Document:

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                                                                     EXHIBIT 4.5
                             ANTARES PHARMA, INC.

                2001 INCENTIVE STOCK OPTION PLAN FOR EMPLOYEES

Section 1.  Purpose.

     The purpose of this 2001 Incentive Stock Option Plan for Employees (the
"Plan") is to promote the interests of Antares Pharma, Inc. (the "Company") and
its shareholders by aiding the Company in attracting and retaining employees
capable of contributing to the growth and success of the Company, and by
offering such employees an opportunity to acquire a proprietary interest in the
Company, thereby providing them with incentives to put forth maximum efforts for
the success of the Company's business and aligning the interests of such
employees with those of the Company's shareholders.

Section 2.  Definitions.

     As used in the Plan, the following terms shall have the meaning set forth
below:

     (a) "Affiliate" shall mean (i) any entity that, directly or indirectly
through one or more intermediaries, is controlled by the Company and (ii) any
entity in which the Company has a significant equity interest, in each case as
determined by the Board of Directors.

     (b) "Award" shall mean any Option granted under the Plan.

     (c) "Award Agreement" shall mean any written agreement, contract or other
instrument or document evidencing any Award granted under the Plan.

     (d) "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and any regulations promulgated thereunder.

     (e) "Committee" shall mean the a committee of the Board of Directors of the
Company to whom the powers and duties of such Board of Directors under the Plan
may be delegated pursuant to Section 3(b) hereof, which shall consist of members
appointed from time to time by the Board of Directors and shall be composed
solely of two or more directors, each of whom is an "outside director" within
the meaning of Section 162(m) of the Code to the extent required by such
Section.

     (f) "Company" shall mean Antares Pharma, Inc., a Minnesota corporation, and
any successor corporation.

     (g) "Eligible Person" shall mean any employee or officer providing services
to the Company or any Affiliate.

     (h) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

     (i) "Fair Market Value" shall mean, with respect to any property
(including, without limitation, any Shares or other securities), the fair market
value of such property determined by such methods or procedures as the Board of
Directors shall establish in good faith from time to time. Where there is a
public market for the Shares, the fair market value per Share on a given date
shall be the closing price of a Share in the over-the-counter market on such
date, as reported in The Wall Street Journal (or, if not so reported, as
otherwise reported by The Nasdaq Stock Market ("Nasdaq")) or, in the event the
Shares are traded on the Nasdaq National Market, SmallCap Market or listed on a
stock
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exchange, the fair market value per Share shall be the closing price on such
system or exchange on such date, as reported in The Wall Street Journal; if such
market or exchange is not open for trading on such date, the Fair Market Value
shall be determined as of the closest preceding date when such market or
exchange was open for trading.

     (j) "Incentive Stock Option" shall mean an option granted under Section
6(a) of the Plan that is intended to meet the requirements of Section 422 of the
Code or any successor provision.

     (k) "Non-Qualified Stock Option" shall mean an option granted under Section
6(a) of the Plan that is not intended to meet the requirements of Section 422 of
the Code or any successor provision.

     (l) "Option" shall mean an Incentive Stock Option or a Non-Qualified Stock
Option.

     (m) "Participant" shall mean an Eligible Person whom the Board of Directors
designates to receive an Award under the Plan.

     (n) "Person" shall mean any individual, corporation, partnership,
association or trust.

     (o) "Rule 16b-3" shall mean Rule 16b-3 promulgated by the Securities and
Exchange Commission under the Exchange Act or any successor rule or regulation.

     (p) "Shares" shall mean shares of Common Stock, $.01 par value, of the
Company or such other securities or property as may become subject to Awards
pursuant to an adjustment made under Section 4(c) of the Plan.

Section 3.  Administration.

     (a) Administration by the Board of Directors.  The Plan shall be
         ----------------------------------------
administered by the Board of Directors of the Company, with or without the
advice of a Committee. Subject to the express provisions of the Plan and to
applicable law, the Board of Directors shall have full power and authority to:
(i) designate Participants; (ii) determine the type or types of Awards to be
granted to each Participants under the Plan; (iii) determine the number of
Shares to be covered by each Award; (iv) determine the terms and conditions of
any Award or Award Agreement; (v) amend the terms and conditions of any Award or
Award Agreement and accelerate the exercisability of Options; (vi) interpret and
administer the Plan and any instrument or agreement relating to, or Award made
under, the Plan; (vii) establish, amend, suspend or waive such rules and
regulations and appoint such agents as it shall deem appropriate for the proper
administration of the Plan; and (viii) make any other determination and take any
other action that the Board of Directors deems necessary or desirable for the
administration of the Plan. Unless otherwise expressly provided in the Plan, all
designations, determinations, interpretations and other decisions under or with
respect to the Plan or any Award shall be within the sole discretion of the
Board of Directors, may be made at any time and shall be final, conclusive and
binding upon any Participant, any holder or beneficiary of any Award and any
employee of the Company or any Affiliate.

     (b) Delegation to Committee.  Notwithstanding anything to the contrary
         -----------------------
contained herein, the Board of Directors may, at any time and from time to time,
delegate its powers and duties hereunder to a Committee solely for purposes of
complying with Section 162(m) of the Code.

     (c) References to Board of Directors.  Unless stated to the contrary, as
         --------------------------------
used herein, references to the Board of Directors shall mean the Committee to
whom the Board of Directors has delegated its powers and duties in the event
such powers and duties have been so delegated.
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Section 4.  Shares Available for Awards.

