Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - Crown Oil and Gas Inc. - Exhibit 10.1

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

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

CONFIDENTIAL
PRIVATE PLACEMENT SUBSCRIPTION
AGREEMENT
(Non-U.S. Subscribers)

THIS SUBSCRIPTION AGREEMENT is dated for reference February 15,
2008.

	TO: 	Crown Oil and Gas Inc., a Nevada
      corporation (the "Company") 
	  	800 – 5th Avenue, Suite 4100 
	  	Seattle, Washington 98104 
	  	USA 

Purchase of Units

1. Subscription

1.1 On the basis of the representations and warranties and
subject to the Terms and Conditions set forth herein,
___________________________________(the "Subscriber") hereby irrevocably
subscribes for and agrees to purchase ______________units (the "Units")
at a price per Unit of US$1.00 (such subscription and agreement to purchase
being the "Subscription"), for an aggregate purchase price of
US$______________(the Subscription Proceeds").

1.2 Each Unit will consist of: (i) one share in the common
stock of the Company (each, a "Share"); and (ii) one non-transferable
common stock purchase warrant (each, a "Warrant") entitling the holder
thereof to purchase one Share (each, a "Warrant Share"), as presently
constituted, for a period of 24 months commencing at the Closing (as defined
below) as follows: (iii) at a price of US$1.50 for the first 12-month period
after the Closing; and (iv) at a price of US$2.00 for the remaining 12-month
period after the Closing. A Certificate representing the Warrant will be in the
form attached as Exhibit "A" hereto. The Shares, Warrants and the Warrant Shares
are collectively referred to as the "Securities".

1.3 On the basis of the representations and warranties and
subject to the Terms and Conditions set forth hereinafter, the Company hereby
irrevocably agrees to sell the Units to the Subscriber.

1.4 Subject to the terms hereof, the Subscription will be
effective upon its acceptance by the Company. The Subscriber acknowledges that
the offering of Units contemplated hereby (the "Offering") is not subject
to any minimum aggregate subscription level.

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2. Payment

2.1 The Subscription Proceeds will accompany this Subscription
and will be paid by certified cheque or bank draft drawn on a major bank, or a
bank in the United States reasonably acceptable to the Company, and made payable
and delivered as directed to the Company. Alternatively, the Subscription
Proceeds may be wired as the Company instructs, pursuant to wiring instructions
that will be provided to the Subscriber upon request. If the funds are wired to
the Company’s lawyers, those lawyers are authorized to immediately deliver the
funds to the Company.

2.2 The Subscriber acknowledges and agrees that this
Subscription Agreement, the Subscription Proceeds and any other documents
delivered in connection herewith will be held on behalf of the Company. In the
event that this Subscription Agreement is not accepted by the Company for
whatever reason, which the Company expressly reserves the right to do, within 30
days of the delivery of an executed Subscription Agreement by the Subscriber,
this Subscription Agreement, the Subscription Proceeds (without interest
thereon) and any other documents delivered in connection herewith will be
returned to the Subscriber at the address of the Subscriber as set forth in this
Subscription Agreement.

2.3 Where the Subscription Proceeds are paid to the Company,
the Company is entitled to treat such Subscription Proceeds as an interest free
loan to the Company until such time as the Subscription is accepted and the
certificates representing the Shares have been issued to the Subscriber.

3. Documents Required from Subscriber

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

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

4. Closing

4.1 Closing of the offering of the Securities (the
"Closing") will occur on or before __________________, 2008, or on such
other date as may be determined by the Company (the "Closing Date").

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

5. Acknowledgements of Subscriber

5.1 The Subscriber acknowledges and agrees that:

	 	(a) 	
      the Company is currently effecting a forward split of its
      authorized and issued and outstanding common stock on an 18-for-1 basis,
      which forward stock split is expected to be effective on or before
      February 15, 2008;

	 	 	 
	 	(b) 	
      none of the Securities have been registered under the
      1933 Act, or under any state securities or "blue sky" laws of any state of
      the United States, and, unless so registered, may not be offered or sold
      in the United States or, directly or indirectly, to U.S. Persons, as that
      term is defined in Regulation S under the 1933 Act ("Regulation
      S"), except in accordance with the provisions of Regulation S,
      pursuant to an effective registration statement under the 1933 Act, or
      pursuant to an exemption from, or in a transaction not subject to, the
      registration requirements of the 1933 Act;

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	 	(c) 	
      the Subscriber acknowledges that the Company has not
      undertaken, and will have no obligation, to register any of the Securities
      under the 1933 Act;

	 	 	 
	 	(d) 	
      the decision to execute this Subscription Agreement and
      acquire the Securities hereunder has not been based upon any oral or
      written representation as to fact or otherwise made by or on behalf of the
      Company, and such decision is based entirely upon a review of information
      (the receipt of which is hereby acknowledged) which has been filed by the
      Company with the United States Securities and Exchange Commission (the
      "SEC") and in compliance, or intended compliance, with applicable
      securities legislation (collectively, the "Public
  Record");

	 	 	 
	 	(e) 	
      if the Company has presented a business plan to the
      Subscriber, the Subscriber acknowledges that the business plan may not be
      achieved or be achievable;

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

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

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

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

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

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

	 	 	 
	 	(l) 	
      the Subscriber will indemnify and hold harmless the
      Company and, where applicable, its directors, officers, employees, agents,
      advisors and shareholders, from and against any and all loss, liability,
      claim, damage and expense whatsoever (including, but not limited to, any
      and all fees, costs and expenses whatsoever reasonably incurred in
      investigating, preparing or defending against any claim, lawsuit,
      administrative proceeding or investigation whether commenced or
      threatened) arising out of or based upon any representation or warranty of
      the Subscriber contained herein or in any document furnished by the
      Subscriber to the Company in connection herewith being untrue in any
      material respect or any breach or failure by the Subscriber to comply with
      any covenant or agreement made by the Subscriber to the Company in
      connection therewith;

	 	 	 
	 	(m) 	
      none of the Securities are listed on any stock exchange
      or automated dealer quotation system and no representation has been made
      to the Subscriber that any of the Securities will become listed on any
      stock exchange or automated dealer quotation
system;

- 4 -

	 	(n) 	
      the Company will refuse to register any transfer of the
      Shares or the Warrant Shares not made in accordance with the provisions of
      Regulation S, pursuant to an effective registration statement under the
      1933 Act or pursuant to an available exemption from the registration
      requirements of the 1933 Act;

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

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

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

	 	 	 	 
	 		(ii) 	
      applicable resale restrictions; and

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

6. Representations, Warranties and Covenants of
the Subscriber

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

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

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

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

	 	 	 
	 	(d) 	
      the Subscriber is not a U.S. Person;

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

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

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

- 5 -

	 	(h) 	
      the Subscriber is acquiring the Securities for investment
      only and not with a view to resale or distribution and, in particular, it
      has no intention to distribute either directly or indirectly any of the
      Securities in the United States or to U.S. Persons;

	 	 	 	 
	 	(i) 	
      the Subscriber is outside the United States when
      receiving and executing this Subscription Agreement and is acquiring the
      Securities as principal for the Subscriber’s own account (except for the
      circumstances outlined in paragraph 6.1(l)), for investment purposes only,
      and not with a view to, or for, resale, distribution or fractionalisation
      thereof, in whole or in part, and no other person has a direct or indirect
      beneficial interest in such Securities;

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

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

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

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

	 	 	 	 
	 		(ii) 	
      the investor accounts for which the Subscriber acts as a
      fiduciary or agent satisfy the definition of an "Accredited Investor", as
      the term is defined in Regulation D under the 1933 Act;

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

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

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

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

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

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

	 	 	 	 
	 		(iv) 	
      that any of the Securities will be listed and posted for
      trading on any stock exchange or automated dealer quotation system or that
      application has been made to list and post any of the Securities of the
      Company on any stock exchange or automated dealer quotation system;
    and

	 	 	 	 
	 	(p) 	
      the Subscriber:

- 6 -

	 	(i) 	
      is knowledgeable of, or has been independently advised as
      to, the applicable securities laws of the securities regulators having
      application in the jurisdiction in which the Subscriber is resident (the
      "International Jurisdiction") which would apply to the acquisition
      of the Units,

