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                             SUBSCRIPTION FOR SHARES

        (Part 5 Accredited Investor Exemption Pursuant to "Multi-lateral
  Instrument 45-103 - Capital Raising Exemptions" - Alberta Residents Only and
    Accredited Investor Exemption Pursuant to "Ontario Securities Commission
                     Rule 45-501" - Ontario Residents Only)

TO:     Kodiak Energy, Inc. (the "Corporation")
        734  7th Avenue S.W. Suite 460
        Calgary AB, T2P 3P8

The undersigned subscriber (the "Subscriber")  acknowledges that the Corporation
is proceeding  with an Offering of shares  ("Sharess") at a price of US$0.02 per
Share for gross  proceeds of US$ . Each Share is one (1) common  share  ("Common
Share").  The  undersigned  Subscriber  hereby tenders to the  Corporation  this
subscription offer which, upon acceptance by the Corporation, will constitute an
agreement of the Subscriber to subscribe for, take up, purchase and pay for and,
on the part of the Corporation,  to issue and sell to the Subscriber, the number
of Shares set out below on the terms and  subject to the  conditions  set out in
this Subscription Agreement. Until the Closing of the Offering, all subscription
funds shall be held in a non-interest  bearing account of the Corporation.  Upon
Closing of the  Offering,  all of the  subscription  proceeds  (net of  expenses
thereon) will be released to the Corporation. In the event the Offering does not
close, any and all subscription proceeds will be returned to subscribers without
interest,  deduction or penalty.  The Subscriber hereby  acknowledges and agrees
that the terms and conditions  contained in the attached  Schedule "A" form part
of this Subscription Agreement and are incorporated herein by reference.

-----------------------------------     Number of Shares:
Name of Subscriber - please print
                                        ----------------------------------------

                                        ----------------------------------------
By: -------------------------------     Aggregate  Subscription  Price
    Authorized Signature                (No. of Shares X US$0.02 per Share):

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

                                        ----------------------------------------
-----------------------------------     No.  of  Common  Shares  Currently  Held
Official Capacity or Title              (excluding  Common Shares comprising the
 - please print                         Shares subscribed for herein):

-----------------------------------     ----------------------------------------
(Please print name of individual
whose signature appears above if        ----------------------------------------
different than the name of the          Deliver the Shares as set forth below:
Subscriber printed above.)
                                        ----------------------------------------
                                        Name
-----------------------------------
Subscriber's Address                    ----------------------------------------
                                        Account reference, if applicable
-----------------------------------
Facsimile Number                        ----------------------------------------
                                        Contact Name
-----------------------------------
Telephone Number     E-Mail Address     ----------------------------------------
                                        Address

-----------------------------------     ----------------------------------------
Register the Shares as set forth        Telephone Number          E-Mail Address
below:

-----------------------------------
Name

-----------------------------------
Account reference, if applicable

-----------------------------------
Address

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

ACCEPTANCE:  The  Corporation  hereby accepts the above  subscription as of this
_______  day of  ________________,  2005  and  the  Corporation  represents  and
warrants to the Subscriber that the  representations  and warranties made by the
Corporation  are true and correct in all  material  respects as in all  material
respects as of this date and that the Subscriber is entitled to rely thereon.

                                       Kodiak energy, Inc.

                                       By:  ------------------------------------

           This is the first page of an agreement comprised of 8 pages
                           (not including Exhibits).


<PAGE>


             SCHEDULE "A" -TERMS AND CONDITIONS OF SUBSCRIPTION FOR
                          SHARES OF KODIAK ENERGY, INC.

Definitions

In this Subscription Agreement:

     (a)  "Closing"  or  "Closing  Date"  means  the  closing  of  the  Offering
          initially  expected  to occur on or about  December  22,  2005 or such
          other date or dates as may be  determined  by the  Corporation  in its
          sole discretion and such other subsequent  closings as may be required
          to complete the Offering;

     (b)  "Common  Share"  means a  common  share  in the  capital  stock of the
          Corporation;

     (c) "Corporation" means Kodiak Energy, Inc.;

     (d)  "MI  45-102"  means   Multilateral   Instrument  45-102  -  Resale  of
          Securities;

     (e)  "MI 45-103" means  Multilateral  Instrument  45-103 - Capital  Raising
          Exemptions;

     (f)  "Offering"  means the offering of Shares by the Corporation at US$0.02
          per Share;

     (g)  "OSC Rule 45-501" means  Ontario  Securities  Commission  Rule 45-501-
          Exempt Distributions;

     (h)  "Securities"  means the  Shares,  the Common  Shares and the  Warrants
          comprising the Shares, and the Warrant Shares;

     (i)  "Subscriber"  means the person or company identified as the Subscriber
          on the face page of this Subscription Agreement;

     (j)  "Subscription  Agreement"  means  this  agreement,  together  with the
          schedules and exhibits  attached  hereto,  as amended or  supplemented
          from time to time;

     (k)  "Subscription  Price" means the aggregate  subscription  price paid by
          the Subscriber,  being the number of Shares  subscribed for multiplied
          by US$0.02 per Share and ;

     (l)  "Share"  means  a Share  consisting  of one (1)  Common  Share  of the
          Corporation;

Terms of the Offering

1.   The Subscriber  hereby confirms its  subscription for and agrees to take up
the Shares as provided  for on the initial page of this  Subscription  Agreement
and  delivers  herewith  a  certified  cheque  or  bank  draft  payable  to  the
Corporation  in  the  amount  of  the  Subscription  Price  and  authorizes  the
Corporation  to  release  the said funds for use by the  Corporation  on Closing
against delivery to the Subscriber of duly issued certificates  representing the
Common Shares and Warrants comprising the Shares subscribed for herein.

2.   The Subscriber  acknowledges  that the Shares subscribed for hereunder form
part of a larger issuance and sale by the Corporation of a maximum of 15,000,000
(fifteen  million) Shares of the Corporation at a subscription  price of US$0.02
per Share.

3.   The  Subscriber  acknowledges  that if the  Offering  does not close on any
subscriptions  received, the amounts received for subscriptions will be promptly
returned by the  Corporation  to  subscribers  without  interest,  deduction  or
penalty.  The Shares offered are subject to acceptance by the Corporation and to
rejection  or  allotment  by  the  Corporation  in  whole  or in  part  and  the
Corporation  reserves the right to discontinue  the Offering at any time without
notice.

4.   The  Subscriber  acknowledges  that  this  Subscription  Agreement  and the
Exhibits hereto require the Subscriber to provide certain  personal  information
to the  Corporation.  Such information is being collected by the Corporation for


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<PAGE>


the purposes of completing the Offering,  which  includes,  without  limitation,
determining the Subscriber's eligibility to purchase the Shares under applicable
securities  legislation,  preparing and  registering  certificates  representing
Shares to be issued to the  Subscriber and  completing  filings  required by any
stock exchange or securities  regulatory  authority.  The Subscriber's  personal
information  may be  disclosed  by the  Corporation  to: (a) stock  exchanges or
securities regulatory authorities,  (b) the Corporation's registrar and transfer
agent,  and (c) any of the other  parties  involved in the  Offering,  including
legal  counsel  and may be  included  in  record  books in  connection  with the
Offering. By executing this Subscription Agreement,  the Subscriber is deemed to
be  consenting  to  the  foregoing   collection,   use  and  disclosure  of  the
Subscriber's personal information. The Subscriber also consents to the filing of
copies or originals of any of the Subscriber's documents described in Section 11
hereof as may be  required  to be filed with any stock  exchange  or  securities
regulatory authority in connection with the transactions contemplated hereby.

