Document:

EXHIBIT 10.1

     

    EXHIBIT
      10.1

     

    
      
        
          
            SECURITIES
              PURCHASE AGREEMENT

             

             

            This
              Securities Purchase Agreement (this “Agreement”)
              is
              dated as of __________ ___, 2006, by and among REIT Americas, Inc., a
              Maryland corporation (the “Company”),
              and
              the purchaser identified on the signature page hereto (each, a “Purchaser”
              ).

             

            WHEREAS,
              subject to the terms and conditions set forth in this Agreement and
              pursuant to
              Section 4(2) of the Securities Act of 1933, as amended (the “Securities
              Act”),
              and
              Rule 506 promulgated thereunder, the Company desires to issue and sell
              to each
              Purchaser, and each Purchaser, severally and not jointly, desires to
              purchase
              from the Company, securities of the Company as more fully described
              in this
              Agreement.

             

            NOW,
              THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
              Agreement,
              and for other good and valuable consideration the receipt and adequacy
              of which
              are hereby acknowledged, the Company and each Purchaser agrees as
              follows:

             

            ARTICLE
              I

            DEFINITIONS

             

            1.1    Definitions.
              In
              addition to the terms defined elsewhere in this Agreement, the following
              terms
              have the meanings indicated in this Section 1.1:

             

            “Affiliate”
means
              any Person that, directly or indirectly through one or more intermediaries,
              controls or is controlled by or is under common control with a Person,
              as such
              terms are used in and construed under Rule 144 under the Securities
              Act.
With
              respect to a Purchaser, any investment fund or managed account that
              is managed
              on a discretionary basis by the same investment manager as such Purchaser
              will
              be deemed to be an Affiliate of such Purchaser.

             

            
              “Closing”
                means the closing of the purchase and sale of the Securities pursuant
                to Section
                2.1. The Company
                may effect more than one Closing.

               

              “Closing
                Date” means the day selected by the Company after all of the Transaction
                Documents have been
                executed and delivered by the Purchaser, and all conditions precedent
                to the
                parties’ obligations under
                this Agreement have been satisfied or waived. The Company may have
                more than one
                Closing Date.

               

            

            “Commission”
means
              the U.S. Securities and Exchange Commission.

             

            “Common
              Stock”
means
              the common stock of the Company, par value $0.01 per share, and any
              securities
              into which such common stock shall hereinafter have been reclassified
              into.

             

            “including”
means
              including, without limitation.

             

            
              
                 

              

              
                 

                
                  

                

              

              
                 

              

               

            

            “Memorandum”
means
              the Company’s Confidential Private Placement Memorandum, dated as of
              ____________, 2006, with respect to the offering contemplated hereby.
              

            

            “Person”
means
              an individual or corporation, partnership, trust, incorporated or unincorporated
              association, joint venture, limited liability company, joint stock
              company,
              government (or an agency or subdivision thereof) or other entity of
              any
              kind.

             

            “Rule
              144”
means
              Rule 144 promulgated by the Commission pursuant to the Securities Act,
              as such
              Rule may be amended from time to time, or any similar rule or regulation
              hereafter adopted.

             

            “Securities”
means
              the Common Stock issuable under
              the
              Transaction Documents.

             

            “Transaction
              Documents”
means
              this Agreement and any other documents or agreements executed in connection
              with
              the transactions contemplated hereunder.

