THIS SUBSCRIPTION AGREEMENT RELATES TO AN OFFERING OF SECURITIES IN AN OFFSHORE
TRANSACTION TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED HEREIN) PURSUANT TO
REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
“1933 ACT”).

NONE OF THE SECURITIES TO WHICH THIS SUBSCRIPTION AGREEMENT (THE “SUBSCRIPTION
AGREEMENT”) RELATES HAVE BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933 (THE “1933 ACT”), OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO
REGISTERED, NONE MAY BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED
STATES OR TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT.

SUBSCRIPTION AGREEMENT

(Offshore Subscribers)

TO:

California Oil & Gas Corporation (the “Company”)

#312, 407 – 2nd Street SW

Calgary, Alberta T2P 2Y3

Purchase of Units

1.

Subscription

1.1                         On the basis of the representations and warranties
and subject to the terms and conditions set forth herein,
__________________________ (the “Subscriber”) hereby irrevocably subscribes for
and agrees to purchase __________ units (the “Units”) at a price per Unit of
US$0.45 (such subscription and agreement to purchase being the “Subscription”),
each Unit consisting of one share of the Company's common stock (a “Share”) and
one-half of one common share purchase warrant (a “Warrant”), each full Warrant
exercisable for one (1) year from Closing for one additional Share (a “Warrant
Share”) at a price of US$0.55 per Warrant Share for the aggregate total purchase
price of US $______________ (the “Subscription Proceeds”). The Shares, Warrants
and Warrant Shares are collectively referred to as the “Securities”.

1.2                         On the basis of the representations and warranties
and subject to the terms and conditions set forth herein, the Company hereby
irrevocably agrees to sell the Units to the Subscriber.

1.3                         Subject to the terms hereof, the Subscription will
be effective upon its acceptance by the Company.

2.

Payment

2.1                         The Subscription Proceeds must accompany this
Subscription and shall be paid by cashiers cheque or bank draft drawn on a U.S.
bank reasonably acceptable to the Company or, at the Subscriber’s option, by
wire transfer to the Company pursuant to instructions to be provided by the
Company upon request.

2.2                         The Subscriber acknowledges and agrees that this
Subscription Agreement, the Subscription Proceeds 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

 

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expressly reserves the right to do, within 30 days of the delivery of an
executed Subscription Agreement by the Subscriber, this Subscription Agreement,
the Subscription Proceeds (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 Company is entitled to treat the Subscription
Proceeds as an interest free loan to the Company until such time as the
Subscription is accepted and a certificate representing the Units has been
issued to the Subscriber.

3.

Documents Required from Subscriber

3.1                         The Subscriber must complete, sign and return to the
Company an executed copy of this Subscription Agreement.

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, the OTC Bulletin Board and applicable law.

4.

Closing

4.1                         Closing of the offering of the Units (the “Closing”)
shall occur on or before __________, 2006, or on such other date as may be
determined by the Company (the “Closing Date”).

5.

Acknowledgements of Subscriber

5.1

The Subscriber acknowledges and agrees that:

 

(a)

none of the Securities have been or will be registered under the 1933 Act, or
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 in the United States or,
directly or indirectly, to U.S. Persons, as that term is defined in Regulation S
under the 1933 Act (“Regulation S”), except in accordance with the provisions of
Regulation S, pursuant to an effective registration statement under the 1933
Act, or 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 applicable state securities laws;

 

(b)

other than as set out herein, the Company has not undertaken, and will have no
obligation, to register any of the Securities under the 1933 Act or any other
securities legislation;

 

(c)

it has received and carefully read this Subscription Agreement;

 

(d)

the decision to execute this Subscription 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 and
such decision is based entirely upon a review of any public information which
has been filed by the Company with the Securities and Exchange Commission
(“SEC”) in compliance, or intended compliance, with applicable securities
legislation;

 

(e)

it and its advisor(s) have had a reasonable opportunity to ask questions of and
receive answers from the Company in connection with the sale of the Securities
hereunder, and to obtain additional information, to the extent possessed or
obtainable by the Company without unreasonable effort or expense;