5.   THE SUBSCRIBER  FURTHER  ACKNOWLEDGES THAT AN INVESTMENT IN THE SHARES MUST
BE  CONSIDERED  SPECULATIVE  AND IS  SUBJECT  TO A NUMBER OF RISK  FACTORS.  THE
SUBSCRIBER  COVENANTS AND AGREES TO COMPLY WITH MI 45-103 OR OSC RULE 45-501, AS
APPLICABLE,  MI 45-102 AND ANY OTHER APPLICABLE SECURITIES  LEGISLATION,  RULES,
REGULATIONS,  ORDERS OR POLICIES CONCERNING THE PURCHASE, HOLDING OF, AND RESALE
OF THE SECURITIES.  THE SECURITIES ARE SUBJECT TO RESALE  RESTRICTIONS  AND WILL
BEAR A LEGEND TO THAT EFFECT.

6.   In addition to one manually  signed,  completed  copy of this  Subscription
Agreement,  the Subscriber will execute and deliver to the Corporation all other
documentation as may be required by applicable  securities  legislation,  rules,
policy  statements,  and  orders,  including  MI 45-103 or OSC Rule  45-501,  as
applicable,  to  permit  the  issue  and  sale  of the  Shares.  The  Subscriber
acknowledges and agrees that any such documentation, when executed and delivered
by the  Subscriber,  will  form  part of and  will  be  incorporated  into  this
Subscription   Agreement  with  the  same  effect  as  if  each   constituted  a
representation and warranty or covenant of the Subscriber hereunder in favour of
the  Corporation,  and the  Subscriber  consents to the filing of such documents
and/or  information  contained in such  documents as may be required to be filed
with  any  securities  or  the  regulatory  authority  in  connection  with  the
transactions contemplated hereby.

Representations, Warranties and Covenants by Subscriber

7.   The Subscriber  represents,  warrants and covenants to the Corporation (and
acknowledges  that the Corporation and its counsel are relying  thereon) both at
the date hereof and at the Closing Date that:

(a)  the  Subscriber  has been  independently  advised as to  restrictions  with
     respect  to  trading  in  the  Shares  imposed  by  applicable   securities
     legislation,  confirms that no representation  has been made to it by or on
     behalf of the Corporation  with respect  thereto,  acknowledges  that it is
     aware of the  characteristics  of the  Shares,  the  risks  relating  to an
     investment  therein  and of the fact that it may not be able to resell  the
     Securities  except in accordance with limited  exemptions  under applicable
     securities  legislation and regulatory policy,  including MI 45-102 and the
     United States  Securities  Act of 1933, as amended (as defined below) until
     expiry of the applicable  restricted  period and compliance  with the other
     requirements  of  applicable  law;  and  the  Subscriber  agrees  that  any
     certificates  representing the Securities,  and all certificates  issued in
     exchange  therefore  or  in  substitution   thereof,  will  bear  a  legend
     indicating that the resale of such Securities is restricted; and

(b)  the  Subscriber  has  not  received  or  been  provided  with,  nor  has it
     requested,  nor does it have any need to receive,  any offering memorandum,
     or any other  document  (other than an annual  report,  annual  information
     form,  interim  report,   information  circular  or  any  other  continuous
     disclosure  document,  the  content  of which is  prescribed  by statute or
     regulation)  describing the business and affairs of the  Corporation  which
     has been prepared for delivery to, and review by, prospective purchasers in
     order to assist  it in making an  investment  decision  in  respect  of the
     Shares; and

(c)  the Subscriber has been afforded the  opportunity (i) to ask such questions
     as it deemed necessary of, and to receive answers from,  representatives of
     the Corporation  concerning the terms and conditions of the offering of the
     Shares and (ii) to obtain such additional information which the Corporation
     possesses or can acquire  without  unreasonable  effort or expense that the
     Subscriber  considered  necessary in connection with its decision to invest
     in the Shares; and

(d)  the Subscriber has not become aware of any advertisement,  article,  notice
     or other  communication  in  printed  media of  general  and  regular  paid
     circulation  (or  other  printed  public  media),  radio,  television,  the


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<PAGE>


     internet or  telecommunications  or other form of advertisement  (including
     electronic display) with respect to the distribution of the Shares; and

(e)  this  Agreement  is made  unconditionally  as a result of the  Subscriber's
     desire to participate in the future development of the Corporation; and

(f)  the  Subscriber  is  purchasing  as  principal  and  it  knows  that  it is
     purchasing the Shares  pursuant to an exemption under MI 45-103 or OSC Rule
     45-501, as applicable, and, as a consequence, is restricted from using most
     of the civil remedies  available under applicable  securities  legislation,
     may not receive information that would otherwise be required to be provided
     to it under  applicable  securities  legislation,  and the  Corporation  is
     relieved  from  certain   obligations  that  would  otherwise  apply  under
     applicable securities legislation; and

     (i)  if a resident of Alberta, the Subscriber is a resident in or otherwise
          subject to the  applicable  securities  laws of  Alberta  and it is an
          "accredited   investor",   as  such  term  is  defined  in  MI  45-103
          promulgated  under the Securities  Act (Alberta) and has  concurrently
          executed and delivered a Representation Letter in the form attached as
          Exhibit 1 to this Subscription Agreement; or

     (ii) if a resident of Ontario, the Subscriber is a resident in or otherwise
          subject  to  the  applicable  securities  laws  of  Ontario  and is an
          "accredited  investor",  as such term is  defined  in OSC Rule  45-501
          promulgated  under the Securities  Act (Ontario) and has  concurrently
          executed and delivered a Representation Letter in the form attached as
          Exhibit 2 to this Subscription Agreement; and

(g)  if the  Subscriber  is  resident  in any  jurisdiction  not  referred to in
     Subsection  7(f) above:  (a) the purchase of the Shares does not contravene
     any of the applicable  laws in the  Subscriber's  jurisdiction of residence
     and does not trigger (i) any  obligation  to prepare and file a prospectus,
     an offering memorandum or similar document,  or any other ongoing reporting
     requirements  with  respect  to such  purchase  or  otherwise,  or (ii) any
     registration or other  obligation on the part of the  Corporation;  (b) the
     sale of the Shares as contemplated in the Subscription  Agreement  complies
     with  or  is  exempt  from   applicable   securities   legislation  of  the
     Subscriber's jurisdiction of residence and the Subscriber will provide such
     evidence  of  compliance  with  all such  matters  as the  Corporation  may
     request;  (c) the  Subscriber  will comply with the provisions of Section 5
     and  Subsection  7(a) as if they were a resident  of  Alberta;  and (d) and
     notwithstanding  that the Subscriber is not a resident of Alberta, it is an
     "accredited  investor",  as such term is defined  in MI 45-103  promulgated
     under the  Securities  Act  (Alberta)  and has  concurrently  executed  and
     delivered a Representation Letter in the form attached as Exhibit 1 to this
     Subscription Agreement; and

