Form of Subscription Agreement for Private Placement of Shares

LLC Subscription Agreement

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KODIAK ENERGY, INC.

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Title: Form of Subscription Agreement for Private Placement of Shares
Governing Law: Delaware Date: 6/19/2008
Industry: Oil and Gas Operations Sector: Energy

Canada & Offshore

Form of Subscription Agreement for Private Placement of Shares

A completed and originally executed copy of this Subscription Agreement and Schedules A. B and C, if applicable, duly completed and signed, must be delivered to the Corporation.

TO: Kodiak Energy, Inc. (the “Corporation”)

The undersigned (the “ Subscriber ”) hereby irrevocably subscribes for and agrees to purchase the number of units (the “ Units ”) set forth below for the subscription price of US$2.50 per Unit representing the aggregate consideration set forth below (the “ Aggregate Subscription Price ”), upon and subject to the terms and conditions set forth in “Terms and Conditions of Subscription for Units of Kodiak Energy, Inc.” attached hereto (together with the face pages and the attached Exhibits, the “ Subscription Agreement ”). Each Unit will consists of one common share in the capital of the Corporation (“ Common Shares ”) and one warrant (“ Warrant ”) where each Warrant entitles the holder to purchase one Common Share in the capital of the Corporation at an exercise price of US$3.50.

Subscriber’s Particulars:

Number of Units : ___________________

Name of Subscriber - please print

Aggregate Subscription Price: $ _______________________

By:

If the Subscriber is signing as agent for a principal, unless it is

Authorized Signature

deemed to be purchasing as principal under NI 45-106, complete

the following and ensure that the applicable Schedule(s) are

completed on behalf of such principal:

Name and Official Capacity or Title of signatory if not Subscriber (please print)

Name of Principal

Subscriber’s Residential Address

Principal’s Residential Address

City/Town

Province

Postal Code

City/Town

Province

Postal Code

Telephone Number

Fax Number

Principal’s Telephone Number

e-mail address

Principal’s e-mail address

Citizenship:

The Subscriber owns, directly or indirectly, the following securities

(including options) of the Corporation: _______________

The Subscriber is r or is not r an insider of the Corporation; or

The Subscriber is r or is not r a member of the pro group of the

Corporation [ Please check the applicable box(s)]

Certificates for Common Shares will be delivered to the registered

shareholder unless delivery is otherwise specified as set forth below:

Name

Contact Name and Telephone Number

Account reference, if applicable

Address

City/Town

Province

Postal Code

City/Town

Province

Postal Code

DATED this _____ day of ___________________, 2008

KODIAK ENERGY, INC.


Per: ______________________________________		Subscription No:

This is the first page of an agreement comprised of 13 pages (not including Schedules A, B and C).

Canada & Offshore

TERMS AND CONDITIONS OF SUBSCRIPTION FOR UNITS OF

KODIAK ENERGY, INC.

1.	Terms of the Offering . The Subscriber (on its own behalf and, if applicable, on behalf of each person on whose behalf the Subscriber is contracting) acknowledges that:

(a)

this subscription is subject to rejection or allotment by the Corporation in whole or in part at any time and in accordance with applicable Securities Laws (as defined herein);

(b)

the Common Shares subscribed for by it hereunder form part of a larger issuance and sale by the Corporation of up to 3,000,000 Units (or such other number of Units as may be determined by the Corporation) at a subscription price of US$2.50 per Unit, where each Unit is comprised of one Common Share and one Warrant (the “ Offering ”);

(c)

each Warrant entitles the holder to purchase one Common Share in the capital of the Corporation at an exercise price of US$3.50 for a period of 24 months following the closing of the Offering (the “ Expiry Date ”);

(d)

in connection with the sale of the Units, if permitted by applicable securities legislation, the Corporation may pay a commission or finder’s fee, which could consist of cash or securities or a combination thereof, to registered brokers or others;

(e)

the Offering is not subject to any minimum subscription level, and therefore, any funds invested under this Subscription Agreement are available to the Corporation and will be paid on the Closing Date to the Corporation, and need not be refunded to the Subscriber unless the Closing Date does not occur by such date as may be agreed to by the Corporation;

(f)

if the Closing Date or Closing Dates do not occur on or before such dates as the Corporation may determine, or in the event that the Corporation rejects the Subscription Agreement, the subscription proceeds will be promptly returned to the Subscriber, without interest or deduction;

(g)

the Corporation is a company incorporated under the laws of the State of Delaware, and because the operations and officers and directors are located outside of Canada, it may not be possible for you to effect service of process on them within Canada or to enforce against them, in Canada, judgements obtained in Canadian courts; further, it may not be possible to enforce judgments of Canadian courts against the Corporation in the United States.