     (a) Shares Available.  Subject to adjustment as provided in Section 4(c),
         ----------------
the aggregate number of Shares which may be issued under all Awards under the
Plan shall be 600,000. Shares to be issued under the Plan shall be authorized
but previously unissued. If any Shares covered by an Award or to which an Award
relates are not purchased or are forfeited, or if an Award otherwise terminates
without delivery of any Shares, then the number of Shares counted against the
aggregate number of Shares available under the Plan with respect to such Award,
to the extent of any such forfeiture or termination, shall again be available
for granting Awards under the Plan.

     (b) Accounting for Awards.  For purpose of this Section 4, if an Award
         ---------------------
entitles the holder thereof to purchase Shares, the number of Shares covered by
such Award shall be counted on the date of grant of such Award against the
aggregate number of Shares available for granting Awards under the Plan.

     (c) Adjustments.  In the event that the Board of Directors shall determine
         -----------
that any dividend or other distribution (whether in the form of cash, Shares,
other securities or other property), recapitalization, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase or exchange of Shares or other securities of the
Company, issuance of warrants or other rights to purchase Shares or other
securities of the Company or other similar corporate transaction or event
affects the Shares such that an adjustment is determined by the Board of
Directors to be appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan,
then the Board of Directors shall, in such manner as it may deem equitable,
adjust any or all of (i) the number and type of Shares (or other securities or
other property) which thereafter may be made the subject of Awards; (ii) the
number and type of Shares (or other securities or other property) subject to
outstanding Awards and (iii) the purchase or exercise price with respect to any
Award; provided, however, that the number of Shares covered by any Award or to
       --------  -------
which such Award relates shall always be a whole number.

Section 5.  Eligibility.

     Any employee, including any employee who is an officer of the Company or
any Affiliate, shall be eligible to be designated a Participant. In determining
which Eligible Persons shall receive an Award and the terms of any Award, the
Board of Directors may take into account the nature of the services rendered by
the respective Eligible Persons, their present and potential contributions to
the success of the Company or such other factors as the Board of Directors, in
its discretion, shall deem relevant. Notwithstanding the foregoing, an Incentive
Stock Option may only be granted to full or part-time employees (which term as
used herein includes, without limitation, officers who are also employees), and
an Incentive Stock Option shall not be granted to an employee of an Affiliate
unless such Affiliate is also a "subsidiary corporation" of the Company within
the meaning of Section 424(f) of the Code or any successor provision.

Section 6.  Awards.

     (a) Options.  The Board of Directors is hereby authorized to grant Options
         -------
to Participants with the following terms and conditions and with such additional
terms and conditions not inconsistent with the provisions of the Plan as the
Board of Directors shall determine:

         (i)     Exercise Price.  The purchase price per Share purchasable under
                 --------------
an Option shall be determined by the Board of Directors; provided, however, that
                                                         --------  -------
such price shall not be less than 100% of the Fair Market Value of a Share on
the date of grant of such Option.
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         (ii)  Option Term.  The term of each Option shall be fixed by the Board
               -----------
of Directors; provided, however, that the term of an Incentive Stock Option may
              --------  -------
not extend more than ten years from the date of grant of such Incentive Stock
Option.  Provided, further, that the Board of Directors shall be under no duty
         --------  -------
to provide terms of like duration for Awards granted under the Plan.

         (iii) Time and Method of Exercise.  The Board of Directors shall
               ---------------------------
determine the time or times at which an Option may be exercised in whole or in
part and the method or methods by which, and the form or forms (including,
without limitation, cash, previously owned Shares, Shares issuable upon exercise
of the Award or any combination thereof, having a Fair Market Value on the
exercise date equal to the relevant exercise price) in which, payment of the
exercise price with respect thereto may be made or deemed to have been made.

         (iv)  Certain Options to be Treated as Non-Qualified Stock Options.
               ------------------------------------------------------------
If the aggregate Fair Market Value of all Shares subject to Incentive Stock
Options granted to a Participant under all plans of the Company and its parent
and subsidiary corporations (as described in Section 422(d) of the Code) that
are exercisable for the first time during any calendar year exceeds $100,000 at
the time an Option is granted to such Participant, then such Option shall be
treated as an Option that does not qualify as an Incentive Stock Option.

         (v)   Ten Percent Shareholder Rule.  Notwithstanding any other
               ----------------------------
provision in the Plan, if at the time an Option is otherwise to be granted
pursuant to the Plan to a Participant who owns, directly or indirectly (within
the meaning of Section 424(d) of the Code), Common Stock of the Company
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or its parent or any subsidiary, then any Incentive Stock
Option to be granted to such Participant pursuant to the Plan shall satisfy the
requirements of Section 422(c)(5) of the Code, and the exercise price of such
Option shall be not less than 110% of the Fair Market Value of the Shares
covered, and such Option by its terms shall not be exercisable after the
expiration of five years from the date such Option is granted.

         (vi)  Option Limitations Under the Plan.  No Eligible Person who is am
               ---------------------------------
employee of the Company at the time of grant may be granted any Option covering
more than 500,000 Shares in the aggregate in any calendar year. The foregoing
annual limitation shall apply to the extent required by Section 162(m) of the
Code to qualify the Option as "qualified performance-based compensation" within
the meaning of such Section.

         (vii) Foreign Jurisdictions.  The Board of Directors may adopt, amend,
               ---------------------
and terminate such arrangements, not inconsistent with the intent of the Plan,
as it may deem necessary or desirable to make available tax or other benefits of
the laws of any foreign jurisdiction to Eligible Persons who are subject to such
laws and who receive Options under the Plan.

     (b) General.
         -------

         (i)   No Cash Consideration for Awards.  Awards shall be granted for no
               --------------------------------
cash consideration or for such minimal cash consideration as may be required by
applicable law.

