Document:

ex10_2.htm

    
      

    

    Exhibit
10.2

     

     

     

    
      
        

      

      
        

      

     

    NONQUALIFIED
STOCK OPTION AGREEMENT

    

    BETWEEN

    

    SILVERLEAF
RESORTS, INC.

    

    AND

     

    _____________________________

    
 

     

     

    
      

    

    
      

    

     

     

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    TABLE OF
CONTENTS

    

    
      	 
      	 
      	 
      	
               Page

            
	 
      	 
      	 
      	 
      
	
              RECITALS

            	
              1

            
	
              AGREEMENT

            	
              1

            
	
              ARTICLE
      I.

            	
              1

            
	
              GRANT
      OF OPTION

            	
              1

            
	
               
      

            	
              Section
      1.1.           
      

            	
              Grant
      of Option

            	
              1

            
	 
      	
              Section
      1.2.

            	
              Fair
      Market Value

            	
              1

            
	 
      	
              Section
      1.3.

            	
              Purchase
      Price

            	
              1

            
	 
      	
              Section
      1.4.

            	
              Time
      for Exercise

            	
              2

            
	 
      	
              Section
      1.5.

            	
              Partial
      Exercise

            	
              2

            
	 
      	
              Section
      1.6.

            	
              Fractional
      Shares

            	
              2

            
	 
      	
              Section
      1.7.

            	
              Method
      of Exercise

            	
              2

            
	 
      	
              Section
      1.8.

            	
              Termination
      of Option

            	
              2

            
	 
      	
              Section
      1.9.

            	
              Payment
      upon Change of Control

            	
              3

            
	
              ARTICLE
      II

            	
              4

            
	
              RESTRICTIONS
      AND LIMITATIONS

            	
              4

            
	 
      	
              Section
      2.1.

            	
              Effect
      on Other Agreements

            	
              4

            
	 
      	
              Section
      2.2.

            	
              Limitation
      on Payments

            	
              4

            
	 
      	
              Section
      2.3.

            	
              Shares
      as Investment

            	
              4

            
	 
      	
              Section
      2.4.

            	
              Reclassification,
      Consolidation, or Merger

            	
              4

            
	 
      	
              Section
      2.5.

            	
              Limitations
      Upon Transfer of Option

            	
              4

            
	 
      	
              Section
      2.6.

            	
              Limitations
      Upon Transfer of Shares

            	
              4

            
	 
      	
              Section
      2.7.

            	
              Rights
      as Shareholder

            	
              5

            
	
              ARTICLE
      III

            	
              5

            
	
              ADMINISTRATIVE
      PROVISIONS

            	
              5

            
	 
      	
              Section
      3.1.

            	
              Notices

            	
              5

            
	 
      	
              Section
      3.2.

            	
              Binding
      Effect

            	
              5

            
	 
      	
              Section
      3.3.

            	
              Nonqualified
      Options

            	
              5

            
	 
      	
              Section
      3.4.

            	
              Incorporation
      of the 2008 Plan

            	
              5

            
	 
      	
              Section
      3.5.

            	
              Effective
      Date of Option Agreement

            	
              5

            

    

    

      
        
           

        

        
          i

          
            

          

        

        
           

        

      

    

     

    NONQUALIFIED
STOCK OPTION AGREEMENT

    BETWEEN

    SILVERLEAF
RESORTS, INC.

    AND

    ___________________________

    

    This Nonqualified Stock Option
Agreement (the “Option Agreement”) is made between SILVERLEAF RESORTS, INC., a
Texas Corporation (the “Company”), and _____________________ (“Optionee”),
effective as of the date specified below.

    

    RECITALS:

    

    A.           As
Optionee is a valuable Director of the Company, the Company considers it
desirable and in its best interests that Optionee be given an inducement to
acquire a proprietary interest in the Company and an added incentive to advance
the interests of the Company in the form of options to purchase common shares of
the Company;

    

    B.           The
stock options granted hereunder are granted pursuant to the terms of the 2008
Stock Option Plan for Silverleaf Resorts, Inc., which was adopted by the
Company’s shareholders effective as of July 29, 2008 (the “2008 Plan”), and are
intended to be Non-Qualified Options as defined in the 2008 Plan and not
Incentive Options as defined in Section 422 of the Internal Revenue Code of
1986, as amended (the “Code”); and

    

    C.           The
stock options granted hereunder may not be exercised and the stock options will
terminate unless the 2008 Plan has been approved by the shareholders within
twelve (12) months of the date the 2008 Plan was adopted by the
Company.

    

    

    AGREEMENT:

    

    NOW, THEREFORE, in consideration of the
promises and the mutual agreements hereinafter contained, and for other good and
valuable consideration, the Parties agree as follows:

    

    ARTICLE
I.

    GRANT OF
OPTION

    

    Section
1.1.         Grant of
Option.  The Company
hereby grants to Optionee the right and option to purchase from it, on the terms
and conditions following, all or any part of an aggregate of Seventy-five
Thousand (75,000) shares of the authorized $0.01 par value common shares of the
Company.

    

    Section
1.2.         Fair
Market Value.  The fair market
value of the Company's $0.01 par value common shares as of the effective date of
this Option Agreement is ONE AND 895/1,000 DOLLARS ($1.895) per share, as
determined by the Compensation Committee of the Company's Board of Directors
pursuant to Section 7.3 of the 2008 Plan.

    

    Section
1.3.         Purchase
Price.  The purchase
price for each share purchasable hereunder shall be ONE AND 895/1,000 DOLLARS
($1.895).

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Section
1.4.         Time for
Exercise.   Optionee
may elect to exercise the options at the times and for the number of shares
indicated as follows:

    

    
      	
               
      

            	
              (a)

            	
              On
      or after August 14, 2009, to and including August 13, 2010, 18,750 shares;
      and

            

    

    

    
      	
               
      

            	
              (b)

            	
              On
      or after August 14, 2010, to and including August 13, 2011, an additional
      18,750 shares;

            

    

    

    
      	
               
      

            	
              (c)

            	
              On
      or after August 14, 2011, to and including August 13, 2012, an additional
      18,750 shares;

            

    

    

    
      	
               
      

            	
              (d)

            	
              On
      or after August 14, 2012, but before August 14, 2018 (the “Option
      Termination Date”),  an additional 18, 750
    shares.

