuable upon exercise of or
otherwise pursuant to the Warrants. The Company will obtain and, so long as the
Subscriber owns any of the Securities, maintain the listing and trading of its
Common Stock on the over-the-counter bulletin board, the Nasdaq National Market
("Nasdaq") Nasdaq SmallCap Market (the "Nasdaq SC"), the New York Stock Exchange
("NYSE") or AMEX and will comply in all respects with the Company's reporting,
filing and other obligations under the bylaws or rules of the any exchanges or
automated quotation systems on which the Common Stock is then listed. The
Company shall promptly provide to the Subscriber copies of any notices it
receives from such exchanges or automated quotation systems on which the Common
Stock is then listed regarding the continued eligibility of the Common Stock for
listing on such exchanges and quotation systems.

12.5 In the event that the Company comes into possession of any material
non-public information, the Company shall make full and complete public
disclosure in accordance with all applicable securities laws (including all
common law formulations thereof). The Company covenants and agrees that neither
it nor any other person acting on its behalf has provided or will provide any
Subscriber or its agents or counsel with any information that the Company
believes constitutes material non-public information, unless prior thereto such
Subscriber shall have executed a written agreement regarding the confidentiality
and use of such information.  The Company understands and confirms that each
Subscriber shall be relying on the foregoing representations in effecting
transactions in securities of the Company.

12.6 The Company agrees to send to the Subscriber until the Subscriber
transfers, assigns, or sells all of the Securities contemporaneously with the
making available or giving to the stockholders of the Company, copies of any
notices or other information the Company makes available or gives to such
stockholders.

12.7 On and after the Closing Date, the Company shall at all times have
authorized, and reserved for the purpose of issuance (including being free of
any preemptive rights), a sufficient number of shares of Common Stock to provide
for the full exercise of the Warrants (based on the exercise price of the
Warrants in effect from time-to-time). The Company shall not reduce the number
of shares reserved for issuance upon exercise of or otherwise pursuant to the
Warrants without the consent of the Subscriber. If at any time the number of
shares of Common Stock authorized and reserved for issuance is below the number
of Warrant Shares to be issued upon exercise of or otherwise pursuant to
Warrants (based on the exercise price of the Warrants in effect from
time-to-time), the Company will promptly take all corporate action necessary to
authorize and reserve a sufficient number of shares, including, without
limitation, calling a special meeting of stockholders to authorize additional
shares to meet the Company's obligations under this Section 12.7, in the case of
an insufficient number of authorized shares, and using its best efforts to
obtain stockholder approval of an increase in such authorized number of shares.

12.8 The Company shall issue irrevocable instructions to its transfer agent to
issue certificates, registered in the name of each Subscriber or its nominee,
for the Shares at the Closing and the Warrant Shares upon exercise of or
otherwise pursuant to the Warrants in accordance with the terms thereof, each in
such amounts as specified from time to time by each Subscriber to the Company
(the "Irrevocable Transfer Agent Instructions"). Prior to registration of the
Shares and Warrant Shares under the 1933 Act or the date on which the Shares or
Warrant Shares may be sold pursuant to Rule 144 without any restriction as to
the number of securities as of a particular date that can then be immediately
sold, all such certificates shall bear the restrictive legend specified in
Section 8.1 of this Agreement. The Company warrants that no instruction, other
than the Irrevocable Transfer Agent Instructions referred to in this Section
12.6 and stop transfer instructions to give effect to Section 5.1(a) hereof (in
the case of the Shares and Warrant Shares, prior to registration of the Shares
and Warrant Shares under the 1933 Act or the date on which the Shares or Warrant
Shares may be sold pursuant to Rule 144 without any restriction as to the number
of securities as of a particular date that can then be immediately sold), will
be given by the Company to its transfer agent and that the Shares and Warrant
Shares shall otherwise be freely transferable on the books and records of the
Company as and to the extent provided in this Agreement. Nothing in this Section
shall affect in any way the Subscriber's obligations and agreement set forth in
Section 8.1 hereof to comply with all applicable prospectus delivery
requirements, if any, upon resale of the Securities and to comply with the plan
of distribution portion of the prospectus contained in the Registration
Statement. If a Subscriber provides the Company with (i) an opinion of counsel,
reasonably satisfactory to the Company in form, substance and scope, to the
effect that a public sale or transfer of such Securities may be made without
registration under the 1933 Act and such sale or transfer is effective or (ii)
the Subscriber provides reasonable assurances that the Securities can be sold
pursuant to Rule 144 and that the Securities will be sold pursuant to Rule 144,
the Company shall permit the transfer, and, in the case of the Shares and
Warrant Shares, promptly instruct its transfer agent to issue one or more
certificates, free from any restrictive legend, in such name and in such
denominations as specified by such Subscriber.

12.9 Until the Registration Statement is declared effective pursuant to Section
0, the Company shall maintain its corporate existence and shall not merge,
consolidate or sell all or substantially all of the Company's assets, except in
the event of a merger or consolidation or sale of all or substantially all of
the Company's assets, where (i) the successor or acquiring entity and, if an
entity different from the successor or acquiring entity, the entity whose
securities into which the Common Stock shall become convertible or exchangeable
in such transaction assumes the Company's obligations hereunder and under the
agreements and instruments entered into in connection herewith (including the
Warrants) and (ii) the entity whose securities into which the Common Stock shall
become convertible or exchangeable in such transaction is a publicly traded
corporation whose common stock is listed for trading on Nasdaq, Nasdaq SC, the
NYSE or AMEX.

13. Commission to the Agent.

13.1 The Subscriber understands that upon Closing, the Agent will receive from
the Company a commission of up to 7.5% of the gross proceeds raised from the
Offering, payable to the Agent in cash plus a cash bonus of $75,000 if
$8,000,000 of Units are sold by July 31, 2003. The Agent will also receive share
purchase warrants which permit the acquisition of the Warrant Shares at the
exercise price of $3.84 per Warrant Share in such number as equals five percent
of the gross proceeds from the Offering.

14. Acknowledgement and Waiver.

14.1 The Subscriber has acknowledged that the decision to purchase the
Securities was solely made on the basis of publicly available information. The
Subscriber hereby waives, to the fullest extent permitted by law, any rights of
withdrawal, rescission or compensation for damages (other than as expressly
described herein) to which the Subscriber might be entitled in connection with
the distribution of any of the Securities.

15. Costs.

15. The Subscriber acknowledges and agrees that all costs and expenses incurred
by the Subscriber (including any fees and disbursements of any special counsel
retained by the Subscriber) relating to the purchase of the Shares shall be
borne by the Subscriber.

16. Appointment of Agent.

16.1 The Subscriber (and others for whom the Subscriber is contracting
hereunder) hereby:

(a) irrevocably authorizes the Agent to swear, execute, file and record any
documents necessary to accept delivery of the Securities on the Closing Date;
and

(b) appoints the Agent to act as its agent to represent it with respect to all
matters relating to this Subscription Agreement, including representing the
Subscriber at the Closing for the purpose of all closing matters and deliveries
of documents and payment of funds, and the Subscriber hereby authorizes the
Agent to extend such time periods and to modify or waive such conditions as the
Agent may deem appropriate, acting reasonably, provided however that the Agent
shall not modify or waive any such condition where to do so would result in a
material change to any of the material attributes or terms of sale of the
Securities, and to correct or rectify any ambiguities, errors or omissions
herein that the Agent, acting reasonably, may deem appropriate.