 

(f)

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 that all
documents, records and books in connection with the

 

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sale of the Securities hereunder have been made available for inspection by him
and his attorney and/or advisor(s);

 

(g)

all information which the Subscriber has provided to the Company is correct and
complete as of the date the Subscription Agreement is signed, and if there
should be any change in such information prior to this Subscription Agreement
being executed by the Company, the Subscriber will immediately provide the
Company with such information;

 

(h)

the Company is entitled to rely on the representations and warranties of the
Subscriber contained in this Subscription Agreement and the Subscriber will hold
harmless the Company from any loss or damage it or they may suffer as a result
of the Subscriber’s failure to correctly complete this Subscription Agreement;

 

(i)

the Subscriber will indemnify and hold harmless the Company and, where
applicable, its 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 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 in connection therewith;

 

(j)

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;

 

(k)

none of the Securities are listed on any stock exchange or automated dealer
quotation system and no representation has been made to the Subscriber that any
of the Securities will become listed 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 National Association of Securities Dealers,
Inc.’s OTC Bulletin Board;

 

(l)

the Subscriber is outside the United States when receiving and executing this
Subscription Agreement and is acquiring the Securities as principal for its own
account, for investment purposes only, and not with a view to, or for, resale,
distribution or fractionalization thereof, in whole or in part, and no other
person has a direct or indirect beneficial interest in such Securities;

 

(m)

none of the Securities may be offered or sold to a U.S. Person or for the
account or benefit of a U.S. Person (other than a distributor) prior to the end
of the Distribution Compliance Period (as defined herein);

 

(n)

the Company will refuse to register any transfer of the Securities not made in
accordance with the provisions of Regulation S, pursuant to an effective
registration statement under the 1933 Act or pursuant to an available exemption
from the registration requirements of the 1933 Act and in each case in
accordance with applicable state securities laws;

 

 

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(o)

neither the SEC nor any other securities commission or similar regulatory
authority has reviewed or passed on the merits of the Securities;

 

(p)

no documents in connection with the sale of the Securities hereunder have been
reviewed by the SEC or any state securities administrators;

 

(q)

there is no government or other insurance covering any of the Securities;

 

(r)

the issuance and sale of the Securities to the Subscriber will not be completed
if it would be unlawful or if, in the discretion of the Company acting
reasonably, it is not in the best interests of the Company;

 

(s)

the Subscriber is purchasing the Securities pursuant to an exemption from the
registration and the prospectus requirements of applicable securities
legislation on the basis that the Subscriber is an accredited investor of the
Company and, as a consequence:

 

(i)

is restricted from using most of the civil remedies available under securities
legislation,

 

(ii)

may not receive information that would otherwise be required to be provided
under securities legislation, and

 

(iii)

the Company is relieved from certain obligations that would otherwise apply
under securities legislation;

 

(t)

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

 

(u)

this Subscription 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 (which representations, warranties and covenants
shall survive the Closing) that:

 

(a)

the Subscriber is not a U.S. Person;

 

(b)

the Subscriber is not acquiring the Securities for the account or benefit of,
directly or indirectly, any U.S. Person;

 

(c)

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
and the sale of the Securities to the Subscriber as contemplated in this
Subscription Agreement complies with or is exempt from the applicable securities
legislation of the jurisdiction of residence of the Subscriber;

 

(d)

the Subscriber has the legal capacity and competence to enter into and execute
this Subscription Agreement 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 Agreement on behalf of
the Subscriber;

 

(e)

if the Subscriber is a corporation or other entity, the entering into of this
Subscription Agreement and the transactions contemplated hereby do not and will
not result in the violation of any of the terms and provisions of any law
applicable to, or the constating documents of, the Subscriber or of

 

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any agreement, written or oral, to which the Subscriber may be a party or by
which the Subscriber is or may be bound;

 

(f)

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;

 