         (ii)  Grant of Additional Awards.  An Eligible Person who has been
               --------------------------
granted an Award under this Plan may be granted additional Awards under the Plan
if the Board of Directors shall so determine.

         (iii) Limits on Transfer of Awards.  No Award and no right under any
               ----------------------------
such Award shall be transferable by a Participant otherwise than by will or by
the laws of descent and distribution.  No
<PAGE>

Award or right under any such Award may be pledged, alienated, attached or
otherwise encumbered, and any purported pledge, alienation, attachment or
encumbrance thereof shall be void and unenforceable against the Company or any
Affiliate.

         (iv)  Restrictions; Securities Exchange Listing.  All certificates for
               -----------------------------------------
Shares or other securities delivered under the Plan pursuant to any Award or the
exercise thereof shall be subject to such stop transfer orders and other
restrictions as the Board of Directors may deem advisable under the Plan or the
rules, regulations and other requirements of the Securities and Exchange
Commission and any applicable federal or state securities laws, and the Board of
Directors may cause a legend or legends to be placed on any such certificate to
make appropriate reference to such restrictions. If the Shares or other
securities are quoted on Nasdaq, traded on the Nasdaq National Market, SmallCap
Market or listed on a stock exchange, the Company shall not be required to
deliver any Shares or other securities covered by an Award unless and until such
Shares or other securities have been admitted for quotation or trading the
Nasdaq National Market, SmallCap Market or such stock exchange.

Section 7.  Income Tax Withholding.

     In order to comply with all applicable federal or state income tax laws or
regulations, the Company may take such action as it deems appropriate to ensure
that all applicable federal or state payroll, withholding, income or other
taxes, all of which are and shall remain the sole and absolute responsibility of
a Participant, are withheld or collected from such Participant. In order to
assist a Participant in paying all or a portion of the federal and state taxes
to be withheld or collected upon exercise of an Award, the Board of Directors,
in its discretion and subject to such additional terms and conditions as it may
adopt, may permit the Participant to satisfy such tax obligation by (i) electing
to have the Company withhold a portion of the Shares otherwise to be delivered
upon exercise of such Award with a Fair Market Value equal to the amount of such
taxes or (ii) delivering to the Company Shares other than Shares issuable upon
exercise of such Award with a Fair Market Value equal to the amount of such
taxes. The election, if any, must be made on or before the date that the amount
of tax to be withheld is determined.

Section 8.  General Provisions.

     (a) No Rights to Awards.  No Eligible Person, Participant or other Person
         -------------------
shall have any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of Eligible Persons, Participants or
holders or beneficiaries of Awards under the Plan. The terms and conditions of
Awards need not be the same with respect to any Participant or with respect to
different Participants.

     (b) Award Agreements.  No Participant will have rights under an Award
         ----------------
granted to such Participant unless and until an Award Agreement shall have been
duly executed on behalf of the Company and, if requested by the Company, signed
by the Participant.

     (c) No Limit on Other Compensation Arrangements.  Nothing contained in the
         -------------------------------------------
Plan shall prevent the Company or any Affiliate from adopting or continuing in
effect other or additional compensation arrangements, and such arrangements may
be either generally applicable or applicable only in specific cases.

     (d) No Right to Employment.  The grant of an Award shall not be construed
         ----------------------
as giving a Participant the right to be retained as an employee or director of
the Company or any Affiliate, nor will it affect in any way the right of the
Company or an Affiliate to terminate such employment or directorship at any
time, with or without cause. In addition, the Company or an Affiliate may at any
time dismiss a
<PAGE>

Participant from employment or directorship free from any liability or any claim
under the Plan, except as otherwise expressly provided in the Plan or in any
Award Agreement.

     (e) Governing Law.  The validity, construction and effect of the Plan or of
         -------------
any Award, and any rules and regulations relating to the Plan or any Award,
shall be determined in accordance with the laws of the State of Minnesota.

     (f) Severability.  If any provision of the Plan or any Award is or becomes
         ------------
or is deemed to be invalid, illegal or unenforceable in any jurisdiction or
would disqualify the Plan or any Award under any law deemed applicable by the
Board of Directors, such provision shall be construed or deemed amended to
conform to applicable law, or if it cannot be so construed or deemed amended
without, in the determination of the Board of Directors, materially altering the
purpose or intent of the Plan or the Award, such provision shall be stricken as
to such jurisdiction or Award, and the remainder of the Plan or any such Award
shall remain in full force and effect.

     (g) No Trust or Fund Created.  Neither the Plan nor any Award shall create
         ------------------------
or be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any Affiliate and a Participant or any other
Person. To the extent that any Person acquires a right to receive payments from
the Company or any Affiliate pursuant to an Award, such right shall be no
greater than the right of any unsecured general creditor of the Company or any
Affiliate.

     (h) No Fractional Shares.  No fractional Shares shall be issued or
         --------------------
delivered pursuant to the Plan or any Award, and the Board of Directors shall
determine whether cash shall be paid in lieu of any fractional Shares or whether
such fractional Shares or any rights thereto shall be canceled, terminated or
otherwise eliminated.

     (i) Headings.  Headings are given to the Sections and subsections of the
         --------
Plan solely as a convenience to facilitate reference.  Such headings shall not
be deemed in any way material or relevant to the construction or interpretation
of the Plan or any provision thereof.

     (j) Other Benefits.  No compensation or benefit awarded to or realized by
         --------------
any Participant under the Plan shall be included for the purpose of computing
such Participant's compensation under any compensation-based retirement,
disability, or similar plan of the Company unless required by law or otherwise
provided by such other plan.