17. Governing Law.

17.1 This Subscription Agreement is governed by the laws of the State of Nevada.
The Subscriber, in its personal or corporate capacity and, if applicable, on
behalf of each beneficial purchaser for whom it is acting, irrevocably attorns
to the jurisdiction of the courts of the Province of British Columbia.

18. Survival.

18.1 This Subscription, including without limitation the representations,
warranties and covenants contained herein, shall survive and continue in full
force and effect and be binding upon the parties hereto notwithstanding the
completion of the purchase of the Securities by the Subscriber pursuant hereto,
the completion of the issue of Securities of the Company and any subsequent
disposition by the Subscriber of the Shares.

19. Assignment.

19.1 This Agreement shall be binding upon and inure to the benefit of the
parties and their successors and assigns. Neither the Company nor any Subscriber
shall assign this Agreement or any rights or obligations hereunder without the
prior written consent of the other. Notwithstanding the foregoing, a Subscriber
may assign its rights hereunder to any of its "affiliates," as that term is
defined under the 1934 Act, without the consent of the Company.

20. Execution.

20.1 The Company shall be entitled to rely on delivery by facsimile machine of
an executed copy of this Subscription and acceptance by the Company of such
facsimile copy shall be equally effective to create a valid and binding
agreement between the Subscriber and the Company in accordance with the terms
hereof.

21. Severability.

21.1 The invalidity or unenforceability of any particular provision of this
Subscription shall not affect or limit the validity or enforceability of the
remaining provisions of this Subscription.

22. Termination.

22.1 If, prior to Closing, the Agent determines for valid cause to terminate
this Subscription Agreement, this Agreement and the obligations of the parties
hereto are deemed to have terminated as at the effective date of such
termination.

23. Entire Agreement.

23.1 Except as expressly provided in this Agreement and in the agreements,
instruments and other documents contemplated or provided for herein, this
Agreement contains the entire agreement between the parties with respect to the
sale of the Securities and there are no other terms, conditions, representations
or warranties, whether expressed, implied, oral or written, by statute or common
law, by the Company, the Agent, the Subscriber or by anyone else.

24. Notices and Counterparts.

24.1 All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Any notice to be given will be sent by prepaid
registered post and will be deemed to have been received by the recipient on the
fourth day following the mailing thereof or on the date of successful facsimile
transmission or email. Notices to the Subscriber shall be directed to the
address on page 30, or to such other address as the Subscriber may advise the
Company by notice in writing; notices to the Company shall be directed to it at
Suite 1500, 885 West Georgia Street, Vancouver, British Columbia, V6C 3E8,
attention of The President; notices to the Agent shall be directed to it at the
address first above written.

24.2 This Agreement may be executed in any number of counterparts, each of
which, when so executed and delivered, shall constitute an original and all of
which together shall constitute one instrument.

25. Publicity.

25.1 The Company and the Subscriber shall have the right to review a reasonable
period of time before issuance of any press releases, filings with the SEC, NASD
or any stock exchange or interdealer quotation system, or any other public
statements with respect to the transactions contemplated hereby in the event
that the Subscriber is identified in any such press release or filing; provided,
however, that the Company shall be entitled, without the prior approval of the
Subscriber, to make any press release or public filings with respect to such
transactions as is required by applicable law and regulations (although the
Subscriber shall be consulted by the Company in connection with any such press
release or public filing prior to its release or public filing and shall be
provided with a copy thereof and be given an opportunity to comment thereon). 

26. Independent Nature of Subscribers.

26.1 The Company acknowledges that the obligations of each Subscriber under this
Agreement, any other document entered into in connection with this Agreement,
and the transactions contemplated hereby and thereby (the "Transaction
Documents") are several and not joint with the obligations of any other
Subscriber, and no Subscriber shall be responsible in any way for the
performance of the obligations of any other Subscriber under the Transaction
Documents. The decision of each Subscriber to purchase Securities pursuant to
this Agreement has been made by such Subscriber independently of any other
Subscriber and independently of any information, materials, statements or
opinions as to the business, affairs, operations, assets, properties,
liabilities, results of operations, condition (financial or otherwise) or
prospects of the Company or of the Subsidiaries which may have made or given by
any other Subscriber or by any agent or employee of any other Subscriber, and no
Subscriber or any of its agents or employees shall have any liability to any
Subscriber (or any other person) relating to or arising from any such
information, materials, statements or opinions. The Company further acknowledges
that nothing contained in the Transaction Documents, and no action taken by any
Subscriber pursuant hereto or thereto, shall be deemed to constitute the
Subscribers as a partnership, an association, a joint venture or any other kind
of entity, or create a presumption that the Subscribers are in any way acting in
concert or as a group with respect to such obligations or the transactions
contemplated hereby. Each Subscriber shall be entitled to independently protect
and enforce its rights, including without limitation, the rights arising out of
this Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Subscriber to be joined as an additional party in any
proceeding for such purpose.

26.2 Each Subscriber was introduced to the Company by the Agent which has acted
solely as agent for the Company and not for any Subscriber. Each Subscriber has
been represented by its own separate legal counsel in their review and
negotiation of the Transaction Documents. For reasons of administrative
convenience only, the Transaction Documents have been prepared by counsel for
one of the Subscribers.  Such counsel does not represent all of the Subscribers
but only such Subscriber and the other Subscribers have retained their own
individual counsel with respect to the transactions contemplated hereby.  The
Company has elected to provide all Subscribers with the same terms and
Transaction Documents for the convenience of the Company and not because it was
required or requested to do so by the Subscribers. The Company acknowledges that
such procedure with respect to the Transaction Documents in no way creates a
presumption that the Subscribers are in any way acting in concert or as a group
with respect to the Transaction Documents or the transactions contemplated
hereby or thereby.

IN WITNESS WHEREOF the Subscriber has duly executed this Subscription as of the
date first above mentioned.

Number of Units
to be purchased at $3.20 each: _____________________________________

Total purchase price: $__________________________________

DELIVERY INSTRUCTIONS

1.

Delivery - please deliver the Share certificate(s) to:

 

 

 

 

 

 

2.

Registration - registration of the Share certificates which are to be delivered
at Closing should be made as follows:

 

 

 

(name)

 

 

 

(address)

3.

Delivery - please deliver the Warrant certificate(s) to:

 

 

 

 

 

 

4.

Registration - registration of the Warrant certificates which are to be
delivered at Closing should be made as follows:

 

 

 

(name)

 

 

 

(address)

 

 

5.

The undersigned hereby acknowledges that it will deliver to the Company all such
additional completed forms in respect of the Subscriber's purchase of Securities
as may be required for filing with the appropriate securities commissions and
regulatory authorities and stock exchanges.

 

 

 

(Name of Subscriber - Please type or print)

 

(Signature and, if applicable, Office

 

(Address of Subscriber

 

(City, State, Zip Code of Subscriber, United States

A C C E P T A N C E

The above-mentioned Subscription in respect of the Securities is hereby accepted
by HEARTLAND OIL AND GAS CORP.

DATED at ______________________________, the _____ day of _______________ 2003.

HEARTLAND OIL AND GAS CORP.

Per: _____________________________________________
Authorized Signatory

EXHIBIT A

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS.