2.	Definitions . In this Subscription Agreement, unless the context otherwise requires:

(a)

“ Accredited Investor Status Certificate ” means the Accredited Investor Status Certificate in the form attached hereto as Schedule A which is required to be completed by a Subscriber who is purchasing securities as an “accredited investor” pursuant to NI 45-106;

(b)

“ affiliate ”, “ distribution ” and “ insider ” have the respective meanings ascribed to them in the Securities Act (Alberta);

(c)

“ Closing ” means the completion of the issue and sale by the Corporation and the purchase by the Subscribers of the Common Shares pursuant to the subscription agreements, in the form of this Subscription Agreement or the subscription agreement for Flow-Through Shares, completed by Subscribers;

(d)

“ Closing Date ” or “ Closing Dates ” means such date or dates as the Corporation may determine;

(e)

“ Closing Time ” means 10:00 a.m. (Calgary time) on the Closing Date or such other time as the Corporation may determine;

Canada & Offshore

(f)

“ Designated Provinces ” means British Columbia, Alberta and Ontario and such other provinces that may be designated by the Corporation prior to the Closing Date;

(g)

“ founder ” means, in respect of the Corporation, a person who:

(i)

acting alone, in conjunction, or in concert with one or more persons, directly or indirectly, takes the initiative in founding, organizing or substantially reorganizing the business of the Corporation; and

(ii)

at the time of the trade is actively involved in the business of the Corporation;

(h)

“ material ” means material in relation to the Corporation and its subsidiaries considered on a consolidated basis;

(i)

“ Offering ” has the meaning given thereto in section 1;

(j)

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

(k)

“ 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 personal or other legal representative;

(l)

“ Securities ” means the Common Shares, the Warrants and the Common Shares to be issued on the exercise of the Warrants;

(m)

“ Securities Commissions ” means, collectively, the securities commission or other securities regulatory authority in each of the Designated Provinces;

(n)

“ Securities Laws ” means collectively, the applicable securities laws of each of the Designated Provinces and the respective instruments, regulations and rules made and forms prescribed thereunder together with all applicable published policy statements, blanket orders, rulings and notices of the Securities Commissions;

(o)

“ 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;

(ii)

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

(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);

(p)

“ Subscribers ” means all subscribers for the Shares pursuant to the Offering, including the Subscriber; and

Canada & Offshore

(q)

“ U.S. Securities Act ” means the United States Securities Act of 1933.

Delivery and Payment . The Subscriber agrees that the following documents shall be delivered to Kodiak Energy, Inc., Suite 460, 734 - 7th Ave. SW, Calgary, AB T2P 3P8 Attention: William Tighe, not later than 5:00 p.m. (Calgary time) on the day that is 2 business days prior to the Closing Date or such other date or place as the Corporation may advise:

(a)

a completed and duly signed copy of this Subscription Agreement;

(b)

if the Subscriber is purchasing Common Shares as an “accredited investor” (as such term is defined in NI 45-106), a completed and duly signed copy of the NI 45-106 Accredited Investor Status Certificate attached hereto as Schedule A;

(c)

if the Subscriber is purchasing Common Shares as a close friend or business associate pursuant to section 5(g)(ii), a completed and duly signed copy of the close personal friend/close business associate questionnaire attached hereto as Schedule B;

(d)

if the Subscriber is a corporation, a completed and duly signed copy of Form 4C, Corporate Placee Registration Form attached hereto as Schedule C;

(e)

any other documents required by applicable Securities Laws which the Corporation requests; and

(f)

a certified cheque or bank draft made payable in same day freely transferable Canadian funds at par in Calgary, Alberta to “Kodiak Energy, Inc.” representing the Aggregate Subscription Price payable by the Subscriber for the Units, or such other method of payment as the Corporation may accept.