            

    

    

    However, if Optionee does not purchase
the full number of shares to which Optionee is entitled in any period above,
Optionee is permitted to purchase those remaining shares in a later period
through and including the Option Termination Date, in addition to those shares
which Optionee may otherwise be entitled to purchase.

    

    Section
1.5.         Partial
Exercise.  No partial
exercise of such option may be for less than 100 full shares.

    

    Section
1.6.         Fractional
Shares.  In no event shall
the Company be required to transfer fractional shares to the
Optionee.

    

    Section
1.7.         Method of
Exercise.  The option shall
be exercised by Optionee as to all or part of the shares covered by the option
by giving written notice of such exercise to the Company, specifying the number
of shares to be purchased and specifying a business day not more than fifteen
(15) days from the date such notice is given, for the payment of the purchase
price against delivery of the shares being purchased.  Such notice
shall set forth a statement, if required by Section 8.8 of the 2008 Plan and
Section 2.3 of this Option Agreement, that the shares are being acquired for
investment.

    

    Subject to any applicable laws or
regulations and to the terms of Sections 8.8, 12.5, and 13.1 of the 2008 Plan,
the Company shall cause certificates for the Shares so purchased to be delivered
to Optionee at the principal business office of the Company, against payment of
the full purchase price, on the date specified in the notice of exercise, such
payment to be made in cash or by certified check or by transfer and delivery of
shares of the common stock of the Company as provided in Section 7.4 of the 2008
Plan.

    

    Section
1.8.         Termination
of Option.  The option and
all rights granted by this Option Agreement, to the extent those rights have not
been exercised, will terminate and become null and void on the sooner
of:

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (a)

            	
              Such
      date as is ten (10) years from the date of this Option
      Agreement;

            

    

    

    
      	
               
      

            	
              (b)

            	
              The
      Option Termination Date as defined in Section 1.4
  hereof;

            

    

    

    
      	
               
      

            	
              (c)

            	
              The
      date which is three months after the date Optionee ceases to continually
      serve as a Director, Officer or Employee of the Company, if such cessation
      is by disability, retirement, or dismissal other than for cause, as
      defined in Section 9.4 of the 2008 Plan, provided that in the event of
      Optionee's cessation of directorship, office or employment under such
      terms, Optionee may exercise such option only to the extent that Optionee
      was entitled to exercise it on the date of Optionee's cessation of
      directorship, office or employment;

            

    

    

    
      	
               
      

            	
              (d)

            	
              The
      date Optionee ceases to continually serve as a Director, Officer or
      Employee of the Company if such cessation is by voluntary termination or
      dismissal for cause as defined in Sections 9.3 and 9.4 of the 2008
      Plan;

            

    

    

    
      	
               
      

            	
              (e)

            	
              The
      date which is one year following the death of Optionee if Optionee dies
      while serving as a Director, Officer or Employee of the Company or within
      the three-month period following the termination of such directorship,
      office or employment if such termination was by disability, retirement, or
      dismissal other than for cause.  In the event of Optionee's
      death under such terms, the person or persons to whom Optionee's rights
      under the option shall pass, whether by will or by the applicable laws of
      descent and distribution, may exercise such option pursuant to Section 8.7
      of the 2008 Plan only to the extent that Optionee was entitled to exercise
      it on the date of Optionee's death;
or

            

    

    

    
      	
               
      

            	
              (f)

            	
              Subject
      to payment being made by the Company under Section 1.9, the date of a
      change of control of the Company.  A “change in control” of the
      Company shall have the same meaning that such phrase has under Section
      10.2 of the 2008 Plan.

            

    

    

    For
purposes of the foregoing provisions, serving as a Director, Officer or Employee
of a subsidiary corporation or parent corporation of the Company, as defined in
the 2008 Plan, shall be deemed to be serving as a Director, Officer or Employee
of the Company.

    

    Section
1.9.         Payment
upon Change of Control.  Provided that the
grant of this Non-Qualified Option has been approved in the manner set forth in
Section 2.6 hereof, upon a change of control of the Company, the Company shall
pay and the Optionee shall be entitled to receive from the Company, with respect
to each Share subject to this Non-Qualified Option, an amount of cash equal to
the excess of the fair market value of such Share immediately prior to the
occurrence of the change of control over the exercise price per Share of this
Non-Qualified Option.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    ARTICLE
II

    RESTRICTIONS AND
LIMITATIONS

    

    Section
2.1.         Effect on
Other Agreements.  Nothing herein
contained shall be deemed to modify the terms of any other agreement between the
Company and Optionee.

    

    Section
2.2.         Limitation
on Payments .  If it is
determined, in the manner provided under Article XI of the 2008 Plan, that
Article XI of the 2008 Plan applies to a payment or payments made under this
Option Agreement, then such payment or payments to the Employee shall be reduced
as provided in Article XI of the 2008 Plan.  This reduction of
payments under Article XI of the 2008 Plan is designed to result in the maximum
after tax amount for the Employee by taking into account the effect that section
4999 of the Code could have on the payment or payments.

    

    Section
2.3.         Shares as
Investment.  By accepting this
option and if required by the 2008 Plan, Optionee acknowledges for Optionee,
Optionee's heirs, and legatees that any and all shares purchased under this
Option Agreement shall be acquired for investment and not for or with a view
towards distribution, and upon the transfer of any or all of the shares subject
to the option granted hereunder, Optionee, or Optionee's heirs or legatees
receiving such shares, shall deliver to the Company a representation in writing
that such shares are being acquired in good faith for investment and not for or
with a view towards distribution.

    

    Section
2.4.         Reclassification,
Consolidation, or Merger.  Adjustments to
the number of shares subject to the option and the option price for them shall
be proportionately adjusted, pursuant to Section 10.1 of the 2008
Plan.

    

    Section
2.5.         Limitations
Upon Transfer of Option.  During the
lifetime of Optionee, the option and all rights granted in this Option Agreement
shall be exercisable only by the Optionee, and except as Section 1.8(f) of this
Option Agreement otherwise provides, the option and all rights granted under
this Option Agreement shall not be transferred, assigned, pledged, or
hypothecated in any way (whether by operation of law or otherwise), and shall
not be subject to execution, attachment, or similar process. Upon any attempt to
transfer, assign, pledge, hypothecate, or otherwise dispose of such option or of
such rights contrary to the provisions in this Option Agreement, or upon the
levy or any attachment or similar process upon such option or such rights, such
option and such rights shall immediately become null and void.