(g)

the Subscriber is acquiring the Securities as principal for its own account for
investment purposes only and not for the account of any other person and not for
distribution, assignment or resale to others, and no other person has a direct
or indirect beneficial interest in such Securities, and it has not subdivided
its interest in the Securities with any other person;

 

(h)

the Subscriber is outside the United States when receiving and executing this
Subscription Agreement and is acquiring the Securities as principal for the
Subscriber’s own account 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 the
Securities;

 

(i)

the Subscriber is aware that an investment in the Company is speculative and
involves certain risks, including the possible loss of the entire investment and
it has carefully read and considered the matters set forth under the heading
“Risk Factors” appearing in the Company’s Form 10-KSB and any other filings
filed with the SEC;

 

(j)

the Subscriber has made an independent examination and investigation of an
investment in the Securities and the Company and has depended on the advice of
its legal and financial advisors and agrees that the Company will not be
responsible in any way whatsoever for the Subscriber’s decision to invest in the
Securities and the Company;

 

(k)

the Subscriber (i) has adequate net worth and means of providing for its current
financial needs and possible personal contingencies, (ii) has no need for
liquidity in this investment, and (iii) is able to bear the economic risks of an
investment in the Securities for an indefinite period of time;

 

(l)

the Subscriber understands and agrees that the Company and others will rely upon
the truth and accuracy of the acknowledgements, representations and agreements
contained in this Subscription Agreement and agrees that if any of such
acknowledgements, representations and agreements are no longer accurate or have
been breached, the Subscriber shall promptly notify the Company;

 

(m)

the Subscriber has the legal capacity and competence to enter into and execute
this Subscription Agreement and to take all actions required pursuant hereto;

 

(n)

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 in accordance with its terms;

 

(o)

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;

 

(p)

it 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;

 

(q)

the Subscriber understands and agrees that none of the Securities have been or
will, except as set forth in this Agreement, be registered under the 1933 Act,
or 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 in the United
States or, directly or indirectly, to U.S. Persons, as that term is defined in
Regulation S

 

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under the 1933 Act (“Regulation S”), except in accordance with the provisions of
Regulation S, pursuant to an effective registration statement under the 1933
Act, or 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 applicable state securities laws;

 

(r)

the Subscriber understands and agrees that offers and sales of any of the
Securities prior to the expiration of a period of one year after the date of
original issuance of the Securities (the one year period hereinafter referred to
as the “Distribution Compliance Period”) shall only be made in compliance with
the safe harbor provisions set forth in Regulation S, pursuant to the
registration provisions of the 1933 Act or an exemption therefrom, and that all
offers and sales after the Distribution Compliance Period shall be made only in
compliance with the registration provisions of the 1933 Act or an exemption
therefrom and in each case only in accordance with applicable state securities
laws;

 

(s)

the Subscriber acknowledges that it 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 any 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;

 

(t)

the Subscriber understands and agrees not to engage in any hedging transactions
involving any of the Securities unless such transactions are in compliance with
the provisions of the 1933 Act and in each case only in accordance with
applicable state securities laws;

 

(u)

the Subscriber understands and agrees that the Company will refuse to register
any transfer of the Securities not made in accordance with the provisions of
Regulation S, pursuant to an effective registration statement under the 1933 Act
or pursuant to an available exemption from the registration requirements of the
1933 Act;

 

(v)

the Subscriber (i) is able to fend for itself in the Subscription; (ii) has such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of its investment in the Securities and the
Company; and (iii) has the ability to bear the economic risks of its prospective
investment and can afford the complete loss of such investment;

 

(w)

the Subscriber is not aware of any advertisement of any of the Securities and 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; and

 

(x)

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

 

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system, except that currently the Company’s common shares are quoted on the
over-the-counter market operated by the NASD’s Over-The-Counter Bulletin Board.

6.2                         In this Subscription Agreement, the term “U.S.
Person” shall have the meaning ascribed thereto in Regulation S.

7.