Section 9.  Amendment and Termination; Adjustments.

     Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Award Agreement or in the Plan:

     (a) Amendments to the Plan.  The Board of Directors of the Company may
         ----------------------
amend, alter, suspend, discontinue or terminate the Plan; provided, however,
                                                          --------  -------
that, notwithstanding any other provision of the Plan or any Award Agreement,
without the approval of the shareholders of the Company, no such amendment,
alteration, suspension, discontinuation or termination shall be made that,
absent such approval, would:

         (i)  violate the rules or regulations of Nasdaq National Market,
SmallCap market or any stock exchange that are applicable to the Company; or

         (ii) cause the Company to be unable, under the Code, to grant Incentive
Stock Options under the Plan.
<PAGE>

     (b) Amendments to Awards.  The Board of Directors may waive any conditions
         --------------------
or rights of the Company under any outstanding Award, prospectively or
retroactively. The Board of Directors may not amend, alter, suspend, discontinue
or terminate any outstanding Award, prospectively or retroactively, without the
consent of the Participant or holder or beneficiary thereof, except as otherwise
provided herein or in the Award Agreement.

     (c) Correction of Defects, Omissions and Inconsistencies.  The Board of
         ----------------------------------------------------
Directors may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Award in the manner and to the extent it shall
deem desirable to carry the Plan into effect.

Section 10.  Effective Date; Term.

     (a) Effective Date.  The Plan shall be effective as of January 31, 2001
         --------------
(the "Effective Date"); provided, however, that if the Company's shareholders do
                        --------  -------
not approve the Plan at the next meeting of Shareholders, the Plan shall be null
and void and all Awards granted prior to the date of such Special Meeting shall
be of no force or effect, and provided further, that no Incentive Stock Option
may be granted before March 22, 2001, the date that the Plan was approved by the
Board.

     (b) Term.  Awards shall be granted under the Plan only during a 10-year
         ----
period beginning on the Effective Date.  Unless otherwise expressly provided in
the Plan or in an applicable Award Agreement, however, any Award theretofore
granted may extend beyond the end of such 10-year period, and the authority of
the Board of Directors provided for hereunder, shall extend beyond the
termination of the Plan.

Section 11.  Notice.

     All notices to the Company regarding the Plan shall be in writing,
effective as of actual receipt by the Company, and shall be sent to

     ANTARES PHARMA, INC.
     161 Cheshire Lane, Suite 100
     Plymouth, MN 55441
     Attn:  Chief Financial OfficerEXHIBIT 4.1 WARRANT AGREEMENT

                                WARRANT AGREEMENT

     THIS WARRANT  AGREEMENT  (this  "Agreement") is made and entered into as of
June  28,  2001,  between  BETA  OIL "$amp;" GAS,  INC.,  a  Nevada  corporation  (the
"Company")  and the person  identified  on the  signature  page  (hereafter  the
"Holder").

                                 R E C I T A L S

     WHEREAS,  the Company  proposes to issue to the Holder  1,250 "A"  warrants
(the "A  Warrants")  and 1,250 "B" warrants  (the "B  Warrants")  for each 5,000
shares of 8% Convertible Preferred Stock of the Company (the "Preferred Shares")
purchased by Holder.  The A Warrants and the B Warrants are together referred to
herein as the "Warrants."  Each Warrant  entitles the holder thereof to purchase
one share of Common Stock, $0.001 par value, of the Company (the "Shares" or the
"Common Stock") at an exercise price of $9.25 per Share (the "Exercise  Price");
and

     WHEREAS,  the  Warrants  which are the  subject of this  Agreement  will be
issued by the Company to Holder in  connection  with an investment by the Holder
pursuant to a private offering by the Company of Units,  each Unit consisting of
one Preferred Share and one-half of one Warrant (the  "Offering"),  as described
in the Company's  Confidential Private Placement Memorandum dated March 20, 2001
(the "Memorandum").

     NOW, THEREFORE,  in consideration of the premises and the mutual agreements
herein set forth, the parties hereto agree as follows:

                                A G R E E M E N T

     1. Warrant Certificates.  The warrant certificates to be delivered pursuant
to this Agreement (the "Warrant Certificates") shall be in the form set forth in
Exhibit A and  Exhibit  B,  attached  hereto and made a part  hereof,  with such
appropriate variations as are required or permitted by this Warrant Agreement.

     2. Right to Exercise Warrants.  Each Warrant may be exercised from the date
of this Agreement until 11:59 P.M. (Central time) on the date that is five years
after the date of this  Agreement  (the  "Expiration  Date").  Each  Warrant not
exercised on or before the Expiration Date shall expire.

     Each A Warrant and each B Warrant shall entitle its holder to purchase from
the  Company  one  share  of  Common  Stock at the  Exercise  Price  subject  to
adjustment as set forth below.

     The Company  shall not be required  to issue  fractional  shares of capital
stock upon the exercise of this Warrant or to deliver Warrant Certificates which
evidence  fractional  shares of capital stock. In the event that a fraction of a
Share would, except for the provisions of this paragraph 2, be issuable upon the
exercise of this Warrant, or if a Warrant Certificate would otherwise evidence a
fraction of a Warrant,  the fraction  shall be rounded up or down to the nearest
whole number.