WARRANT CERTIFICATE

WARRANT FOR PURCHASE OF COMMON SHARES

THIS WARRANT WILL BE VOID AND OF NO VALUE UNLESS EXERCISED WITHIN THE LIMITS
HEREIN PROVIDED

THIS WARRANT IS NOT TRANSFERABLE

HEARTLAND OIL AND GAS CORP.
(Incorporated under the laws of the State of Nevada)

WARRANT CERTIFICATE NO. _____ _______________ WARRANTS

Each such warrant entitling the holder to purchase one-half of one Common Share
at the Exercise Price of $3.84 per full Common Share if exercised at or before
5:00 p.m. (Vancouver time) on August 26, 2006.

DATE OF ISSUANCE: _______, 2003

THIS IS TO CERTIFY THAT __________ (herein called the "Holder") is entitled to
acquire in the manner herein provided, subject to the restrictions herein
contained, during the period commencing on the date hereof and ending at 5:00
p.m. (Vancouver time) on August 26, 2006 (the "Expiry Date"), up to
_____________ fully paid and non-assessable common shares ("Common Shares")
without nominal or par value of Heartland Oil and Gas Corp. ("the Company") as
set forth above.

The Warrants are governed by the Terms and Conditions attached.

Any Common Shares issuable on exercise of the Warrants represented by this
Certificate will contain the following legends:

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE AND HAVE BEEN ISSUED IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS.

THE FOLLOWING ARE THE TERMS AND CONDITIONS REFERRED TO IN THIS WARRANT:

ARTICLE 1
INTERPRETATION

1.1 Definitions.

In these Terms and Conditions, unless there is something in the subject matter
or context inconsistent therewith:

(a) "Common Shares" means the common shares in the capital of the Company as
constituted at the date hereof and any shares resulting from any subdivision or
consolidation of the Common Shares;

(b) "Company" means Heartland Oil and Gas Corp. or its successor corporation as
a result of consolidation, amalgamation or merger with or into any other
corporation or corporations, or as a result of the conveyance or transfer of all
or substantially all of the properties and estates of the Company as an entirety
to any other corporation and thereafter "Company" will mean such successor
corporation;

(c) "Company's Auditors" means an independent firm of accountants duly appointed
as Auditors of the Company;

(d) "herein", "hereby" and similar expressions refer to these Terms and
Conditions as the same may be amended or modified from time to time; and the
expression "Article" and "Section" followed by a number refer to the specified
Article or Section of these Terms and Conditions;

(e) "person" means an individual, corporation, partnership, trustee or any
unincorporated organization and words importing persons have a similar meaning;

(f) "Warrant Holders" or "Holders" means the holders of the Warrants; and

(g) "Warrants" mean share purchase warrants issued by the Company.

1.2 Gender.

Words importing the singular number include the plural and vice versa and words
importing the masculine gender include the feminine and neuter genders.

1.3 Interpretation Not Affected by Headings.

The division of these Terms and Conditions into Articles and Sections, and the
insertion of headings are for convenience of reference only and will not affect
the construction or interpretation thereof.

1.4 Applicable Law.

The Warrants will be construed in accordance with the laws of the Nevada and
will be treated in all respects as Nevada contracts.

ARTICLE 2
ISSUE OF ADDITIONAL WARRANTS

2.1 Additional Warrants.

The Company may at any time and from time to time issue additional warrants or
grant options or similar rights to acquire or purchase Common Shares.

2.2 Issue in Substitution for Lost Warrants.

(a) In case a Warrant becomes mutilated, lost, destroyed or stolen, the Company,
at its discretion, may issue and deliver a new Warrant of like date and tenor as
the one mutilated, lost, destroyed or stolen, in exchange for and in place of
and upon cancellation of such mutilated Warrant, or in lieu of, and in
substitution for such lost, destroyed or stolen Warrant and the substituted
Warrant will be entitled to the benefit hereof and rank equally in accordance
with its terms with all other Warrants issued or to be issued by the Company.

(b) The applicant for the issue of a new Warrant pursuant hereto will bear the
cost of the issue thereof and in case of loss, destruction or theft furnish to
the Company such evidence of ownership and of loss, destruction, or theft of the
Warrant so lost, destroyed or stolen as will be satisfactory to the Company in
its discretion and such applicant may also be required to furnish indemnity in
amount and form satisfactory to the Company in its discretion, and will pay the
reasonable charges of the Company in connection therewith.

2.3 Warrant Holder Not a Shareholder.

A Warrant Holder is not a shareholder of the Company, is not entitled to any
rights or interests as a shareholder of the Company and has only the rights and
interests expressly provided herein.

ARTICLE 3
NOTICE

3.1 Notice to Warrant Holders.

Any notice to be given to the Holders will be sent by prepaid registered post
and will be deemed to have been received by the Holder on the fourth day
following the mailing thereof or on the date of successful facsimile
transmission or email. Any such notice will be addressed to the Holder at the
address of the Holder appearing on the Holder's Warrant or to such other address
as the Holder may advise the Company by notice in writing.

3.2 Notice to the Company.

Any notice to be given to the Company may be delivered personally, or sent by
facsimile or other means of electronic communication providing a printed copy
("Electronic Communication") or may be forwarded by first class prepaid
registered mail to the addresses set forth below. Any notice delivered or sent
by Electronic Communication shall be deemed to have been given and received at
the time of delivery. Any notice mailed as aforesaid shall be deemed to have
been given and received on expiration of 72 hours after it is posted, addressed
as follows:

Heartland Oil and Gas Corp.
Suite 1500 - 885 West Georgia Street
Vancouver, B.C.
Canada V6C 3E8

Attention: The President

Facsimile No.: (604) 638-3525

ARTICLE 4
EXERCISE OF WARRANTS

4.1 Method of Exercise of Warrants.

(a) The right to acquire Common Shares conferred by the Warrants may be
exercised by the Holder of such Warrant by surrendering the Warrant Certificate
representing same, together with a duly completed and executed Exercise Form in
the form attached hereto and a bank draft or certified cheque payable to the
Company at its principal office in the City of Vancouver, British Columbia, for
the purchase price applicable at the time of exercise in respect of the number
of Warrants exercised.

(b) Notwithstanding anything in this Warrant to the contrary, in no event shall
the Holder of this Warrant be entitled to exercise a number of Warrants (or
portions thereof) in excess of the number of Warrants (or portions thereof) upon
exercise of which the sum of (i) the number of Common Shares beneficially owned
by the Holder and its affiliates other than Common Shares which may be deemed
beneficially owned through the ownership of the unexercised Warrants and the
unexercised or unconverted portion of any other securities of the Company
(including any other securities subject to a limitation on conversion or
exercise analogous to the limitation contained herein) and (ii) the number of
Common Shares issuable upon exercise of the Warrants (or portions thereof) with
respect to which the determination described herein is being made, would result
in beneficial ownership by the Holder and its affiliates of more than 9.9% of
the outstanding Common Shares. For purposes of the immediately preceding
sentence, beneficial ownership shall be determined in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13D-G
thereunder, except as otherwise provided in clause (i) hereof. Notwithstanding
anything in this Warrant to the contrary, the restrictions on exercise of this
Warrant set forth in this paragraph shall not be amended without (i) the written
consent of the Holder and the Company and (ii) the approval of the holders of a
majority of the Common Shares present or represented by proxy, and voting at any
meeting called to vote on the amendment of such restriction.

4.2 Effect of Exercise of Warrants.

(a) Upon surrender and payment as aforesaid the Common Shares so subscribed for
will be deemed to have been issued and such person or persons will be deemed to
have become the holder or holders of record of such Common Shares on the date of
such surrender.