Representations and Warranties will be Relied Upon by the Company

7.1                         The Subscriber acknowledges that the representations
and warranties contained herein are made by it with the intention that such
representations and warranties may be relied upon by the Company and its legal
counsel in determining the Subscriber’s eligibility to purchase the Securities
under applicable securities legislation, or (if applicable) the eligibility of
others on whose behalf it is contracting hereunder to purchase the Securities
under applicable securities legislation. The Subscriber further agrees that by
accepting delivery of the certificates representing the Securities on the
Closing Date, it will be representing and warranting that the representations
and warranties contained herein are true and correct as at the Closing Date with
the same force and effect as if they had been made by the Subscriber on the
Closing Date and that they will survive the purchase by the Subscriber of the
Securities and will continue in full force and effect notwithstanding any
subsequent disposition by the Subscriber of such Securities.

8.

Resale Restrictions

8.1                         The Subscriber acknowledges that any resale of the
Shares or Warrants will be subject to resale restrictions contained in the
securities legislation applicable to each Subscriber or proposed transferee. The
Subscriber acknowledges that the Shares and Warrants have not been registered
under the 1933 Act of the securities laws of any state of the United States. The
Shares and Warrants may not be offered or sold in the United States unless
registered in accordance with United States federal securities laws and all
applicable state securities laws or exemptions from such registration
requirements are available.

8.2                         The Subscriber acknowledges that restrictions on the
transfer, sale or other subsequent disposition of the Securities by the
Subscriber may be imposed by securities laws in addition to any restrictions
referred to in Section 8.1 above, and, in particular, the Subscriber
acknowledges and agrees that none of the Securities may be offered or sold to a
U.S. Person or for the account or benefit of a U.S. Person (other than a
distributor) prior to the end of the Distribution Compliance Period.

9.

Acknowledgement and Waiver

9.1                         The Subscriber has acknowledged that the decision to
purchase the Securities was solely made on the basis of information available to
the Subscriber on the EDGAR database maintained by the SEC at www.sec.gov. The
Subscriber hereby waives, to the fullest extent permitted by law, any rights of
withdrawal, rescission or compensation for damages to which the Subscriber might
be entitled in connection with the distribution of the Securities.

10.

Legending of Subject Securities

10.1                       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 WERE ISSUED IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT
U.S. PERSONS (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”). ACCORDINGLY, NONE OF
THE SECURITIES TO WHICH THIS CERTIFICATE RELATES HAVE BEEN REGISTERED UNDER THE
1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY
BE OFFERED OR SOLD IN THE UNITED STATES OR, DIRECTLY OR INDIRECTLY, TO U.S.
PERSONS (AS DEFINED HEREIN) EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND

 

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IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN
ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED
UNLESS IN ACCORDANCE WITH THE 1933 ACT.”

10.2                       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.

11.

Costs

11.1                       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
Securities shall be borne by the Subscriber.

12.

Registration Statement.

12.1                       If the Company decides to file a registration
statement (the "Registration Statement") under the 1933 Act covering the
distribution or sale of any securities of the Company other than the Units
(other than a registration on Form S-8), it shall forthwith give written notice
(the "Registration Notice") to the Subscriber of such decision. The Subscriber
shall have the right to elect, by written notice (the "Reply to Registration
Notice") to be given to the Company not more than five (5) business days
following receipt of the Registration Notice, to have the Registration Statement
cover the sale of the Units by the Subscriber.

12.2                       This Agreement shall be subject to the right of the
Company to include none or a lesser number of Units for qualification under the
Registration Statement at the direction (made reasonably) of any underwriter or
agent engaged by the Company in connection with the offering.

12.3                       The obligations of the Company under this Agreement
shall terminate and be of no further effect upon the earliest to occur of the
following:

 

(a)

when all Units shall have been sold pursuant to Rule 144 (or any successor
provision) under the 1933 Act;

 

(b)

when all Units shall have been otherwise transferred and a new certificate(s)
for such Units not bearing a legend restricting further transfer shall have been
delivered by The Company; and

 

(c)

that day that is two (2) years following the original issue date of the Units.