    

    Section
2.6.         Limitations
Upon Transfer of Shares.  No shares
acquired by Optionee pursuant to this Option Agreement shall be sold or disposed
of within six (6) months following the date of acquisition of such shares,
unless either the grant of this Non-Qualified Option is approved by the Board of
Directors, or a committee of the Board of Directors that is composed solely of
two or more non-employee directors as defined in Rule 16b-3 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), or the grant of this
Non-Qualified Option is approved or ratified, in compliance with Section 14 of
the Exchange Act, by either:  the affirmative votes of the holders of
a majority of the securities of the Company present, or represented, and
entitled to vote at a meeting duly held in accordance with the applicable laws
of the state or other jurisdiction in which the Company is incorporated, or the
written consent of the holders of a majority of the securities of the Company
entitled to vote, provided that such ratification occurs no later than the date
of the next annual meeting of the shareholders.  Any attempted sale,
disposal or transfer of such shares in violation of the foregoing restrictions
on transfer shall be without effect.  All shares transferred to
Optionee pursuant to the exercise of the option granted hereby shall be clearly
marked with the foregoing restrictions on transfer to the extent
applicable.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    Section
2.7.        Rights as
Shareholder.  Neither Optionee
nor Optionee's executor, administrator, heirs, or legatees, shall be or have any
rights or privileges of a shareholder of the Company in respect of the shares
transferable upon exercise of the option granted under this Option Agreement,
unless and until certificates representing such shares shall have been endorsed,
transferred, and delivered and the Optionee, or the Optionee's executor,
administrator, heirs or legatees, as the case may be, has caused his name to be
entered as the shareholder of record on the books of the Company.

    

    ARTICLE
III

    ADMINISTRATIVE
PROVISIONS

    

    Section
3.1.         Notices.  Any notice to be
given under the terms of this Option Agreement shall be addressed to the Parties
as follows:

    

    If to the
Company:

    

    
      	
               
      

            	
              Silverleaf
      Resorts, Inc.

            

    

    
      	
               
      

            	
              Attn:  Robert
      E. Mead, Chief Executive Officer

            

    

    
      	
               
      

            	
              1221
      River Bend Drive, Suite 120

            

    

    
      	
               
      

            	
              Dallas,
      Texas 75247

            

    

    

    If to
Optionee:

    

    

    Any Party may change its address by
giving notice in writing, stating its new address, to the other Party as
provided in the foregoing manner.  Any notice shall be deemed duly
given when enclosed in a properly sealed envelope or wrapper addressed as herein
required, certified and deposited (postage and certification fee prepaid) in a
post office or branch post office regularly maintained by the United States
Government.

    

    Section
3.2.         Binding
Effect.  This Option
Agreement shall be binding upon the heirs, executors, administrators, and
successors of the parties hereto.

    

    Section
3.3.         Nonqualified
Options.  The options
granted hereunder are intended to be Nonqualified Options as defined in the 2008
Plan.

    

    Section
3.4.         Incorporation
of the 2008 Plan.  The terms,
conditions and limitations contained in the 2008 Plan are incorporated herein by
reference and such provisions shall control to the extent they are not
specifically contrary to a provision of this Option Agreement.

    

    Section
3.5.         Effective
Date of Option Agreement.  This Option
Agreement is effective as of the 14th day of August, 2008.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

    
      	
              DATES
      OF EXECUTION:

            	 
      	
              SILVERLEAF
      RESORTS, INC., the Company

            
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	
              ______________,
      _____

            	 
      	
              By: 
      

            	 
      
	 
      	 
      	 
      	
              Authorized
      Officer

            
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	
              ______________,
      _____

            	 
      	 
      	 
      
	 
      	 
      	
              Optionee

            

    

      
  

    6EXHIBIT
      4.1

    

    SUBSCRIPTION
      FOR UNITS

    

    (Part
      5
      Accredited Investor Exemption Pursuant to “National Instrument 45-106
      -
      Prospectus and Registration Exemptions”
-
      

    Alberta
      and British Columbia Residents Only)

    

    TO: 
Deep
      Well Oil & Gas, Inc. (the "Corporation")
     
      510 Royal Bank Building
    
      10117 Jasper Avenue, AB T5J 1W8

    

    The
      undersigned subscriber (the “Subscriber”) acknowledges that the Corporation is
      proceeding with an Offering of 10,638,297
      units
      (“Units”) at a price of US$0.47 per Unit for gross proceeds of US$5,000,000.
      Each Unit is comprised of one (1) common share (“Common Share”), one (1) Common
      Share purchase warrant (“Whole
      Warrant”)
      and 0.188000015 of one Common Share purchase warrant (“Additional Fractional
      Warrant”). Each Whole Warrant entitles the holder to purchase one (1) Common
      Share at a price of US$0.71 for a period of three years from the Closing Date.
      Each Additional Fractional Warrant entitles the holder to purchase 0.188000015
      of one Common Share at a price of US$0.95 for a period of three years from
      the
      Closing Date. The undersigned Subscriber hereby tenders to the Corporation
      this
      subscription offer which, upon acceptance by the Corporation, will constitute
      an
      agreement of the Subscriber to subscribe for, take up, purchase and pay for
      and,
      on the part of the Corporation, to issue and sell to the Subscriber, the number
      of Units set out below on the terms and subject to the conditions set out in
      this Subscription Agreement. Until the Closing of the Offering, all subscription
      funds shall be held in a non-interest bearing account of the Corporation. Upon
      Closing of the Offering, all of the subscription proceeds (net of expenses
      thereon) will be released to the Corporation. In the event the Offering does
      not
      close, any and all subscription proceeds will be returned to subscribers without
      interest, deduction or penalty. The Subscriber hereby acknowledges and agrees
      that the terms and conditions contained in the attached Schedule “A” form part
      of this Subscription Agreement and are incorporated herein by
      reference.