             

            ARTICLE
              II

            SECURITIES

             

            2.1    Closing.
              On the
              Closing Date, upon the terms and subject to the conditions set forth
              herein, the
              Company agrees to deliver, and each Purchaser agrees to accept the
              number of
              shares of the Securities set forth opposite the Purchaser’s name on the
              signature page hereto. The Company shall deliver to the Purchaser the
              Purchaser’s respective shares of Common Stock as determined pursuant to the
              terms set forth in the Memorandum and the other items set forth in
              Section 2.2
              at the Closing. Upon satisfaction of the conditions set forth in Section
              2.2,
              the Closing shall occur at the offices of the Company, or such other
              location as
              the parties shall mutually agree. The Company may enter into Transaction
              Documents (including a Securities Purchase Agreement) with other purchasers
              with
              respect to the Securities offered hereby. Each set of Transaction Documents
              shall be identical in all material respects except as to the identities
              of the
              respective Purchasers, the amount of Securities to be purchased and
              the date of
              execution and closing. The Company may have more than one Closing and
              Closing
              Date with respect to such other Transaction Documents.

             

            2.2    Deliveries.

             

            (a)   On
              the
              Closing Date, the Company shall deliver or cause to be delivered to
              the
              Purchaser the following:

             

            (i)    this
              Agreement duly executed by the Company; and

             

            (ii)    a
              certificate evidencing a number of shares of Common Stock subscribed
              for;
              and

            
               

              
                
                   

                

                
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              (b)   On
                the
                Closing Date, each Purchaser shall deliver or cause to be delivered
                the
                following: 

            

             

            (i)    this
              Agreement duly executed by such Purchaser; and

             

            (ii)    an
              Accredited
              Investor Questionnaire completed by the Purchaser
              and
              reasonably satisfactory to counsel for the Company.

             

            2.3    Closing
              Conditions.

             

            (a)    The
              obligations of the Company hereunder in connection with the Closing
              are subject
              to the following conditions being met:

             

            (i)    the
              accuracy
              in all material respects when made and on the Closing Date (except
              for
              representations and warranties made as of a specific date, which must
              be
              accurate in all material respects as of such date) of the representations
              and
              warranties of the Purchaser contained herein and in the Accredited
              Investor
              Questionnaire;

             

            (ii)    all
              obligations, covenants and agreements of the Purchaser required to
              be performed
              at or prior to the Closing Date shall have been performed; and

            

            (iii)    the
              delivery by the Purchaser of the items set forth in Section 2.2(b)
              of this
              Agreement.

            
               

              (b)    The
                respective obligations of the Purchaser hereunder in connection with
                the Closing
                are subject to the following conditions being met:

               

              (i)    all
                obligations, covenants and agreements of the Company required to
                be performed at
                or prior to the Closing Date shall have been performed; and

            

            

            (ii)    the
              delivery by the Company of the items set forth in Section 2.2(a) of
              this
              Agreement.

             

            ARTICLE
              III

            REPRESENTATIONS
              AND WARRANTIES

            
               

              3.1    Representations
                and Warranties of the Purchaser.
                Each
                Purchaser hereby, for itself and for no other Purchaser, represents
                and warrants
                as of the date hereof and as of the Closing Date to the Company as
                follows:

               

              (a)    Organization;
                Authority.
                If the
                Purchaser is an entity, such Purchaser is an entity duly organized,
                validly
                existing and in good standing under the laws of the jurisdiction
                of its
                organization with full right, corporate or partnership power and
                authority to
                enter into and to consummate the transactions contemplated by the
                Transaction
                Documents and otherwise to carry out its obligations thereunder.
                The execution,
                delivery and performance by such Purchaser of the transactions contemplated
                by
                this Agreement have been duly authorized by all necessary corporate,
                if
                applicable, or similar action on the part of such Purchaser. Each
                Transaction
                Document to which it is a party has been duly executed by such Purchaser,
                and
                when delivered by such Purchaser in accordance with the terms hereof,
                will
                constitute the valid and legally binding obligation of such Purchaser,
                enforceable against it in accordance with its terms, except (i) as
                limited by
                general equitable principles and applicable bankruptcy, insolvency,
                reorganization, moratorium and other laws of general application
                affecting
                enforcement of creditors’ rights generally, (ii) as limited by laws relating to
                the availability of specific performance, injunctive relief or other
                equitable
                remedies and (iii) insofar as indemnification and contribution provisions
                may be
                limited by applicable law.