     3. Mutilated or Missing  Warrant  Certificates.  In case any of the Warrant
Certificates  shall  be  mutilated,  lost,  stolen  or  destroyed  prior  to its
expiration  date,  the  Company  shall  issue  and  deliver,   in  exchange  and
substitution for and upon cancellation of the mutilated Warrant Certificate,  or
in lieu of and in  substitution  for the  Warrant  Certificate  lost,  stolen or
destroyed,  a  new  Warrant  Certificate  of  like  tenor  and  representing  an
equivalent right or interest. The Company may, at its discretion, require Holder
to furnish a bond or to agree to indemnify  Company  against loss in the event a
lost or missing Warrant Certificate is later presented to the Company.

     4.  Reservation  of Shares.  The Company will at all times reserve and keep
available,  free from preemptive  rights, out of the aggregate of its authorized
but unissued Shares or its authorized and issued Shares held in its treasury for
the  purpose of  enabling  it to satisfy  its  obligation  to issue  Shares upon
exercise of Warrants, the full number of Shares deliverable upon the exercise of
all outstanding Warrants.

     The Company  covenants that all Shares which may be issued upon exercise of
Warrants will be validly issued, fully paid and nonassessable outstanding Shares
of the Company.

     5. Rights of Holder.  The Holder shall not, by virtue of anything contained
in this Warrant  Agreement or otherwise,  prior to exercise of this Warrant,  be
entitled to any right  whatsoever,  either in law or equity, as a stockholder of
the Company,  including without limitation, the right to receive dividends or to
vote or to  consent  or to  receive  notice as a  shareholder  in respect of the
meetings of  shareholders  or the  election of  directors  of the Company of any
other matter.

     6.  Callability.  The A Warrants are callable at the option of the Company,
on and  after  the date  that the  Company's  Common  Stock  has  traded  on any
exchange,  including the NASD  Bulletin  Board,  at a Market  Price,  as defined
below, at 150% of the Exercise Price for any ten (10) trading days.

     The B Warrants are callable at the option of the Company,  on and after the
date that the Company's  Common Stock is traded on any  exchange,  including the
NASD  Bulletin  Board,  at a Market  Price,  as  defined  below,  at 175% of the
Exercise Price for any ten (10) days.

     The Market  Price shall be the highest  bid price of the Common  Stock,  as
reported by the National  Association of Securities Dealers Automated  Quotation
System, or the highest reported sales price in the  over-the-counter  market, or
in the event the Common  Stock is listed on a stock  exchange,  the Market Price
per share shall be the closing  price on the  exchange,  as reported in the Wall
Street Journal.

     7. Investment  Intent.  Holder  represents and warrants to the Company that
Holder is  acquiring  the  Warrants  for  investment  and with no  intention  of
distributing  or reselling  any of the  Warrants,  or any of the Company  Common
Stock acquired upon exercise of a Warrant.

     8.  Certificates  to Bear  Language.  The Warrants and the  certificate  or
certificates therefor shall bear the following legend by which each holder shall
be bound:

     "THE  WARRANTS  REPRESENTED  BY THIS  CERTIFICATE  AND THE SHARES OF COMMON
STOCK  (OR  OTHER  SECURITIES)  ISSUABLE  UPON  EXERCISE  THEREOF  HAVE NOT BEEN
REGISTERED  UNDER THE  SECURITIES  ACT OF 1933.  THE  SHARES  MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR TRANSFERRED IN THE ABSENCE OF
SUCH  REGISTRATION OR AN OPINION OF COUNSEL THAT AN EXEMPTION FROM  REGISTRATION
UNDER SUCH ACT IS AVAILABLE."

     The Shares and the  certificate  or  certificates  evidencing  any  Company
Common Stock shall bear the following legend:

     "THE SHARES (OR OTHER SECURITIES)  REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED  UNDER THE SECURITIES ACT OF 1933. THE SHARES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL THAT AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE."

     Certificates  for  Warrants  without  such  legend  shall be issued if such
warrants or shares are sold  pursuant  to an  effective  registration  statement
under the  Securities  Act of 1933 (the "Act") or if the Company has received an
opinion from counsel  reasonably  satisfactory to counsel for the Company,  that
such legend is no longer required under the Act.

     9.  Registration  Rights.  The Company shall commence  registration  of the
Shares underlying the Warrants within one (1) year of the offering, as described
in the Memorandum.

     10. Adjustment of Number of Shares and Class of Capital Stock  Purchasable.
The Number of Shares and Class of Capital Stock  purchasable  under this Warrant
Agreement  are  subject  to  adjustment  from  time to time as set forth in this
Section.

           (a)      Adjustment for Change in Capital Stock.  If the Company:

                    (i)  pays a dividend or makes a  distribution  on its Common
                         Stock, in each case, in shares of its Common Stock;

                    (ii) subdivides its outstanding  shares of Common Stock into
                         a greater number of shares;

                    (iii)combines its outstanding  shares of Common Stock into a
                         smaller number of shares;

                    (iv) makes a  distribution  on its Common Stock in shares of
                         its capital stock other than Common Stock; or

                    (v)  issues  by  reclassification  of its  shares  of Common
                         Stock any shares of its capital stock;

then the number and classes of shares purchasable upon exercise of each Warrant
in effect immediately prior to such action shall be adjusted so that the holder
of any Warrant thereafter exercised may receive the number and classes of shares
of capital stock of the Company which such holder would have owned immediately
following such action if such holder had exercised the Warrant immediately prior
to such action.

     For a  dividend  or  distribution  in  the  shares  of  Common  Stock,  the
adjustment  shall  become  effective  immediately  after the record date for the
dividend or distribution.  For a subdivision,  combination or  reclassification,
the adjustment  shall become effective  immediately  after the effective date of
the subdivision, combination or reclassification.

