REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights Agreement (this "Agreement") is made and entered into
as of August 18, 2005, by and among Eden Energy Corp., a Nevada corporation (the
"Company"), and the purchasers listed on Schedule I hereto (the "Purchasers").

 

This Agreement is being entered into pursuant to the Note and Warrant Purchase
Agreement dated as of the date hereof among the Company and the Purchasers (the
"Purchase Agreement").

 

The Company and the Purchasers hereby agree as follows:

 

1.

Definitions.

 

Capitalized terms used and not otherwise defined herein shall have the meanings
given such terms in the Purchase Agreement. As used in this Agreement, the
following terms shall have the following meanings:

 

"Advice" shall have meaning set forth in Section 3(m).

 

"Affiliate" means, with respect to any Person, any other Person that directly or
indirectly controls or is controlled by or under common control with such
Person. For the purposes of this definition, "control," when used with respect
to any Person, means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise; and the
terms of "affiliated," "controlling" and "controlled" have meanings correlative
to the foregoing.

 

"Board" shall have meaning set forth in Section 3(n).

 

"Business Day" means any day except Saturday, Sunday and any day which shall be
a legal holiday or a day on which banking institutions in the state of New York
generally are authorized or required by law or other government actions to
close.

 

"Closing Date" means the date of the closing of the purchase and sale of the
Notes pursuant to the Purchase Agreement.

 

"Commission" means the Securities and Exchange Commission.

 

"Common Stock" means the Company's Common Stock, par value $0.001 per share.

 

"Effectiveness Date" means with respect to the Registration Statement the
earlier of the ninetieth (90) day following the Closing Date or the date which
is within three (3) Business Days of the date on which the Commission informs
the Company that the Commission (i) will not review the Registration Statement
or (ii) that the Company may request the acceleration of the effectiveness of
the Registration Statement and the Company makes such request.

 

 

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"Effectiveness Period" shall have the meaning set forth in Section 2.

 

"Event" shall have the meaning set forth in Section 7(d).

 

"Event Date" shall have the meaning set forth in Section 7(d).

 

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

 

"Filing Date" means the thirtieth (30th) day following the Closing Date.

 

"Holder" or "Holders" means the holder or holders, as the case may be, from time
to time of Registrable Securities.

 

"Indemnified Party" shall have the meaning set forth in Section 5(c).

 

"Indemnifying Party" shall have the meaning set forth in Section 5(c).

 

"Losses" shall have the meaning set forth in Section 5(a).

 

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

 

"Proceeding" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.

 

"Prospectus" means the prospectus included in the Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by the
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference in such Prospectus.

 

"Registrable Securities" means (i) the shares of Common Stock issuable upon
conversion of the Notes and the Option Notes issued to the Purchasers pursuant
to the Purchase Agreement and (ii) the shares of Common Stock issuable upon
exercise of the Warrants and the Additional Warrants.

 

"Registration Statement" means the registration statements and any additional
registration statements contemplated by Section 2, including (in each case) the
Prospectus, amendments and supplements to such registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference in such registration statement.

 

 

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"Rule 144" means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

 

"Rule 158" means Rule 158 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

 

"Rule 415" means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

 

"Rule 424" means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

 

"Securities Act" means the Securities Act of 1933, as amended.

 

"Special Counsel" means Kramer Levin Naftalis & Frankel LLP, for which the
Holders will be reimbursed by the Company pursuant to Section 4.

 

"Warrants" means the warrants to purchase shares of Common Stock issued to the
Purchasers pursuant to the Purchase Agreement.

 

2.

Resale Registration.

 

On or prior to the Filing Date the Company shall prepare and file with the
Commission a "resale" Registration Statement providing for the resale of all
Registrable Securities for an offering to be made on a continuous basis pursuant
to Rule 415. The Registration Statement shall be on Form SB-2 (except if the
Company is not then eligible to register for resale the Registrable Securities
on Form SB-2, in which case such registration shall be on another appropriate
form in accordance with the Securities Act and the rules promulgated
thereunder). The Company shall (i) not permit any securities other than the
Registrable Securities and the securities to be listed on Schedule II hereto to
be included in the Registration Statement and (ii) use its reasonable best
efforts to cause the Registration Statement to be declared effective under the
Securities Act as promptly as possible after the filing thereof, but in any
event prior to the Effectiveness Date, and to keep such Registration Statement
continuously effective under the Securities Act until such date as is the
earlier of (x) the date when all Registrable Securities covered by such
Registration Statement have been sold or (y) the date on which the Registrable
Securities may be sold without any restriction pursuant to Rule 144(k) as
determined by the counsel to the Company pursuant to a written opinion letter,
addressed to the Company's transfer agent to such effect (the "Effectiveness
Period").

 

3.

Registration Procedures.