(h)  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 a
          stock exchange or that  application has been made to list and post any
          of the Securities for trading on a stock exchange; and

(i)  the Subscriber has no knowledge of a "material  fact" or "material  change"
     (as those  terms are  defined  by  applicable  securities  legislation)  in
     respect  of the  affairs  of the  Corporation  that has not been  generally
     disclosed  to the public,  other than  knowledge  relating  directly to its
     subscription for the Shares; and

(j)  the Corporation may complete additional  financings in the future, and such
     future  financings  may have a  dilutive  effect on  then-current  security
     holders of the Corporation, including the Subscriber; and

(k)  it is aware that the  Securities  have not been and will not be  registered
     under  the  United  States  Securities  Act  of  1933,  as  amended  ("U.S.
     Securities  Act") and that the Securities may not be offered or sold in the
     United  States or to, or for the account or benefit  of, a U.S.  Person (as
     defined in Regulation S under the U.S.  Securities  Act) (a "U.S.  Person")
     without  registration  under the U.S.  Securities  Act or  compliance  with
     requirements  of an  exemption  or  exclusion  from  registration  and  the


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<PAGE>


     applicable  laws  of  all  applicable  states  and  acknowledges  that  the
     Corporation  has no present  intention of filing a  registration  statement
     under the U.S. Securities Act in respect of the Securities; and

(l) the Shares have not been offered to the Subscriber in the United States; and

(m)  it is not a U.S.  Person and is not  purchasing the Shares on behalf of, or
     for the account or benefit of, a U.S. Person; and

(n)  the  Subscriber  undertakes  and agrees  that it will not offer or sell the
     Securities in the United States unless such securities are registered under
     the U.S. Securities Act and the securities laws of all applicable states of
     the United  States or an  exemption  or  exclusion  from such  registration
     requirements  is  available,  and  further  that it  will  not  resell  the
     Securities   except  in  accordance   with  the  provisions  of  applicable
     securities legislation,  regulations,  rules, policies and orders and stock
     exchange rules; and

(o)  it will not engage in hedging  transactions  with regard to the  Securities
     except in compliance with the U.S. Securities Act; and

(p)  it  understands  and  acknowledges  that the  Corporation  must  refuse  to
     register  any transfer of the  Securities  not made in  accordance  with an
     available exemption or exclusion from the registration  requirements of the
     U.S.  Securities Act or pursuant to registration under the U.S.  Securities
     Act; and

(q)  if the Subscriber is a "distributor"  (as defined in Regulation S under the
     U.S. Securities Act) or is an "affiliate" (as defined in Rule 405 under the
     U.S.  Securities  Act)  of a  distributor  or  is  acting  on  behalf  of a
     distributor,  (i) it agrees  that it will not offer or sell the  Securities
     during the one year period after the completion of the  distribution of the
     Shares (the "Distribution  Compliance  Period") to a U.S. Person or for the
     account or benefit of a U.S. Person (other than a distributor), and (ii) if
     it sells Securities to another distributor, a dealer (as defined in Section
     2(a)(12)  of the U.S.  Securities  Act) or a  person  receiving  a  selling
     concession fee or other  remuneration,  during the Distribution  Compliance
     Period,  the Subscriber agrees that it will send a written  confirmation or
     other notice to the purchaser  stating that the purchaser is subject to the
     same  restrictions  on offers  and sales that  apply to a  distributor  and
     setting forth the restrictions on offers and sales of Securities within the
     United States or to, or for the account or benefit of, U.S. Persons; and

(r)  if any Securities are being sold in the United States  pursuant to Rule 144
     under the U.S.  Securities Act, the United States restrictive legend may be
     removed from the certificates  representing the Securities by delivering to
     the  Corporation  a written  opinion of  counsel,  of  recognized  standing
     reasonably  satisfactory to the Corporation,  to the effect that the legend
     is no longer required under applicable  requirements of the U.S. Securities
     Act or state securities laws; and

(s)  if a corporation, partnership,  unincorporated association or other entity,
     it has the legal  capacity to enter into and be bound by this  Subscription
     Agreement and further certifies that all necessary  approvals of directors,
     shareholders or otherwise have been given and obtained; and

(t)  if an  individual,  it is of the  full  age  of  majority  and  is  legally
     competent  to  execute  this  Subscription  Agreement  and take all  action
     pursuant hereto; and

(u)  it  acknowledges  that the net  subscription  proceeds (gross proceeds less
     expenses,   including   legal   fees  which  have  not  been  paid  by  the
     Corporation),  will be  immediately  releasable to the  Corporation  on the
     Closing Date or later closing dates, as the case may be; and

(v)  this Subscription Agreement has been duly and validly authorized,  executed
     and delivered by and  constitutes a legal,  valid,  binding and enforceable
     obligation of the Subscriber; and

(w)  the  entering  into of this  Subscription  Agreement  and the  transactions
     contemplated  hereby will not result in a violation of any of the terms and
     provisions of any law applicable to it, or any of its constating documents,
     or of any  agreement to which the  Subscriber  is a party or by which it is
     bound; and


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<PAGE>


(x)  in the case of a subscription  by the Subscriber for Shares acting as agent
     for a disclosed  principal,  it is duly  authorized  to execute and deliver
     this  Subscription  Agreement  and all  other  necessary  documentation  in
     connection  with such  subscription  on behalf of such  principal  and this
     Subscription Agreement has been duly authorized,  executed and delivered by
     or on behalf of, and constitutes a legal,  valid and binding  agreement of,
     such principal; and

(y)  the Subscriber  has such knowledge in financial and business  affairs as to
     be  capable  of  evaluating  the  merits  and  risks  of  the  Subscriber's
     investment and the  Subscriber,  or, where the Subscriber is not purchasing
     as principal,  each beneficial purchaser, is able to bear the economic risk
     of loss of the Subscriber's entire investment in the Shares; and

(z)  except  for the  representations  and  warranties  made by the  Corporation
     herein, it has relied solely upon publicly available  information  relating
     to the Corporation and not upon any verbal or written  representation as to
     fact or otherwise made by or on behalf of the Corporation and  acknowledges
     that the Corporation's counsel are acting as counsel to the Corporation and
     not as counsel to the Subscriber; and