(b) Within five business days after surrender as aforesaid, the Company will
forthwith cause to be delivered to the person or persons in whose name or names
the Common Shares so subscribed for are to be issued as specified in such
subscription or mailed to him or them at his or their respective addresses
specified in such subscription, a certificate or certificates for the
appropriate number of Common Shares not exceeding those which the Warrant Holder
is entitled to acquire pursuant to the Warrant surrendered.

4.3 Subscription for Less Than Entitlement.

The holder of any Warrant may subscribe for and acquire a number of Common
Shares, less than the number which he is entitled to acquire pursuant to the
surrendered Warrant. In the event of any acquisition of a number of Common
Shares less than the number which can be acquired pursuant to a Warrant, the
holder thereof upon exercise thereof will in addition be entitled to receive a
new Warrant in respect of the balance of the Common Shares which he was entitled
to acquire pursuant to the surrendered Warrant and which were not then acquired.

4.4 Warrants for Fractions of Shares.

To the extent that the holder of any Warrant is entitled to receive on the
exercise or partial exercise thereof a fraction of a Common Share, such right
may be exercised in respect of such fraction only in combination with another
Warrant or other Warrants which in the aggregate entitle the holder to receive a
whole number of such Common Shares.

4.5 Expiration of Warrants.

After the expiration of the period within which a Warrant is exercisable, all
rights thereunder will wholly cease and terminate and such Warrant will no
longer be valid and of no effect.

4.6 Time of Essence.

Time will be of the essence hereof.

4.7 Adjustments.

The number of Common Shares deliverable upon the exercise of the Warrants will
be subject to adjustment in the event and in the manner following:

(a) Merger, Sale of Assets, Etc. If at any time while this Warrant, or any
portion thereof, is outstanding and unexpired there shall be (i) a
reorganization (other than a combination, reclassification, exchange or
subdivision of shares otherwise provided for herein), (ii) a merger or
consolidation of the Company with or into another corporation in which the
Company is not the surviving entity, or a reverse triangular merger in which the
Company is the surviving entity but the shares of the Company's capital stock
outstanding immediately prior to the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash, or
otherwise, or (iii) a sale or transfer of the Company's properties and assets
as, or substantially as, an entirety to any other person, then, as a part of
such reorganization, merger, consolidation, sale or transfer, lawful provision
shall be made so that the holder of this Warrant shall thereafter be entitled to
receive upon exercise of this Warrant, during the period specified herein and
upon payment of the Exercise Price then in effect, the number of shares of stock
or other securities or property of the successor corporation resulting from such
reorganization, merger, consolidation, sale or transfer that a holder of the
shares deliverable upon exercise of this Warrant would have been entitled to
receive in such reorganization, consolidation, merger, sale or transfer if this
Warrant had been exercised immediately before such reorganization, merger,
consolidation, sale or transfer, all subject to further adjustment as provided
in this Section 4.7. The foregoing provisions of this Section 4.7 shall
similarly apply to successive reorganizations, consolidations, mergers, sales
and transfers and to the stock or securities of any other corporation that are
at the time receivable upon the exercise of this Warrant. If the per share
consideration payable to the holder hereof for shares in connection with any
such transaction is in a form other than cash or marketable securities, then the
value of such consideration shall be determined in good faith by the Company's
Board of Directors. In all events, appropriate adjustment (as determined in good
faith by the Company's Board of Directors) shall be made in the application of
the provisions of this Warrant with respect to the rights and interests of the
Holder after the transaction, to the end that the provisions of this Warrant
shall be applicable after that event, as near as reasonably may be, in relation
to any shares or other property deliverable after that event upon exercise of
this Warrant.

(b) Reclassification, Etc. If the Company, at any time while this Warrant, or
any portion thereof, remains outstanding and unexpired by reclassification of
securities or otherwise, shall change any of the securities as to which purchase
rights under this Warrant exist into the same or a different number of
securities of any other class or classes, this Warrant shall thereafter
represent the right to acquire such number and kind of securities as would have
been issuable as the result of such change with respect to the securities that
were subject to the purchase rights under this Warrant immediately prior to such
reclassification or other change and the Exercise Price therefor shall be
appropriately adjusted, all subject to further adjustment as provided in this
Section 4.7. No adjustment shall be made pursuant to this Section 4.7, upon any
conversion or redemption.

(c) Split, Subdivision or Combination of Shares. If the Company at any time
while this Warrant, or any portion thereof, remains outstanding and unexpired
shall split, subdivide or combine the securities as to which purchase rights
under this Warrant exist, into a different number of securities of the same
class, the Exercise Price for such securities shall be proportionately decreased
in the case of a split or subdivision or proportionately increased in the case
of a combination.

(d) Adjustments for Dividends in Stock or Other Securities or Property. If while
this Warrant, or any portion hereof, remains outstanding and unexpired the
holders of the securities as to which purchase rights under this Warrant exist
at the time shall have received, or, on or after the record date fixed for the
determination of eligible Stockholders, shall have become entitled to receive,
without payment therefor, other or additional stock or other securities or
property (other than cash) of the Company by way of dividend, then and in each
case, this Warrant shall represent the right to acquire, in addition to the
number of shares of the security receivable upon exercise of this Warrant, and
without payment of any additional consideration therefor, the amount of such
other or additional stock or other securities or property (other than cash) of
the Company that such holder would hold on the date of such exercise had it been
the holder of record of the security receivable upon exercise of this Warrant on
the date hereof and had thereafter, during the period from the date hereof to
and including the date of such exercise, retained such shares and/or all other
additional stock available by it as aforesaid during such period, giving effect
to all adjustments called for during such period by the provisions of this
Section 4.7.

(e) Certificate as to Adjustments. Upon the occurrence of each adjustment or
readjustment pursuant to this Section 4.7, the Company at its expense shall
promptly compute such adjustment or readjustment in accordance with the terms
hereof and furnish to each Holder of this Warrant a certificate setting forth
such adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Company shall, upon the written
request, at any time, of any such Holder, furnish or cause to be furnished to
such Holder a like certificate setting forth: (i) such adjustments and
readjustments; (ii) the Exercise Price at the time in effect; and (iii) the
number of shares and the amount, if any, of other property that at the time
would be received upon the exercise of the Warrant.

(f) No Impairment. The Company will not, by any voluntary action, avoid or seek
to avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Company, but will at all times in good faith assist
in the carrying out of all the provisions of this Section 4.7 and in the taking
of all such action as may be necessary or appropriate in order to protect the
rights of the Holders of this Warrant against impairment.

4.8 Determination of Adjustments.

If any questions will at any time arise with respect to any adjustment provided
for in Section 4.7, such question will be conclusively determined by the
Company's Auditors, or, if they decline to so act any other firm of chartered
accountants, in Vancouver, British Columbia, that the Company may designate and
who will have access to all appropriate records and such determination will be
binding upon the Company and the holders of the Warrants.

ARTICLE 5
COVENANTS BY THE COMPANY

5.1 Reservation of Shares.

The Company will reserve and there will remain unissued out of its authorized
capital a sufficient number of Common Shares to satisfy the rights provided for
herein and in the Warrants should the holders of all the Warrants from time to
time outstanding determine to exercise such rights in respect of all Common
Shares which they are or may be entitled to acquire pursuant thereto and hereto.

5.2 Company may Purchase.

The Company may from time to time offer to purchase and purchase, for
cancellation only, any Warrants in such manner, from such persons and on such
terms and conditions as it determines.