 

In connection with the Company's registration obligations hereunder, the Company
shall:

 

 

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(a)        Prepare and file with the Commission on or prior to the Filing Date,
a Registration Statement on Form SB-2 (or if the Company is not then eligible to
register for resale the Registrable Securities on Form SB-2 such registration
shall be on another appropriate form in accordance with the Securities Act and
the rules promulgated thereunder) in accordance with the method or methods of
distribution thereof as specified by the Holders (except if otherwise directed
by the Holders), and use its reasonable best efforts to cause the Registration
Statement to become effective and remain effective as provided herein; provided,
however, that not less than five (5) Business Days prior to the filing of the
Registration Statement or any related Prospectus or any amendment or supplement
thereto (including any document that would be incorporated therein by
reference), the Company shall (i) furnish to the Holders care of the Special
Counsel, copies of all such documents proposed to be filed, which documents
(other than those incorporated by reference) will be subject to the review of
such Holders and such Special Counsel, and (ii) cause its officers and
directors, counsel and independent certified public accountants to respond to
such inquiries as shall be necessary, in the reasonable opinion of Special
Counsel, to conduct a reasonable investigation within the meaning of the
Securities Act. Unless otherwise advised by outside counsel to the Company, the
Company shall not file the Registration Statement or any such Prospectus or any
amendments or supplements thereto to which the Holders of a majority of the
Registrable Securities or any Special Counsel shall reasonably object in writing
within three (3) Business Days of their receipt thereof.

 

(b)        (i) Prepare and file with the Commission such amendments, including
post-effective amendments, to the Registration Statement as may be necessary to
keep the Registration Statement continuously effective as to the applicable
Registrable Securities for the Effectiveness Period and prepare and file with
the Commission such additional Registration Statements as necessary in order to
register for resale under the Securities Act all of the Registrable Securities;
(ii) cause the related Prospectus to be amended or supplemented by any required
Prospectus supplement, and as so supplemented or amended to be filed pursuant to
Rule 424 (or any similar provisions then in force) promulgated under the
Securities Act; (iii) respond as promptly as possible, but in no event later
than ten (10) Business Days, to any comments received from the Commission with
respect to the Registration Statement or any amendment thereto and as promptly
as possible provide the Holders care of the Special Counsel true and complete
copies of all correspondence from and to the Commission relating to the
Registration Statement; and (iv) comply in all material respects with the
provisions of the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Securities covered by the Registration Statement
during the applicable period in accordance with the intended methods of
disposition by the Holders thereof set forth in the Registration Statement as so
amended or in such Prospectus as so supplemented. The Company and the Purchasers
agree that the Holders will suffer damages if the Company fails to comply with
the provisions of subclause (iii) of this Section 3(b). The Company and the
Holders further agree that it would not be feasible to ascertain the extent of
such damages with precision. Accordingly, if the Company fails to comply with
the time restrictions set forth in subclause (iii) of this Section 3(b), of the
Company shall pay an amount in cash as liquidated damages to each Holder equal
to .025% for each day after the expiration of such ten (10) Business Day period
of the Holder’s initial investment in the Notes and/or Option Notes pursuant to
the Purchase Agreement, until the event referred to in subclause (iii) of this
Section 3(b) is cured. No such liquidated damages shall be payable if,
notwithstanding the Company’s compliance with the restrictions set forth in
subclause (iii) of this Section 3(b), the Registration Statement does not become
effective by the Effectiveness Date.

 

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(c)        Notify the Holders of Registrable Securities to be sold and any
Special Counsel as promptly as possible (and, in the case of (i)(A) below, not
less than five (5) days prior to such filing) and (if requested by any such
Person) confirm such notice in writing no later than one (1) Business Day
following the day (i)(A) when a Prospectus or any Prospectus supplement or
post-effective amendment to the Registration Statement is filed; (B) when the
Commission notifies the Company whether there will be a "review" of such
Registration Statement and whenever the Commission comments in writing on such
Registration Statement and (C) with respect to the Registration Statement or any
post-effective amendment, when the same has become effective; (ii) of any
request by the Commission or any other Federal or state governmental authority
for amendments or supplements to the Registration Statement or Prospectus or for
additional information; (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement covering any or
all of the Registrable Securities or the initiation of any Proceedings for that
purpose; (iv) if at any time any of the representations and warranties of the
Company contained in any agreement contemplated hereby ceases to be true and
correct in all material respects; (v) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (vi) of the occurrence of any event that makes any statement made
in the Registration Statement or Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires any revisions to the Registration Statement, Prospectus or other
documents so that, in the case of the Registration Statement or the Prospectus,
as the case may be, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.

 

(d)        Use its reasonable best efforts to avoid the issuance of, or, if
issued, obtain the withdrawal of, (i) any order suspending the effectiveness of
the Registration Statement or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, at the earliest practicable moment.