	 	 	 	 
	 	(ii) 	
      is purchasing the Units pursuant to exemptions from
      prospectus or equivalent requirements under applicable securities laws or,
      if such is not applicable, the Subscriber is permitted to purchase the
      Units under the applicable securities laws of the securities regulators in
      the International Jurisdiction without the need to rely on any
      exemptions,

	 	 	 	 
	 	(iii) 	
      acknowledges that the applicable securities laws of the
      authorities in the International Jurisdiction do not require the Company
      to make any filings or seek any approvals of any kind whatsoever from any
      securities regulator of any kind whatsoever in the International
      Jurisdiction in connection with the issue and sale or resale of any of the
      Securities, and

	 	 	 	 
	 	(iv) 	
      represents and warrants that the acquisition of the Units
      by the Subscriber does not trigger:

	 	 	 	 
	 		A. 	
      any obligation to prepare and file a prospectus or
      similar document, or any other report with respect to such purchase in the
      International Jurisdiction, or

	 	 	 	 
	 		B. 	
      any continuous disclosure reporting obligation of the
      Company in the International Jurisdiction, and

	 	 	 	 
	 			
      the Subscriber will, if requested by the Company, deliver
      to the Company a certificate or opinion of local counsel from the
      International Jurisdiction which will confirm the matters referred to in
      subparagraphs (ii), (iii) and (iv) above to the satisfaction of the
      Company, acting reasonably.

7. Acknowledgement and Waiver

7.1 The Subscriber has acknowledged that the decision to
purchase the Securities was solely made on the basis of publicly available
information contained in the Public Record. The Subscriber hereby waives, to the
fullest extent permitted by law, any rights of withdrawal, rescission or
compensation for damages to which the Subscriber might be entitled in connection
with the distribution of any of the Securities.

8. Legending of Subject Securities

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

  THE SECURITIES REPRESENTED HEREBY HAVE BEEN OFFERED IN AN
    OFFSHORE TRANSACTION TO A PERSON WHO IS NOT A U.S. PERSON (AS DEFINED HEREIN)
    PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
    AMENDED (THE "1933 ACT").

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

- 7 -

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

9. Piggyback Registration Rights

9.1 If the Company determines to proceed with the preparation
and filing with the SEC of a registration statement (the "Registration
Statement") relating to an offering for its own account or the account of
others under the 1933 Act of any of its common shares, other than on Form S-4 or
Form S-8 (each as promulgated under the 1933 Act) or its then equivalents
relating to equity securities issuable in connection with stock option or other
employee benefit plans, then the Company will send to the Subscriber written
notice of such determination and, if within thirty (30) days after receipt of
such notice, the Subscriber will so request in writing, then the Company will
cause the registration under the 1933 Act of the Shares (the "Registrable
Securities") and; provided that, if at any time after giving written notice
of its intention to register any of its common shares and prior to the effective
date of the registration statement filed in connection with such registration,
then the Company will determine for any reason not to register or to delay
registration of such common shares, the Company may, at its election, give
written notice of such determination to the Subscriber and, thereupon: (i) in
the case of a determination not to register, will be relieved of its obligation
to register the Registrable Securities in connection with such registration; and
(ii) in the case of a determination to delay registering, will be permitted to
delay registering the Registrable Securities for the same period as the delay in
registering such other common shares. The Company will include in such
registration statement all or any part of the Registrable Securities; provided,
however, that the Company will not be required to register any shares that are
eligible for sale pursuant to Rule 144(k) of the 1933 Act. Notwithstanding any
other provision in this section, if the Company receives a comment from the SEC
which effectively results in the Company having to reduce the number of
Registrable Securities included on such Registration Statement, then the Company
may, in its sole discretion, reduce on a pro rata basis the number of
Registrable Securities to be included in such Registration Statement.

9.2 In connection with each Registration Statement described in
this section, the Subscriber will furnish to the Company in writing such
information and representation letters with respect to itself and the proposed
distribution by it as reasonably will be necessary in order to assure compliance
with federal and applicable state securities laws. The Company may require the
Subscriber to furnish to the Company a certified statement as to the number of
shares of common stock beneficially owned by the Subscriber and the name of the
natural person thereof that has voting and dispositive control over the
Registrable Shares.

9.3 All fees and expenses incidental to the performance of or
compliance with the filing of the Registration Statement will be borne by the
Company whether or not any Registrable Securities are sold pursuant to the
Registration Statement. The fees and expenses referred to in the foregoing
sentence will include, without limitation: (i) all registration and filing fees,
including, without limitation, fees and expenses: (A) with respect to filings
required to be made with the OTC Bulletin Board or other exchange or quotation
service on which the common stock of the Company is then listed for trading, and
(B) in compliance with applicable state securities or Blue Sky laws; (ii)
printing expenses, including, without limitation, expenses of printing
certificates for Registrable Securities and of printing prospectuses, if the
printing of prospectuses is reasonably requested by the holders of a majority of
the Registrable Securities included in the Registration Statement; (iii)
messenger, telephone and delivery expenses; (iv) fees and disbursements of
counsel for the Company; (v) 1933 Act liability insurance, if the Company so
desires such insurance; and (vi) fees and expenses of all other persons retained
by the Company in connection with the filing of the Registration Statement. In
addition, the Company will be responsible for all of its internal expenses
incurred in connection with the filing of the Registration Statement, including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties, the expense of any annual audit and the
fees and expenses incurred in connection with the listing of the Registrable
Securities on any securities exchange, if applicable. In no event will the
Company be responsible for any broker or similar commissions or, except to the
extent provided for hereunder, any legal fees or other costs of the
Subscriber.

9.4 The Company will, notwithstanding any termination of this
Subscription Agreement, indemnify and hold harmless the Subscriber, its
officers, directors, agents and employees, and each person who controls the
Subscriber (within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act) and the officers, directors, agents and employees of each such
controlling person, to the fullest extent permitted by applicable law, 

- 8 -

from and against any and all losses, claims, damages,
liabilities, costs (including, without limitation, reasonable attorneys' fees)
and expenses (collectively, "Losses"), as incurred, arising out of or
relating to any untrue or alleged untrue statement of a material fact contained
in the Registration Statement, or in any amendment or supplement thereto or in
any preliminary prospectus, or arising out of or relating to any omission or
alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, except to the extent, but only to
the extent, that: (i) such untrue statements or omissions are based solely upon
information regarding the Subscriber furnished in writing to the Company by the
Subscriber expressly for use therein, or to the extent that such information
relates to the Subscriber or the Subscriber's proposed method of distribution of
Registrable Securities and was reviewed and expressly approved in writing by the
Subscriber expressly for use in the Registration Statement, or in any amendment
or supplement thereto; or (ii) the use by the Subscriber of an outdated or
defective Registration Statement after the Company has notified the Subscriber
in writing that the Registration Statement is outdated or defective.

9.5 The Subscriber will indemnify and hold harmless the
Company, its directors, officers, agents and employees, each person who controls
the Company (within the meaning of Section 15 of the 1933 Act and Section 20 of
the 1934 Act), and the directors, officers, agents or employees of such
controlling persons, to the fullest extent permitted by applicable law, from and
against all Losses, as incurred, to the extent arising out of or based solely
upon: (i) the Subscriber's failure to comply with the prospectus delivery
requirements of the 1933 Act; or (ii) any untrue or alleged untrue statement of
a material fact contained in any Registration Statement, or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or
relating to any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading: (A)
to the extent, but only to the extent, that such untrue statement or omission is
contained in any information so furnished in writing by the Subscriber to the
Company specifically for inclusion in the Registration Statement, or (B) to the
extent that such untrue statements or omissions are based solely upon
information regarding the Subscriber furnished in writing to the Company by the
Subscriber expressly for use therein, or (C) to the extent that such information
relates to the Subscriber or the Subscriber's proposed method of distribution of
Registrable Securities and was reviewed and expressly approved in writing by the
Subscriber expressly for use in the Registration Statement or in any amendment
or supplement thereto; or (iii) the use by the Subscriber of an outdated or
defective Registration Statement after the Company has notified the Subscriber
in writing that the Registration Statement is outdated or defective. In no event
will the liability of the Subscriber hereunder be greater in amount than the
dollar amount of the net proceeds received by the Subscriber upon the sale of
the Registrable Securities giving rise to such indemnification obligation.