              
                
                   

                

                
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              (b)    Purchaser
                Representation.
                Such
                Purchaser understands that the Securities are “restricted securities” and have
                not been registered under the Securities Act or any applicable state
                securities
                law and is acquiring the Securities as principal for the Purchaser’s own account
                for investment and not with a view to,
                or for
                sale in connection with, any distribution of such Securities or any
                part
                thereof, has no present intention of distributing any of such Securities
                and has
                no arrangement or understanding with any other Persons regarding
                the
                distribution of such Securities. Such Purchaser is acquiring the
                Securities
                hereunder in the ordinary course of the Purchaser’s business. Such Purchaser
                does not have any agreement or understanding, directly or indirectly,
                with any
                Person to distribute any of the Securities.

               

              (c)    Purchaser
                Status.
                At the
                time such Purchaser was offered the Securities, the Purchaser was,
                and at the
                date hereof the Purchaser is, an
                “accredited investor” as defined
                in
                Regulation D under
                the
                Securities Act. 

               

              (d)    Experience
                of Such Purchaser.
                Such
                Purchaser, either alone or together with the Purchaser’s representatives, has
                such knowledge, sophistication and experience in business and financial
                matters
                so as to be capable of evaluating the merits and risks of the prospective
                investment in the Securities,
                and has
                so evaluated the merits and risks of such investment. Such Purchaser
                is able to
                bear the economic risk of an investment in the Securities, has no
                need for
                liquidity with respect to the Purchaser’s investment and, at the present time,
                is able to afford a complete loss of such investment.

               

              (e)    General
                Solicitation.
                Such
                Purchaser is not purchasing the Securities as a result of any advertisement,
                article, notice or other communication regarding the Securities,
                published in
                any newspaper, magazine or similar media or broadcast over television
                or radio
                or presented at any seminar or any other general solicitation or
                general
                advertisement.

               

              (f)    Purchaser
                Investigation.
                Such
                Purchaser has had the opportunity to request and receive all information
                deemed
                necessary by the Purchaser to evaluate an investment in the Company.
                The
                Purchaser confirms that the Company has made available to the Purchaser
                the
                opportunity to ask questions of, and receive answers from the Company
                concerning
                the terms and conditions of the Securities and the nature of the
                business of the
                Company, and to obtain additional information or documents which
                the Company
                possesses or can acquire without unreasonable effort or expense.
                In formulating
                the decision to acquire the Securities, the Purchaser has relied
                solely upon the
                Purchaser’s own advisors and the Purchaser’s own independent investigation of
                the Company with respect to this Agreement and the nature and effect
                of any
                investment in the Securities as well as the information contained,
                or
                incorporated by reference, in the Company’s Memorandum.

              
                
                   

                

                
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              (g)    Certain
                Fees.
                No
                brokerage or finder’s fees or commissions are or will be payable to any broker,
                financial advisor or consultant, finder, placement agent, investment
                banker,
                bank or other Person with respect to the transactions contemplated
                by this
                Agreement based upon arrangements made by the Purchaser or any of
                the
                Purchaser’s Affiliates. The Company shall have no obligation with respect to
                any
                fees or with respect to any claims made by or on behalf of any Person
                for fees
                of a type contemplated in this Section that may be due in connection
                with the
                transactions contemplated by this Agreement based upon arrangements
                made by any
                Purchaser or any of the Purchaser’s Affiliates.

               

            

            The
              Company acknowledges and agrees that each Purchaser does not make or
              has not
              made any representations or warranties with respect to the transactions
              contemplated hereby other than those specifically set forth in this
              Section 3.1
              and in the Accredited
              Investor Questionnaire.