 

(e)        If requested by the Holders of a majority in interest of the
Registrable Securities, (i) promptly incorporate in a Prospectus supplement or
post-effective amendment to the Registration Statement such information as the
Company reasonably agrees should be included therein and (ii) make all required
filings of such Prospectus supplement or such post-effective amendment as soon
as practicable after the Company has received notification of the matters to be
incorporated in such Prospectus supplement or post-effective amendment.

 

(f)         Furnish to each Holder and any Special Counsel, without charge, at
least one conformed copy of each Registration Statement and each amendment
thereto, including financial statements and schedules, all documents
incorporated or deemed to be incorporated therein by reference, and all exhibits
to the extent requested by such Person (including those previously furnished or
incorporated by reference) promptly after the filing of such documents with the
Commission.

 

(g)        Promptly deliver to each Holder and any Special Counsel, without
charge, as many copies of the Prospectus or Prospectuses (including each form of
prospectus) and each

 

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amendment or supplement thereto as such Persons may reasonably request; and the
Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Holders in connection with the
offering and sale of the Registrable Securities covered by such Prospectus and
any amendment or supplement thereto.

 

(h)        Prior to any public offering of Registrable Securities, use its
reasonable best efforts to register or qualify or cooperate with the selling
Holders and any Special Counsel in connection with the registration or
qualification (or exemption from such registration or qualification) of such
Registrable Securities for offer and sale under the securities or Blue Sky laws
of such jurisdictions within the United States as any Holder requests in
writing, to keep each such registration or qualification (or exemption
therefrom) effective during the Effectiveness Period and to use commercially
reasonable efforts to enable the disposition in such jurisdictions of the
Registrable Securities covered by a Registration Statement; provided, however,
that the Company shall not be required to qualify generally to do business in
any jurisdiction where it is not then so qualified or to take any action that
would subject it to general service of process in any such jurisdiction where it
is not then so subject or subject the Company to any material tax in any such
jurisdiction where it is not then so subject.

 

(i)         Cooperate with the Holders to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold pursuant
to a Registration Statement, which certificates shall be free of all restrictive
legends (provided that the issuance of such unlegended certificates is in
compliance with applicable securities laws), and to enable such Registrable
Securities to be in such denominations and registered in such names as any
Holder may request in writing at least two (2) Business Days prior to any sale
of Registrable Securities.

 

(j)         Upon the occurrence of any event contemplated by Section 3(c)(vi),
as promptly as possible, prepare a supplement or amendment, including a
post-effective amendment, to the Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered, neither the Registration Statement nor such Prospectus
will contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.

 

(k)        Use its reasonable best efforts to cause all Registrable Securities
relating to the Registration Statement to be listed on the OTC Bulletin Board or
any other securities exchange, quotation system or market, if any, on which
similar securities issued by the Company are then listed or traded as and when
required pursuant to the Purchase Agreement.

 

(l)         Comply in all material respects with all applicable rules and
regulations of the Commission and make generally available to its security
holders earning statements satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 not later than 45 days after the end of any 12-month
period (or 90 days after the end of any 12-month period if such period is a
fiscal year) or such extended period as is permitted under the Securities Act
commencing on the first day of the first fiscal quarter of the Company after the
effective date of the Registration Statement, which statement shall conform to
the requirements of Rule 158.

 

 

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(m)       The Company may require each selling Holder to furnish to the Company
information regarding such Holder and the distribution of such Registrable
Securities as is required by law to be disclosed in the Registration Statement,
and the Company may exclude from such registration the Registrable Securities of
any such Holder who unreasonably fails to furnish such information within a
reasonable time after receiving such request.

 

If the Registration Statement refers to any Holder by name or otherwise as the
holder of any securities of the Company, then such Holder shall have the right
to require (if such reference to such Holder by name or otherwise is not
required by the Securities Act or any similar federal statute then in force) the
deletion of the reference to such Holder in any amendment or supplement to the
Registration Statement filed or prepared subsequent to the time that such
reference ceases to be required.

 

Each Holder covenants and agrees that (i) it will not sell any Registrable
Securities under the Registration Statement until it has received copies of the
Prospectus as then amended or supplemented as contemplated in Section 3(g) and
notice from the Company that such Registration Statement and any post-effective
amendments thereto have become effective as contemplated by Section 3(c) and
(ii) it and its officers, directors or Affiliates, if any, will comply with the
prospectus delivery requirements of the Securities Act as applicable to them in
connection with sales of Registrable Securities pursuant to the Registration
Statement.