9.6 If a claim for indemnification hereunder is unavailable to
either the Company or the Subscriber (in each case, an "Indemnified Party or
Indemnified Parties", as applicable) (by reason of public policy or
otherwise), then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, will contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party will be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses will be deemed to include, subject
to the limitations set forth in this Subscription, any reasonable attorneys' or
other reasonable fees or expenses incurred by such party in connection with any
proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this section was available to
such party in accordance with its terms. The parties hereto agree that it would
not be just and equitable if contribution pursuant to this section were
determined by pro rata allocation or by any other method of allocation that does
not take into account the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this section,
no Subscriber will be required to contribute, in the aggregate, any amount in
excess of the amount by which the proceeds actually received by the Subscriber
from the sale of the Registrable Securities subject to the proceeding exceeds
the amount of any damages that the Subscriber has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission, except in the case of fraud by the Subscriber.

- 9 -

10. Costs

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

11. Governing Law

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

12. Survival

12.1 This Subscription Agreement, including without limitation
the representations, warranties and covenants contained herein, will survive and
continue in full force and effect and be binding upon the parties hereto
notwithstanding the completion of the purchase of the Units by the Subscriber
pursuant hereto.

13. Assignment

13.1 This Subscription Agreement is not transferable or
assignable.

14. Severability

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

15. Entire Agreement

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

16. Notices

16.1 All notices and other communications hereunder will be in
writing and will be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Subscriber will be
directed to the address on page 10 and notices to the Company will be directed
to it at Crown Oil and Gas Inc., 800 – 5th Avenue, Suite 4100, Seattle,
Washington 98104, USA, Attention: President, Fax: (206) 521–9317.

17. Counterparts and Electronic Means

     This Subscription Agreement may
be executed in any number of counterparts, each of which, when so executed and
delivered, will constitute an original and all of which together will constitute
one instrument. Delivery of an executed copy of this Agreement by electronic
facsimile transmission or other means of electronic communication capable of
producing a printed copy will be deemed to be execution and delivery of this
Agreement as of the date hereinafter set forth.

- 10 -

18. Delivery Instructions

18.1 The Subscriber hereby directs the Company to deliver the
Share and Warrant Certificates to:

	 	(name)
  
	 	 
	 	(address) 

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

	 	(name)
  
	 	 
	 	(address) 

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

	 	 
	 	(Name of Subscriber – Please type or print)
  
	 	 
	 	(Signature and, if applicable, Office) 
	 	 
	 	(Address of Subscriber) 
	 	 
	 	(City, State or Province, Postal Code of
      Subscriber) 
	 	 
	 	(Country of Subscriber)

- 11 -

A C C E P T A N C E

The above-mentioned Subscription Agreement in respect of the
Shares is hereby accepted by Crown Oil and Gas Inc.DATED at
_____________________________________, the _____day of __________________,
2008.

	 	CROWN OIL AND GAS
      INC. 
	 	 	  
	 	 	  
	 	Per:	 
	 	 	Authorized Signatory 

EXHIBIT "A"

THE SECURITIES REPRESENTED HEREBY HAVE BEEN OFFERED IN AN
OFFSHORE TRANSACTION TO A PERSON WHO IS NOT A U.S. PERSON (AS DEFINED HEREIN)
PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "1933 ACT"). 

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

THESE WARRANTS WILL EXPIRE AND BECOME NULL AND VOID 
AT 4:30
P.M. (CENTRAL STANDARD TIME) ON __________________, 2010.

SHARE PURCHASE WARRANTS
TO PURCHASE SHARES IN THE COMMON
STOCK OF
CROWN OIL AND GAS INC. 
(incorporated in the State of
Nevada)

	CERTIFICATE NO.:______________ 	February 15, 2008 

     THIS IS TO CERTIFY THAT
_____________________, (the "Holder") of _____________________, has the
right to purchase, upon and subject to the Terms and Conditions hereinafter
referred to, up to ______________ fully paid and non-assessable shares (the
"Shares") in the common stock of Crown Oil and Gas Inc. (hereinafter
called the "Company") on or before 4:30 p.m. (Pacific Standard time) on
__________________, 2010 (the "Expiry Date") at a price per Share (the
"Exercise Price") of: (i) US$1.50 for the first 12-month period after the
Closing (as defined in Appendix "A" attached hereto); and (ii) US$2.00 for the
remaining 24-month period after the Closing on the Terms and Conditions attached
hereto as Appendix "A" (the "Terms and Conditions").

	 	1. 	
      ONE (1) WARRANT AND THE EXERCISE PRICE ARE REQUIRED TO
      PURCHASE ONE (1) SHARE. THIS CERTIFICATE REPRESENTS ______________
      WARRANTS.

	 	 	 
	 	2. 	
      These Warrants are issued subject to the Terms and
      Conditions, and the Warrant Holder may exercise the right to purchase
      Shares only in accordance with those Terms and Conditions.

	 	 	 
	 	3. 	
      Nothing contained herein or in the Terms and Conditions
      will confer any right upon the Holder hereof or any other person to
      subscribe for or purchase any Shares at any time subsequent to the Expiry
      Date, and from and after such time, this Warrant and all rights hereunder
      will be void and of no value.

[Remainder of page intentionally left blank; signature page
to follow.]

- 2 -

IN WITNESS WHEREOF the Company has executed this Warrant
Certificate this ____ day of ___________, 2008.

	 	CROWN OIL AND GAS
      INC. 
	 	 	  
	 	 	  
	 	Per: 	
	 	 	       Authorized Signatory
    

PLEASE NOTE THAT ALL SHARE CERTIFICATES WILL BE LEGENDED AS
FOLLOWS DURING THE CURRENCY OF APPLICABLE HOLD PERIODS:

  THE SECURITIES REPRESENTED HEREBY HAVE BEEN OFFERED IN
    AN OFFSHORE TRANSACTION TO A PERSON WHO IS NOT A U.S. PERSON (AS DEFINED HEREIN)
    PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
    AMENDED (THE "1933 ACT"). 

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

Appendix "A"

THESE TERMS AND CONDITIONS are dated for reference February 15,
2008, and are attached to and made a part of the Warrant Certificates dated for
reference February 15, 2008, issued by Crown Oil and Gas Inc.

1. INTERPRETATION

1.1 Definitions

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

	 	(a) 	
      "Closing" means the closing of the securities under the
      Subscription Agreement on or before 
__________________
, 2008, or
      on such date as may be determined by the Company;

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

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

	 	 	 
	 	(d) 	
      "Director" means a director of the Company for the time
      being, and reference, without more, to action by the directors means
      action by the directors of the Company as a board, or whenever duly
      empowered, action by an executive committee of the board;

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

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

	 	 	 
	 	(g) 	
      "shares" means the shares in the common stock of the
      Company as constituted at the date hereof and any shares resulting from
      any subdivision or consolidation of the shares;

	 	 	 
	 	(h) 	
      "Subscription Agreement" means the Subscription Agreement
      dated for reference February 15, 2008, to which these Terms and Conditions
      are attached and made a part;

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

	 	 	 
	 	(j) 	
      "Warrants" means the warrants of the Company issued and
      presently authorized and for the time being
outstanding.

1.2 Gender

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

1.3 Interpretation not affected by Headings

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

- 2 -

1.4 Applicable Law

The Warrants will be construed in accordance with the laws of
the State of Nevada.

2. ISSUE OF WARRANTS

2.1 Additional Warrants

The Company may at any time and from time to time issue
additional warrants or grant options or similar rights to purchase shares of its
capital stock.

2.2 Warrant to Rank Pari Passu

All Warrants and additional warrants, options or similar rights
to purchase shares from time to time issued or granted by the Company, will rank
pari passu whatever may be the actual dates of issue or grant thereof, or
of the dates of the certificates by which they are evidenced.

2.3 Issue in substitution for Lost Warrants

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

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

2.4 Warrant Holder Not a Shareholder

The holding of a Warrant will not constitute the Holder thereof
a shareholder of the Company, nor entitle it to any right or interest in respect
thereof except as in the Warrant expressly provided.

3. NOTICE

3.1 Notice to Warrant Holders

Any notice required or permitted to be given to the Holders
will be in writing and may be given by prepaid registered post, electronic
facsimile transmission or other means of electronic communication capable of
producing a printed copy to the address of the Holder appearing on the Holder’s
Warrant certificate or to such other address as any Holder may specify by notice
in writing to the Company, and any such notice will be deemed to have been given
and received by the Holder to whom it was addressed if mailed, on the third day
following the mailing thereof, if by facsimile or other electronic
communication, on successful transmission, or, if delivered, on delivery; but,
if at the time or mailing or between the time of mailing and the third business
day thereafter there is a strike, lockout, or other labour disturbance affecting
postal service, then the notice will not be effectively given until actually
delivered.