     If after an adjustment the holder of a Warrant upon exercise of the Warrant
may receive  shares of two or more classes of capital stock of the Company,  the
Board of Directors of the Company shall in good faith  determine the  allocation
of the adjusted  Exercise  Price between or among the classes of capital  stock.
After such  allocation,  that portion of the Exercise  Price  applicable to each
share of each such  class of  capital  stock  shall  thereafter  be  subject  to
adjustment  on terms  comparable  to those  applicable  to Common  Stock in this
Agreement. Notwithstanding the allocation of the Exercise Price between or among
shares of capital stock as provided by this Section 10(a), a Warrant may only be
exercised by payment in full of the entire Exercise Price currently in effect.

          (b)  Consolidation, Merger or Sale of the Company. If the Company is a
               party to a  consolidation,  merger or  transfer  of assets  which
               reclassifies  or  changes  its  outstanding   Common  Stock,  the
               successor  corporation (or corporation  controlling the successor
               corporation  or the  Company,  as  the  case  may  be)  shall  by
               operation  of law assume  the  Company's  obligations  under this
               Warrant  Agreement.  Upon  consummation  of such  transaction the
               Warrants shall automatically  become exercisable for the kind and
               amount of securities,  cash or other assets which the holder of a
               Warrant  would have owned  immediately  after the  consolidation,
               merger or  transfer  if the  holder  had  exercised  the  Warrant
               immediately  before the effective date of such transaction.  As a
               condition to the  consummation of such  transaction,  the Company
               shall  arrange  for the  person  or  entity  obligated  to  issue
               securities  or deliver cash or other assets upon  exercise of the
               Warrant  to,   concurrently   with  the   consummation   of  such
               transaction,   assume  the  Company's  obligations  hereunder  by
               executing an instrument  so providing  and further  providing for
               adjustments  which  shall  be as  nearly  equivalent  as  may  be
               practical to the adjustments provided for in this Section 10.

     11.  Successors.  All the covenants and  provisions of this Agreement by or
for the benefit of the Company or Holder  shall bind and inure to the benefit of
their respective successor and assigns hereunder.

     12.  Counterparts.  This  Agreement  may  be  executed  in  any  number  of
counterparts and each of such  counterparts  shall for all proposes be deemed to
be an original,  and such counterparts shall together  constitute by one and the
same instrument.

     13. Notices.  All notices or other  communications under this Warrant shall
be in  writing  and shall be deemed to have been given if  delivered  by hand or
mailed by first class mail,  postage  prepaid,  addressed as follows:  if to the
Company: Beta Oil "&" Gas, Inc., 6120 S. Yale, Suite 813, Tulsa, Oklahoma,  74136,
Attention:  Chief Executive  Officer,  and to the Holder:  at the address of the
Holder  appearing on the signature  page of this Agreement or the records of the
Company's transfer agent, if any.

     Either the  Company or the Holder may from time to time  change the address
to which notices to it are to be mailed  hereunder by notice in accordance  with
the provisions of this Section 13.

     14.  Supplements  and  Amendments.  The  Company  may  from  time  to  time
supplement or amend this Warrant  Agreement  without the approval of any Holders
of Warrants in order to cure any  ambiguity or to be correct or  supplement  any
provision contained herein which may be defective or inconsistent with any other
provision,  or to make any other  provisions  in regard to matters or  questions
herein arising  hereunder  which the Company may deem necessary or desirable and
which shall not materially  adversely  affect the interest of the Holder.  Other
amendments  may be made with the written  consent of the persons who are Holders
of a majority of all the  outstanding  A Warrants  and B Warrants  issued by the
Company in the offering.

     15.  Severability.  If for any reason any  provision,  paragraph or term of
this Warrant Agreement is held to be invalid or  unenforceable,  all other valid
provisions  herein  shall  remain  in full  force  and  effect  and  all  terms,
provisions and paragraphs of this Warrant shall be deemed to be severable.

     16. Governing Law and Venue.  This Warrant shall be deemed to be a contract
made  under  the laws of the state of  Oklahoma  and for all  purposes  shall be
governed and construed in accordance with the laws of said state. Any proceeding
arising under this Warrant Agreement shall be instituted in Tulsa County,  state
of Oklahoma.

     17.  Headings.  Paragraphs  and  subparagraph  headings,  used  herein  are
included  herein  for  convenience  of  reference  only and shall not affect the
construction  of this Warrant  Agreement  nor  constitute a part of this Warrant
Agreement for any other purpose.

     18.  Power Of  Attorney.  THE  SUBSCRIPTION  DOCUMENT  INCLUDES  A POWER OF
ATTORNEY WHICH AUTHORIZES THE COMPANY TO EXECUTE THIS WARRANT  AGREEMENT ON YOUR
BEHALF UPON ACCEPTANCE OF YOUR INVESTMENT IN THIS OFFERING.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the date and year first above written.

"COMPANY"

BETA OIL "&"  GAS, INC.