ARTICLE 6
MODIFICATION OF TERMS, MERGER, SUCCESSORS

6.1 Modification of Terms and Conditions for Certain Purposes.

From time to time the Company may, subject to the provisions of these Terms and
Conditions, modify the Terms and Conditions hereof, for the purpose of
correction or rectification of any ambiguities, defective provisions, errors or
omissions herein, provided that such modifications shall not adversely effect
the rights of the Holder without the Holder's prior written consent.

6.2 Transferability.

The Warrant and all rights attached to it are transferable or assignable, if
transferred or assigned in accordance with all applicable securities laws.

IN WITNESS WHEREOF HEARTLAND OIL AND GAS CORP. has caused this Warrant to be
signed by its duly authorized officers under its corporate seal, and this
Warrant to be dated as of the date of issuance first above written.

SIGNED BY:

HEARTLAND OIL AND GAS CORP.

Per: ___________________________________
Authorized Signatory

Per: ____________________________________
Authorized Signatory

Date: __________________________________

EXERCISE FORM

TO: Heartland Oil and Gas Corp.

The undersigned holder of Warrants hereby exercises the right to acquire
_____________ Common Shares without nominal or par value of Heartland Oil and
Gas Corp. (the "Company") (or such number of other securities or property to
which such Warrants entitle the undersigned in lieu thereof or in addition
thereto under the provisions set forth in the Warrant Certificate) according to
the terms set forth in the Warrant Certificate.

Such securities or property are to be issued as follows:

Name:

 

Address in Full:

 

 

 

The undersigned acknowledges that the certificates representing the Common
Shares issuable hereunder shall bear such legends as may be required under
applicable securities law.

DATED this _____ day of _______________, 200_.

___________________________________

Signature

___________________________________

(Print full name)

___________________________________

(Print full address)

Instructions

:

The registered holder may exercise his right to acquire Common Shares by
completing the above form, surrendering this Warrant Certificate and providing
payment by bank draft, money order or certified check to the Company at its
principal office in Vancouver, British Columbia. For the protection of the
holder, it would be prudent to register if forwarding by mail. Certificates for
Common Shares will be delivered or mailed as soon as practicable after the
exercise of the Warrants. The rights of the registered holder cease if the
Warrants are not exercised prior to 5:00 p.m. (Vancouver time) on the Expiry
Date

EXHIBIT B

U.S. SECURITIES LAW QUESTIONNAIRE

All capitalized terms herein, unless otherwise defined, have the meanings
ascribed thereto in the Subscription Agreement.

1. The Subscriber covenants, represents and warrants to the Company that:

(a) the Subscriber is a U.S. Person;

(b) the Subscriber has such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of the transactions
detailed in the Subscription Agreement and it is able to bear the economic risk
of loss arising from such transactions;

(c) the Subscriber is acquiring the Securities for investment only and not with
a view to resale or distribution and, in particular, it has no intention to
distribute either directly or indirectly any of the Securities in the United
States or to U.S. Persons; provided, however, that the Subscriber may sell or
otherwise dispose of any of the Securities pursuant to registration thereof
pursuant to the Securities Act of 1933 (the "1933 Act") and any applicable State
securities laws unless an exemption from such registration requirements is
available or registration is not required pursuant to Regulation S under the
1933 Act or registration is otherwise not required under the 1933 Act;

(d) the Subscriber satisfies one or more of the categories indicated below
(please check the appropriate box):

[ ]

 

Category 1 An organization described in Section 501(c)(3) of the United States
Internal Revenue Code, a corporation, a Massachusetts or similar business trust
or partnership, not formed for the specific purpose of acquiring the Securities,
with total assets in excess of US $5,000,000;

[ ]

 

Category 2 A natural person whose individual net worth, or joint net worth with
that person's spouse, on the date of purchase exceeds US $1,000,000;

[ ]

 

Category 3 A natural person who had an individual income in excess of US
$200,000 in each of the two most recent years or joint income with that person's
spouse in excess of US $300,000 in each of those years and has a reasonable
expectation of reaching the same income level in the current year;

[ ]

 

Category 4 A "bank" as defined under Section (3)(a)(2) of the 1933 Act or
savings and loan association or other institution as defined in Section
3(a)(5)(A) of the 1933 Act acting in its individual or fiduciary capacity; a
broker dealer registered pursuant to Section 15 of the Securities Exchange Act
of 1934 (United States); an insurance company as defined in Section 2(13) of the
1933 Act; an investment company registered under the Investment Company Act of
1940 (United States) or a business development company as defined in Section
2(a)(48) of such Act; a Small Business Investment Company licensed by the U.S.
Small Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958 (United States); a plan with total assets in excess of
$5,000,000 established and maintained by a state, a political subdivision
thereof, or an agency or instrumentality of a state or a political subdivision
thereof, for the benefit of its employees; an employee benefit plan within the
meaning of the Employee Retirement Income Security Act of 1974 (United States)
whose investment decisions are made by a plan fiduciary, as defined in Section
3(21) of such Act, which is either a bank, savings and loan association,
insurance company or registered investment adviser, or if the employee benefit
plan has total assets in excess of $5,000,000, or, if a self-directed plan,
whose investment decisions are made solely by persons that are accredited
investors;

[ ]

 

Category 5 A private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940 (United States);

[ ]

 

Category 6 A director or executive officer of the Company;

[ ]

 

Category 7 A trust with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the Securities, whose purchase is directed by a
sophisticated person as described in Rule 506(b)(2)(ii) under the 1933 Act; or

[ ]

 

Category 8 An entity in which all of the equity owners satisfy the requirements
of one or more of the foregoing categories; and

(e) the Subscriber is not acquiring the Securities as a result of any form of
general solicitation or general advertising including advertisements, articles,
notices or other communications published in any newspaper, magazine or similar
media or broadcast over radio, or television, or any seminar or meeting whose
attendees have been invited by general solicitation or general advertising.

2. The Subscriber acknowledges and agrees that:

(a) if the Subscriber decides to offer, sell or otherwise transfer any of the
Securities, it will not offer, sell or otherwise transfer any of such securities
directly or indirectly, unless:

(i) the Securities have been registered,

(ii) the sale is to the Company;

(iii) the sale is made outside the United States in a transaction meeting the
requirements of Rule 904 of Regulation S under the 1933 Act and in compliance
with applicable local laws and regulations;

(iv) the sale is made pursuant to the exemption from the registration
requirements under the 1933 Act provided by Rule 144 thereunder if available and
in accordance with any applicable state securities or "Blue Sky" laws; or

(v) the Securities are sold in a transaction that does not require registration
under the 1933 Act or any applicable U.S. state laws and regulations governing
the offer and sale of securities, and it has prior to such sale furnished to the
Company an opinion of counsel reasonably satisfactory to the Company;

(b) any of the Warrants may not be exercised in the United States or by or on
behalf of a U.S. Person unless registered under the 1933 Act and any applicable
state securities laws unless an exemption from such registration requirements is
available;

(c) the Subscriber has not acquired the Securities as a result of, and will not
itself engage in, any "directed selling efforts" (as defined in Regulation S
under the 1933 Act) in the United States in respect of the Securities which
would include any activities undertaken for the purpose of, or that could
reasonably be expected to have the effect of, conditioning the market in the
United States for the resale of any of the Securities; provided, however, that
the Subscriber may sell or otherwise dispose of any of the Securities pursuant
to registration of any of the Securities pursuant to the 1933 Act and any
applicable state securities laws or under an exemption from such registration
requirements and as otherwise provided herein;

(d) upon the issuance thereof, and until such time as the same is no longer
required under the applicable requirements of the 1933 Act or applicable U.S.
State laws and regulations, the certificates representing any of the Securities
will bear a legend in substantially the following form:

"THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS."