- 3 -

3.2 Notice to the Company

Any notice required or permitted to be given to the Company
will be in writing and may be given by prepaid registered post, electronic
facsimile transmission or other means of electronic communication capable of
producing a printed copy to the address of the Company set forth below or such
other address as the Company may specify by notice in writing to the Holder, and
any such notice will be deemed to have been given and received by the Company to
whom it was addressed if mailed, on the third day following the mailing thereof,
if by facsimile or other electronic communication, on successful transmission,
or, if delivered, on delivery; but, if at the time or mailing or between the
time of mailing and the third business day thereafter there is a strike,
lockout, or other labour disturbance affecting postal service, then the notice
will not be effectively given until actually delivered:

CROWN OIL AND GAS INC. 
800 – 5th
Avenue, Suite 4100 
Seattle, Washington 98104 
USA

Attention: President 

Fax No. (206) 521-9317 

with a copy to:

CLARK WILSON LLP 
Barristers and
Solicitors 
800 – 885 West Georgia Street 
Vancouver, British Columbia

Canada V6C 3H1

Attention: Jonathan Lotz

Fax: (604) 687-6314

4. EXERCISE OF WARRANTS

4.1 Method of Exercise of Warrants

The right to purchase shares conferred by the Warrants may be
exercised by the Holder surrendering the Warrant certificate representing same,
with a duly completed and executed subscription in the form attached hereto and
a bank draft or certified cheque payable to or to the order of the Company, for
the purchase price applicable at the time of surrender in respect of the shares
subscribed for in lawful money of the United States of America, to the Company
at the address set forth in, or from time to time specified by the Company
pursuant to, Section 3.2 hereof.

4.2 Effect of Exercise of Warrants

	 	(a) 	
      Upon surrender and payment as aforesaid the shares so
      subscribed for will be deemed to have been issued and such person or
      persons will be deemed to have become the Holder or Holders of record of
      such shares on the date of such surrender and payment, and such shares
      will be issued at the subscription price in effect on the date of such
      surrender and payment.

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

- 4 -

4.3 Subscription for Less Than Entitlement

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

4.4 Warrants for Fractions of Shares

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

4.5 Expiration of Warrants

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

4.6 Time of Essence Time will be of the essence hereof.
4.7 Subscription Price

Each Warrant is exercisable at a price per share (the
"Exercise Price") of: (i) US$1.50 for the first 12-month period after the
Closing; and (ii) US$2.00 for the remaining 12-month period after the Closing.
One (1) Warrant and the Exercise Price are required to subscribe for each share
during the term of the Warrants.

4.8 Adjustment of Exercise Price

	 	(a) 	
      The Exercise Price and the number of shares deliverable
      upon the exercise of the Warrants will be subject to adjustment in the
      event and in the manner following:

	 	 	 	 
	 		(i) 	
      If and whenever the shares at any time outstanding are
      subdivided into a greater or consolidated into a lesser number of shares
      the Exercise Price will be decreased or increased proportionately as the
      case may be; upon any such subdivision or consolidation the number of
      shares deliverable upon the exercise of the Warrants will be increased or
      decreased proportionately as the case may be; or

	 	 	 	 
	 		(ii) 	
      In case of any capital reorganization or of any
      reclassification of the capital of the Company or in the case of the
      consolidation, merger or amalgamation of the Company with or into any
      other Company (hereinafter collectively referred to as a
      "Reorganization"), each Warrant will after such Reorganization
      confer the right to purchase the number of shares or other securities of
      the Company (or of the Company’s resulting from such Reorganization) which
      the Warrant Holder would have been entitled to upon Reorganization if the
      Warrant Holder had been a shareholder at the time of such
      Reorganization.

	 	 	 	 
	 			
      In any such case, if necessary, appropriate adjustments
      will be made in the application of the provisions of this Article Four
      relating to the rights and interest thereafter of the Holders of the
      Warrants so that the provisions of this Article Four will be made
      applicable as nearly as reasonably possible to any shares or other
      securities deliverable after the Reorganization on the exercise of the
      Warrants.

- 5 -

The subdivision or consolidation of
shares at any time outstanding into a greater or lesser number of shares
(whether with or without par value) will not be deemed to be a Reorganization
for the purposes of this clause 4.8(a)(ii) .

	 	(b) 	
      The adjustments provided for in this Section 4.8 are
      cumulative and will become effective immediately after the record date or,
      if no record date is fixed, the effective date of the event which results
      in such adjustments.

4.9 Determination of Adjustments

If any questions will at any time arise with respect to the
Exercise Price or any adjustment provided for in Section 4.8 hereof, such
questions will be conclusively determined by the Company’s Auditors, or, if they
decline to so act any other firm of certified public accountants in the United
States of America that the Company may designate and who will have access to all
appropriate records and such determination will be binding upon the Company and
the Holders of the Warrants.

5. COVENANTS BY THE COMPANY

5.1 Reservation of Shares

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

6. WAIVER OF CERTAIN RIGHTS

6.1 Immunity of Shareholders, etc.

The Warrant Holder, as part of the consideration for the issue
of the Warrants, waives and will not have any right, cause of action or remedy
now or hereafter existing in any jurisdiction against any past, present or
future incorporator, shareholder, Director or Officer (as such) of the Company
for the issue of shares pursuant to any Warrant or on any covenant, agreement,
representation or warranty by the Company herein contained or in the
Warrant.

7. MODIFICATION OF TERMS, MERGER,
SUCCESSORS

7.1 Modification of Terms and Conditions for Certain
Purposes

From time to time the Company may, subject to the provisions of
these presents, modify the Terms and Conditions hereof, for the purpose of
correction or rectification of any ambiguities, defective provisions, errors or
omissions herein.

7.2 Warrants Not Transferable

The Warrants and all rights attached to it are not
transferable.

DATED as of the date first above written in these Terms and
Conditions.

	 	CROWN OIL AND GAS
      INC. 
	 	 	  
	 	 	  
	 	 Per: 	
	 	 	Authorized Signatory 

FORM OF SUBSCRIPTION

	TO: 	CROWN OIL AND GAS INC. 
	  	800 – 5th Avenue, Suite 4100 
	  	Seattle, Washington 98104 
	  	USA 

The undersigned warrant holder hereby subscribes for
____________common shares (the "Shares") of Crown Oil and Gas Inc. (the
"Company") at a price of: (i) US$1.50 per share if the Shares are being
purchased in the first 12-month period after the Closing (as defined in the
Warrant Certificate dated for reference February 15, 2008); or (ii) US$2.00 per
share if the Shares are being purchased in the remaining 12-month period,
pursuant to the terms of the Warrant Certificate and Subscription Agreement,
dated for reference February 15, 2008, as applicable. This Subscription is
accompanied by a certified cheque or bank draft payable to or to the order of
the Company for the whole amount of the purchase price of the Shares.

The undersigned hereby represents and warrants that the
undersigned is not a U.S. person and is not subscribing for the Shares on behalf
of a U.S. person.

The undersigned hereby directs that the Shares be registered as
follows:

	NAME(S) IN FULL 	 	ADDRESS(ES) 	 	NUMBER OF SHARES 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	  	 	TOTAL: 	 	  
	 	 	 	 	 

(Please print full name in which share certificates are to
be issued, stating whether Mr., Mrs. or Miss is applicable).

DATED this ________day of __________________, ________.

Signed in the presence of:

	Signature of Witness
    	 	Signature
      of Warrant Holder 

	Please print below your name and address
      in full. 
	 	 
	Name (Mr./Mrs./Miss) 	 
	 	 
	Address 	 
	 	 
	 	 

INSTRUCTIONS FOR SUBSCRIPTION

The signature to this Subscription must correspond in every
particular with the name written upon the face of the Warrant Certificate
without alteration or enlargement or any change whatever. If there is more than
one subscriber, all must sign this Subscription. In the case of persons signing
by agent or attorney or by personal representative(s), the authority of such
agent, attorney or representative(s) to sign must be proven to the satisfaction
of the Company.