             

            ARTICLE
              IV

            OTHER
              AGREEMENTS OF THE PARTIES

             

            4.1    Transfer
              Restrictions.

             

            (a)    The
              Securities may only be disposed of in compliance with state and federal
              securities laws. In connection with any transfer of Securities other
              than
              pursuant to an effective registration statement, the Company may require
              the
              transferor thereof to provide to the Company an opinion of counsel
              selected by
              the transferor and reasonably acceptable to the Company, the form and
              substance
              of which opinion shall be reasonably satisfactory to the Company, to
              the effect
              that such transfer does not require registration of such transferred
              Securities
              under the Securities Act. As a condition of transfer, any such transferee
              shall
              agree in writing to be bound by the terms of this Agreement and shall
              have the
              rights of a Purchaser under this Agreement, provided, that the foregoing
              shall
              not apply to a transfer of Securities pursuant to an effective registration
              statement.

             

            (b)    Each
              Purchaser agrees to the imprinting, so long as is required by applicable
              federal and state securities laws,
              of a
              legend on any of the certificate(s) evidencing the Securities in the
              following
              form:

             

            THESE
              SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
              COMMISSION,
              OR THE SECURITIES COMMISSION OF ANY STATE, IN RELIANCE UPON AN EXEMPTION
              FROM
              REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
              ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO
              AN
              EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT
              TO AN
              AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
              REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE
              STATE
              SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE COMPANY
              TO
              SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE
              TO THE
              COMPANY. 

             

            
              
                 

              

              
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            (c)    Each
              Purchaser agrees that the removal of the restrictive legend from the
              certificate(s) evidencing the Securities as set forth in this Section
              4.1 is
              predicated upon the Company’s reliance that the Purchaser will sell any
              Securities pursuant to either the registration requirements of the
              Securities
              Act, including any applicable prospectus delivery requirements, or
              an exemption
              therefrom.

             

            ARTICLE
              V

            RELEASE

            

            5.1    Each
              Purchaser, does hereby release, remise and forever discharge the Company
              and its
              predecessors, successors and assigns, and respective directors, officers,
              employees, agents and representatives thereof (collectively, the “Released
              Parties”) of and from any and all actions, cases of action, suits, claims,
              demands, accountings, covenants, contracts, agreements, debt, liabilities
              and
              obligations of any nature, fixed or contingent, known or unknown, whether
              at law
              or in equity, which the Purchaser ever had, now has, or which the Purchaser’s
              heirs, executors, administrators, or legal representatives, successors,
              or
              assigns, as applicable, or any of them, hereinafter can, shall or may
              have
              against the Released Parties for or by reason of any event, occurrence,
              circumstance or matter of any nature whatsoever which occurred or existed
              at any
              time on or before the date hereof.

            

            5.2    Indemnification.
              Each
              Purchaser shall indemnify and hold the Released Parties harmless from
              and
              against all damages, expenses, costs and attorneys’ fees which any of the
              Released Parties may suffer or incur by reason of any breach by such
              Purchaser
              of any of the provisions hereof.

            

            ARTICLE
              VI

            MISCELLANEOUS

             

            6.1    Fees
              and Expenses.
              Except
              as expressly set forth in the Transaction Documents to the contrary,
              each party
              shall pay the fees and expenses of its advisers, counsel, accountants
              and other
              experts, if any, and all other expenses incurred by such party incident
              to the
              negotiation, preparation, execution, delivery and performance of this
              Agreement.
              The Company shall pay all transfer agent fees, stamp taxes and other
              taxes and
              duties levied in connection with the issuance of any Securities in
              the name of
              the Purchaser.

             

            6.2    Entire
              Agreement.
              The
              Transaction Documents, together with the exhibits and schedules thereto,
              contain
              the entire understanding of the parties with respect to the subject
              matter
              hereof and supersede all prior agreements and understandings, oral
              or written,
              with respect to such matters, which the parties acknowledge have been
              merged
              into such documents, exhibits and schedules.