(aa) the Subscriber understands that Shares are being offered for sale only on a
     "private  placement"  basis and that the sale and delivery of the Shares is
     conditional  upon such sale being  exempt from the  requirements  as to the
     filing of a prospectus  or delivery of an offering  memorandum  or upon the
     issuance of such orders, consents or approvals as may be required to permit
     such sale without the  requirement  of filing a prospectus or delivering an
     offering  memorandum  and, as a consequence (i) it is restricted from using
     most of the civil remedies available under securities legislation;  (ii) it
     may not receive information that would otherwise be required to be provided
     to it under securities  legislation;  and (iii) the Corporation is relieved
     from  certain  obligations  that would  otherwise  apply  under  securities
     legislation; and

(bb) if required  by  applicable  securities  legislation,  regulations,  rules,
     policies  or  orders,  MI  45-103,  OSC Rule  45-501  or by any  securities
     commission,  stock exchange or other regulatory  authority,  the Subscriber
     will execute, deliver, file and otherwise assist the Corporation in filing,
     such reports, undertakings and other documents with respect to the issue of
     the Shares (including,  without  limitation,  a completed and duly executed
     Representation  Letter,  attached  as  Exhibit 1 and  Exhibit 2 hereto,  as
     applicable); and

(cc) the Subscriber will not resell the Securities except in accordance with the
     provisions of applicable  securities  legislation and stock exchange rules,
     if applicable, in the future; and

(dd) the  Subscriber  deals at arm's  length  with the  Corporation  within  the
     meaning of the Income Tax Act (Canada)  and will  continue to deal at arm's
     length  with the  Corporation  at all  times  which are  relevant  for this
     Subscription Agreement; and

(ee) none of the funds the  Subscriber  is using to purchase  the Shares are, to
     the knowledge of the Subscriber,  proceeds obtained or derived, directly or
     indirectly, as a result of illegal activities; and

(ff) the funds  representing the total Subscription Price which will be advanced
     by the Subscriber to the Corporation  hereunder will not represent proceeds
     of crime for the purposes of the Proceeds of Crime (Money  Laundering)  Act
     (Canada) (the "PCMLA") and the Subscriber acknowledges that the Corporation
     may in the future be required by law to disclose the Subscriber's  name and
     other  information   relating  to  this  Subscription   Agreement  and  the
     Subscriber's  subscription  hereunder, on a confidential basis, pursuant to
     the PCMLA; and

(gg) to the best of its knowledge,  the subscription funds to be provided by the
     Subscriber  (i) have not been or will not be derived from or related to any
     activity that is deemed criminal under the law of Canada, the United States
     of America, or any other  jurisdiction,  and (ii) are not being tendered on
     behalf of a person or entity who has not been  identified to the Subscriber
     and the Subscriber  shall promptly notify the Corporation if the Subscriber
     discovers that any of such representations cease to be true, and to provide
     the Corporation with appropriate information in connection therewith; and

(hh) the  Subscriber  acknowledges  that it has been  encouraged  to and  should
     obtain independent legal,  income tax and investment advice with respect to
     its subscription for these Shares and accordingly,  has been  independently
     advised as to the meanings of all terms  contained  herein  relevant to the
     Subscriber for purposes of giving representations, warranties and covenants
     under this Subscription Agreement.


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<PAGE>


Representations, Warranties and Covenants of the Corporation

8.   The  Corporation  hereby  represents and warrants to the Subscriber that it
has been duly  incorporated and is a valid and subsisting  corporation under the
laws of the State of Delaware,  United States,  and has full corporate power and
authority  to  enter  into  this  Subscription  Agreement  and  to  perform  its
obligations hereunder.

9.   The Corporation  hereby covenants with the Subscriber that it will take all
corporate  action  required to issue to the  Subscriber the Common Shares on the
Closing Date.

Registration Rights

10.  If the  Corporation  proposes to  register,  pursuant  to any  registration
rights agreement (a "Registration  Rights  Agreement"),  for shareholders  other
than the  Subscriber,  any of its Common Shares or other equity  securities  (or
securities  convertible into equity securities) under the U.S. Securities Act in
connection with the public  offering of such  securities  solely for cash (other
than a registration on Form S-8, Form S-4 or Form F-4), the Corporation will, at
all such times,  promptly give the  Subscriber  written  notice of such proposed
registration.  Upon the written request of the Subscriber,  given within 20 days
after the  mailing of such  notice by the  Corporation,  the  Corporation  will,
subject to the provisions of applicable Registration Rights Agreements,  use its
commercial  best efforts to cause a registration  statement  covering all of the
(i) Common Shares being  acquired  hereunder that each such Holder has requested
to be registered to become effective under the U.S.  Securities Act. Only to the
extent they apply to "piggy back" registrations, such registration shall also be
subject  to  the  other  provisions  of  each  applicable   Registration  Rights
Agreement.  For greater certainty, (i) such registration shall not be subject to
any provisions of any Registration  Rights Agreement that are applicable only to
"demand"  registrations,  and (ii) the  Subscriber  acknowledges  that except as
contemplated by this Section,  the Corporation is under no obligation  hereunder
to register any of its  securities or to complete any offering of its securities
it proposes to make,  and the  Corporation  will  therefore  incur no  liability
(including  any  penalties  that may be  incurred  under a  Registration  Rights
Agreement) to the  Subscriber  for its failure to register any of its securities
or to complete any offering of its securities.

Closing

11.  The Subscriber  agrees to deliver to the  Corporation,  not later than 4:30
p.m.  (Calgary  time) on the Closing Date:  (a) this duly completed and executed
Subscription  Agreement;  (b) a certified cheque or bank draft payable to Kodiak
Energy,  Inc. for the Subscription Price of the Shares subscribed for under this
Subscription  Agreement;  (c) if the Subscriber is an  "accredited  investor" in
Alberta or is purchasing  Shares pursuant to Subsection  7(g), a fully completed
and duly executed  Representation Letter,  attached as Exhibit 1 hereto; and (d)
if the Subscriber is an "accredited  investor" in Ontario, a fully completed and
duly executed Representation Letter, attached as Exhibit 2 hereto.

12.  The purchase and sale of the Shares pursuant to this Subscription Agreement
will be completed at the offices of the Corporation's solicitors,  Borden Ladner
Gervais LLP, in Calgary, Alberta on the Closing Date or such other place or time
as the  Corporation  decides in its sole  discretion.  On the Closing Date,  the
Corporation shall receive all completed subscription agreements,  including this
Subscription  Agreement,  and the  Subscription  Price  against  delivery by the
Corporation of the certificates representing the Shares.

13.  The  Corporation  shall be entitled to rely on delivery of a facsimile copy
of executed  subscriptions,  and acceptance by the Corporation of such facsimile
subscriptions shall be legally effective to create a valid and binding agreement
between the Subscriber and the Corporation in accordance with the terms hereof.