 

Each Holder agrees by its acquisition of such Registrable Securities that, upon
receipt of a notice from the Company of the occurrence of any event of the kind
described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v), 3(c)(vi) or 3(n),
such Holder will forthwith discontinue disposition of such Registrable
Securities under the Registration Statement until such Holder's receipt of the
copies of the supplemented Prospectus and/or amended Registration Statement
contemplated by Section 3(j), or until it is advised in writing (the "Advice")
by the Company that the use of the applicable Prospectus may be resumed, and, in
either case, has received copies of any additional or supplemental filings that
are incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement.

 

(n)        If (i) there is material non-public information regarding the Company
which the Company's Board of Directors (the "Board") reasonably determines not
to be in the Company's best interest to disclose and which the Company is not
otherwise required to disclose, or (ii) there is a significant business
opportunity (including, but not limited to, the acquisition or disposition of
assets (other than in the ordinary course of business) or any merger,
consolidation, tender offer or other similar transaction) available to the
Company which the Board reasonably determines not to be in the Company's best
interest to disclose, then the Company may (x) postpone or suspend filing of a
registration statement for a period not to exceed 30 consecutive days or (y)
postpone or suspend effectiveness of a registration statement for a period not
to exceed 20 consecutive days; provided that the Company may not postpone or
suspend effectiveness of a registration statement under this Section 3(n) for
more than 45 days in the aggregate during any 360 day period; provided, however,
that no such postponement or suspension shall be permitted for consecutive 20
day periods arising out of the same set of facts, circumstances or transactions.

 

4.

Registration Expenses.

 

 

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All fees and expenses incident to the performance of or compliance with this
Agreement by the Company, except as and to the extent specified in this Section
4, shall be borne by the Company whether or not the Registration Statement is
filed or becomes effective and whether or not any Registrable Securities are
sold pursuant to the Registration Statement. The fees and expenses referred to
in the foregoing sentence shall include, without limitation, (i) all
registration and filing fees (including, without limitation, fees and expenses
(A) with respect to filings required to be made with the and each other
securities exchange or market on which Registrable Securities are required
hereunder to be listed, (B) with respect to filing fees required to be paid to
the National Association of Securities Dealers, Inc. and the NASD Regulation,
Inc. and (C) in compliance with state securities or Blue Sky laws (including,
without limitation, fees and disbursements of counsel for the Holders in
connection with Blue Sky qualifications of the Registrable Securities and
determination of the eligibility of the Registrable Securities for investment
under the laws of such jurisdictions as the Holders of a majority of Registrable
Securities may designate)), (ii) printing expenses (including, without
limitation, expenses of printing certificates for Registrable Securities and of
printing prospectuses if the printing of prospectuses is requested by the
holders of a majority of the Registrable Securities included in the Registration
Statement), (iii) messenger, telephone and delivery expenses, (iv) fees and
disbursements of counsel for the Company and Special Counsel for the Holders, in
the case of the Special Counsel, up to a maximum amount of $5,000, (v)
Securities Act liability insurance, if the Company so desires such insurance,
and (vi) fees and expenses of all other Persons retained by the Company in
connection with the consummation of the transactions contemplated by this
Agreement, including, without limitation, the Company's independent public
accountants (including the expenses of any comfort letters or costs associated
with the delivery by independent public accountants of a comfort letter or
comfort letters). In addition, the Company shall be responsible for all of its
internal expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit, the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder.

 

5.

Indemnification.  

 

(a)        Indemnification by the Company. The Company shall, notwithstanding
any termination of this Agreement, indemnify and hold harmless each Holder, the
officers, directors, agents, brokers (including brokers who offer and sell
Registrable Securities as principal as a result of a pledge or any failure to
perform under a margin call of Common Stock), investment advisors and employees
of each of them, each Person who controls any such Holder (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) and the
officers, directors, agents and employees of each such controlling Person, to
the fullest extent permitted by applicable law, from and against any and all
losses, claims, damages, liabilities, costs (including, without limitation,
costs of preparation and attorneys' fees) and expenses (collectively, "Losses"),
as incurred, arising out of or relating to any untrue or alleged untrue
statement of a material fact contained in the Registration Statement, any
Prospectus or any form of prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or form
of prospectus or supplement thereto, in the light of the circumstances under
which they were made) not misleading, except to the extent, but only to the
extent, that (i) such untrue statements

 

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or omissions are based solely upon information regarding such Holder or such
other Indemnified Party furnished in writing to the Company by or on behalf of
such Holder expressly for use therein and (ii) that the foregoing indemnity
agreement is subject to the condition that, insofar as it relates to any untrue
statement, allegedly untrue statement, omission or alleged omission made in any
preliminary prospectus but eliminated or remedied in the final prospectus (filed
pursuant to Rule 424 of the Securities Act), such indemnity agreement shall not
inure to the benefit of any Holder, underwriter, broker or other Person acting
on behalf of holders of the Registrable Securities, from whom the Person
asserting any loss, claim, damage, liability or expense purchased the
Registrable Securities which are the subject thereof, if a copy of such final
prospectus had been made available to such Person and such Holder, underwriter,
broker or other Person acting on behalf of holders of the Registrable Securities
and such final prospectus was not delivered to such Person with or prior to the
written confirmation of the sale of such Registrable Securities to such Person.
The Company shall notify the Holders promptly of the claim, threat or assertion
of any Proceeding of which the Company is aware in connection with the
transactions contemplated by this Agreement.