If the Warrant Certificate and this Subscription are being
forwarded by mail, registered mail must be employed.EXHIBIT 10.1

 

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

 

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”)
by and between Optio Software, Inc. (“Company”), and C. Wayne Cape (“You”
or “Your”) (collectively referred to as the “Parties”), is entered into and
effective as of the 29th of February, 2008 (the “Effective Date”) and amends
and restates that certain Employment Agreement dated August 1, 2003.(1)

(1) Unless otherwise indicated, all capitalized
terms used in this Agreement are defined in the “Definitions” section attached
as Exhibit A . Exhibit A is incorporated by reference and is included
in the Definition of “Agreement.”

 

WHEREAS, the Company is engaged in the Business;

 

WHEREAS, the Parties entered into that certain Employment Agreement
(the “Original Agreement”) effective as of August 1, 2003;

 

WHEREAS, the Parties desire to amend and restate the Original Agreement
in its entirety as of the Effective Date, upon the terms and conditions set
forth herein;

 

WHEREAS, Your position is a position of trust and responsibility with
access to Confidential Information, Trade Secrets, and information concerning
employees and customers of the Company;

 

WHEREAS, the Trade Secrets and Confidential Information, and the
relationship between the Company and each of its employees and customers are
valuable assets of the Company and may not be converted to Your own use;

 

WHEREAS, the Company has agreed to employ You in exchange for Your
compliance with the terms of this Agreement;

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, it is agreed:

 

1.        Employment and Duties.

 

A.       Company shall continue to employ You as Chief Executive
Officer, President and Chairman of the Board in accordance with the terms and
conditions set forth in this Agreement. You accept such continued employment on
the terms set forth herein. You shall report to the Board of Directors of the
Company.

 

B.        You shall have such duties as set forth on Exhibit B
(Duties) and as may otherwise be assigned to You by the Board of Directors from
time to time.

 

 

C.        You agree to devote all necessary working time required of
Your position, to devote Your best efforts, skill, and energies to promote and
advance the business and/or interests of the Company, and to fully perform Your
obligations under this Agreement. During Your employment, You shall not render
services to any other entity, regardless of whether You receive compensation,
without the prior written consent of the Company. You may, however, (i) engage
in community, charitable, and educational activities, (ii) manage Your
personal investments, and (iii) with the prior written consent of the
Company, serve on corporate boards or committees, provided that such activities
do not conflict or interfere with the performance of Your obligations under
this Agreement or conflict with the interests of the Company.

 

D.       As an officer of the Company, You owe a duty of care and
loyalty to the Company, as well as a duty to perform Your Duties in a manner
that is in the best interests of the Company.

 

E.        You agree to comply with the policies and procedures of the
Company as may be adopted and changed from time to time, including those
described in the Company’s employee handbook. Material changes to policies and
procedures may be made from time to time by the Board of Directors. If this
Agreement conflicts with such policies or procedures, this Agreement will
control.

 

2.        Compensation.

 

A.       Base Salary.  During the term of this Agreement, Company
shall pay to You a base salary of $306,860 per year, increased as set forth
below (Base Salary), subject to all applicable withholdings. Your Base Salary
shall be increased each August 1 in an amount equal to the product of the
Base Salary (as previously increased) and the percentage increase, if any, of
the Consumer Price Index for All Urban Consumers, Region South, published by
the U.S. Bureau of Labor Statistics over the prior year’s Consumer Price Index
for All Urban Consumers, Region South, published by the U.S. Bureau of Labor
Statistics. In addition, Your Base Salary may be adjusted annually at the
discretion of the Board of Directors, however these adjustments may only be
increases and not decreases. Your Base Salary shall be paid to You in
accordance with the Company’s normal payroll practices.

 

B.        Bonus.  During the term of this Agreement, You will
receive an annual bonus if Your performance and the Company’s performance meets
certain criteria established from year to year by the Company’s Board of
Directors (the Bonus). You will not receive any Bonus if, due to termination
For Cause, You are not employed on the last day of the year for which the Bonus
is to be paid, otherwise the Bonus is to be prorated. The Bonus will be subject
to all applicable withholdings and will be paid in accordance with the Company’s
Annual Bonus Incentive Plan. In the event of a Change of Control, the Company
and Your individual performance targets for the Annual Bonus Incentive Plan
shall be deemed to be met in full for the remainder of the plan year in which
the Change of Control occurs. Payment of such bonus shall be made to You on the
earlier of (i) Your termination pursuant to Section 5C hereof, or (ii) in
accordance with the payment schedule set forth in the bonus plan.

 

 

2

 

C.        Executive Benefits.  You shall be entitled to participate in all
benefit plans as shall be in effect for all executive level personnel or
applicable generally to employees of the Company from time to time, subject to
the terms and conditions of such plans and programs.

 

3.        Term. This
Agreement shall continue until terminated by either Party in accordance with Section 4
hereof.

 

In the event of a Change of Control, Your rights thereafter under this
Agreement shall become permanent, are not terminable, and cannot be affected by
any corporate action without Your consent, except as is provided for in Section 4
of this Agreement with respect to death or normal retirement, termination by
the Company For Cause, or Your disability. The previous sentence shall not
restrict the Company’s right to terminate this Agreement as provided in the
first paragraph of this Section 3, subject to Section 4 below.

 

4.        Termination.
This Agreement may be terminated upon the occurrence of any of the following
events:

 

A.       Your death, however prorating of bonus (to the extent earned
by You prior to Your death) would transfer to Your estate;

 

B.        Your disability; “Disability” means you are either (1) unable
to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months; or (2) by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, receiving income
replacement benefits for a period of not less than three months under an
accident and health plan covering employees of the service provider’s
employer.  You will be deemed disabled if
determined to be totally disabled by the Social Security Administration or
Railroad Retirement Board or if determined to be disabled in accordance with a
disability insurance program, provided that the definition of disability
applied under such disability insurance program complies with the requirements
of this subsection 4B;

 

C.        Mutual written agreement between You and the Company at any
time to terminate this Agreement;

 

D.       For Cause, as defined below,:

 

1.        Your material breach of this agreement, provided that, if
such breach is curable, You shall be entitled to written notice and a thirty
(30) day opportunity to cure such breach;

 

2.        Any act or omission by You which is, or is likely to be,
materially injurious to the Company or the business reputation of the Company;

 

 

3

 

3.        Your dishonesty, fraud, malfeasance, gross negligence or
misconduct in the performance of Your duties or otherwise having an adverse
affect on the Company;

 

4.        Your continued failure to satisfactorily perform Your duties
under this Agreement, to follow the direction (consistent with Your duties) of
the Board of Directors, or to follow the policies, procedures, and rules of
the Company, after notice and a thirty (30) day opportunity to cure;

 

5.        Your arrest, indictment for, or conviction of, or Your entry
of a plea of guilty or no contest to, a felony or crime involving moral
turpitude; or

 

6.        Your resignation for other than Good Reason or failure to
perform services under this Agreement.

 

E.        Your resignation for Good Reason which shall exist if the
Company, without Your written consent, (i) takes any action which is
inconsistent with, or results in the reduction of, Your then current title,
duties or responsibilities, (ii) reduces Your then current Base Salary, (iii) reduces
the benefits to which You are entitled on the Effective Date, unless a similar
reduction is made for other executive employees; (iv) requires You to
relocate more than seventy-five (75) miles from the location of the Company’s
offices on the Effective Date, or (v) enters into a Change of Control
transaction and the successor corporation, if it is not the Company, does not
assume (by law or contract) the obligations of the Company hereunder. Good
Reason shall not include any isolated, insubstantial or inadvertent action that
(i) is not taken in bad faith, and (ii) is remedied by the Company
within thirty (30) days of receiving notice by You of such action.

 

F.        Upon giving You ninety (90) days written notice, termination
of employment by the Company at any time for any reason not defined in
subsections A-E above.

 

5.        Post Termination Payment
Obligations.

 

A.       If this Agreement terminates for any of the reasons set forth
in subsections 4A, 4C or 4D of this Agreement, then You shall be entitled to
receive Your Base Salary through the termination date (as increased by any
raises) and thereafter the Company shall have no further obligations under this
Agreement, including, but not limited to, the obligation to pay You any portion
of the Bonus under Section 2B, but You shall continue to be bound by
Sections 8A, 8B and 8C, and all other post-termination obligations contained in
this Agreement.