---------------------------------
By: Steve Antry
Its: President

"HOLDER"

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

---------------------------------
Authorized Signature

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

Tax Identification No.:

                             A WARRANT CERTIFICATE
A WARRANT NUMBER ____________                                                                                                                     Warrant to Purchase
                                                                                                                                                     ----------------
                                                                                                                                                         Shares
                               BETA OIL "&"  GAS, INC.
                          COMMON STOCK PURCHASE WARRANT
see reverse for certain definitions
will be void if not exercised prior to 11:59 P.M. Pacific Time five years from
the date in 2001 that the last A Warrants are issued by the Company

This Certifies that_____________________________ for value received,                                                                                       the registered holder or
assigns ("Holder"),___________________________________________________________
is entitled to purchase from Beta Oil "&"  Gas, Inc., a Nevada corporation (the
"Company") at any time after 9:00 A.M. Eastern Time on __________, 2001 at an
exercise price of $________ per share (the "Exercise Price"), the number of
shares of Common Stock of the Company set forth above (the "Shares"). The number
of shares purchasable upon exercise of each warrant evidenced hereby and the
Exercise Price per Share shall be subject to adjustment from time to time as set
forth in the Warrant Agreement referred to below. The Warrants expire exactly
five years from the date in 2001 that the last A Warrants are issued by the
Company ("Expiration Date"). Holder will not have any rights or privileges of as
a stockholder of the Company prior to exercise of the Warrants. Holders has
certain rights with respect to registration with the Securities and Exchange
Commission of the Warrants and Common Stock issuable upon exercise hereof as
described in that certain Private Placement Memorandum dated as of March 20,
2001 pursuant to which this Warrant Certificate were issued. Subject to the
provisions of the Warrant Agreement, referenced below, the Warrant evidenced
hereby may be called for redemption at the option of the Company, on and any
time after the date that its Common Stock is traded on any exchange, including
the NASD Bulletin Board, at a Market Price, as defined below, at 175% of the
Exercise Price for any ten days. The Market Price shall be the highest reported
sales price on the NASDAQ National Market System as reported in the Wall Street
Journal, if in effect. If not, the highest sales price will be as reasonably
determined by the Company. The Warrant evidenced hereby may be exercised in
whole or in part by presentation of this Warrant certificate with the Purchase
Form on the reverse side hereof fully executed and simultaneous payment of the
Exercise Price (subject to adjustment) at the principal office of the Company
prior to the Expiration Date. Payment of such price shall be made at the option
of the holder in cash or by certified check or bank draft. The Warrants
evidenced hereby are part of a duly authorized issue of Common Stock Purchase
Warrants with rights to purchase an aggregate of up to ______________ shares of
Common Stock of the Company, as described in the Warrant Agreement of even date
herewith between Holder and Company. Upon any partial exercise of the Warrant
evidenced hereby, there shall be countersigned and issued to the Holder a new
Warrant Certificate in respect of the Shares as to which the Warrants evidenced
hereby shall not have been exercised. This Warrant Certificate may be exchanged
at the office of the Company by surrender of this Warrant Certificate properly
endorsed either separately or in combination with one or more other Warrants for
one or more new Warrants to purchase the same aggregate number of Shares as
evidenced by the Warrant or Warrants exchanged. No fractional Shares will be
issued upon the exercise of rights to purchase hereunder, but the Company shall
pay the cash value of any fraction upon the exercise of one or more Warrants.
The Holder hereof may be treated by the Company and all other persons dealing

with this Warrant Certificate as the absolute owner hereof for all purposes and
as the person entitled to exercise the rights represented hereby, any notice to
the contrary notwithstanding, and until such transfer is on such books, the
Company may treat the Holder as the owner for all purposes.

Dated: __________, 2001    BETA OIL "&"  GAS, INC.

                                     Secretary                                                                      Chief Executive Officer

                              SEE LEGEND ON REVERSE

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF
CERTAIN STATES, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED
OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT
APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING
TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH
OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN
EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE.

                              ELECTION TO PURCHASE

         The undersigned hereby elects irrevocably to exercise the within "A"
Warrant and to purchase _______________________ shares of Common Stock of Beta
Oil "&"  Gas, Inc. and hereby makes payment of $_________ (at the rate of $________
per share) in payment of the Exercise Price pursuant hereto. Please issue the
shares as to which this Warrant is exercised in accordance with the instructions
given below.

         The undersigned represents and warrants that the exercise of the within
Warrant was solicited by the member firm of the National Association of
Securities Dealers, Inc. ("NASD") listed below. If not solicited by an NASD
member, please write "unsolicited" in the space below.

                       ------------------------------------------------------
                             (Insert Name of NASD Member or "Unsolicited")

Dated: ________________, 20______

Warrant Holder's Signature: _____________________________________________

                     INSTRUCTIONS FOR REGISTRATION OF SHARES

Name (print) __________________________________________________________________

Address (print) ________________________________________________________________

                                   ASSIGNMENT

         FOR VALUE RECEIVED, ____________________________________ does hereby
sell, assign and transfer unto ____________________________________, the right
to purchase ________________shares of Common Stock of Beta Oil "&" Gas, Inc.,
evidenced by the within Warrant, and does hereby irrevocably constitute and appoint
__________________________________________ attorney to transfer such right on
the books of Beta Oil "&"  Gas, Inc., with full power of substitution on the
premises.

Dated: ________________, 20______  Signature: __________________________________

Notice: The signature of Election to Purchase or Assignment must correspond with
the name as written upon the face of the within Warrant in every particular
without alteration or enlargement or any change whatsoever. If under the
Election to Purchase the Registration of Shares differs from the name as written
on the face of the within Warrant, and in the case of Assignment, signature(s)
must by guaranteed by an eligible guarantor institution (Banks, Stockbrokers,
Savings and Loan Associations and Credit Unions with membership in an approved
signature guarantee Medallion Program), pursuant to S.E.C. Rule 17Ad-15.