 

(b)        Indemnification by Holders. Each Holder shall, severally and not
jointly, indemnify and hold harmless the Company, its directors, officers,
agents and employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents and employees of such controlling Persons, to the
fullest extent permitted by applicable law, from and against all Losses (as
determined by a court of competent jurisdiction in a final judgment not subject
to appeal or review), as incurred, arising solely out of or based solely upon
any untrue statement of a material fact contained in the Registration Statement,
any Prospectus, or any form of prospectus, or arising solely out of or based
solely upon any omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or form
of prospectus or supplement thereto, in the light of the circumstances under
which they were made) not misleading, to the extent, but only to the extent,
that such untrue statement or omission is contained in any information so
furnished in writing by such Holder or other Indemnifying Party to the Company
specifically for inclusion in the Registration Statement or such Prospectus.
Notwithstanding anything to the contrary contained herein, the Holders shall be
liable under this Section 5(b) for only that amount as does not exceed the
lesser of (i) the dollar amount of the net proceeds received by such Holder upon
the sale of the Registrable Securities giving rise to such indemnification
obligation and (ii) the aggregate purchase price paid by the Holder for the
Shsares pursuant to the Purchase Agreement.

 

(c)        Conduct of Indemnification Proceedings. If any Proceeding shall be
brought or asserted against any Person entitled to indemnity hereunder (an
"Indemnified Party"), such Indemnified Party promptly shall notify the Person
from whom indemnity is sought (the "Indemnifying Party) in writing, and the
Indemnifying Party shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to the Indemnified Party and the payment of all
fees and expenses incurred in connection with defense thereof; provided, that
the failure of any Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to this Agreement,
except (and only) to the extent that it shall be finally determined by a court
of competent jurisdiction (which determination is not subject to appeal or
further review) that such failure shall have proximately and materially
adversely prejudiced the Indemnifying Party.

 

 

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An Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
expenses; or (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified Party
and the Indemnifying Party, and such Indemnified Party shall have been advised
by counsel (which shall be reasonably acceptable to the Indemnifying Party) that
a conflict of interest is likely to exist if the same counsel were to represent
such Indemnified Party and the Indemnifying Party (in which case, if such
Indemnified Party notifies the Indemnifying Party in writing that it elects to
employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense thereof and
such counsel shall be at the expense of the Indemnifying Party). The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected without its written consent, which consent shall not be unreasonably
withheld or delayed. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any pending
Proceeding in respect of which any Indemnified Party is a party, unless such
settlement includes an unconditional release of such Indemnified Party from all
liability on claims that are the subject matter of such Proceeding.

 

All fees and expenses of the Indemnified Party (including reasonable fees and
expenses to the extent incurred in connection with investigating or preparing to
defend such Proceeding in a manner not inconsistent with this Section) shall be
paid to the Indemnified Party, as incurred, within ten (10) Business Days of
written notice thereof to the Indemnifying Party (regardless of whether it is
ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder; provided, that the Indemnifying Party may require
such Indemnified Party to undertake to reimburse all such fees and expenses to
the extent it is finally judicially determined that such Indemnified Party is
not entitled to indemnification hereunder).  

 

(d)        Contribution. If a claim for indemnification under Section 5(a) or
5(b) is unavailable to an Indemnified Party because of a failure or refusal of a
governmental authority to enforce such indemnification in accordance with its
terms (by reason of public policy or otherwise), then each Indemnifying Party,
in lieu of indemnifying such Indemnified Party, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such Losses, in such
proportion as is appropriate to reflect the relative benefits received by the
Indemnifying Party on the one hand and the Indemnified Party on the other from
the offering of the Notes and Warrants. If, but only if, the allocation provided
by the foregoing sentence is not permitted by applicable law, the allocation of
contribution shall be made in such proportion as is appropriate to reflect not
only the relative benefits referred to in the foregoing sentence but also the
relative fault, as applicable, of the Indemnifying Party and Indemnified Party
in connection with the actions, statements or omissions that resulted in such
Losses as well as any other relevant equitable considerations. The relative
fault of such Indemnifying Party and Indemnified Party shall be determined by
reference to, among other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to

 

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the limitations set forth in Section 5(c), any reasonable attorneys' or other
reasonable fees or expenses incurred by such party in connection with (i) any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this Section was available to
such party in accordance with its terms or (ii) enforcing any rights under this
Section 5. In no event shall any selling Holder be required to contribute an
amount under this Section 5(d) in excess of the net proceeds received by such
Holder upon sale of such Holder’s Registrable Securities pursuant to the
Registration Statement giving rise to such contribution obligation.