General

14.  The Subscriber agrees that the representations, warranties and covenants of
the Subscriber  herein will be true and correct both as of the execution of this
Subscription  Agreement  and  as of  the  Closing  Date  and  will  survive  the
completion of the issuance of the Shares.  The  representations,  warranties and
covenants of the Subscriber  herein are made with the intent that they be relied
upon by the  Corporation  and it's counsel in determining  the  eligibility of a
purchaser  of Shares and the  Subscriber  agrees to indemnify  the  Corporation,
including  its  respective  affiliates,   shareholders,   directors,   officers,
partners,  employees,  advisors and agents,  against all losses,  claims, costs,
expenses and damages or liabilities  which any of them may suffer or incur which
are  caused  or arise  from a  breach  thereof.  The  Subscriber  undertakes  to
immediately  notify the Corporation at 734 7th Avenue S. W. Calgary AB, T2P 3P8,
Attention:  Mark  Hlady  (Fax  Number:  (403)  262-5118),  of any  change in any


                                       7
<PAGE>


statement or other information relating to the Subscriber set forth herein which
takes place prior to the Closing Date.

15.  The  obligations of the parties  hereunder are subject to acceptance of the
terms of the Offering by any required regulatory approvals.

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

17.  The contract arising out of this  Subscription  Agreement and all documents
relating  thereto shall be governed by and construed in accordance with the laws
of the  Province of Alberta and the federal laws of Canada  applicable  therein.
The parties  irrevocably  attorn to the exclusive  jurisdiction of the courts of
the Province of Alberta.

18.  Time shall be of the essence hereof.

19.  This Subscription  Agreement represents the entire agreement of the parties
hereto  relating to the subject matter hereof and there are no  representations,
covenants or other  agreements  relating to the subject  matter hereof except as
stated or referred to herein.

20.  The terms and provisions of this  Subscription  Agreement  shall be binding
upon and enure to the benefit of the  Subscriber and the  Corporation  and their
respective heirs, executors,  administrators,  successors and assigns;  provided
that,  except for the  assignment  by a  Subscriber  who is acting as nominee or
agent to a beneficial owner and as otherwise herein provided,  this Subscription
Agreement  shall not be assignable by any party without prior written consent of
the other parties.

21.  The Subscriber,  on its own behalf and, if applicable,  on behalf of others
for whom it is contracting hereunder,  agrees that this subscription is made for
valuable  consideration  and  may not be  withdrawn,  cancelled,  terminated  or
revoked by the  Subscriber,  on its own behalf and, if applicable,  on behalf of
others for whom it is contracting hereunder.

22.  Neither  this  Subscription  Agreement  nor any  provision  hereof shall be
modified,  changed,  discharged or terminated except by an instrument in writing
signed by the party against whom any waiver, change, discharge or termination is
sought.

23.  The  invalidity,  illegality or  unenforceability  of any provision of this
Subscription Agreement shall not affect the validity, legality or enforceability
of any other provision hereof.

24.  The Subscriber acknowledges and agrees that acceptance of this Subscription
Agreement will be  conditional,  among other things,  upon the sale of Shares to
the  Subscriber  being  exempt  from  any  prospectus  and  offering  memorandum
requirements of all applicable  securities  laws. The Corporation will be deemed
to have accepted this  Subscription  Agreement  upon the delivery on the Closing
Date of the certificates representing the Shares to or upon the direction of the
Subscriber in accordance with the provisions hereof.

25.  The headings  used in this  Subscription  Agreement  have been inserted for
convenience of reference only and shall not affect the meaning or interpretation
of this Subscription Agreement or any provision hereof.

26.  The  covenants,  representations  and  warranties  contained  herein  shall
survive the Closing of the transactions contemplated hereby.

27.  Each party  shall from time to time do such  further  acts and  execute and
deliver such further documents as shall be reasonably required in order to fully
perform and carry out the terms of this Subscription Agreement.

28.  In this  Subscription  Agreement,  words importing the singular include the
plural and vice versa and words importing persons include firms or corporations.

29.  This  Subscription  Agreement may be executed in any number of counterparts
with the same effect as if all parties to this Subscription Agreement had signed
the same document and all counterparts will be construed together and constitute
one and the same instrument.


                                       8
<PAGE>


30.  All notices  hereunder  will be in writing and  addressed  to the party for
whom it is intended at the address indicated herein.  Either party may by notice
to the other  party  change its  address  for  service.  Any  notice  personally
delivered  will be deemed to have been given or made on the date it was actually
delivered, or if sent by electronic facsimile, will be deemed to have been given
or  made  on the  business  day  next  following  the  date  upon  which  it was
transmitted.

31.  In this  Subscription  Agreement  references  to "$" are to  United  States
dollars unless stated otherwise.

































                                        9

<PAGE>


                                    EXHIBIT 1

                              REPRESENTATION LETTER

                       (FOR ALBERTA ACCREDITED INVESTORS)

TO:               KODIAK ENERGY, INC. (the "Corporation")

     In connection with the purchase of Shares of the Corporation  ("Shares") by
the undersigned subscriber or, if applicable,  the principal on whose behalf the
undersigned  is purchasing as agent (the  "Subscriber"  for the purposes of this
Exhibit 1), the Subscriber hereby represents,  warrants, covenants and certifies
to the Corporation that:

1.   The  Subscriber  is  resident  in  Alberta or is subject to the laws of the
Province of Alberta;

2.   The Subscriber, unless it is a person or company described in paragraph (p)
or (q) in the attached Appendix "A" that is deemed pursuant to the provisions of
section  1.2  of  Multilateral   Instrument  45-103  entitled  "Capital  Raising
Exemptions" to be purchasing as principal, is purchasing the Shares as principal
for its own account;

3.   The  Subscriber  is  an  "accredited   investor"   within  the  meaning  of
Multilateral  Instrument 45-103 entitled "Capital Raising  Exemptions" by virtue
of  satisfying  the  indicated  criterion  as set  out in  Appendix  "A" to this
Representation Letter; and

4.   Upon execution of this Exhibit 1 by the Subscriber, this Exhibit 1 shall be
incorporated into and form a part of the Subscription Agreement.

  Dated: _________________________, 2005.


                    __________________________________________________________
                    Print name of Subscriber


                    By:   ____________________________________________________
                          Signature


                          ____________________________________________________
                          Print name of Signatory (if different from Subscriber)

                          ____________________________________________________
                          Title


     IMPORTANT: PLEASE INITIAL THE APPROPRIATE PARAGRAPH(S) ON APPENDIX "A"








<PAGE>


                                  APPENDIX "A"
                                  to Exhibit 1


         Accredited Investor - (defined in MI 45-103) means:

______    (a)  a Canadian financial  institution,  or an authorized foreign bank
               listed in Schedule III of the Bank Act (Canada); or

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

______    (c)  an association  under the  Cooperative  Credit  Associations  Act
               (Canada)  located  in  Canada  or a  central  cooperative  credit
               society for which an order has been made under subsection  473(1)
               of that Act; or

______    (d)  a subsidiary  of any person or company  referred to in paragraphs
               (a) to (c),  if the  person  or  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; or

______    (e)  a person or company  registered under the securities  legislation
               of a jurisdiction of Canada, as an adviser or dealer,  other than
               a limited  market  dealer  registered  under the  Securities  Act
               (Ontario) or the Securities Act (Newfoundland and Labrador); or