         Signature Guarantee ________________________________________

                              B WARRANT CERTIFICATE
B WARRANT NUMBER ____________                                                                                                                     Warrant to Purchase
                                                                                                                                                     ----------------
                                                                                                                                                         Shares
                      BETA OIL "&"  GAS, INC.
                COMMON STOCK PURCHASE WARRANT
see reverse for
certain definitions

will be void if not exercised prior to 11:59 P.M. Pacific Time five years from
the date in 2001 that the last B Warrants are issued by the Company

This Certifies that _______________________________ for value received,                                                                                       the registered holder or
assigns ("Holder"),_______________________________________________
is entitled to purchase from Beta Oil "&"  Gas, Inc., a Nevada corporation (the
"Company") at any time after 9:00 A.M. Eastern Time on __________, 2001 at an
exercise price of $________ per share (the "Exercise Price"), the number of
shares of Common Stock of the Company set forth above (the "Shares"). The number
of shares purchasable upon exercise of each warrant evidenced hereby and the
Exercise Price per Share shall be subject to adjustment from time to time as set
forth in the Warrant Agreement referred to below. The Warrants expire exactly
five years from the date in 2001 that the last B Warrants are issued by the
Company ("Expiration Date"). Holder will not have any rights or privileges of as
a stockholder of the Company prior to exercise of the Warrants. Holders has
certain rights with respect to registration with the Securities and Exchange
Commission of the Warrants and Common Stock issuable upon exercise hereof as
described in that certain Private Placement Memorandum dated as of March 20,
2001 pursuant to which this Warrant Certificate were issued. Subject to the
provisions of the Warrant Agreement, referenced below, the Warrant evidenced
hereby may be called for redemption at the option of the Company, on and any
time after the date that its Common Stock is traded on any exchange, including
the NASD Bulletin Board, at a Market Price, as defined below, at 175% of the
Exercise Price for any ten days. The Market Price shall be the highest reported
sales price on the NASDAQ National Market System as reported in the Wall Street
Journal, if in effect. If not, the highest sales price will be as reasonably
determined by the Company. The Warrant evidenced hereby may be exercised in
whole or in part by presentation of this Warrant certificate with the Purchase

Form on the reverse side hereof fully executed and simultaneous payment of the
Exercise Price (subject to adjustment) at the principal office of the Company
prior to the Expiration Date. Payment of such price shall be made at the option
of the holder in cash or by certified check or bank draft. The Warrants
evidenced hereby are part of a duly authorized issue of Common Stock Purchase
Warrants with rights to purchase an aggregate of up to ______________ shares of
Common Stock of the Company, as described in the Warrant Agreement of even date
herewith between Holder and Company. Upon any partial exercise of the Warrant
evidenced hereby, there shall be countersigned and issued to the Holder a new
Warrant Certificate in respect of the Shares as to which the Warrants evidenced
hereby shall not have been exercised. This Warrant Certificate may be exchanged
at the office of the Company by surrender of this Warrant Certificate properly
endorsed either separately or in combination with one or more other Warrants for
one or more new Warrants to purchase the same aggregate number of Shares as
evidenced by the Warrant or Warrants exchanged. No fractional Shares will be
issued upon the exercise of rights to purchase hereunder, but the Company shall
pay the cash value of any fraction upon the exercise of one or more Warrants.
The Holder hereof may be treated by the Company and all other persons dealing
with this Warrant Certificate as the absolute owner hereof for all purposes and
as the person entitled to exercise the rights represented hereby, any notice to
the contrary notwithstanding, and until such transfer is on such books, the
Company may treat the Holder as the owner for all purposes.

Dated: __________, 2001    BETA OIL "&"  GAS, INC.

                                     Secretary                                                                      Chief Executive Officer

                              SEE LEGEND ON REVERSE

THE SECURIT7
beta\warrant agreement
IES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF
CERTAIN STATES, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED
OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT
APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING
TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH
OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN
EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE.

                              ELECTION TO PURCHASE

         The undersigned hereby elects irrevocably to exercise the within "B"
Warrant and to purchase _______________________ shares of Common Stock of Beta
Oil "&"  Gas, Inc. and hereby makes payment of $_________ (at the rate of $________
per share) in payment of the Exercise Price pursuant hereto. Please issue the
shares as to which this Warrant is exercised in accordance with the instructions
given below.

         The undersigned represents and warrants that the exercise of the within
Warrant was solicited by the member firm of the National Association of
Securities Dealers, Inc. ("NASD") listed below. If not solicited by an NASD
member, please write "unsolicited" in the space below.

              ------------------------------------------------------
                     (Insert Name of NASD Member or "Unsolicited")

Dated: ________________, 20______

 Warrant Holder's Signature: _____________________________________________

                     INSTRUCTIONS FOR REGISTRATION OF SHARES

Name (print) __________________________________________________________________

Address (print) ________________________________________________________________

                                   ASSIGNMENT

         FOR VALUE RECEIVED, ____________________________________ does hereby
sell, assign and transfer unto ____________________________________, the right
to purchase ________________shares of Common Stock of Beta Oil "&"  Gas, Inc.,
evidenced by the within Warrant, and does hereby irrevocably constitute and appoint
__________________________________________ attorney to transfer such right on
the books of Beta Oil "&" Gas, Inc., with full power of substitution on the
premises.

Dated: ________________, 20______  Signature: __________________________________

Notice: The signature of Election to Purchase or Assignment must correspond with
the name as written upon the face of the within Warrant in every particular
without alteration or enlargement or any change whatsoever. If under the
Election to Purchase the Registration of Shares differs from the name as written
on the face of the within Warrant, and in the case of Assignment, signature(s)
must by guaranteed by an eligible guarantor institution (Banks, Stockbrokers,
Savings and Loan Associations and Credit Unions with membership in an approved
signature guarantee Medallion Program), pursuant to S.E.C. Rule 17Ad-15.

         Signature Guarantee ________________________________________

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