(e) the Company may make a notation on its records or instruct the registrar and
transfer agent of the Company in order to implement the restrictions on transfer
set forth and described herein; and

(f) the Subscriber, if an individual, is a resident of the state or other
jurisdiction in its address on the Subscriber's execution page of the
Subscription Agreement, or if the Subscriber is not an individual, the office of
the Subscriber at which the Subscriber received and accepted the offer to
acquire the Securities is the address listed on the Subscriber's execution page
of the Subscription Agreement.

IN WITNESS WHEREOF, the undersigned has executed this Questionnaire as of the
________ day of __________________, 2003.

If a Corporation, Partnership or Entity

 

If an Individual

 

 

 

Print or Type Name of Entity

 

Signature

 

 

 

 

 

 

Signature of Authorized Signatory

 

Print or Type Name

 

 

 

 

 

 

Type of Entity

 

Social Security/Tax I.D. No.

 

 

 

 

 

 

 

EXHIBIT C

MULTILATERAL INSTRUMENT 45-103

ACCREDITED INVESTOR QUESTIONNAIRE

The purpose of this Questionnaire is to assure Heartland Oil and Gas Corp. (the
"Company") that the undersigned (the "Subscriber") will meet certain
requirements for the registration and prospectus exemptions provided for under
Multilateral Instrument 45-103 ("MI 45-103"), as adopted by the British Columbia
Securities Commission and the Alberta Securities Commission, in respect of a
proposed private placement of securities by the Company (the "Transaction"). The
Company will rely on the information contained in this Questionnaire for the
purposes of such determination.

The undersigned Subscriber covenants, represents and warrants to the Company
that:

1. the Subscriber has such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of the Transaction
and the Subscriber is able to bear the economic risk of loss arising from such
Transaction;

2. the Subscriber satisfies one or more of the categories of "accredited
investor" (as that term is defined in MI 45-103) indicated below (please check
the appropriate box):

[ ]

 

an individual who beneficially owns, or who together with a spouse beneficially
own, financial assets (as defined in MI 45-103) having an aggregate realizable
value that, before taxes but net of any related liabilities, exceeds
CDN.$1,000,000;

[ ]

 

an individual whose net income before taxes exceeded CDN.$200,000 in each of the
two more recent years or whose net income before taxes combined with that of a
spouse exceeded $300,000 in each of those years and who, in either case, has a
reasonable expectation of exceeding the same net income level in the current
year;

[ ]

 

an individual registered or formerly registered under the Securities Act
(British Columbia), or under securities legislation in another jurisdiction of
Canada, as a representative of a person or company registered under the
Securities Act (British Columbia), or under securities legislation in another
jurisdiction of Canada, as an adviser or dealer, other than a limited market
dealer registered under the Securities Act (Ontario);

[ ]

 

a Canadian financial institution as defined in National Instrument 14-101, or an
authorized foreign bank listed in Schedule III of the Bank Act (Canada);

[ ]

 

the Business Development Bank of Canada incorporated under the Business
Development Bank Act (Canada);

[ ]

 

an association under the Cooperative Credit Associations Act (Canada) located in
Canada;

[ ]

 

a subsidiary of any company referred to in any of the foregoing categories,
where the company owns all of the voting securities of the subsidiary, except
the voting securities required by law to be owned by directors of that
subsidiary;

[ ]

 

a person or company registered under the Securities Act (British Columbia), or
under securities legislation of another jurisdiction of Canada, as an adviser or
dealer, other than a limited market dealer registered under the Securities Act
(Ontario);

[ ]

 

a pension fund that is regulated by either the Office of the Superintendent of
Financial Institutions (Canada) or a provincial pension commission or similar
regulatory authority;

[ ]

 

an entity organized in a foreign jurisdiction that is analogous to any of the
entities referred to in any of the foregoing categories in form and function;

[ ]

 

the government of Canada or a province, or any crown corporation or agency of
the government of Canada or a province;

[ ]

 

a municipality, public board or commission in Canada;

[ ]

 

a national, federal, state, provincial, territorial or municipal government of
or in any foreign jurisdiction, or any agency thereof;

[ ]

 

a registered charity under the Income Tax Act (Canada);

[ ]

 

a corporation, limited partnership, limited liability partnership, trust or
estate, other than a mutual fund or non-redeemable investment fund, that had net
assets of at least CDN.$5,000,000 as reflected on its most recently prepared
financial statements;

[ ]

 

a mutual fund or non-redeemable investment fund that, in British Columbia,
distributes it securities only to persons or companies that are accredited
investors;

[ ]

 

a mutual fund or non-redeemable investment fund that, in British Columbia,
distributes its securities under a prospectus for which a receipt has been
issued by the executive director of the British Columbia Securities Commission;
or

[ ]

 

a person or company in respect of which all of the owners of interests, direct
or indirect, legal or beneficial, are persons or companies that are accredited
investors.

The Subscriber acknowledges and agrees that the Subscriber may be required by
the Company to provide such additional documentation as may be reasonably
required by the Company and its legal counsel in determining the Subscriber's
eligibility to acquire the Shares under relevant Legislation.

IN WITNESS WHEREOF, the undersigned has executed this Questionnaire as of the
_____ day of _______________ 2003.

 

If a Corporation, Partnership or Entity

 

If an Individual

 

 

 

Print or Type Name of Entity

 

Signature

 

 

 

 

 

 

Signature of Authorized Signatory

 

Print or Type Name

 

 

 

 

 

 

Type of Entity

 

Social Security/Tax I.D. No.

 

 

 

 

 

 

EXHIBIT D

RISK FACTORS

As used in this Exhibit, the terms "we", "us", "our" and "Heartland" mean
Heartland Oil and Gas Corp., unless otherwise indicated. All dollar amounts
refer to US dollars unless otherwise indicated. The following discussion should
be read in conjunction with our financial statements and the related notes.

Much of the information included in our Public Record includes or is based upon
estimates, projections or other "forward looking statements". Such forward
looking statements include any projections or estimates made by us and our
management in connection with our business operations. While these
forward-looking statements, and any assumptions upon which they are based, are
made in good faith and reflect our current judgment regarding the direction of
our business, actual results will almost always vary, sometimes materially, from
any estimates, predictions, projections, assumptions or other future performance
suggested herein.

Those forward-looking statements also involve certain risks and uncertainties.
Factors, risks and uncertainties that could cause or contribute to such
differences include those specific risks and uncertainties discussed below and
those discussed in our Form 10-KSB Annual Report for the year ended December 31,
2002. The cautionary statements made in this document should be read as being
applicable to all related forward-looking statements wherever they appear in our
Public Record.

Our common shares are considered speculative during the development of our new
business operations. Prospective investors should consider carefully the risk
factors set out below.

We have a limited operating history which raises substantial doubt about our
ability to continue as a going concern.