             

            
              
                 

              

              
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            6.3    Notices.
              Any and
              all notices or other communications or deliveries required or permitted
              to be
              provided hereunder shall be in writing and shall be deemed given and
              effective
              on the earliest of (a) the date of transmission, if such notice or
              communication
              is delivered via facsimile at the facsimile number set forth on the
              signature
              pages attached hereto prior to 5:30 p.m. (Eastern Time) on a business
              day, (b)
              the next business day after the date of transmission, if such notice
              or
              communication is delivered via facsimile at the facsimile number set
              forth on
              the signature pages attached hereto on a day that is not a business
              day or later
              than 5:30 p.m. (Eastern Time) on any business day, (c) the second business
              day
              following the date of mailing, if sent by U.S. nationally recognized
              overnight
              courier service, or (d) upon actual receipt by the party to whom such
              notice is
              required to be given. The address for such notices and communications
              shall be
              as set forth on the signature pages attached hereto.

             

            6.4    Amendments;
              Waivers.
              No
              provision of this Agreement may be waived or amended except in a written
              instrument signed, in the case of an amendment, by the Company and
              each
              Purchaser or, in the case of a waiver, by the party against whom enforcement
              of
              any such waiver is sought. No waiver of any default with respect to
              any
              provision, condition or requirement of this Agreement shall be deemed
              to be a
              continuing waiver in the future or a waiver of any subsequent default
              or a
              waiver of any other provision, condition or requirement hereof, nor
              shall any
              delay or omission of either party to exercise any right hereunder in
              any manner
              impair the exercise of any such right.

             

            6.5    Construction.
              The
              headings herein are for convenience only, do not constitute a part
              of this
              Agreement and shall not be deemed to limit or affect any of the provisions
              hereof. The language used in this Agreement will be deemed to be the
              language
              chosen by the parties to express their mutual intent, and no rules
              of strict
              construction will be applied against any party.

             

            6.6    Successors
              and Assigns.
              This
              Agreement is intended for the benefit of and shall be binding upon
              and inure to
              the benefit of the parties and their heirs, executors, administrators,
              legal
              representatives, successors or permitted assigns, as applicable. The
              Company may
              not assign this Agreement or any rights or obligations hereunder without
              the
              prior written consent of each Purchaser. Any Purchaser may assign any
              or all of
              the Purchaser’s rights under this Agreement to any Person to whom such Purchaser
              assigns or transfers any Securities, provided such transferee agrees
              in writing
              to be bound, with respect to the transferred Securities, by the provisions
              hereof that apply to the “Purchaser.”

             

            6.7    Governing
              Law.
              All
              questions concerning the construction, validity, enforcement and interpretation
              of the Transaction Documents shall be governed by and construed and
              enforced in
              accordance with the internal laws of the State of
              Maryland, without regard to the principles of conflicts of law thereof.
              Each
              party agrees that all legal proceedings concerning the interpretations,
              enforcement and defense of the transactions contemplated by this Agreement
              and
              any other Transaction Documents (whether brought against a party hereto
              or its
              respective affiliates, directors, officers, shareholders, employees
              or agents)
              shall be commenced exclusively in the state and federal courts sitting
              in the
              State of Maryland.
              Each party hereby irrevocably submits to the exclusive jurisdiction
              of the state
              and federal courts sitting in the County
              of
[INSERT],
              State
              of
              Maryland for the adjudication of any dispute hereunder or in connection
              herewith
              or with any transaction contemplated hereby or discussed herein (including
              with
              respect to the enforcement of any of the Transaction Documents), and
              hereby
              irrevocably waives, and agrees not to assert in any suit, action or
              proceeding,
              any claim that it is not personally subject to the jurisdiction of
              any such
              court, that such suit, action or proceeding is improper or inconvenient
              venue
              for such proceeding. Each party hereby irrevocably waives personal
              service of
              process and consents to process being served in any such suit, action
              or
              proceeding by mailing a copy thereof via registered or certified mail
              or
              overnight delivery (with evidence of delivery) to such party at the
              address in
              effect for notices to it under this Agreement and agrees that such
              service shall
              constitute good and sufficient service of process and notice thereof.
              Nothing
              contained herein shall be deemed to limit in any way any right to serve
              process
              in any manner permitted by law. The parties hereby waive all rights
              to a trial
              by jury. If either party shall commence an action or proceeding to
              enforce any
              provisions of the Transaction Documents, then the prevailing party
              in such
              action or proceeding shall be reimbursed by the other party for its
              attorneys’
fees and other costs and expenses incurred with the investigation,
              preparation
              and prosecution of such action or proceeding. 