 

The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.

 

The indemnity and contribution agreements contained in this Section are in
addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties. Notwithstanding anything to the contrary contained herein,
the Holders shall be liable under this Section 5(d) for only that amount as does
not exceed the net proceeds to such Holder as a result of the sale of
Registrable Securities pursuant to such Registration Statement.

 

6.

Rule 144.

 

As long as any Holder owns any Registrable Securities, Notes, Option Notes,
Warrants or Additional Warrants, the Company covenants to timely file (or obtain
extensions in respect thereof and file within the applicable grace period) all
reports required to be filed by the Company after the date hereof pursuant to
Section 13(a) or 15(d) of the Exchange Act and to promptly furnish the Holders
with true and complete copies of all such filings. As long as any Holder owns
any Registrable Securities, Notes, Option Notes, Warrants or Additional
Warrants, if the Company is not required to file reports pursuant to Section
13(a) or 15(d) of the Exchange Act, it will prepare and furnish to the Holders
and make publicly available in accordance with Rule 144(c) promulgated under the
Securities Act annual and quarterly financial statements, together with a
discussion and analysis of such financial statements in form and substance
substantially similar to those that would otherwise be required to be included
in reports required by Section 13(a) or 15(d) of the Exchange Act, as well as
any other information required thereby, in the time period that such filings
would have been required to have been made under the Exchange Act. The Company
further covenants that it will take such further action as any Holder may
reasonably request in writing, all to the extent required from time to time to
enable such Person to sell the Registrable Securities without registration under
the Securities Act within the limitation of the exemptions provided by Rule 144
promulgated under the Securities Act, including providing any legal opinions
relating to such sale pursuant to Rule 144.

 

7.

Miscellaneous.

 

(a)        Remedies. In the event of a breach by the Company or by a Holder, of
any of their obligations under this Agreement, each Holder or the Company, as
the case may be, in addition to being entitled to exercise all rights granted by
law and under this Agreement,

 

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including recovery of damages, will be entitled to specific performance of its
rights under this Agreement. The Company and each Holder agree that monetary
damages would not provide adequate compensation for any losses incurred by
reason of a breach by it of any of the provisions of this Agreement and hereby
further agrees that, in the event of any action for specific performance in
respect of such breach, it shall waive the defense that a remedy at law would be
adequate.

 

(b)        No Inconsistent Agreements. Neither the Company nor any of its
subsidiaries has, as of the date hereof entered into and currently in effect,
nor shall the Company or any of its subsidiaries, on or after the date of this
Agreement, enter into any agreement with respect to its securities that is
inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. Except as disclosed in Schedule
2.1(c) of the Purchase Agreement, neither the Company nor any of its
subsidiaries has previously entered into any agreement currently in effect
granting any registration rights with respect to any of its securities to any
Person. Without limiting the generality of the foregoing, without the written
consent of the Holders of a majority of the then outstanding Registrable
Securities, the Company shall not grant to any Person the right to request the
Company to register any securities of the Company, under the Securities Act
unless the rights so granted are subject in all respects to the prior rights in
full of the Holders set forth herein, and are not otherwise in conflict with the
provisions of this Agreement.

 

(c)        No Piggyback on Registrations. Neither the Company nor any of its
security holders (other than the Holders in such capacity pursuant hereto or as
disclosed on Schedule 2.1(c) of the Purchase Agreement or Schedule II hereto)
may include securities of the Company in the Registration Statement, and the
Company shall not after the date hereof enter into any agreement providing such
right to any of its securityholders, unless the right so granted is subject in
all respects to the prior rights in full of the Holders set forth herein, and is
not otherwise in conflict with the provisions of this Agreement.

 

(d)        Failure to File Registration Statement. The Company and the
Purchasers agree that the Holders will suffer damages if the Registration
Statement is not filed on or prior to the Filing Date. The Company and the
Holders further agree that it would not be feasible to ascertain the extent of
such damages with precision. Accordingly, if the Registration Statement is not
filed on or prior to the Filing Date (any such failure or breach being referred
to as an “Event,” and the date on which such Event occurs, being referred to as
“Event Date”), the Company shall pay an amount as liquidated damages to each
Holder, payable in cash equal to .025% for each day of the Holder’s initial
investment in the Notes and/or Option Notes from the Event Date until the Event
is cured.

 

(e)        Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the same shall be in writing and signed by the Company and the
Holders of a majority of the Registrable Securities outstanding.