     

    
      	 	 	 	Number of
              Units:
	
              
Name
              of Subscriber - please print	 	 	
              10,638,297

            
	
            	 	 	 
	
              By:

              
                

              

              Authorized
                Signature

            	 	 	
              Aggregate
                Subscription
                Price
                (No. of Units X US$0.47
                per Unit):
                US$5,000,000

              

            
	
               

            	 	 	
               

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

              

            
	
            	 	 	 
	
              Date: 

              
                
 

              
                

              

              (Please
                print name of individual whose signature appears above
                

              if
                different than the name of the Subscriber printed
                above.)

            	 	 	
              13,362,494
                common shares (not including the Whole Warrant and Special Warrant
                issued
                on June 22, 2007)

            
	 	 	 	 
	
              
Subscriber's
              Address	 	 	Register the Units as set
              forth
              below:
	 	 	 	
              
                
Name

            
	
              
 	 	 	 
	 	 	 	
              
Address
	
              
Facsimile
              Number	 	 	 
	 	 	 	
              
 
	
              
Telephone
              Number                                        E-Mail
              Address	 	 	 Address
	 	 	 	
               

              
                

              

            

    

     

    ACCEPTANCE:
      The
      Corporation hereby accepts the above subscription as of this 14th
      day of
      August, 2008 and the Corporation represents and warrants to the Subscriber
      that
      the representations and warranties made by the Corporation are true and correct
      in all material respects as in all material respects as of this date and that
      the Subscriber is entitled to rely thereon.

     

    
      	 	 	 
	 	
              DEEP
                WELL OIL & GAS, INC.

            
	 
 	 
 	 
 
	
            	By:  	 
	 	
              

            

    

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      “A” -TERMS AND CONDITIONS OF SUBSCRIPTION FOR

    UNITS
      OF DEEP WELL OIL & GAS, INC.

     

    Definitions

     

    In
      this
      Subscription Agreement:

    

      
        	 	
                (a)

              	
                “Additional
                  Fractional Warrant”
                  means 0.188000015 of one Common Share purchase warrant of the Corporation
                  which entitles the holder to purchase 0.188000015 of one Common
                  Share of
                  the Corporation at a price of US$0.95 for a period of three (3)
                  years from
                  the Closing Date;

              

      

       

      
        	 	
                (b)

              	
                “Closing”
                  or “Closing
                  Date”
                  means the closing of the Offering initially expected to occur on
                  or about
                  August 8, 2008 or such other date or dates as may be determined
                  by the
                  Corporation in its sole discretion and such other subsequent closings
                  as
                  may be required to complete the
                  Offering;

              

      

       

      
        	 	
                (c)

              	
                “Common
                  Share” means
                  a common share in the capital stock of the
                  Corporation;

              

      

       

      
        	 	
                (d)

              	
                “Corporation”
                  means Deep Well Oil & Gas,
                  Inc.;

              

      

       

      
        	 	
                (e)

              	
                “NI
                  45-102” means
                  National Instrument 45-102 - Resale
                  of Securities; 

              

      

       

      
        	 	
                (f)

              	
                “NI
                  45-106” means
                  National Instrument 45-106 - Prospectus
                  and Registration Exemptions; 

              

      

       

      
        	 	
                (g)

              	
                “Offering”
                  means the offering of Units by the Corporation at US$0.47 per
                  Unit;

              

      

       

      
        	 	
                (h)

              	
                “Securities”
                  means the Units, the Common Shares and the Warrants comprising
                  the Units,
                  and the Warrant Shares;

              

      

       

      
        	 	
                (i)

              	
                “Subscriber”
                  means the person or company identified as the Subscriber on the
                  face page
                  of this Subscription Agreement;

              

      

       

      
        	 	
                (j)

              	
                “Subscription
                  Agreement”
                  means this agreement, together with the exhibits attached hereto,
                  as
                  amended or supplemented from time to
                  time;

              

      

       

      
        	 	
                (k)

              	
                “Subscription
                  Price”
                  means the aggregate subscription price paid by the Subscriber,
                  being the
                  number of Units subscribed for multiplied by US$0.47 per
                  Unit;

              

      

       

      
        	 	
                (l)

              	
                “Unit”
                  means a unit consisting of one (1) Common Share, one (1) Whole
                  Warrant and
                  one (1) Additional Fractional
                  Warrant;

              

      

       

      
        	 	
                (m)

              	
                “Warrant”
                  means either an Additional Fractional Warrant or a Whole Warrant
                  and
                  “Warrants”
                  means both Additional Fractional Warrants and Whole
                  Warrants;

              

      

       

      
        	 	
                (n)

              	
                “Whole Warrant”
                  means one (1) Common Share purchase warrant of the Corporation
                  entitling
                  the holder to purchase one (1) Common Share of the Corporation
                  at a price
                  of US$0.71 for a period of three (3) years from the Closing Date;
                  and

              

      

       

      
        	 	
                (o)

              	
                “Warrant
                  Share”
                  means a Common Share issuable upon exercise of a
                  Warrant.

              

      

       

      Terms
        of the Offering

       

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

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      2. The
        Subscriber acknowledges that the Units subscribed for hereunder consist of
        a
        sale by the Corporation of 10,638,297 Units of the Corporation at a subscription
        price of US$0.47 per Unit.

       

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

       

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

       

      5. THE
        SUBSCRIBER FURTHER ACKNOWLEDGES THAT AN INVESTMENT IN THE UNITS MUST BE
        CONSIDERED SPECULATIVE AND IS SUBJECT TO A NUMBER OF RISK FACTORS. THE
        SUBSCRIBER COVENANTS AND AGREES TO COMPLY WITH NI 45-106, NI 45-102 AND ANY
        OTHER APPLICABLE SECURITIES LEGISLATION, RULES, REGULATIONS, ORDERS OR POLICIES
        CONCERNING THE PURCHASE, HOLDING OF, AND RESALE OF THE SECURITIES. THE
        SECURITIES ARE SUBJECT TO RESALE RESTRICTIONS AND WILL BEAR A LEGEND TO THAT
        EFFECT.

       

      6. In
        addition to one manually signed, completed copy of this Subscription Agreement,
        the Subscriber will execute and deliver to the Corporation all other
        documentation as may be required by applicable securities legislation, rules,
        policy statements, and orders, including NI 45-106, to permit the issue and
        sale of the Units. The Subscriber acknowledges and agrees that any such
        documentation, when executed and delivered by the Subscriber, will form part
        of
        and will be incorporated into this Subscription Agreement with the same effect
        as if each constituted a representation and warranty or covenant of the
        Subscriber hereunder in favour of the Corporation, and the Subscriber consents
        to the filing of such documents and/or information contained in such documents
        as may be required to be filed with any securities or the regulatory authority
        in connection with the transactions contemplated hereby.