             

            
              
                 

              

              
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            6.8    Survival.
              The
              covenants, representations and warranties contained herein, including,
              but not
              limited to, those contained in Article V of this Agreement, shall survive
              the
              Closing and the delivery of the Securities.

             

            6.9    Execution.
              This
              Agreement may be executed in two or more counterparts, all of which
              when taken
              together shall be considered one and the same agreement and shall become
              effective when counterparts have been signed by each party and delivered
              to the
              other party, it being understood that both parties need not sign the
              same
              counterpart. In the event that any signature is delivered by facsimile
              transmission, such signature shall create a valid and binding obligation
              of the
              party executing (or on whose behalf such signature is executed) with
              the same
              force and effect as if such facsimile signature page were an original
              thereof.

             

            6.10    Severability.
              If any
              provision of this Agreement is held to be invalid or unenforceable
              in any
              respect, the validity and enforceability of the remaining terms and
              provisions
              of this Agreement shall not in any way be affected or impaired thereby
              and the
              parties will attempt to agree upon a valid and enforceable provision
              that is a
              reasonable substitute therefor, and upon so agreeing, shall incorporate
              such
              substitute provision in this Agreement.

             

            6.11    Replacement
              of Securities.
              If any
              certificate or instrument evidencing any Securities is mutilated, lost,
              stolen
              or destroyed, the Company shall issue or cause to be issued in exchange
              and
              substitution for and upon cancellation thereof, or in lieu of and substitution
              therefor, a new certificate or instrument, but only upon receipt of
              evidence
              reasonably satisfactory to the Company of such loss, theft or destruction
              and
              customary and reasonable indemnity, if requested. The applicants for
              a new
              certificate or instrument under such circumstances shall also pay any
              reasonable
              third-party costs associated with the issuance of such replacement
              Securities.

            
              
                 

              

              
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            6.12    Remedies.
              In
              addition to being entitled to exercise all rights provided herein or
              granted by
              law, including recovery of damages, each Purchaser and the Company
              will be
              entitled to specific performance under the Transaction Documents. The
              parties
              agree that monetary damages may not be adequate compensation for any
              loss
              incurred by reason of any breach of obligations described in the foregoing
              sentence and hereby agree to waive in any action for specific performance
              of any
              such obligation the defense that a remedy at law would be adequate.

             

            6.13    Independent
              Nature of Purchaser’s Obligations and Rights.
              The
              obligations of each Purchaser under any Transaction Document are several
              and not
              joint with the obligations of any other Purchaser, and no Purchaser
              shall be
              responsible in any way for the performance of the obligations of any
              other
              Purchaser under any Transaction Document. Nothing contained herein
              or in any
              Transaction Document, and no action taken by any Purchaser pursuant
              thereto,
              shall be deemed to constitute the Purchaser as a partnership, an association,
              a
              joint venture or any other kind of entity, or create a presumption
              that the
              Purchaser is in any way acting in concert or as a member of a group
              with respect
              to such obligations or the transactions contemplated by the Transaction
              Documents. Each Purchaser shall be entitled to independently protect
              and enforce
              the Purchaser’s rights, including without limitation, the rights arising out of
              this Agreement or out of the other Transaction Documents, and it shall
              not be
              necessary for any other Purchaser to be joined as an additional party
              in any
              proceeding for such purpose. Each Purchaser has been represented by
              the
              Purchaser’s own separate legal counsel in the Purchaser’s review and negotiation
              of the Transaction Documents. The Company has elected to provide all
              Purchasers
              with the same terms and the Transaction Documents for the convenience
              of the
              Company and not because it was required or requested to do so by the
              Purchasers.