Our company has a limited operating history and must be considered in the
development stage. The success of the company is significantly dependent on a
successful drilling, completion and production program. Our company's operations
will be subject to all the risks inherent in the establishment of a developing
enterprise and the uncertainties arising from the absence of a significant
operating history. No assurance can be given that we may be able to operate on a
profitable basis. We are in the development stage and potential investors should
be aware of the difficulties normally encountered by enterprises in the
development stage. There can be no assurance that our business plan will prove
successful, and no assurance that we may be able to operate profitably, if at
all.

Because of the early stage of development and the nature of our business, our
securities are considered highly speculative.

Our securities must be considered highly speculative, generally because of the
nature of our business and the early stage of its development. We are engaged in
the business of exploring and, if warranted, developing commercial reserves of
oil and gas. Our properties are in the exploration stage only and are without
known reserves of oil and gas. Accordingly, we have not generated any revenues
nor have we realized a profit from our operations to date and there is little
likelihood that we will generate any revenues or realize any profits in the
short term. Any profitability in the future from our business will be dependent
upon locating and developing economic reserves of oil and gas, which itself is
subject to numerous risk factors as set forth herein. Since we have not
generated any revenues, we will have to raise additional monies through the sale
of our equity securities or debt in order to continue our business operations.

A portion of our interest in our properties may be lost if we are unable to
obtain significant additional financing.

Our ability to continue exploration and, if warranted, development of our
properties will be dependent upon our ability to raise significant additional
financing. If we are unable to obtain such financing, a portion of our interest
in our properties may be lost to exploration partners or our properties may be
lost entirely. We have limited financial resources and limited cash flow from
operations and we are dependent for funds on our ability to sell our common
shares, primarily on a private placement basis. There can be no assurance that
we will be able to obtain financing on that basis in light of factors such as
the market demand for our securities, the state of financial markets generally
and other relevant factors. The method of financing employed by us to date
results in increased dilution to the existing shareholders each time a private
placement is conducted.

We anticipate that we may need to obtain additional bank financing or sell
additional debt or equity securities in future public or private offerings.
There can be no assurance that additional funding will be available to us for
exploration and development of our projects or to fulfill our obligations under
any applicable agreements. Although historically we have announced additional
financings to proceed with the development of some of our previous properties,
there can be no assurance that we will be able to obtain adequate financing in
the future or that the terms of such financing will be favourable. Failure to
obtain such additional financing could result in delay or indefinite
postponement of further exploration and development of our projects with the
possible loss of such properties.

Due to the losses incurred since inception, our stockholders' deficiencies and
lack of revenues, there is substantial doubt about our ability to continue as a
going concern.

There is substantial doubt about our ability to continue as a going concern due
to the losses incurred since inception, our stockholders' deficiency, and lack
of revenues.

There can be no assurance that, if required, any such financing will be
available upon terms and conditions acceptable to us, if at all. Our inability
to obtain additional financing in a sufficient amount when needed and upon terms
and conditions acceptable to us could have a materially adverse effect upon our
company. Although we believe that we have funds sufficient to meet our immediate
needs, we require further funds to finance the development of our company. There
can be no assurance that such funds will be available or available on terms
satisfactory to us. If additional funds are raised by issuing equity securities,
further dilution to existing or future shareholders is likely to result. If
adequate funds are not available on acceptable terms when needed, we may be
required to delay, scale back or eliminate the development of our company.
Inadequate funding could also impair our ability to compete in the marketplace,
which may result in the dissolution of our company.

We will require substantial funds to enable us to decide whether our properties
contain commercial oil and gas deposits and whether they should be brought into
production, and if we cannot raise the necessary funds we may never be able to
realize the potential of our properties.

Our decision as to whether our properties contain commercial oil and gas
deposits and should be brought into production will require substantial funds
and depend upon the results of exploration programs and feasibility studies and
the recommendations of duly qualified engineers, geologists, or both. This
decision will involve consideration and evaluation of several significant
factors including but not limited to: (1) costs of bringing a property into
production, including exploration and development work, preparation of
production feasibility studies, and construction of production facilities; (2)
availability and costs of financing; (3) ongoing costs of production; (4) market
prices for the oil and gas to be produced; (5) environmental compliance
regulations and restraints; and (6) political climate, governmental regulation
and control. If we are unable to raise the funds necessary to properly evaluate
our properties, then we may not be able to realize any potential of our
properties.

We have obtained title reports, but our properties may be subject to prior
unregistered agreements, native land claims or transfers which have not been
recorded or detected through title searches, resulting in a possible claim
against any future revenues generated by such properties.

We have obtained title reports with respect to our oil and gas properties and
believe our interests are valid and enforceable; however, these reports do not
guarantee title against all possible claims. The properties may be subject to
prior unregistered agreements, native land claims or transfers which have not
been recorded or detected through title research. Additionally, the land upon
which we hold oil and gas leases may not have been surveyed; therefore, the
precise area and location of such interests may be subject to challenge. If the
interests in our properties is challenged, we may have to expend funds defending
any such claims and may ultimately lose some or all of any revenues generated
from the properties if we lose our interest in such properties.

Our accounts are subject to currency fluctuations which may materially affect
our financial position and results.

We maintain our accounts in US and Canadian currencies and are therefore subject
to currency fluctuations and such fluctuations may materially affect our
financial position and results. We do not engage in currency hedging activities.

We may not be able to manage the significant strains that future growth may
place on our administration infrastructure, systems and controls.

In the event our properties commence production, we could experience rapid
growth in revenues, personnel, complexity of administration and in other areas.
There can be no assurance that we will be able to manage the significant strains
that future growth may place on our administrative infrastructure, systems, and
controls. If we are unable to manage future growth effectively, our business,
operating results and financial condition may be materially adversely affected.

The loss of Richard Coglon and Donald Sharpe would have an adverse impact on
future development and could impair our ability to succeed.

We are dependent on our ability to hire and retain highly skilled and qualified
personnel, including our President, Mr. Coglon, and Mr. Donald Sharpe, one of
our directors. We face competition for qualified personnel from numerous
industry sources, and there can be no assurance that we will be able to attract
and retain qualified personnel on acceptable terms. We do not have key man
insurance on any of our employees. The loss of service of any of our key
personnel could have a material adverse effect on our operations or financial
condition.

Our management currently engages in other oil and gas businesses and, as a
result, conflicts could arise.

In addition to their interest in our company, our management currently engages,
and intends to engage in the future, in the oil and gas business independently
of our company. As a result, conflicts of interest between us and management of
our company might arise.

Trading of our stock may be restricted by the SEC's penny stock regulations
which may limit a stockholder's ability to buy and sell our stock.

Our shares of common stock are subject to rules promulgated by the Securities
and Exchange Commission relating to "penny stocks," which apply to companies
whose shares are not traded on a national stock exchange or on the NASDAQ
system, trade at less than $5.00 per share, or who do not meet certain other
financial requirements specified by the Securities and Exchange Commission.
These rules require brokers who sell "penny stocks" to persons other than
established customers and "accredited investors" to complete certain
documentation, make suitability inquiries of investors, and provide investors
with certain information concerning the risks of trading in the such penny
stocks. These rules may discourage or restrict the ability of brokers to sell
our shares of common stock and may affect the secondary market for our shares of
common stock. These rules could also hamper our ability to raise funds in the
primary market for our shares of common stock.

Since our shares are thinly traded, and trading on the OTC Bulletin Board may be
sporadic because it is not an exchange, stockholders may have difficulty
reselling their shares.