The Subscriber acknowledges and agrees that documents referred to in this section, 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. The Subscriber consents to the filing of such documents as may be required to be filed with the applicable securities regulatory authorities in connection with the transactions contemplated hereby. The Subscriber acknowledges and agrees that this subscription, the Subscription Price and any other documents delivered in connection herewith will be held by the [corporation] until Closing.

4.	Closing . The transactions contemplated hereby will be completed at the Closing Time in Calgary at the location determined by the Corporation.

Authorization. The Subscriber hereby irrevocably authorizes the Corporation, in its sole discretion: (a) to act as its representative at the closing and to execute in its name and on its behalf all closing receipts and documents required; (b) to complete or correct any errors or omissions in any form or document provided by the Subscriber; and (c) to receive on its behalf certificates representing the Common Shares and Warrants purchased under this Subscription Agreement or to arrange for their delivery.

Subscriber’s Representations, Warranties, Covenants & Acknowledgments . The Subscriber (on its own behalf and, if applicable, on behalf of each person on whose behalf the Subscriber is contracting) represents, warrants, covenants and acknowledges to the Corporation (and acknowledges that the Corporation and respective counsel are relying thereon), that both at the date hereof and at the Closing Time:

Canada & Offshore

(a)

Authorization and Effectiveness . If the Subscriber is an individual, it is of the full age of majority and has all requisite legal capacity and competence to execute and deliver this Subscription Agreement and to observe and perform its covenants and obligations hereunder, or if the Subscriber is a corporation, the Subscriber is a valid and subsisting corporation, has the necessary corporate capacity and authority to execute and deliver this Subscription Agreement and to observe and perform its covenants and obligations hereunder and has taken all necessary corporate action in respect thereof or, if the Subscriber is a partnership, syndicate or other form of unincorporated organization, the Subscriber has the necessary legal capacity and authority to execute and deliver this Subscription Agreement and to observe and perform its covenants and obligations hereunder and has obtained all necessary approvals in respect thereof, and, if the Subscriber is subscribing for Common Shares hereunder as agent for a 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, in any case, upon acceptance by the Corporation, this Subscription Agreement has been duly and validly authorized, executed and delivered by the Subscriber and constitutes a legal, valid and binding contract of the Subscriber (and any beneficial purchaser whom the Subscriber is subscribing on behalf of) enforceable against the Subscriber (and any beneficial purchaser whom the Subscriber is subscribing on behalf of) in accordance with its terms and will not result in a violation of any of the Subscriber’s applicable constating documents, any of the terms or provisions of any law applicable to the Subscriber or any agreement to which the Subscriber is a party or by which it is bound;

(b)

Residence; Citizenship . The Subscriber is a resident of the jurisdiction referred to under “Subscriber’s Particulars” on page 1 hereof, which will not be in the United States. The Subscriber is not a citizen of the United States;

(c)

No Offering Memorandum . The Subscriber has not received, nor has it requested, nor does it have any need to receive, any offering memorandum, or any other document (other than financial statements, interim financial statements or any other 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 subscribers in order to assist it in making an investment decision in connection with this Offering and it has not become aware of any advertisement in printed media of general and regular paid circulation (or other printed public media) or on radio, television or telecommunications or other form of advertisement (including electronic display such as the Internet) with respect to the distribution of the Common Shares;

(d)

Purchasing as Principal . Except as provided in subsection 5(f) hereof, the Subscriber is purchasing the Units as principal (as defined in all applicable Securities Laws) for its own account, and not for the benefit of any other person;

(e)

Purchasing for Investment Only. Except as provided in subsection 5(f) hereof, the Subscriber is purchasing the Subscriber’s Units for investment only and not with a view to resale or distribution. The Subscriber is aware that no prospectus has been filed with any of the Securities Commissions or similar regulatory authority in connection with the sale of the Units, and it is purchasing the Units pursuant to an exemption from the prospectus requirement or similar requirement under applicable Securities Laws and, as a consequence: (i) it is restricted from using most of the civil remedies available under Securities Laws; (ii) it may not receive information that would otherwise be required to be provided to it under Securities Laws; and (iii) the Corporation is relieved of certain obligations that would otherwise apply under Securities Laws;