       

      Representations,
        Warranties and Covenants by Subscriber

       

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

       

      
        	
                (a)

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

              

      

       

      
        	
                (b)

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

              

      

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      
        	
                (c)

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

              

      

       

      
        	
                (d)

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

              

      

       

      
        	
                (e)

              	
                the
                  Subscriber is purchasing as principal and it knows that it is purchasing
                  the Units pursuant to an exemption under NI 45-106 and, as a
                  consequence, is restricted from using most of the civil remedies
                  available
                  under applicable securities legislation, may not receive information
                  that
                  would otherwise be required to be provided to it under applicable
                  securities legislation, and the Corporation is relieved from certain
                  obligations that would otherwise apply under applicable securities
                  legislation; and

              

      

       

      
        	 	
                (i)

              	
                if
                  a resident of Alberta,
                  the Subscriber is a
                  resident in or otherwise subject to the applicable securities laws
                  of
                  Alberta and
                  it is an "accredited investor" as such term is defined in NI 45-106
                  promulgated under the Securities
                  Act
                  (Alberta) and has concurrently executed and delivered a Representation
                  Letter in the form attached as Exhibit 1
                  to
                  this Subscription Agreement; or

              

      

       

      
        	 	
                (ii)

              	
                if
                  a resident of British Columbia,
                  the Subscriber is a resident in or otherwise subject to the applicable
                  securities laws of British Columbia and it is an "accredited investor"
                  as
                  such term is defined in NI 45-106 promulgated under the Securities
                  Act
                  (British Columbia) and has concurrently executed and delivered
                  a
                  Representation Letter in the form attached as Exhibit 1
                  to
                  this Subscription Agreement; and

              

      

       

      
        	
                (f)

              	
                if
                  the Subscriber is resident in any jurisdiction not referred to
                  in
                  Subsection 7(e)
                  above:
                  (a) the purchase of the Units does not contravene any of the applicable
                  laws in the Subscriber’s jurisdiction of residence and does not trigger
                  (i) any obligation to prepare and file a prospectus, an offering
                  memorandum or similar document, or any other ongoing reporting
                  requirements with respect to such purchase or otherwise, or (ii)
                  any
                  registration or other obligation on the part of the Corporation;
                  (b) the
                  sale of the Units as contemplated in the Subscription Agreement
                  complies
                  with or is exempt from applicable securities legislation of the
                  Subscriber’s jurisdiction of residence and the Subscriber will provide
                  such evidence of compliance with all such matters as the Corporation
                  may
                  request; (c) the Subscriber will comply with the provisions of
                  Section 5
                  and Subsection 7(a) as if they were a resident of Alberta or British
                  Columbia; and (d) and notwithstanding that the Subscriber is not
                  a
                  resident of Alberta or British Columbia, it is an "accredited investor"
                  as
                  such term is defined in NI 45-106 promulgated under the Securities
                  Act
                  (Alberta) and/or the Securities
                  Act
                  (British Columbia) and
                  has concurrently executed and delivered a Representation Letter
                  in the
                  form attached as Exhibit 1
                  to
                  this Subscription Agreement; and

              

      

       

      
        	
                (g)

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

              

      

       

      
        	 	
                (i)

              	
                that
                  any person will resell or repurchase any of the
                  Securities;

              

      

       

      
        	 	
                (ii)

              	
                that
                  any person will refund the purchase price of any of the
                  Securities;

              

      

       

      
        	 	
                (iii)

              	
                as
                  to the future price or value of any of the Securities;
                  or

              

      

       

      
        	 	
                (iv)

              	
                that
                  any of the Securities will be listed and posted for trading on
                  a stock
                  exchange or that application has been made to list and post any
                  of the
                  Securities for trading on a stock exchange;
                  and

              

      

       

      
        	
                (h)

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

              

      

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      
        	
                (i)

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

              

      

       

      
        	
                (j)

              	
                it
                  is aware that the Securities have not been and will not be registered
                  under the United States Securities Act of 1933, as amended (“U.S.
                  Securities Act”) and that the Securities may not be offered or sold in the
                  United States or to, or for the account or benefit of, a U.S. Person
                  (as
                  defined in Regulation S under the U.S. Securities Act) (a "U.S.
                  Person")
                  without registration under the U.S. Securities Act or compliance
                  with
                  requirements of an exemption or exclusion from registration and
                  the
                  applicable laws of all applicable states and acknowledges that
                  the
                  Corporation has no present intention of filing a registration statement
                  under the U.S. Securities Act in respect of the Securities;
                  and

              

      

       

      
        	
                (k)

              	
                the
                  Units have not been offered to the Subscriber in the United States;
                  and

              

      

       

      
        	
                (l)

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

              

      

       

      
        	
                (m)

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

              

      

       

      
        	
                (n)

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

              

      

       

      
        	
                (o)

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

              

      

       

      
        	
                (p)

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

              

      

       

      
        	
                (q)

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

              

      

       

      
        	
                (r)

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

              

      

       

      
        	
                (s)

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

              

      

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      
        	
                (t)

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

              

      

       

      
        	
                (u)

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

              

      

       

      
        	
                (v)

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

              

      

       

      
        	
                (w)

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

              

      

       

      
        	
                (x)

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

              

      

       

      
        	
                (y)

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

              

      

       

      
        	
                (z)

              	
                the
                  Subscriber has such knowledge in financial and business affairs
                  as to be
                  capable of evaluating the merits and risks of the Subscriber’s investment
                  and the Subscriber, or, where the Subscriber is acting as agent
                  for a
                  disclosed principal, each beneficial purchaser, is able to bear
                  the
                  economic risk of loss of the Subscriber’s entire investment in the Units;
                  and

              

      

       

      
        	
                (aa)

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

              

      

       

      
        	
                (bb)

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

              

      

       

      
        	
                (cc)

              	
                if
                  required by applicable securities legislation, regulations, rules,
                  policies or orders, NI 45-106, or by any securities commission,
                  stock
                  exchange or other regulatory authority, the Subscriber will execute,
                  deliver, file and otherwise assist the Corporation in filing, such
                  reports, undertakings and other documents with respect to the issue
                  of the
                  Units (including, without limitation, a completed and duly executed
                  Representation Letter, attached as Exhibit 1);
                  and