 

(f)         Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earlier of (i) the date of transmission, if
such notice or communication is

 

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delivered via facsimile at the facsimile telephone number specified for notice
prior to 5:00 p.m., New York City time, on a Business Day, (ii) the Business Day
after the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile telephone number specified for notice later than 5:00
p.m., New York City time, on any date and earlier than 11:59 p.m., New York City
time, on such date, (iii) the Business Day following the date of mailing, if
sent by nationally recognized overnight courier service or (iv) actual receipt
by the party to whom such notice is required to be given. The addresses for such
communications shall be with respect to each Holder at its address set forth
under its name on Schedule I attached hereto, or with respect to the Company,
addressed to:

 

Eden Energy Corporation

1925-200 Burrard Street

 

Vancouver, BC V6C3L6

 

Attention: President

 

Tel. No.: (604) 693-0179

 

Fax No.: (604) 638-3525

 

with copies (which copies

shall not constitute notice

to the Company) to:

Clark Wilson LLP

 

 

800-885 West Georgia Street

 

 

Vancouver, B.C. Canada V6C2H1

 

Attention: Bernard Pinsky

 

 

Tel. No.: (604) 687-5700

 

 

Fax No.: (604) 687-6314

 

 

or to such other address or addresses or facsimile number or numbers as any such
party may most recently have designated in writing to the other parties hereto
by such notice.

 

(g)        Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns
and shall inure to the benefit of each Holder and its successors and assigns.
The Company may not assign this Agreement or any of its rights or obligations
hereunder without the prior written consent of each Holder. Each Purchaser may
assign its rights hereunder in the manner and to the Persons as permitted under
the Purchase Agreement.

 

(h)        Assignment of Registration Rights. The rights of each Holder
hereunder, including the right to have the Company register for resale
Registrable Securities in accordance with the terms of this Agreement, shall be
assignable by each Holder to any Affiliate of such Holder or any other Holder or
Affiliate of any other Holder of all or a portion of the Registrable Securities
if: (i) the Holder agrees in writing with the transferee or assignee to assign
such rights, and a copy of such agreement is furnished to the Company within a
reasonable time after such assignment, (ii) the Company is, within a reasonable
time after such transfer or assignment, furnished with written notice of (a) the
name and address of such transferee or assignee, and (b) the securities with
respect to which such registration rights are being transferred or assigned,
(iii) following such transfer or assignment the further disposition of such
securities by the transferee or assignees is restricted under the Securities Act
and applicable state securities laws, (iv) at or before the time the Company
receives the written notice contemplated by clause (ii) of this

 

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Section, the transferee or assignee agrees in writing with the Company to be
bound by all of the provisions of this Agreement and the assignee makes the
representations of the Holder contained in the Purchase Agreement, and (v) such
transfer shall have been made in accordance with the applicable requirements of
the Purchase Agreement and the Securities Act. In addition, each Holder shall
have the right to assign its rights hereunder to any other Person with the prior
written consent of the Company, which consent shall not be unreasonably
withheld. The rights to assignment shall apply to the Holders (and to
subsequent) successors and assigns.

 

(i)         Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement. In
the event that any signature is delivered by facsimile transmission, such
signature shall create a valid binding obligation of the party executing (or on
whose behalf such signature is executed) the same with the same force and effect
as if such facsimile signature were the original thereof.

 

(j)         Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York, without giving
effect to any of the conflicts of law principles which would result in the
application of the substantive law of another jurisdiction. This Agreement shall
not be interpreted or construed with any presumption against the party causing
this Agreement to be drafted.

 

(k)        Cumulative Remedies. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law.

 

(l)         Severability. If any term, provision, covenant or restriction of
this Agreement is held to be invalid, illegal, void or unenforceable in any
respect, the remainder of the terms, provisions, covenants and restrictions set
forth herein shall remain in full force and effect and shall in no way be
affected, impaired or invalidated, and the parties hereto shall use their
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

 

(m)       Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.

 

(n)        Shares Held by the Company and its Affiliates. Whenever the consent
or approval of Holders of a specified percentage of Registrable Securities is
required hereunder, Registrable Securities held by the Company or its Affiliates
(other than any Holder or transferees or successors or assigns thereof if such
Holder is deemed to be an Affiliate solely by reason of its holdings of such
Registrable Securities) shall not be counted in determining whether such consent
or approval was given by the Holders of such required percentage.