______    (f)  an  individual   registered  or  formerly  registered  under  the
               securities   legislation  of  a  jurisdiction  of  Canada,  as  a
               representative  of a person or company  referred to in  paragraph
               (e); or

______    (g)  the  government  of Canada or a  jurisdiction  of Canada,  or any
               crown   corporation,   agency  or  wholly-owned   entity  of  the
               government  of  Canada  or a  jurisdiction  of  Canada;  or (h) a
               municipality, public board or commission in Canada; or

______    (i)  any  national,   federal,  state,   provincial,   territorial  or
               municipal  government of or in any foreign  jurisdiction,  or any
               agency of that government; or

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

______    (k)  an individual  who,  either alone or with a spouse,  beneficially
               owns,   directly  or  indirectly,   financial  assets  having  an
               aggregate  realizable  value that  before  taxes,  but net of any
               related liabilities, exceeds CAD$1,000,000; or

______    (l)  an individual whose net income before taxes exceeded  CAD$200,000
               in each of the two most recent  years or whose net income  before
               taxes combined with that of a spouse exceeded CAD$300,000 in each
               of the two most recent years and who, in either case,  reasonably
               expects to exceed that net income level in the current year; or

______    (m)  a person or company,  other than a mutual fund or  non-redeemable
               investment  fund,  that,  either alone or with a spouse,  has net
               assets of at least CAD$5,000,000 and unless the person or company
               is an  individual,  that  amount  is shown  on its most  recently
               prepared financial statements; or

______    (n)  a mutual  fund or  non-redeemable  investment  fund that,  in the
               local jurisdiction, distributes its securities only to persons or
               companies  that are  "accredited  investors"  (as  defined  in MI
               45-103); or

______    (o)  a mutual  fund or  non-redeemable  investment  fund that,  in the
               local  jurisdiction,  is  distributing  or  has  distributed  its
               securities under one or more prospectuses for which the regulator
               has issued receipts; or



<PAGE>


                                  APPENDIX "A"
                                  to Exhibit 1


______    (p)  a trust company or trust corporation  registered or authorized to
               carry on business under the Trust and Loan Companies Act (Canada)
               or under comparable  legislation in a jurisdiction of Canada or a
               foreign jurisdiction,  trading as a trustee or agent on behalf of
               a fully managed account; or

______    (q)  a person or company trading as agent on behalf of a fully managed
               account if that person or company is  registered or authorized to
               carry  on  business  under  the   securities   legislation  of  a
               jurisdiction  of Canada or a foreign  jurisdiction as a portfolio
               manager or under an  equivalent  category of adviser or is exempt
               from  registration  as a  portfolio  manager  or  the  equivalent
               category of adviser; or

______    (r)  a registered  charity under the Income Tax Act (Canada)  that, in
               regard to the trade,  has  obtained  advice  from an  eligibility
               adviser or other  adviser  registered  to  provide  advice on the
               securities being traded; or

______    (s)  an entity organized in a foreign  jurisdiction  that is analogous
               to any of the entities  referred to in paragraphs (a) through (e)
               and paragraph (j) in form and function; or

______    (t)  a person or  company  in  respect  of which all of the  owners of
               interests,  direct or indirect,  legal or beneficial,  except the
               voting securities  required by law to be owned by directors,  are
               persons or companies that are "accredited  investors" (as defined
               in MI 45-103).

          NOTE: The investor must initial  beside the applicable  portion of the
     above definition.

         For the purposes hereof:

(a)  "affiliate" means an issuer connected with another issuer because

     (i)  one of them is the subsidiary of the other, or

     (ii) each of them is controlled by the same person or company;

(b)  "beneficial ownership" of securities by a person occurs

     (i)  for the purposes of Alberta  securities  law, when such securities are
          beneficially owned by

          (A)  a  company  controlled  by that  person or an  affiliate  of that
               company,

          (B)  an affiliate of that person, or

          (C)  through  a  trustee,   legal   representative,   agent  or  other
               intermediary of that person;

(c)  "Canadian  financial  institution"  means a bank, loan  corporation,  trust
     company,  insurance  company,  treasury  branch,  credit  union  or  caisse
     populaire  that, in each case, is authorized to carry on business in Canada
     or  a  jurisdiction,   or  the  Confederation  des  caisses  populaires  et
     d'economie Desjardins du Quebec;

(d)  "director" when used in relation to a person, includes a person acting in a
     capacity similar to that of a director of a company;

(e)  "eligibility  adviser" means an investment dealer or equivalent category of
     registration,   registered   under  the   securities   legislation  of  the
     jurisdiction  of a purchaser and  authorized to give advice with respect to
     the type of security being distributed;

(f)  "financial assets" means cash and securities;

(g)  "foreign  jurisdiction"  means a country  other than  Canada or a political
     subdivision of a country other than Canada;

(h)  "founder", in respect of the Corporation, means a person or company who,


                                        2
<PAGE>


                                  APPENDIX "A"
                                  to Exhibit 1

     (i)  acting  alone,  in  conjunction  or in concert  with one or more other
          persons or companies, directly or indirectly, has taken the initiative
          in founding,  organizing or substantially reorganizing the business of
          the Corporation, and

     (ii) at the  time  of the  proposed  trade,  is  actively  involved  in the
          business of the Corporation;

(i)  "fully  managed  account"  means an  account  for which a person or company
     makes  the  investment  decisions  if  that  person  or  company  has  full
     discretion to trade in  securities  for the account  without  requiring the
     client's express consent to a transaction;

(j)  "jurisdiction"  means a province or territory of Canada except when used in
     the term "foreign jurisdiction";

(k)  "local  jurisdiction"  means  the  jurisdiction  in  which  the  applicable
     securities regulatory authority is situate;

(l)  "individual" means a natural person, but does not include

     (i)  a partnership,  unincorporated association,  unincorporated syndicate,
          unincorporated organization or a trust, or

     (ii) a natural  person  in the  person's  capacity  as  trustee,  executor,
          administrator or other legal representative;

(m)  "mutual fund" includes an issuer of securities  that entitles the holder to
     receive on demand,  or within a specified  period after  demand,  an amount
     computed by reference to the value of a proportionate interest in the whole
     or in part of the net assets,  including a separate fund or trust  account,
     of an issuer of the securities;

(n)  "non-redeemable investment fund" means an issuer,

     (i)  where contributions of security holders are pooled for investment,

     (ii) where  security  holders  do not  have  day-to-day  control  over  the
          management and investment decisions of an issuer,  whether or not they
          have the right to be consulted or to give directions, and

     (iii)whose  securities  do not  entitle the  security  holder to receive on
          demand,  or within a specified period after demand, an amount computed
          by reference to the value of a proportionate  interest in the whole or
          in part of the net assets of an issuer;

(o)  "person or company" includes

     (i)  for  the   purposes  of  Alberta   securities   law,  an   individual,
          corporation, partnership,  unincorporated or incorporated association,
          unincorporated  or  incorporated  syndicate,  unincorporated  or other
          incorporated organization,  trust, trustee, executor, administrator or
          other legal representative;