 

B.        Except as otherwise provided in subsection 5C, if applicable,
if this Agreement terminates for any of the reasons set forth in subsections 4E
or 4F of this Agreement, then the Company shall pay You a separation payment
equal to twelve (12) months base salary in effect as of the date of termination
(subject to increase pursuant to Section 3, including increases after the
date of termination), payable over a period of twelve (12) months beginning on
the first day of the month following the date of termination, in accordance
with the Company’s normal payroll practices, any prorated Bonus payments (to
the extent earned by You prior to the date of Your termination) 

 

4

 

payable in accordance with the Company’s
Annual Bonus Incentive Plan.  If this
Agreement terminates for the reason set forth in subsection 4B of this
Agreement by reason of an injury which occurs in the course of the performance
of Your duties for the Company, then the Company shall pay You a separation
payment equal to twelve (12) months base salary in effect as of the date of
termination, less the monthly amount that you are entitled to receive under any
and all long-term and short-term disability insurance policies, payable over a
period of twelve (12) months beginning on the first day of the month following
the date of termination, in accordance with the Company’s normal payroll
practices.

 

C.        If, within twelve (12) months following a Change of Control:

 

1.        the Company or the successor entity to the Company terminates
Your employment in the manner described in subsection 4F of this Agreement; or

 

2.        You terminate your employment pursuant to subsection 4E of
this Agreement, then

 

(i)        You shall receive a
separation payment equal to twelve (12) months Base Salary in effect as of the
Date of Termination, payable over a period of twelve (12) months beginning on
the first day of the month following the date of termination, in accordance
with the Company’s normal payroll practices;

 

(ii)       the Company shall
maintain in full force and effect and pay all related expenses for the
continued benefit of You and Your dependants until the earlier of twelve (12)
months following Your termination, or the date You accept other employment and
obtain, the equivalent of all life, disability, accident, health insurance and
other employee benefit plans, programs, benefits or arrangements in which You
were entitled to participate immediately prior to such date provided that Your
continued participation is possible under the general terms and provisions of
such plans and programs. No deduction for any expenses related to the benefits
described in this section shall be made from Your Base Salary during the period
after termination for which You are eligible for such benefits. In the event
that Your participation in any such plan or program is barred, the Company
shall arrange to provide You with benefits substantially similar to those which
You were entitled to receive under such plans and programs immediately prior to
Your termination, provided that any reduction of benefits which constituted a
basis for Your termination of employment for Good Reason shall not be taken
into account for purposes of determining Your continued benefits under this
subsection;

 

(iii)      You shall receive the
cash bonus amount earned by You as though You and the Company met the
performance objectives required by the Board of Directors for payment of such
bonus amount for the remainder of the plan year in which the Change of Control
occurs.

 

5

 

D.       As of the Effective Date, you hold options to purchase
1,000,000 shares of the Company’s common stock all of which were issued outside
the Company’s Stock Incentive Plan and are fully vested and exercisable
(Non-Plan Options). Notwithstanding anything herein to the contrary or without
respect to the nature of termination, the Non-Plan Options have no expiration
date, in accordance with their terms.

 

E.        The Company’s obligation to make the separation payments as
set forth herein shall be conditioned upon Your:

 

1.        Execution of a Separation and Release Agreement in a form
prepared by the Company whereby You release the Company from any and all
liability and claims of any kind; and

 

2.        Compliance with the restrictive covenants (Sections 8A, 8B
and 8C) and all post-termination obligations contained in this Agreement.

 

The Company’s obligation to make the separation payments set forth in
this Section 5 shall terminate immediately upon any breach by You of any
post-termination obligations to which You are subject.

 

6.        Set-Off.  To the extent permitted by Code section 409A,
if You have any outstanding obligations to the Company at the time this
Agreement terminates for any reason, You acknowledge that the Company is
authorized to deduct any amounts owed to the Company from Your final paycheck
and/or from any amounts that would otherwise be due to You under Section 5
above.

 

7.        Books and Records.  You agree that all files, documents, records,
customer lists, books and other materials which come into Your use or
possession during the term of this Agreement and which are in any way related
to the Company’s business shall at all times remain the property of the
Company, and that upon request by Company or upon the termination of this
Agreement for any reason, You shall immediately surrender to Company all such
property and copies thereof.

 

8.        Restrictive Covenants.  You acknowledge that the restrictions
contained in this Section 8 are reasonable and necessary to protect the
legitimate business interests of the Company, and will not impair or infringe
upon Your right to work or earn a living after Your employment with the Company
ends.

 

A.       Trade Secrets and Confidential Information.  You represent and warrant that: (i) You
are not subject to any agreement that would prevent You from performing Your
duties for the Company or otherwise complying with this Agreement, and (ii) You
are not subject to or in breach of any non-disclosure agreement, including any
agreement concerning trade secrets or confidential information owned by any
other party.

 

You agree that You will
not: (i) use, disclose, or reverse engineer the Trade Secrets or the
Confidential Information, except as authorized by the Company; (ii) during
Your employment with the Company, use, disclose, or reverse engineer (a) any
confidential information or trade secrets of any former employer or third
party, or (b) any 

 

 

6

 

 

works of
authorship developed in whole or in part by You during any former employment or
for any other party, unless authorized in writing by the former employer or
third party; or (iii) upon Your resignation or termination (a) retain
Trade Secrets or Confidential Information, including any copies existing in any
form (including electronic form), which are in Your possession or control, or (b) destroy,
delete, or alter the Trade Secrets or Confidential Information without the
Company’s consent.

 

The obligations under
this Section 8A shall: (i) with regard to the Trade Secrets, remain in
effect as long as the information constitutes a trade secret under applicable
law, and (ii) with regard to the Confidential Information, remain in
effect during the Restricted Period.

 

B.        Non-Solicitation of Customers. During the Restricted Period,
You will not solicit any Customer of the Company for the purpose of providing
any goods or services competitive with the Business. The restrictions set forth
in this Section 8B apply only to the Customers with whom You had Contact.

 

C.        Non-Recruit of Employees. During the Restricted Period, You
will not, directly or indirectly, solicit, recruit or induce any Employee to (a) terminate
his or her employment relationship with the Company or (b) work for any
other person or entity engaged in the Business.

 

9.        Work Product.
Your employment duties may include inventing in areas directly or indirectly
related to the business of the Company or to a line of business that the
Company may reasonably be interested in pursuing. All Work Product shall
constitute work made for hire. If (i) any of the Work Product may not be
considered work made for hire, or (ii) ownership of all right, title, and
interest to the legal rights in and to the Work Product will not vest
exclusively in the Company, then, without further consideration, You assign all
presently-existing Work Product to the Company, and agree to assign, and
automatically assign, all future Work Product to the Company.

 

The Company will have the right to obtain and hold in its own name
copyrights, patents, design registrations, proprietary database rights,
trademarks, rights of publicity, and any other protection available in the Work
Product. At the Company’s request, You agree to perform, during or after Your
employment with the Company, any acts to transfer, perfect and defend the
Company’s ownership of the Work Product, including, but not limited to: (i) executing
all documents (including a formal assignment to the Company) necessary for
filing an application or registration for protection of the Work Product (an
Application), (ii) explaining the nature of the Work Product to persons
designated by the Company, (iii) reviewing Applications and other related
papers, or (iv) providing any other assistance reasonably required for the
orderly prosecution of Applications.

 

You agree to provide the Company with a written description of any Work
Product in which You are involved (solely or jointly with others) and the
circumstances surrounding the creation of such Work Product.

 

 

7

 

 

10.      License. You
grant to the Company an irrevocable, nonexclusive, worldwide, royalty-free
license to: (i) make, use, sell, copy, perform, display, distribute, or
otherwise utilize copies of the Licensed Materials, (ii) prepare, use and
distribute derivative works based upon the Licensed Materials, and (ii) authorize
others to do the same. You shall notify the Company in writing of any Licensed
Materials You deliver to the Company.

 

11.      Release. You
consent to the Company’s use of Your image, likeness, voice, or other
characteristics in the Company’s products or services. You release the Company
from any claims which You have or may have for right of publicity, copyright
infringement, or any other causes of action arising out of the use,
distribution, adaptation, reproduction, broadcast, or exhibition of such
characteristics.