 

(o)        Independent Nature of Purchasers. The Company acknowledges that the
obligations of each Purchaser under the Transaction Documents are several and
not joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under the Transaction Documents. The

 

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Company acknowledges that the decision of each Purchaser to purchase securities
pursuant to the Purchase Agreement has been made by such Purchaser independently
of any other purchase and independently of any information, materials,
statements or opinions as to the business, affairs, operations, assets,
properties, liabilities, results of operations, condition (financial or
otherwise) or prospects of the Company or of its Subsidiaries which may have
made or given by any other Purchaser or by any agent or employee of any other
Purchaser, and no Purchaser or any of its agents or employees shall have any
liability to any Purchaser (or any other person) relating to or arising from any
such information, materials, statements or opinions. The Company acknowledges
that nothing contained herein, or in any Transaction Document, and no action
taken by any Purchaser pursuant hereto or thereto (including, but not limited
to, the (i) inclusion of a Purchaser in the Registration Statement and (ii)
review by, and consent to, such Registration Statement by a Purchaser) shall be
deemed to constitute the Purchasers as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Purchasers
are in any way acting in concert or as a group with respect to such obligations
or the transactions contemplated by the Transaction Documents. The Company
acknowledges that each Purchaser shall be entitled to independently protect and
enforce its rights, including without limitation, the rights arising out of this
Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose. The Company acknowledges that for reasons of
administrative convenience only, the Transaction Documents have been prepared by
counsel for one of the Purchasers and such counsel does not represent all of the
Purchasers but only such Purchaser and the other Purchasers have retained their
own individual counsel with respect to the transactions contemplated hereby. 
The Company acknowledges that it has elected to provide all Purchasers with the
same terms and Transaction Documents for the convenience of the Company and not
because it was required or requested to do so by the Purchasers. The Company
acknowledges that such procedure with respect to the Transaction Documents in no
way creates a presumption that the Purchasers are in any way acting in concert
or as a group with respect to the Transaction Documents or the transactions
contemplated hereby or thereby.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

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IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights
Agreement to be duly executed by their respective authorized persons as of the
date first indicated above.

 

EDEN ENERGY CORP.

 

 

By:

 

 

Name: Donald Sharpe

 

Title:

President

 

 

 

PURCHASER:

 

 

By:_____________________________________
                                                                              Name:

Title:

 

 

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Schedule I

List of Purchasers

EDEN ENERGY CORP.

Name and Address of Purchaser

Amount Invested

RAB Special Situations (Master) Fund Ltd.
Credit Suisse First Boston LLC
One Madison Avenue
2nd Floor, New York, NY 10010

Marc Bamber
44-20-7387-7000
mb@rabcap.com

$4,000,000

Cranshire Capital LP
666 Dundee Road, Suite 1901
Northbrook, IL 60062

Mitch Kopin
847-562-9030
mkopin@cranshirecapital.com

250,000

Douglas Campbell Jr.
17 Brambele Lane
Riverside, CT 06878

203-637-1497
dcamjr@spiritcapital.net

200,000

SDS Capital Group SPC, Ltd.
c/o Ogler & Boxalls
Queengate House, 113 South Church Street
P.O. Box 1234GT
Grand Cayman, Cayman Islands

Kevin Johnson
203-967-5855
kevin@sdscapital.com

500,000

Nite Capital LP
100 East Cook Avenue, Suite 201
Libertyville, IL 60048

Keith Goodman
847-968-2655
keith@nitecapital.com

500,000

Omicron Master Trust
650 Fifth Avenue, 24th Floor
New York, NY 10019

Brian Daly
212-258-2302
bd@omicron.com

500,000

 

 

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Capital Ventures International
101 California Street, Suite 3250
San Francisco, CA 94111

Martin Kobinger
415-403-6500
kobinger@sig.com

500,000

Crestview Capital Master, LLC
95 Revere Drive, Suite A
Northbrook, IL 60062

Daniel Warsh
847-418-8333
danw@crestviewcap.com

625,000

Double U Master Fund LP
Harbour House, 2nd Floor
Waterfront Drive
Road Town, Tortola
British Virgin Islands

Carl Jacobson
284-494-4770
carl@beaconsecurities.com

750,000

Iroquois Master Fund Ltd.
641 Lexington Avenue, 26th Floor
New York, NY 10022

Joshua Silverman
212-974-3070
jsilverman@icfund.com

250,000

JGB Capital L.P.
660 Madison Avenue, 21st Floor
New York, NY 10021

Brett Cohen
212-355-5771
bcohen@jgbcap.com; ealexander@jgbcap.com

500,000

 

Enable Growth Partners LP
One Ferry Building, Suite 255
San Francisco, CA 94111

Brendan O’Neil
415-677-1578
boneil@enablecapital.com

350,000

 

Enable Opportunity Partners LP
One Ferry Building, Suite 255
San Francisco, CA 94111

Brendan O’Neil
415-677-1578
boneil@enablecapital.com

150,000

 

TOTAL:

$9,075,000

 

 

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Schedule II

Securities Allowed to be Included on Registration Statement

 

1.          Shares of Common Stock issuable upon the exercise of Warrants issued
to the placement agent and its designees in connection with the transactions
contemplated by the Purchase Agreement.

 

 

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