(p)  "regulator" means

     (i)  the Executive  Director,  as defined under section 1 of the Securities
          Act (Alberta);

     (ii) such  other  person  as is  referred  to  in  Appendix  D of  National
          Instrument 14-101 - Definitions;

(q) "related liabilities" means:

     (i)  liabilities  incurred  or assumed  for the  purpose of  financing  the
          acquisition or ownership of financial assets; or

     (ii) liabilities that are secured by financial assets;


                                        3
<PAGE>


                                  APPENDIX "A"
                                  to Exhibit 1

(r) "securities legislation" means

     (i)  for Alberta,  the  Securities  Act (Alberta) and the  regulations  and
          rules under such Act and the blanket  rulings and orders issued by the
          Alberta Securities Commission, and

     (ii) for other Canadian jurisdictions,  such other statutes and instruments
          as  are  listed  in  Appendix  B  of  National   Instrument  14-101  -
          Definitions;

(s) "securities regulatory authority" means

(i) the Alberta Securities Commission;

     (ii) in respect of any local  jurisdiction  other than  Alberta,  means the
          securities  commission  or  similar  regulatory  authority  listed  in
          Appendix C of National Instrument 14-101 - Definitions;

(t) "voting security" means any security which:

     (i) is not a debt security; and

     (ii) carries a voting right either  under all  circumstances  or under some
          circumstances that have occurred and are continuing;

(u)  An issuer is considered to be "controlled" by a person or company if:

     (i) for the purposes of Alberta securities law,

          a)   voting  securities  of the issuer  carrying  more than 50% of the
               votes that may be cast to elect  directors  are held,  other than
               for the purpose of giving  collateral for a bona fide debt, by or
               for the benefit of that person or company; and

          b)   the  votes  carried  by the  securities  referred  to in (a)  are
               sufficient,  if  exercised,  to elect a majority  of the board of
               directors of the issuer.


                                       4
<PAGE>


                                   EXHIBIT "2"

                              REPRESENTATION LETTER

                       (FOR ONTARIO ACCREDITED INVESTORS)

TO:               KODIAK ENERGY, INC. (the "Corporation")

     In connection with the purchase of Shares in the capital of the Corporation
(the "Shares") by the undersigned subscriber or, if applicable,  each beneficial
purchaser for whom the undersigned is acting (the  "Subscriber" for the purposes
of this Exhibit 2), the Subscriber hereby  represents,  warrants,  covenants and
certifies to the Corporation that:

1.   The Subscriber is resident in Ontario or is subject to the laws of the
Province of Ontario;

2.   The Subscriber is purchasing the Shares as principal for its own account;

3.   The Subscriber is an "accredited investor" within the meaning of Ontario
Securities Commission Rule 45-501 promulgated under the Securities Act (Ontario)
by virtue of satisfying  the  indicated  criterion as set out in Appendix "A" to
this Representation Letter; and

4.   Upon execution of this Exhibit 2 by the Subscriber, this Exhibit 2 shall be
incorporated into and form a part of the Subscription Agreement.



   Dated:  _______________________, 2005.



                     __________________________________________________________
                     Print name of Subscriber


                     By:  _____________________________________________________
                          Signature


                          _____________________________________________________
                          Print name of Signatory (if different from Subscriber)


                          _____________________________________________________
                          Title

     IMPORTANT: PLEASE INITIAL THE APPROPRIATE PARAGRAPH(S) ON APPENDIX "A"





<PAGE>


                                  APPENDIX "A"
                                  to Exhibit 2



     Accredited  Investor  -  (defined  in Ontario  Securities  Commission  Rule
45-501) means:

______    (a)  a bank listed in Schedule I or II of the Bank Act (Canada), or an
               authorized  foreign  bank listed in Schedule  III of the Bank Act
               (Canada);

______    (b)  the Business  Development  Bank  incorporated  under the Business
               Development Bank Act (Canada);

______    (c)  a loan corporation or trust corporation registered under the Loan
               and Trust  Corporations Act (Ontario) or under the Trust and Loan
               Companies Act (Canada),  or under  comparable  legislation in any
               other jurisdiction;

______    (d)  a co-operative credit society,  credit union central,  federation
               of caisses populaire,  credit union or league, or regional caisse
               populaire,   or  an  association  under  the  Cooperative  Credit
               Associations Act (Canada), in each case, located in Canada;

______    (e)  a company licensed to do business as an insurance  company in any
               jurisdiction;

______    (f)  a  subsidiary  entity of any  person or  company  referred  to in
               paragraph  (a), (b), (c), (d) or (e), where the person or company
               owns all of the voting shares of the subsidiary entity;

______    (g)  a person or company registered under the Securities Act (Ontario)
               or securities  legislation in another  jurisdiction as an adviser
               or dealer, other than a limited market dealer;

______    (h)  the  government  of Canada or of any  jurisdiction,  or any crown
               corporation,  instrumentality  or agency of a  Canadian  federal,
               provincial or territorial government;

______    (i)  any  Canadian   municipality   or  any  Canadian   provincial  or
               territorial capital city; ---------

______    (j)  any  national,   federal,  state,   provincial,   territorial  or
               municipal  government of or in any foreign  jurisdiction,  or any
               instrumentality or agency thereof;

______    (k)  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;

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

______    (m)  an  individual  who  beneficially  owns,  or who together  with a
               spouse  beneficially  own,  financial  assets having an aggregate
               realizable  value  that,  before  taxes  but  net of any  related
               liabilities, exceeds CAD$1,000,000;

______    (n)  an individual whose net income before taxes exceeded  CAD$200,000
               in each of the two most recent  years or whose net income  before
               taxes combined with that of a spouse exceeded CAD$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;

______    (o)  an  individual  who  has  been  granted  registration  under  the
               Securities  Act  (Ontario) or securities  legislation  in another
               jurisdiction as a representative  of a person or company referred
               to in paragraph (g), whether or not the individual's registration
               is still in effect;

______    (p)  a promoter of the issuer or an affiliated entity of a promoter of
               the issuer;

______    (q)  a spouse,  parent,  brother,  sister,  grandparent or child of an
               officer, director or promoter of the issuer;


<PAGE>


                                  APPENDIX "A"
                                  to Exhibit 2


______    (r)  a person or  company  that,  in  relation  to the  issuer,  is an
               affiliated  entity or a person or company  referred  to in clause
               (c) of the definition of  distribution  in subsection 1(1) of the
               Securities Act (Ontario) ("Control Person");

______    (s)  an issuer that is acquiring securities of its own issue;

______    (t)  a  company,   limited  liability  company,  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  CAD$5,000,000  as  reflected  in  its  most
               recently prepared financial statements;

______    (u)  a person or company that is recognized by the Ontario  Securities
               Commission as an accredited investor;

______    (v)  a mutual fund or non-redeemable investment fund that, in Ontario,
               distributes  its securities only to persons or companies that are
               accredited investors;

______    (w)  a mutual fund or non-redeemable investment fund that, in Ontario,
               distributes its securities under a prospectus for which a receipt
               has been granted by the  Director  (as defined in the  Securities
               Act  (Ontario))  or,  if  it  has  ceased   distribution  of  its
               securities,  has  previously  distributed  its securities in this
               manner;

______    (x)  a fully managed account if it is acquiring a security that is not
               a security of a mutual fund or non-redeemable investment fund;

______    (y)  an  account  that  is  fully  managed  by  a  trust   corporation
               registered under the Loan and Trust Corporations Act (Ontario) or
               under  the  Trust  and  Loan  Companies  Act  (Canada),  or under
               comparable legislation in any other jurisdiction;

______    (z)  an entity organized outside of Canada that is analogous to any of
               the  entities  referred  to in  paragraphs  (a)  through  (g) and
               paragraph (k) in form and function; or

______    (aa) 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" (as defined in OSC
               Rule 45-501).

     NOTE:The  investor must initial beside the applicable  portion of the above
     definition.