              

      

       

      
        	
                (dd)

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

              

      

       

      
        	
                (ee)

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

              

      

       

      
        	
                (ff)

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

              

      

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      
        	
                (gg)

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

              

      

       

      
        	
                (hh)

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

              

      

       

      
        	
                (ii)

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

              

      

       

      Representations,
        Warranties and Covenants of the Corporation

       

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

       

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

       

      Registration
        Rights

       

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

       

      Closing

       

      11. The
        Subscriber agrees to deliver to the Corporation, not later than 4:30 p.m.
        (Edmonton time) on the Closing Date: (a) this duly completed and executed
        Subscription Agreement; (b) a certified cheque or bank draft payable to
        Deep Well Oil & Gas, Inc. for the Subscription Price of the Units subscribed
        for under this Subscription Agreement; (c) if the Subscriber is an
“accredited investor” in Alberta a fully completed and duly executed
        Representation Letter, attached as Exhibit
        1
        hereto;
        or (d) if the Subscriber is an “accredited investor” in British Columbia a
        fully completed and duly executed Representation Letter, attached as
Exhibit
        1
        hereto;
        or (e)
        if the Subscriber is purchasing Units pursuant to Subsection 7(f)
        a fully
        completed and duly executed Representation Letter, attached as Exhibit
        1
        hereto.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      12. The
        Subscriber acknowledges that the Corporation does not issue fractions of
        Common
        Shares or distribute certificates which evidence fractional Common Shares
        and as
        a result, agrees that on the Closing Date, the Corporation shall not be required
        to issue a warrant certificate for the Additional Fractional Warrants subscribed
        for hereunder, but instead, in full satisfaction thereof, shall issue to
        the
        Subscriber a warrant certificate for 2,000,000 whole Common Share purchase
        warrants entitling the Subscriber to purchase 2,000,000 Common Shares at
        a price
        of US$0.95 for a period of three (3) years from the Closing Date.

       

      13. The
        purchase and sale of the Units pursuant to this Subscription Agreement will
        be
        completed at the offices of the Corporation’s solicitors, Parlee
        McLaws llp,
        in
        Edmonton, Alberta on the Closing Date or such other place or time as the
        Corporation decides in its sole discretion. On the Closing Date, the Corporation
        shall receive all completed subscription agreements, including this Subscription
        Agreement, and the Subscription Price against delivery by the Corporation
        of the
        certificates representing the Units.

       

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

       

      General

       

      15. The
        Subscriber agrees that the representations, warranties and covenants of the
        Subscriber herein will be true and correct both as of the execution of this
        Subscription Agreement and as of the Closing Date and will survive the
        completion of the issuance of the Units. The representations, warranties
        and
        covenants of the Subscriber herein are made with the intent that they be
        relied
        upon by the Corporation and it’s counsel in determining the eligibility of a
        purchaser of Units and the Subscriber agrees to indemnify the Corporation,
        including its respective affiliates, shareholders, directors, officers,
        partners, employees, advisors and agents, against all losses, claims, costs,
        expenses and damages or liabilities which any of them may suffer or incur
        which
        are caused or arise from a breach thereof. The Subscriber undertakes to
        immediately notify the Corporation at 510 Royal Bank Building, 10117 Jasper
        Avenue, Edmonton, Alberta, T5J 1W8, Attention: Curtis Sparrow (Fax Number:
        (780)
        409-8146), of any change in any statement or other information relating to
        the
        Subscriber set forth herein which takes place prior to the Closing
        Date.

       

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

       

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

       

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

       

      19. Time
        shall be of the essence hereof.

       

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

       

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

       

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

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Exhibit
        1

      

      REPRESENTATION
        LETTER

      

      (FOR
        ALBERTA AND/OR BRITISH COLUMBIA ACCREDITED INVESTORS OR ACCREDITED INVESTORS
        TO
        WHOM SUBSECTION 7(f) APPLIES)

       

      TO: DEEP
        WELL OIL & GAS, INC. (the "Corporation")

      

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

      

      
        	 	
                1.

              	
                The
                  Subscriber is resident in Alberta or British Columbia or is subject
                  to the
                  laws of the Province of Alberta or British
                  Columbia;

              

      

      

      
        	 	
                2.

              	
                The
                  Subscriber, unless it is a person or company described in paragraph
                  (q) in
                  the attached Appendix "A" that is deemed pursuant to the provisions
                  of
                  section 2.3(5) of National Instrument 45-106 entitled "Prospectus
                  and
                  Registration Exemptions" to be purchasing as principal, is purchasing
                  the
                  Units as principal for its own
                  account;

              

      

      

      
        	 	
                3.

              	
                The
                  Subscriber is an "accredited investor" within the meaning of National
                  Instrument 45-106 entitled "Prospectus and Registration Exemptions"
                  by
                  virtue of satisfying the indicated criterion as set out in
                  Appendix "A" to this Representation Letter;
                  and

              

      

      

      
        	 	
                4.

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

              

      

       

      Dated:
        ___________________________________.

       

        	 	 	 
	 	
                
Print
                name of Subscriber
	 	 	 
	 	By:  	 
	 	
                

                Signature

              
	 	 
	 	 
	 	
                

                Print
                  name of Signatory (if different from Subscriber)

              
	 	 
	 	 
	 	
                

                Title

              

      

       

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

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      APPENDIX
        "A"

      to
        Exhibit 1

       

      Accredited
        Investor
        -
        (defined in NI 45-106) means:

      

        
          	_____	
                  (a)

                	
                  a
                    Canadian financial institution or a Schedule III Bank;
                    or

                
	 	 	 
	_____	
                  (b)

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

                
	 	 	 
	_____	
                  (c)

                	
                  a
                    subsidiary of any person referred to in paragraphs (a) or (b), if the
                    person owns all of the voting securities of the subsidiary, except
                    the
                    voting securities required by law to be owned by directors of
                    that
                    subsidiary; or

                
	 	 	 
	_____	
                  (d)

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

                
	 	 	 
	_____	
                  (e)

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

                
	 	 	 