             

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            IN
              WITNESS WHEREOF, the Company has caused this Securities Purchase Agreement
              to be
              duly executed by its authorized signatory as of the date first indicated
              above.

             

            
              	
                       

                      REIT
                        Americas, Inc.

                       

                       

                      By:__________________________________________

                      Name:
                        

                      Title:
                        

                    	
                      ADDRESS

                       

                      2960
                        N. Swan Rd., Suite 300

                      Tucson,
                        AZ 85712

                       

                      Facsimile
                        No.: [INSERT]

                    
	 	
                      With
                        a copy to (which shall not constitute notice):

                       

                      Bruce
                        Rosetto

                      Blank
                        Rome LLP

                      1200
                        North Federal Highway, Suite 417

                      Boca
                        Raton, FL 33432

                    
	 	 

            

            

            

            

            

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            PURCHASER
              SIGNATURE PAGES TO THE SECURITIES PURCHASE AGREEMENT

            

            IN
              WITNESS WHEREOF, the undersigned executed or caused this Securities
              Purchase
              Agreement to be duly executed by its respective authorized signatories
              as of the
              date first indicated above.

            

            Number
              of
              Shares of Common Stock subscribed for: _______________________

            Name
              of
              Purchaser: __________________________

            Signature
              of Authorized Signatory of Subscriber:
              __________________________

            Name
              of
              Authorized Signatory: _________________________

            Title
              of
              Authorized Signatory: __________________________

            Email
              Address of Authorized Signatory: ________________________________

            EIN
              Number of Purchaser: ______________________________________

            

            

            Address
              for Notice of Purchaser:

            

            

            Facsimile
              No. of Purchaser:

            

            

            Address
              for Delivery of Securities for Purchaser (if not same as above):

             

             

             

             

             

             

             

            
              
                 

              

              
                11================================================================================

                             SUBSCRIPTION FOR UNITS

   (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  2,940,000  units  ("Units")  at a price of
US$1.70 per Unit for gross proceeds of  US$4,998,000.  Each Unit is comprised of
one (1) common share ("Common  Share") and one (1) Common Share purchase warrant
("Warrant").  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 Units 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 Units:
Name of Subscriber - please print                        ______________________

By:________________________________      Aggregate Subscription Price (No. of
         Authorized Signature            Units X US$1.70  per Unit):

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

___________________________________      ______________________________________
(Please  print  name of  individual
whose  signature  appears  above if
different  than  the  name  of  the
Subscriber printed above.)

___________________________________      Deliver the Units as set forth below:
Subscriber's Address

___________________________________      ______________________________________
Facsimile Number                         Name

___________________________________      ______________________________________
Telephone Number     E-Mail Address      Account reference, if applicable

                                         ______________________________________
Register the Units as set forth below:   Contact Name

___________________________________      ______________________________________
Name                                     Address

___________________________________      ______________________________________
Account reference, if applicable         Telephone Number        E-Mail Address

___________________________________
Address

___________________________________

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

ACCEPTANCE:  The  Corporation  hereby accepts the above  subscription as of this
_______ day of  ____________________,  2006 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
                          UNITS 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 June 1, 2006 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 Units by the  Corporation  at
             US$1.70 per Unit;

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

         (h) "Securities"  means the Units, the Common Shares and the Warrants
             comprising the Units, 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  Units  subscribed  for
             multiplied by US$1.70 per Unit;

         (l) "Unit"  means a unit  consisting  of one (1) Common Share and one
             (1) Warrant of the Corporation;

         (m)  "Warrant"  means one (1) Common  Share  purchase  warrant of the
             Corporation  which  entitles  the holder to purchase one (1) Common
             Share at a price of US$2.5  for a period of two (2) years  from the
             Closing Date and a price of $3.50 for a period of three years after
             the two year period.  The warrant shall expire after five (5) years
             from the closing date; and

         (n) "Warrant  Share" means a Common Share issuable upon exercise of a
             Warrant.