Our shares of common stock are currently publicly traded on the OTC Bulletin
Board service of the National Association of Securities Dealers, Inc. The
trading price of our shares of common stock has been subject to wide
fluctuations. Trading prices of our shares of common stock may fluctuate in
response to a number of factors, many of which will be beyond our control. The
stock market has generally experienced extreme price and volume fluctuations
that have often been unrelated or disproportionate to the operating performance
of companies with no current business operation. There can be no assurance that
trading prices and price earnings ratios previously experienced by our shares of
common stock will be matched or maintained. These broad market and industry
factors may adversely affect the market price of our shares of common stock,
regardless of our operating performance.

In the past, following periods of volatility in the market price of a company's
securities, securities class-action litigation has often been instituted. Such
litigation, if instituted, could result in substantial costs for us and a
diversion of management's attention and resources.

Investors' interests in our company will be diluted and investors may suffer
dilution in their net book value per share if we issue additional shares or
raise funds through the sale of equity securities.

Our constating documents authorize the issuance of 100,000,000 shares of common
stock, each with a par value of $0.001. In the event that we are required to
issue any additional shares or enter into private placements to raise financing
through the sale of equity securities, investors' interests in our company will
be diluted and investors may suffer dilution in their net book value per share
depending on the price at which such securities are sold. If we issue any such
additional shares, such issuances also will cause a reduction in the
proportionate ownership and voting power of all other shareholders. Further, any
such issuance may result in a change in our control.

Risks Relating to the Industry

As our properties are in the exploration and development stage there can be no
assurance that we will establish commercial discoveries on our properties.

Exploration for economic reserves of oil and gas is subject to a number of risk
factors. While the rewards to an investor can be substantial if an economically
viable discovery is made, few of the properties that are explored are ultimately
developed into producing oil and/or gas wells. Our properties are in the
exploration and development stage only and are without proven reserves of oil
and gas. There can be no assurance that we will establish commercial discoveries
on any of our properties.

The potential profitability of oil and gas ventures depends upon factors beyond
the control of our

company

The potential profitability of oil and gas properties is dependent upon many
factors beyond our control. For instance, world prices and markets for oil and
gas are unpredictable, highly volatile, potentially subject to governmental
fixing, pegging, controls, or any combination of these and other factors, and
respond to changes in domestic, international, political, social, and economic
environments. Additionally, due to world-wide economic uncertainty, the
availability and cost of funds for production and other expenses have become
increasingly difficult, if not impossible, to project. These changes and events
may materially affect our financial performance.

Adverse weather conditions can also hinder drilling operations. A productive
well may become uneconomic in the event water or other deleterious substances
are encountered which impair or prevent the production of oil and/or gas from
the well. In addition, production from any well may be unmarketable if it is
impregnated with water or other deleterious substances. The marketability of oil
and gas which may be acquired or discovered will be affected by numerous factors
beyond our control. These factors include the proximity and capacity of oil and
gas pipelines and processing equipment, market fluctuations of prices, taxes,
royalties, land tenure, allowable production and environmental protection. The
extent of these factors cannot be accurately predicted but the combination of
these factors may result in our company not receiving an adequate return on
invested capital.

Competition in the oil and gas industry is highly competitive and there is no
assurance that we will be successful in acquiring the leases.

The oil and gas industry is intensely competitive. We compete with numerous
individuals and companies, including many major oil and gas companies, which
have substantially greater technical, financial and operational resources and
staffs. Accordingly, there is a high degree of competition for desirable oil and
gas leases, suitable properties for drilling operations and necessary drilling
equipment, as well as for access to funds. There can be no assurance that the
necessary funds can be raised or that any projected work will be completed. Our
budget anticipates our acquisition of additional acreage in the Forest City
basin. There is no assurance that this acreage will become available or if it is
available for leasing, that we will be successful in acquiring the leases. There
are other competitors that have operations in the Forest City basin and the
presence of these competitors could adversely affect our ability to acquire
additional leases.

The marketability of nature resources will be affected by numerous factors
beyond our control which may result in us not receiving an adequate return on
invested capital to be profitable or viable.

The marketability of natural resources which may be acquired or discovered by us
will be affected by numerous factors beyond our control. These factors include
market fluctuations in oil and gas pricing and demand, the proximity and
capacity of natural resource markets and processing equipment, governmental
regulations, land tenure, land use, regulation concerning the importing and
exporting of oil and gas and environmental protection regulations. The exact
effect of these factors cannot be accurately predicted, but the combination of
these factors may result in us not receiving an adequate return on invested
capital to be profitable or viable.

Oil and gas operations are subject to comprehensive regulation which may cause
substantial delays or require capital outlays in excess of those anticipated
causing an adverse effect on our company.

Oil and gas operations are subject to federal, state, and local laws relating to
the protection of the environment, including laws regulating removal of natural
resources from the ground and the discharge of materials into the environment.
Oil and gas operations are also subject to federal, state, and local laws and
regulations which seek to maintain health and safety standards by regulating the
design and use of drilling methods and equipment. Various permits from
government bodies are required for drilling operations to be conducted; no
assurance can be given that such permits will be received. No assurance can be
given that environmental standards imposed by federal, provincial, or local
authorities will not be changed or that any such changes would not have material
adverse effects on our activities. Moreover, compliance with such laws may cause
substantial delays or require capital outlays in excess of those anticipated,
thus causing an adverse effect on us. Additionally, we may be subject to
liability for pollution or other environmental damages which it may elect not to
insure against due to prohibitive premium costs and other reasons.

Exploration and production activities are subject to certain environmental
regulations which may prevent or delay the commencement or continuance of our
operations.

In general, our exploration and production activities are subject to certain
federal, state and local laws and regulations relating to environmental quality
and pollution control. Such laws and regulations increase the costs of these
activities and may prevent or delay the commencement or continuance of a given
operation. Compliance with these laws and regulations has not had a material
effect on our operations or financial condition to date. Specifically, we are
subject to legislation regarding emissions into the environment, water
discharges and storage and disposition of hazardous wastes. In addition,
legislation has been enacted which requires well and facility sites to be
abandoned and reclaimed to the satisfaction of state authorities. However, such
laws and regulations are frequently changed and we are unable to predict the
ultimate cost of compliance. Generally, environmental requirements do not appear
to affect us any differently or to any greater or lesser extent than other
companies in the industry.

We believe that our operations comply, in all material respects, with all
applicable environmental regulations.

Our operating partners maintain insurance coverage customary to the industry;
however, it is not fully insured against all environmental risks.

Risks Associated with Drilling

Exploratory drilling involves many risks and we may become liable for pollution
or other liabilities which may have an adverse effect on our financial position.

Drilling operations generally involve a high degree of risk. Hazards such as
unusual or unexpected geological formations, power outages, labor disruptions,
blow-outs, sour gas leakage, fire, inability to obtain suitable or adequate
machinery, equipment or labour, and other risks are involved. We may become
subject to liability for pollution or hazards against which it cannot adequately
insure or which it may elect not to insure. Incurring any such liability may
have a material adverse effect on our financial position and operations.

Any change to government regulation/administrative practices may have a negative
impact on our ability to operate and our profitability.

There is no assurance that the laws, regulations, policies or current
administrative practices of any government body, organization or regulatory
agency in the United States or any other jurisdiction, will not be changed,
applied or interpreted in a manner which will fundamentally alter the ability of
our company to carry on our business.

The actions, policies or regulations, or changes thereto, of any government body
or regulatory agency, or other special interest groups, may have a detrimental
effect on us. Any or all of these situations may have a negative impact on our
ability to operate and/or our profitably.