 

12.      Post-Employment Disclosure.
During the Restricted Period, you will disclose that you have covenants (and
the nature of those covenants) to persons and/or entities to whom You provide
goods and services. If, during the Restricted Period, You provide services to
another person or entity which provides goods or services competitive with the
goods or services provided by the Company You shall provide the Company with
such person or entity’s name, Your job title, and a description of the services
You will provide.

 

13.      Injunctive Relief.
You agree that if You breach Sections 8, 9, 10 and/or 11 of this Agreement: (i) the
Company would suffer irreparable harm; (ii) it would be difficult to
determine damages, and money damages alone would be an inadequate remedy for
the injuries suffered by the Company, and (iii) if the Company seeks
injunctive relief to enforce this Agreement, You will waive and will not (a) assert
any defense that the Company has an adequate remedy at law with respect to the
breach, or (b) require that the Company submit proof of the economic value
of any Trade Secret or Confidential Information. Nothing contained in this
Agreement shall limit the Company’s right to any other remedies at law or in
equity.

 

14.      Application of Section 409A
of the Code.

 

A.       To the extent applicable, it is intended that this Agreement
comply with the provisions of Section 409A of the Code, so as to prevent
inclusion in gross income of any amounts payable or benefits provided hereunder
in a taxable year that is prior to the taxable year or years in which such
amounts or benefits would otherwise actually be distributed, provided or
otherwise made available to You.  This
Agreement shall be construed, administered, and governed in a manner consistent
with this intent and the following provisions of this Section shall
control over any contrary provisions of this Agreement.

 

B.        In the event You are a “specified employee” within the
meaning of Section 409A(a)(2)(B)(i) of the Code and delayed payment
of any amount or commencement of any benefit under this Agreement is required
to avoid a prohibited distribution under Section 409A(a)(2) of the
Code, then (i) amounts payable in connection with Your termination of
employment will be delayed and paid in a single lump sum six months thereafter
(or if earlier, the date of Your death) and (ii) with respect to medical
and welfare benefits, You shall be entitled to bear the cost of such benefits
for six months following such termination date, after which time the Company
shall continue to provide

 

8

 

such benefits for the period they would
otherwise have been provided, commencing from the six month anniversary of the
Your termination date.

 

C.        Payments and benefits hereunder upon Your termination or
severance of employment with the Company that constitute deferred compensation
under Code Section 409A shall be paid or provided only at the time of a
termination of Your employment which constitutes a “separation from service”
within the meaning of Code Section 409A (subject to a possible six-month
delay pursuant to the Subsection B above).

 

D.       For purposes of Code Section 409A, the right to a series
of payments under this Agreement shall be treated as a right to a series of
separate payments so that each payment hereunder is designated as a separate
payment for purposes of Code Section 409A.

 

E.        All reimbursements and in kind benefits provided under this
Agreement, shall be made or provided in accordance with the requirements of
Code Section 409A, including, where applicable, the requirement that (i) any
reimbursement is for expenses incurred during Your lifetime (or during a
shorter period of time specified in this Agreement), (ii) the amount of
expenses eligible for reimbursement, or in kind benefits provided, during a
calendar year may not affect the expenses eligible for reimbursement, or in
kind benefits to be provided, in any other calendar year, (iii) the
reimbursement of an eligible expense will be made on or before the last day of
the calendar year following the year in which the expense is incurred, and (iv) the
right to reimbursement or in kind benefits is not subject to liquidation or
exchange for another benefit.

 

F.        References in this Agreement to Code Section 409A
include both that section of the Code itself and any guidance promulgated
thereunder.

 

15.      Severability.
The provisions of this Agreement are severable. If any provision is determined
to be invalid, illegal, or unenforceable, in whole or in part, the remaining
provisions and any partially enforceable provisions shall remain in full force
and effect.

 

16.      Attorneys’ Fees.
In the event of litigation relating to this Agreement, the prevailing party
shall be entitled to recover attorneys’ fees and costs of litigation in
addition to all other remedies available at law or in equity.

 

17.      Arbitration With Respect
to Certain Matters. The parties agree to submit to arbitration, in
accordance with these provisions, any claim or controversy arising from or
related to the alleged breach of this Agreement, provided that claims or
disputes of the types described in Section 13 above shall not be subject
to this Section 16. The parties further agree that, other than with
respect to claims or disputes of the types described in Section 13 above,
the arbitration process agreed upon herein shall be the exclusive means for
resolving all disputes made subject to arbitration herein, but that no
arbitrator shall have authority to expand the scope of these arbitration
provisions. Any arbitration hereunder shall be conducted under the Model
Employment Procedures of the American Arbitration Association (AAA) and the
parties agree that the Federal Arbitration Act shall govern the proceedings.
Either party may invoke arbitration procedures herein by written notice for
arbitration containing a statement of the matter to be 

 

9

 

arbitrated.
The parties shall then have fourteen (14) days in which they may identify a
mutually agreeable, neutral arbitrator. After the fourteen (14) day period has
expired, the parties shall prepare and submit to the AAA a joint submission,
with each party to contribute half of the appropriate administrative fee. In
the event the parties cannot agree upon a neutral arbitrator within fourteen
(14) days after written notice for arbitration is received, their joint
submission to the AAA shall request a panel of nine arbitrators who are
practicing attorneys with professional experience in the field of employment
law, and the parties shall attempt to select an arbitrator from the panel
according to AAA procedures. Unless otherwise agreed by the parties, the
arbitration hearing shall take place in Atlanta, Georgia at a place designated
by the AAA. All arbitration procedures hereunder shall be confidential. The
arbitrator shall have authority to include all or any portion of costs of such
arbitration in an award. The arbitrator shall not have the power or authority
to award indirect, special, incidental, consequential, exemplary, or punitive
damages. The arbitrator may include equitable relief. Any arbitration awarded
shall be accompanied by a written statement containing a summary of the issues
in controversy, a description of the award, and an explanation of the reasons
for the award. It is understood and agreed by the parties that their agreements
herein concerning arbitration do not otherwise alter the terms and conditions
of employee’s employment as provided by this agreement.

 

18.      Waiver. Any
Party’s failure to enforce any provision of this Agreement shall not act as a
waiver of that or any other provision. Any Party’s waiver of any breach of this
Agreement shall not act as a waiver of any other breach.

 

19.      Entire Agreement.
This Agreement, including Exhibits A and B which are incorporated by reference,
constitutes the entire agreement between the Parties concerning the subject
matter of this Agreement. This Agreement supersedes any prior communications,
agreements or understandings, whether oral or written, between the Parties
relating to the subject matter of this Agreement. Other than terms of this Agreement,
no other representation, promise or agreement has been made with You to cause
You to sign this Agreement.

 

20.      Amendments.
This Agreement may not be amended or modified except in writing signed by both
Parties.

 

21.      Survival; Successors and
Assigns. This Agreement shall be assignable to, and shall inure to
the benefit of, the Company’s successors and assigns, including, without
limitation, successors through merger, name change, consolidation, or sale of a
majority of the Company’s stock or assets, and shall be binding upon You. A
Change of Control shall not affect the terms of this Agreement. As used in this
Agreement, Company shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid or otherwise. You shall
not have the right to assign Your rights or obligations under this Agreement.
The covenants contained in Sections 8A, 8B and 8C of this Agreement shall
survive cessation of Your employment with the Company, regardless of the reason
for cessation of Your employment and regardless of who causes the cessation.

 

22.      Governing Law.
The laws of the State of Georgia shall govern this Agreement. If Georgia’s
conflict of law rules would apply another state’s laws, the Parties agree
that Georgia law shall still govern.

 

10

 

23.      No Strict Construction.
If there is a dispute about the language of this Agreement, the fact that one
Party drafted the Agreement shall not be used in its interpretation.

 

24.      Notice. Whenever
any notice is required, it shall be given in writing addressed as follows:

 

To Company:

 

Optio Software, Inc.

3015 Windward Plaza

Windward Fairways II

Alpharetta, Georgia 30005

Attn: Board of Directors

 

To Executive:

 

C. Wayne Cape

545 Brightmore Downs

Alpharetta, GA 30005

 

Notice shall be deemed given and effective three (3) days after
the deposit in the U.S. mail of a writing addressed as above and sent first
class mail, certified, return receipt requested, or when actually received.
Either Party may change the address for notice by notifying the other party of
such change in accordance with this Section.