(f)

Purchasing as Agent or Trustee . In the case of the purchase hereunder by the Subscriber of Units as agent or trustee for any principal whose identity is disclosed or undisclosed or identified by account number only, each beneficial purchaser of the Units hereunder is purchasing the Units as principal for its own account, and not for the benefit of any other person, for investment only and not with a view to resale or distribution, is a resident and citizen of the jurisdiction as set out under “Subscriber’s Particulars” on page 1 hereof, and the Subscriber has due and proper authority to act as agent or trustee for and on behalf of such beneficial purchaser in connection with the transactions contemplated hereby, 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 beneficial purchaser, and:

Canada & Offshore

(i)

it is an “accredited investor” as defined in paragraph (p) or (q) of the definition of “accredited investor” in NI 45-106 provided, however that it is not a trust company or trust corporation registered under the laws of Prince Edward Island that is not registered under the Trust and Loan Companies Act (Canada) or under comparable legislation in another jurisdiction of Canada and has concurrently executed and delivered the Accredited Investor Status Certificate in the form attached hereto as Schedule A and has initialled indicating that the Subscriber satisfies the category of “accredited investor” set forth in paragraph (p) or (q) thereof; or

(ii)

the Subscriber is acting as agent for one or more disclosed principals, each of which principal is purchasing as a principal for its own account, not for the benefit of any other person, and not with a view to the resale or distribution of all or any of the Common Shares, and each of which principals complies with subsection 5(g) below;

(g)

Subscriber Has Benefit of Statutory Exemptions . Unless the Subscriber complies with the provisions of subsection 5(f) hereof, the Subscriber fully complies with one of the criteria set forth below:

[MARK BELOW THE CATEGORY WHICH DESCRIBES YOU]

(i)

it is a resident of a Designated Province and is an “accredited investor” as such term is defined in NI 45-106 and specifically represents and warrants that one or more of the categories set forth in the Accredited Investor Status Certificate correctly, and in all respects, describes the Subscriber and the Subscriber has so indicated by marking the box next to the category which so describes it and executing and delivering a copy of the Accredited Investor Status Certificate attached hereto as Schedule A with this Subscription Agreement and if the Subscriber is purchasing Common Shares as an “accredited investor” as defined in paragraph (m) of the definition of “accredited investor” in NI 45-106 it is not a person created or used solely to purchase or hold securities as an “accredited investor”; or

(ii)

it is a resident of British Columbia or Alberta and in the case of subclauses D, E and F, and if applicable H or I, it has completed and duly executed Schedule B, and it is:

[CIRCLE THE APPROPRIATE SUBCLAUSE A - I]

a “director”, “executive officer” or “control person” (as such terms are defined in NI 45-106 and reproduced in Schedule A to this Subscription Agreement) of the Corporation or of an affiliate of the Corporation; or

a spouse, parent, grandparent, brother, sister or child of any person referred to in subclause A above; or

a parent, grandparent, brother, sister or child of the spouse of any person referred to in subclause A above; or

a “close personal friend” (within the meaning thereof as set out in Companion Policy 45-106CP to NI 45-106) of any person referred to in subclause A above and; or

a “close business associate” (within the meaning thereof as set out in Companion Policy 45-106CP to NI 45-106) of any person referred to in subclause A above; or

Canada & Offshore

a “founder” (as such term is defined in NI 45-106 and reproduced in Schedule A to this Subscription Agreement) of the Corporation or a spouse, parent, grandparent, brother, sister, child, close personal friend or close business associate of a founder of the Corporation; or

a parent, grandparent, brother, sister or child of the spouse of a founder of the Corporation; or

a person or company of which a majority of the voting securities are beneficially owned by, or a majority of the directors are, persons referred to in subclauses A to G above; or

a trust or estate of which all of the beneficiaries or a majority of the trustees are persons described in subclauses A to G above; or