12.4                       In the event of a registration pursuant to the
provisions of this Agreement, the Company shall use its best efforts to cause
the Units so registered to be registered or qualified for sale under the
securities or blue sky laws of such jurisdictions as the Subscriber may
reasonably request; provided, however, that the Company shall not by reason of
this Agreement be required to qualify to do business in any state in which it is
not otherwise required to qualify to do business or to file a general consent to
service of process.

12.5                       The Company shall keep effective any registration or
qualification contemplated by this Agreement and shall from time to time amend
or supplement each applicable registration statement, preliminary prospectus,
final prospectus, application, document, and communication for a period of one
year from the date the Registration Statement is first declared effective.

13.

Indemnification.

13.1                       Indemnification by the Company. The Company shall,
notwithstanding any termination of this Agreement, indemnify and hold harmless
the Subscriber, the officers, directors, agents, brokers (including brokers who
offer and sell the Securities as principal as a result of a pledge or any
failure to perform under a margin call of common stock), investment advisors and
employees of the Subscriber, each person who controls the Subscriber (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
and the officers,

 

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directors, agents and employees of each such controlling person, to the fullest
extent permitted by applicable law, from and against any and all losses, claims,
damages, liabilities, costs (including, without limitation, costs of preparation
and attorneys' fees) and expenses (collectively, "Losses"), as incurred, arising
out of or relating to any untrue or alleged untrue statement of a material fact
contained in the Registration Statement, any prospectus or any form of
prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or relating to any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein (in the case of any prospectus or form of prospectus or
supplement thereto, in the light of the circumstances under which they were
made) not misleading, except to the extent, but only to the extent, that (i)
such untrue statements or omissions are based solely upon information regarding
the Subscriber furnished in writing to the Company by or on behalf of the
Subscriber expressly for use therein, and (ii) that the foregoing indemnity
agreement is subject to the condition that, insofar as it relates to any untrue
statement, allegedly untrue statement, omission or alleged omission made in any
preliminary prospectus but eliminated or remedied in the final prospectus (filed
pursuant to Rule 424 of the Securities Act), such indemnity agreement shall not
inure to the benefit of the Subscriber or any underwriter, broker or other
person acting on behalf of holders of the Securities, from whom the person
asserting any loss, claim, damage, liability or expense purchased the Securities
which are the subject thereof, if a copy of such final prospectus had been made
available to such person and the Subscriber or such underwriter, broker or other
person acting on behalf of the Subscriber and such final prospectus was not
delivered to such person with or prior to the written confirmation of the sale
of such Securities to such person. The Company shall notify the Subscriber
promptly of the claim, threat or assertion of any proceeding of which the
Company is aware in connection with the transactions contemplated by this
Agreement.

13.2                       Indemnification by Subscriber. The Subscriber shall
indemnify and hold harmless the Company, its directors, officers, agents and
employees, each person who controls the Company (within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act), and the directors,
officers, agents and employees of such controlling persons, to the fullest
extent permitted by applicable law, from and against all Losses (as determined
by a court of competent jurisdiction in a final judgment not subject to appeal
or review), as incurred, arising solely out of or based solely upon any untrue
statement of a material fact contained in the Registration Statement, any
prospectus, or any form of prospectus, or arising solely out of or based solely
upon any omission of a material fact required to be stated therein or necessary
to make the statements therein (in the case of any prospectus or form of
prospectus or supplement thereto, in the light of the circumstances under which
they were made) not misleading, to the extent, but only to the extent, that such
untrue statement or omission is contained in any information so furnished in
writing by the Subscriber to the Company specifically for inclusion in the
Registration Statement or such prospectus. Notwithstanding anything to the
contrary contained herein, the Subscriber shall be liable under this Section
13.2 for only that amount as does not exceed the lesser of (i) the dollar amount
of the net proceeds received by the Subscriber upon the sale of the Securities
giving rise to such indemnification obligation and (ii) the aggregate purchase
price paid by the Subscriber for the Securities pursuant to this Agreement.