	_____	
                  (f)

                	
                  the
                    Government of Canada or a jurisdiction of Canada, or any crown
                    corporation, agency or wholly owned entity of the Government
                    of Canada or
                    a jurisdiction of Canada; or

                
	 	 	 
	_____	
                  (g)

                	
                  a
                    municipality, public board or commission in Canada and a metropolitan
                    community, school board, Comité de gestion de la taxe scolaire de
                    l' le de Montreal or an intermunicipal management board in Québec;
                    or

                
	 	 	 
	_____	
                  (h)

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

                
	 	 	 
	_____	
                  (i)

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

                
	 	 	 
	_____	
                  (j)

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

                
	 	 	 
	_____	
                  (k)

                	
                  an
                    individual whose net income before taxes exceeded CAD$200,000
                    in each of
                    the 2 most recent calendar years or whose net income before taxes
                    combined
                    with that of a spouse exceeded CAD$300,000 in each of the 2 most
                    recent
                    calendar years and who, in either case, reasonably expects to
                    exceed that
                    net income level in the current calendar year; or

                
	 	 	 
	_____	
                  (l)

                	
                  an
                    individual who, either alone or with a spouse, has net assets
                    of at least
                    CAD$5,000,000; or

                
	 	 	 
	_____	
                  (m)

                	
                  a
                    person, other than an individual or investment fund that has
                    net assets of
                    at least CAD$5,000,000 as shown on its most recently prepared
                    financial
                    statements and such person was not created or used solely to
                    purchase or
                    hold securities as an “accredited investor”; or

                
	 	 	 
	_____	
                  (n)

                	
                  an
                    investment fund that distributes or has distributed its securities
                    only
                    to:

                   

                  (i)
                    a person that is or was an accredited investor at the time of
                    the
                    distribution;

                   

                  (ii)
                    a person that acquires or acquired securities in the circumstances
                    referred to in sections 2.10 and 2.19 of NI 45-106; or

                   

                  (iii)
                    a person described in paragraph (n)(i) or (ii) that acquires
                    or acquired
                    securities under section 2.18 of NI 45-106;
                    or

                

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	_____	
                  (o)

                	
                  an
                    investment fund that distributes or has distributed securities
                    under a
                    prospectus in a jurisdiction of Canada for which the regulator,
                    or in
                    Québec, the securities regulatory authority, has issued a receipt;
                    or

                
	 	 	 
	_____	
                  (p)

                	
                  a
                    trust company or trust corporation registered or authorized to
                    carry on
                    business under the Trust
                    and Loan Companies Act
                    (Canada) or under comparable legislation in a jurisdiction of
                    Canada or a
                    foreign jurisdiction, acting on behalf of a fully managed account
                    managed
                    by the trust company or trust corporation, as the case may be;
                    or

                
	 	 	 
	_____	
                  (q)

                	
                  a
                    person acting on behalf of a fully managed account managed by
                    that person,
                    if that person

                   

                  (i)
                    is registered or authorized to carry on business as an adviser
                    or the
                    equivalent under the securities legislation of a jurisdiction
                    of Canada or
                    a foreign jurisdiction; and

                   

                  (ii)
                    in Ontario, is purchasing a security that is not a security of
                    an
                    investment fund; or

                
	 	 	 
	_____	
                  (r)

                	
                  a
                    registered charity under the Income
                    Tax Act
                    (Canada) that, in regard to the trade, has obtained advice from
                    an
                    eligibility adviser or an adviser registered under the securities
                    legislation of the jurisdiction of the registered charity to
                    give advice
                    on the securities being traded; or

                
	 	 	 
	_____	
                  (s)

                	
                  an
                    entity organized in a foreign jurisdiction that is analogous
                    to any of the
                    entities referred to in paragraphs (a) to (d) or paragraph (i)
                    in form and function; or

                
	 	 	 
	_____	
                  (t)

                	
                  a
                    person in respect of which all of the owners of interests, direct,
                    indirect, or beneficial, except the voting securities required
                    by law to
                    be owned by directors, are persons that are “accredited investors” (as
                    defined in NI 45-106); or

                
	 	 	 
	_____	
                  (u)

                	
                  an
                    investment fund that is advised by a person registered as an
                    adviser or a
                    person that is exempt from registration as an adviser;
                    or

                
	 	 	 
	_____	
                  (v)

                	
                  a
                    person that is recognized or designated by the securities regulatory
                    authority or, except in Ontario and Québec, the regulator as

                  (i)
                    an “accredited investor” (as defined in NI 45-106); or

                  (ii)
                    an exempt purchaser in Alberta or British
                    Columbia.

                

        

         

      

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

      

      For
        the purposes hereof:

      

      
        	
                (a)

              	
                "bank"
                  means a bank named in Schedule I or II of the Bank
                  Act (Canada);

              

      

       

      
        	
                (b)

              	
                "Canadian
                  financial institution"
                  means

              

      

       

      
        	 	
                (i)
                  

              	
                an
                  association governed by the Cooperative
                  Credit Associations Act
                  (Canada) or a central cooperative credit society for which an order
                  has
                  been made under section 473(1) of that Act;
                  or

              

      

       

      
        	 	
                (ii)

              	
                a
                  bank, loan corporation, trust company, trust corporation, insurance
                  company, treasury branch, credit union, caisse populaire, financial
                  services cooperative, or league that, in each case, is authorized
                  by an
                  enactment of Canada or a jurisdiction of Canada to carry on business
                  in
                  Canada or a jurisdiction of Canada;

              

      

       

      
        
          
          

        

        
          A-2

          
            

          

        

        
          
          

        

      

       

      
        	
                (c)

              	
                "director"
                  means

              

      

       

      
        	 	
                (i)
                  

              	
                a
                  member of the board of directors of a company or an individual
                  who
                  performs similar functions for a company,
                  and

              

      

       

      
        	 	
                (ii)
                  

              	
                with
                  respect to a person that is not an company, an individual who performs
                  functions similar to that of a director of a
                  company;

              

      

       

      
        	
                (d)

              	
                "eligibility
                  adviser"
                  means a person that is registered as an investment dealer or in
                  an
                  equivalent category of registration under the securities legislation
                  of
                  the jurisdiction of a purchaser and authorized to give advice with
                  respect
                  to the type of security being distributed;

              

      

       

      
        	
                (e)