Terms of the Offering

1.       The Subscriber  hereby confirms its subscription for and agrees to take
up the Units 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 Units subscribed for herein.

2.       The  Subscriber  acknowledges  that the Units  subscribed for hereunder
form part of a larger  issuance  and sale by the  Corporation  of a  maximum  of
2,940,000 Units of the Corporation at a subscription price of US$1.70 per Unit.

<PAGE>

                                       3

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 Units 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
the purposes of completing the Offering,  which  includes,  without  limitation,
determining the Subscriber's  eligibility to purchase the Units under applicable
securities  legislation,  preparing and  registering  certificates  representing
Units 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 UNITS
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  Units.  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 Units  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 Units, 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  therefor 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 Units; and

<PAGE>

                                       4

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

<PAGE>

                                       5

(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  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 Units 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 Units 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 Units (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)      the Subscriber  understands and acknowledges  that the Warrants may not
         be exercised by or on behalf of a U.S. Person unless the Warrant Shares
         issuable  upon  such  exercise  have  been  registered  under  the U.S.
         Securities Act or an exemption or exclusion from such  registration  is
         available; and

(s)      the Subscriber understands and acknowledges that each person exercising
         a Warrant will be required to provide either (i) written certification
         that it is not a U.S. Person and the Warrant is not being exercised on
         behalf of a U.S. Person, or (ii) a written opinion of counsel, of
         recognized standing reasonably satisfactory to the Corporation, to the
         effect that the Warrant being exercised and the Warrant Shares issuable
         upon such exercise have been registered under the U.S. Securities Act
         or are exempt from registration thereunder; and

(t)      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

(u)      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

<PAGE>

                                       6

(v)      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

(w)      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

(x)      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

(y)      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

(z)      in the case of a  subscription  by the  Subscriber  for Units 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

(aa)     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
         Units; and

(bb)     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

(cc)     the Subscriber  understands  that Units are being offered for sale only
         on a "private  placement"  basis and that the sale and  delivery of the
         Units 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

(dd)     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 Units (including,  without limitation,
         a  completed  and duly  executed  Representation  Letter,  attached  as
         Exhibit 1 and Exhibit 2 hereto, as applicable); and

(ee)     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

(ff)     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

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

(hh)     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

<PAGE>

                                       7

(ii)     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

(jj)     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  Units  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.

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 Nevada, United States, is extra-provincially registered
in the Province of Alberta, Canada 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 Units and the
Common Shares and the Warrants comprising the Units 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  and (ii) Warrant  Shares 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 Units subscribed for under
this Subscription  Agreement;  (c) if the Subscriber is an "accredited investor"
in Alberta or is purchasing Units 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  Units  pursuant  to this  Subscription
Agreement  will be  completed at the offices of the  Corporation  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 Units.

<PAGE>

                                       8

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 Units.  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 Units 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.  Suite 460 Calgary,
Alberta,  T2P 3P8, Attention:  Mark Hlady (Fax Number:  (403) 262-5252),  of any
change in any  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 Units 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
Units 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 Units 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.

<PAGE>

                                       9

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.

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.

<PAGE>

                                    EXHIBIT 1

                              REPRESENTATION LETTER

                       (FOR ALBERTA ACCREDITED INVESTORS)

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

         In connection with the purchase of units of the  Corporation  ("Units")
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
( ) or ( ) 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 Units 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  ( ) to ( ), 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
                  (a); 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 (b) 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,

<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;

<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.

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