( Note: for the purposes of subparagraphs (D) and (F) above, a person is not a” close personal friend” solely because the individual is a relative or a member of the same organization, association or religious group or because the individual is a client, customer or former client or customer, nor is an individual a close personal friend as a result of being a close personal friend of a close personal friend of one of the listed individuals above, rather the relationship must be direct. A close personal friend is one who knows the director, executive officer, founder or control person well enough and has known them for a sufficient period of time to be in a position to assess their capabilities and trustworthiness. Further, for the purposes of subparagraphs (E) and (F) above, a person is not a "close business associate" if the person is a casual business associate or a person introduced or solicited for purposes of purchasing securities nor is the individual a close business associate solely because the individual is a client, customer, former client or customer, nor is the individual a close business associate if they are a close business associate of a close business associate of one of the listed individuals above, rather the relationship must be direct. A close business associate is an individual who had sufficient prior dealings with the director, executive officer, founder or control person to be in a position to assess their capabilities and trustworthiness.)

(iii) o

it is a resident of Ontario and it has purchased the Common Shares as principal and it is:

[CIRCLE THE APPROPRIATE SUBCLAUSE A - D]

a founder of the Corporation;

an affiliate of a founder of the Corporation;

a spouse, parent, brother, sister, grandparent or child of an executive officer, director or founder of the Corporation; or

a person that is a control person of the Corporation; or

(iv) o

it is purchasing the Common Shares as principal and is purchasing a sufficient number of Common Shares such that the aggregate acquisition cost to the Subscriber is not less than $150,000, paid in cash at the time of the trade; provided however that the Subscriber has not been created or used solely to purchase or hold securities in reliance on this exemption; or

(v) o

it is an “employee”, “executive officer”, “director” or “consultant” (as such terms (other than employee) are defined in NI 45-106 and reproduced in Appendix A to this Subscription Agreement) of the Corporation or a related entity of the Corporation or a permitted assign (as defined in Ni 45-106) of such person and its participation in the trade is voluntary, meaning it is not induced to participate in the trade by expectation of employment or continued employment with the Corporation or a related entity of the Corporation; or

Canada & Offshore

(vi) o

it is a resident of a jurisdiction referred to in the preceding paragraphs but it is not purchasing thereunder, and instead is purchasing pursuant to a statutory exemption or an exemption order permitting such purchase, which exemption or order has the effect of eliminating any requirement for a prospectus or similar disclosure document in respect of the purchase of Common Shares by the Subscriber, the details of which are disclosed to the Corporation to its satisfaction;

(h)

Residents of Other Jurisdictions . If the Subscriber is a resident of any jurisdiction not referred to in subsection 5(g) it complies with all requirements under applicable securities legislation and shall deliver to the Corporation such particulars of the exemption(s) and the Subscriber’s qualifications thereunder as the Corporation may reasonably request:

(i)

No Undisclosed Information . The Subscriber’s Units are not being purchased by the Subscriber as a result of any material information concerning the Corporation that has not been publicly disclosed and the Subscriber’s decision to enter into this Subscription Agreement and acquire the Subscriber’s Units has not been made as a result of any oral or written representation as to fact or otherwise made by or on behalf of the Corporation or any other person and is based entirely upon currently available public information concerning the Corporation;

(j)

Investment Suitability . The Subscriber and any beneficial purchaser referred to in subsection 5(f) hereof has such knowledge and experience in financial and business affairs as to be capable of evaluating the merits and risks of the investment hereunder in the Units and is able to bear the economic risk of loss of such investment;

(k)

Aggregate Subscription Funds . The Subscriber represents and warrants that the funds representing the Aggregate 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 “ PCMLTFA ”) 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 PCMLTFA. To the best of its knowledge: (a) none of the subscription funds to be provided by the Subscriber (i) have been or will be derived from or related to any activity that is deemed criminal under the laws of Canada, the United States of America, or any other jurisdiction or (ii) are being tendered on behalf of a person or entity who has not been identified to the Subscriber; and (b) it shall promptly notify the Corporation if the Subscriber discovers that any of such representations ceases to be true and provide the Corporation with appropriate information in connection therewith; and

(l)

Further Acknowledgments . The Subscriber acknowledges that:

(i)

no securities commission or similar regulatory authority has reviewed or passed on the merits of the Units;

(ii)

there is no government or other insurance covering the Units;

(iii)

there are risks associated with the purchase of the Units;

(iv)

there are restrictions on the Subscriber’s (and if app

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