 

13.3                       Contribution. If a claim for indemnification under
Section 13.1 or 13.2 is unavailable to an indemnified party because of a failure
or refusal of a governmental authority to enforce such indemnification in
accordance with its terms (by reason of public policy or otherwise), then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such Losses, in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party on the one hand and the indemnified
party on the other from the offering of the Securities. If, but only if, the
allocation provided by the foregoing sentence is not permitted by applicable
law, the allocation of contribution shall be made in such proportion as is
appropriate to reflect not only the relative benefits referred to in the
foregoing sentence but also the relative fault, as applicable, of the
indemnifying party and indemnified party in connection with the actions,
statements or omissions that resulted in such Losses as well as any other
relevant equitable considerations. The relative fault of such indemnifying party
and indemnified party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission of a material fact, has been
taken or made by, or relates to information supplied by, such indemnifying party
or indemnified party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action, statement or
omission. The amount paid or payable by a party as a result of any Losses shall
be deemed to include any reasonable attorneys' or other reasonable fees or
expenses incurred by such party in connection with (i) any proceeding to the
extent such party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was

 

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available to such party in accordance with its terms or (ii) enforcing any
rights under this Section 13. In no event shall the Subscriber be required to
contribute an amount under this Section 13.3 in excess of the net proceeds
received by the Subscriber upon sale of the Subscriber’s Securities pursuant to
the Registration Statement giving rise to such contribution obligation.

 

The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 13.3 were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.

The indemnity and contribution agreements contained in this Section are in
addition to any liability that the indemnifying parties may have to the
indemnified parties. Notwithstanding anything to the contrary contained herein,
the Subscriber shall be liable under this Section 13.3 for only that amount as
does not exceed the net proceeds to the Subscriber as a result of the sale of
Securities pursuant to such Registration Statement.

14.

Governing Law

14.1                       This Subscription Agreement is governed by the laws
of the State of Nevada and the federal laws of the United States applicable
therein.

15.

Survival

15.1                       This Subscription Agreement, 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.

16.

Assignment

16.1

This Subscription Agreement is not transferable or assignable.

17.

Severability

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

18.

Entire Agreement

18.1                       Except as expressly provided in this Subscription
Agreement and in the agreements, instruments and other documents contemplated or
provided for herein, this Subscription 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 or by anyone
else.

19.

Notices

19.1                       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. Notices to the Subscriber
shall be directed to the address on the signature page of this Subscription
Agreement and notices to the Company shall be directed to it at California Oil &
Gas Corporation, Suite 312, 407 – 2nd Street, SW, Calgary, Alberta, T2P 2Y3,
Attention: President.

 

 

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20.

Counterparts and Electronic Means

20.1                       This Subscription 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. Delivery of an executed copy of this Subscription Agreement by
electronic facsimile transmission or other means of electronic communication
capable of producing a printed copy will be deemed to be execution and delivery
of this Subscription Agreement as of the date hereinafter set forth.

21.

Delivery Instructions

 

21.1

The Subscriber hereby directs the Company to deliver the Certificate evidencing
the Units to:

 

                                          
                                                                         

(name)

 

                                          
                                                                         

(address)

 

21.2                       The Subscriber hereby directs the Company to cause
the Units to be registered on the books of the Company as follows:

 

                                          
                                                                         

(name)

 

                                          
                                                                         

(address)

 

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

IN WITNESS WHEREOF the Subscriber has duly executed this Subscription Agreement
as of the date of acceptance by the Company.

 

                                          
                                                                     

By:                                          

 

(Signature and, if applicable, Office)

                                               

 

Address

                                              

 

 

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A C C E P T A N C E

The above-mentioned Subscription Agreement in respect of the Units is hereby
accepted by California Oil & Gas Corporation

DATED at ______________________________, the ______ day of __________, 2006.

CALIFORNIA OIL & GAS CORPORATION

 

 

Per:

                                                                         

 

________________________________
Authorized Signatory