     For the purposes hereof:

(a)  "company" means any  corporation,  incorporated  association,  incorporated
     syndicate or other incorporated organization;

(b)  "Control  Person" means any person,  company or  combination  of persons or
     companies  holding a sufficient  number of any  securities of the issuer to
     affect  materially the control of the issuer but any holding of any person,
     company or combination of persons or companies holding more than 20% of the
     outstanding  voting securities of the issuer, in the absence of evidence to
     the  contrary,  shall be deemed to affect  materially  the  control  of the
     issuer;

(c)  "director" where used in relation to a person,  includes a person acting in
     a capacity similar to that of a director of a company;

(d)  "entity" means a company, syndicate,  partnership,  trust or unincorporated
     organization;

(e)  "financial assets" means cash, securities,  or any contract of insurance or
     deposit or evidence  thereof that is not a security for the purposes of the
     Securities Act (Ontario);

                                       2
<PAGE>


                                  APPENDIX "A"
                                  to Exhibit 2


(f)  "fully managed account" means an investment  portfolio  account of a client
     established  in  writing  with a  portfolio  adviser  who makes  investment
     decisions for the account and has full discretion to trade in securities of
     the  account   without   requiring  the  client's   express  consent  to  a
     transaction;

(g)  "individual"  means a natural  person,  but does not include a partnership,
     unincorporated   association,   unincorporated  syndicate,   unincorporated
     organization, trust, or a natural person in his or her capacity as trustee,
     executor, administrator or other legal personal representative;

(h)  "mutual  fund" means an issuer  whose  primary  purpose is to invest  money
     provided by its security holders and whose securities entitle the holder to
     receive on demand,  or within a specified  period after  demand,  an amount
     computed by reference to the value of a proportionate interest in the whole
     or in a part of the net assets, including a separate fund or trust account,
     of the issuer;

(i)  "non-redeemable investment fund" means an issuer:

     (i)  whose  primary  purpose is to invest  money  provided by its  security
          holders;

     (ii) that does not invest,

          (A)  for the purpose of exercising  or seeking to exercise  control of
               an  issuer,  other  than an  issuer  that is a  mutual  fund or a
               non-redeemable investment fund, or

          (B)  for the purpose of being  actively  involved in the management of
               any issuer in which it  invests,  other than an issuer  that is a
               mutual fund or a non-redeemable investment fund; and

     (iii) that is not a mutual fund;

(j)  "officer"  means the chair,  any vice-chair of the board of directors,  the
     president,  any vice president, the secretary, the assistant secretary, the
     treasurer,  the assistant treasurer,  and the general manager of a company,
     and any other  person  designated  an  officer  of a  company  by by-law or
     similar authority, or any individual acting in a similar capacity on behalf
     of an issuer;

(k)  "person"  means an  individual,  partnership,  unincorporated  association,
     unincorporated  syndicate,  unincorporated  organization,  trust,  trustee,
     executor, administrator, or other legal representative;

(l)  "portfolio adviser" means

     (i)  a portfolio manager; or

     (ii) a broker or investment dealer exempted from registration as an adviser
          under  subsection  148(1) of the Regulation  made under the Securities
          Act (Ontario) if that broker or  investment  dealer is not exempt from
          the  by-laws or  regulations  of the  Toronto  Stock  Exchange  or the
          Investment  Dealers'   Association  of  Canada  referred  to  in  that
          subsection;

(m)  "promoter"  means  (a)  a  person  or  company  who,  acting  alone  or  in
     conjunction  with one or more other  persons,  companies  or a  combination
     thereof,  directly or  indirectly,  has taken the  initiative  in founding,
     organizing or substantially reorganizing the business of the issuer, or (b)
     a person or company who, in  connection  with the  founding,  organizing or
     substantial  reorganizing  of the  business  of  the  issuer,  directly  or
     indirectly,  receives in  consideration  of services or  property,  or both
     services and property, 10% or more of any class of securities of the issuer
     or 10% or more of the proceeds  from the sale of any class of securities of
     a particular issue, but a person or company who receives such securities or
     proceeds   either  solely  as   underwriting   commissions   or  solely  in
     consideration of property shall not be deemed a promoter within the meaning
     of this  definition if such person or company does not otherwise  take part
     in founding, organizing or substantially reorganizing the business;


                                        3
<PAGE>


                                  APPENDIX "A"
                                  to Exhibit 2


(n)  "related liabilities" means liabilities incurred or assumed for the purpose
     of  financing  the  acquisition  or  ownership  of  financial   assets  and
     liabilities that are secured by financial assets; and

(o)  "spouse",  in relation to an individual,  means another  individual to whom
     that  individual is married,  or another  individual of the opposite sex or
     the same sex with whom that individual is living in a conjugal relationship
     outside marriage.

Affiliated Entities, Control and Subsidiaries

1.   A person or company is  considered  to be an  affiliated  entity of another
person or company  if one is a  subsidiary  entity of the other,  or if both are
subsidiary  entities  of the  same  person  or  company,  or if  each of them is
controlled by the same person or company.

2.   A person or company is  considered  to be controlled by a person or company
if

(a)  in the case of a person or company,

     (i)  voting  securities of the first mentioned  person or company  carrying
          more than 50% of the votes for the  election  of  directors  are held,
          otherwise  than by way of security only, by or for the benefit of, the
          other person or company, and

     (ii) the votes  carried by the  securities  are entitled,  if exercise,  to
          elect a majority of the  directors  of the  first-mentioned  person or
          company.

(b)  in the case of a  partnership  that does not have  directors,  other than a
     limited partnership, the second-mentioned person or company holds more than
     50% of the interests in the partnership; or

(c)  in  the  case  of  a  limited  partnership,  the  general  partner  is  the
     second-mentioned person or company.

3.   A person or  company is  considered  to be a  subsidiary  entity of another
person or company if

(a)  it is controlled by,

     (i)  that other, or

     (ii) that  other and one or more  persons  or  companies,  each of which is
          controlled by that other, or

     (iii)two or more persons or companies,  each of which is controlled by that
          other, or

(b)  it is a  subsidiary  entity  of a person  or  company  that is the  other's
     subsidiary entity.


                                        4