 

25.      Consent to Jurisdiction
and Venue. You agree that any claim arising out of or relating to
this Agreement shall be (i) brought in the Superior Court of Fulton
County, Georgia, or (ii) brought in or removed to the United States
District Court for the Northern District of Georgia, Atlanta Division. You
consent to the personal jurisdiction of the courts identified above. You waive (i) any
objection to jurisdiction or venue, or (ii) any defense claiming lack of
jurisdiction or improper venue, in any action brought in such courts.

 

26.      AFFIRMATION.
YOU ACKNOWLEDGE THAT YOU HAVE CAREFULLY READ THIS AGREEMENT, YOU KNOW AND
UNDERSTAND ITS TERMS AND CONDITIONS, AND YOU HAVE HAD THE OPPORTUNITY TO ASK
THE COMPANY ANY QUESTIONS YOU MAY HAVE HAD PRIOR TO SIGNING THIS
AGREEMENT.

 

IN WITNESS WHEREOF, the
Parties hereto have executed this Agreement as of the day and year first above
written.

 

	
   

  	
   OPTIO SOFTWARE , INC .:

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  /s/ Caroline
  Bembry

  
	
   

  	
  Its:

  	
  CFO

  

 

 

	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  /s/ C. Wayne
  Cape

  
	
   

  	
   

  	
  C. Wayne Cape

  

 

 

11

 

 

EXHIBIT A

 

DEFINITIONS

 

A.            “Business” shall
mean the business of (i) developing and providing software that enables a
business to integrate and present information to its customers, suppliers,
partners, and employees through various types of media (including, but not
limited to, print, Internet, e-mail and fax) by customizing, delivering and
exchanging information over a computer network (the Software), and (ii) providing
the implementation, training, and consulting services that support the
Software.

 

B.            “Change of Control”
shall mean either of the following: (i) the acquisition, directly or
indirectly after the date of this Agreement, in one series of related
transactions, of 45% or more of the Company’s common stock by any person as
that term is defined in Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended excluding any acquisitions in capital raising
transactions; (ii) the consummation of a merger, consolidation, share
exchange or similar transaction of the Company with any other corporation,
entity or group, as a result of which the holders of the voting capital stock
of the Company as a group would receive less than 45% of the voting capital
stock of the surviving or resulting corporation, or (iii) the consummation
of an agreement providing for the sale or transfer (other than as security for
obligations of the Company) of substantially all the assets of the Company,
provided that none of the transactions described in subsections (i), (ii) or
(iii) shall include a transaction or series of transactions with an entity
which is controlled, directly or indirectly, after the transaction, by the
Company or another entity in which the shareholders of the Company immediately
prior to such transaction control, directly or indirectly, at least 45% of the
outstanding voting securities (including any entity which as a result of such
transaction owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries), provided, however,
that no event shall constitute a Change of Control under this Agreement unless
it is a “change in control event” under Code section 409A and the regulations
thereunder.

 

C.            “Company” means
Optio Software, Inc., its parents, subsidiaries, affiliates and all
related companies, as well as their respective officers, directors,
shareholders, employees, agents and any other representatives.

 

D.            “Confidential
Information” means information of the Company, to the extent not considered a
Trade Secret under applicable law, that (i) relates to the business of the
Company, (ii) possesses an element of value to the Company, (iii) is
not generally known to the Company’s competitors, and (iv) would damage
the Company if disclosed. Confidential Information includes, but is not limited
to, (i) future business plans, (ii) the composition, description,
schematic or design of products, future products or equipment of the Company, (iii) communication
systems, audio systems, system designs and related documentation, (iv) advertising
or marketing plans, (v) information regarding independent contractors,
employees, clients and customers of the Company, and (vi) information
concerning the Company’s financial structure and methods and procedures of
operation. Confidential Information shall not include any information that (i) is
or becomes generally available to the public other than as a result of an unauthorized
disclosure, (ii) has been independently developed and disclosed by others
without violating this Agreement or the legal rights of any party, or (iii) otherwise
enters the public domain through lawful means.

 

 

12

 

E.             “Contact” means any
interaction between You and a Customer which (i) takes place in an effort
to establish, maintain, and/or further a business relationship on behalf of the
Company and (ii) occurs during the last year of Your employment with the
Company (or during Your employment if employed less than a year).

 

F.             “Customer” means
any person or entity to whom the Company has sold its products or services, or
solicited to sell its products or services.

 

G.            “Employee” means any
person who (i) is employed by the Company at the time Your employment with
the Company ends, (ii) was employed by the Company during the last year of
Your employment with the Company (or during Your employment if employed less
than a year), or (iii) is employed by the Company during the Restricted
Period.

 

H.            “Licensed Materials”
means any materials that You utilize for the benefit of the Company, or deliver
to the Company or the Company’s customers, which (i) do not constitute
Work Product, (ii) are created by You or of which You are otherwise in
lawful possession, and (iii) You may lawfully utilize for the benefit of,
or distribute to, the Company or the Company’s customers.

 

I.              “Restricted Period”
means the time period during Your employment with the Company, and for one year
after Your employment with the Company ends.

 

J.             “Trade Secrets”
means information of the Company, and its licensors, suppliers, clients and
customers, without regard to form, including, but not limited to, technical or
nontechnical data, a formula, a pattern, a compilation, a program, a device, a
method, a technique, a drawing, a process, financial data, financial plans,
product plans, or a list of actual or potential customers or suppliers which is
not commonly known by or available to the public and which information (i) derives
economic value, actual or potential, from not being generally known to, and not
being readily ascertainable by proper means by, other persons who can obtain
economic value from its disclosure or use, and (ii) is the subject of
efforts that are reasonable under the circumstances to maintain its secrecy.

 

K.            “Work Product” means
(a) any data, databases, materials, documentation, computer programs,
inventions (whether or not patentable), designs, and/or works of authorship,
including but not limited to, discoveries, ideas, concepts, properties,
formulas, compositions, methods, programs, procedures, systems, techniques,
products, improvements, innovations, writings, pictures, audio, video, images
of You, and artistic works, and (b) any subject matter protected under
patent, copyright, proprietary database, trademark, trade secret, rights of
publicity, confidential information, or other property rights, including all
worldwide rights therein, that is or was conceived, created or developed in
whole or in part by You while employed by the Company and that either (i) is
created within the scope of Your employment, (ii) is based on, results
from, or is suggested by any work performed within the scope of Your employment
and is directly or indirectly related to the business of the Company or a line
of business that the Company may reasonably be interested in pursuing, (iii) has
been or will be paid for by the Company, or (iv) was created or improved
in whole or in part by using the Company’s time, resources, data, facilities,
or equipment.

 

 

13

 

EXHIBIT B

 

CHIEF EXECUTIVE OFFICER AND
PRESIDENT

 

Position Responsibilities:

 

Develop the Company’s business and product strategy and carry it through
full implementation.

 

Work closely with the Board of Directors in reviewing the market place
strategy and evaluating new growth opportunities and acquisition targets.

 

Lead, manage and direct business on a day-to-day basis worldwide with
full responsibility and accountability for vision, processes, growth,
profitability and effectively implementing business plans.

 

Serve as an officer and/or director of the Company’s subsidiaries as
requested by the Company.

 

Ensure that Company assets are utilized to the maximum.

 

Establish strong connection with potential partners, customers,
industry experts, trade analysts, financial analysts and investment bankers.

 

Increase organizational intensity, establish individual and team goals
and accountability, while creating an environment, which rewards and promotes a
commitment to excellence and winning.

 

Begin to assume a prominent industry profile through participation in a
variety of public and industry-oriented forums to understand the competitive
environment and opportunities for future growth.

 

Perform periodic performance and compensation reviews for the
management team. Retain proper documentation for all review/counseling
sessions.

 

Schedule quarterly Board meetings as authorized by the Board. Prepare
an agenda and circulate it to all members of Board. Arrange for minutes to be
taken, distributed and filed.

 

Review financial and statistical reports for presentation to the Board.

 

Maintain direct/indirect approval of all Company expenditures. Approve
and sign accounts payable and payroll checks within the established financial
guidelines.

 

In conjunction with legal counsel, assure appropriateness of all legal
contracts for Company.

 

 

14

 

Interface with Company’s accounting, insurance, legal firms, pension
advisors and consultants as required.

 

Perform other duties as requested by the Board of Directors to ensure
the smooth operation and goal attainment for Company.

 

 

 

15

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