              	
                "EVCC"
                  means an employee venture capital corporation that does not have
                  a
                  restricted constitution and is registered under Part 2 of the Employee
                  Investment Act (British
                  Columbia), R.S.B.C. 1996 c. 112, and whose business objective is
                  making
                  multiple investments;

              

      

       

      
        	
                (f)

              	
                "financial
                  assets"
                  means

              

      

       

      
        	
              	(i)	
                cash;

              

      

       

      
        
          	
                	(ii)	
                  securities;
                    or

                

        

      

       

      
        	 	
                (iii)
                  

              	
                a
                  contract of insurance, a deposit or evidence of a deposit that
                  is not a
                  security for the purposes of securities
                  legislation;

              

      

       

      
        	
                (g)

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

              

      

       

      
        	
                (h)

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

              

      

       

      
        	
                (i)

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

              

      

       

      
        	
                (j)

              	
                "individual"
                  means

              

      

       

      
        	 	
                (i)
                  

              	
                for
                  Alberta, a natural person, but does not
                  include

              

      

       

      
        	 	
                (A)
                  

              	
                a
                  partnership, unincorporated association, unincorporated syndicate,
                  unincorporated organization or a trust,
                  or

              

      

       

      
        	 	
                (B)
                  

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

              

      

       

      
        	 	
                (ii)
                  

              	
                for
                  British Columbia, a natural person, but does not
                  include

              

      

       

      
        	 	
                (A)
                  

              	
                a
                  partnership, unincorporated association, unincorporated syndicate,
                  unincorporated organization or a trust,
                  or

              

      

       

      
        	 	
                (B)
                  

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

              

      

       

      
        	
                (k)

              	
                "investment
                  fund"
                  means a mutual fund or a non-redeemable investment fund, and, for
                  greater
                  certainty in British Columbia, includes an EVCC and a
                  VCC;

              

      

       

      
        	
                (l)

              	
                "non-redeemable
                  investment fund"
                  means an issuer,

              

      

       

      
        	 	
                (i)

              	
                whose
                  primary purpose is to invest money provided by its
                  securityholders,

              

      

       

      
        
          
          

        

        
          A-3

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (ii)
                  

              	
                that
                  does not invest,

              

      

       

      
        	 	
                (A)

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

              

      

       

      
        	 	
                (B)

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

              

      

       

      
        	 	
                (iii)
                  

              	
                that
                  is not a mutual fund;

              

      

       

      
        	
                (m)

              	
                "person"
                  includes

              

      

       

      
        	
              	(i)	
                an
                  individual;

              

      

       

      
        	
              	(ii)	
                a
                  corporation;

              

      

       

      
        	 	
                (iii)
                  

              	
                a
                  partnership, trust, fund and an association, syndicate, organization
                  or
                  other organized group of persons, whether incorporated or not;
                  and

              

      

       

      
        	 	
                (iv)
                  

              	
                an
                  individual or other person in that person's capacity as a trustee,
                  executor, administrator or other legal
                  representative;

              

      

       

      
        	
                (n)

              	
                "related
                  liabilities"
                  means

              

      

       

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

              

      

       

      
        	
              	(ii)	
                liabilities
                  that are secured by financial
                  assets;

              

      

       

      
        	
                (o)

              	
                "Schedule
                  III bank"
                  means an authorized foreign bank named in Schedule III of the Bank
                  Act (Canada):

              

      

       

      
        	
                (p)

              	
                "securities
                  legislation"
                  means

              

      

       

      
        	 	
                (i)
                  

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

              

      

       

      
        	 	
                (ii)
                  

              	
                for
                  British Columbia, the Securities
                  Act
                  (British Columbia) and the regulations, rules and forms under such
                  Act and
                  the blanket rulings and orders issued by the British Columbia Securities
                  Commission;

              

      

       

      
        	 	
                (iii)
                  

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

              

      

       

      
        	
                (q)

              	
                "securities
                  regulatory authority"
                  means

              

      

       

      
        	
              	(i)	
                for
                  Alberta, the Alberta Securities
                  Commission;

              

      

       

      
        	
              	(ii)	
                for
                  British Columbia, the British Columbia Securities
                  Commission;

              

      

       

      
        	 	
                (iii)
                  

              	
                for
                  other Canadian jurisdictions, means the securities regulatory authority
                  as
                  listed in Appendix C of National Instrument 14-101 - Definitions;
                  

              

      

       

      
        	
                (r)

              	
                "spouse"
                  means an individual who

              

      

       

      
        	 	
                (i)
                  

              	
                is
                  married to another individual and is not living separate and apart
                  within
                  the meaning of the Divorce
                  Act
                  (Canada), from the other individual;
                  or

              

      

       

      
        	 	
                (ii)
                  

              	
                is
                  living with another individual in a marriage-like relationship,
                  including
                  a marriage-like relationship of individuals of the same gender;
                  or

              

      

       

      
        
          
          

        

        
          A-4

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (iii)
                  

              	
                in
                  Alberta, is an individual referred to in paragraph (i) or (ii)
                  or is an
                  adult interdependent partner within the meaning of the Adult
                  Interdependent Relationships Act
                  (Alberta);

              

      

       

      
        	
                (s)

              	
                "subsidiary"
                  means an issuer that is controlled directly or indirectly by another
                  issuer and includes a subsidiary of that subsidiary;
                  and

              

      

       

      
        	
                (t)

              	
                "VCC"
                  means a venture capital corporation registered under Part 1 of
                  the
                  Small
                  Business Venture Capital Act (British
                  Columbia), R.S.B.C. 1996 c. 429 whose business objective is making
                  multiple investments.

              

      

       

      Meaning
        of Control:

       

      A
        person
        ("first person") is considered to "control"
        another
        person ("second person") if:

       

      (i)
         the
        first
        person, directly or indirectly, beneficially owns or exercises control or
        direction over securities of the second person carrying votes which, if
        exercised, would entitle the first person to elect a majority of the directors
        of the second person, unless that first person holds the voting securities
        only
        to secure an obligation; or

       

      (ii)
         the
        second person is a partnership, other than a limited partnership, and the
        first
        person holds more than 50% of the interests of the partnership; or

       

      (iii)
         the
        second person is a limited partnership and the general partner of the limited
        partnership is the first person.

       

      
        
          
          

        

        
          A-5

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00146-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00146-of-00352.parquet"}]]