Registration Rights Agreement




 EXHIBIT 4.9 
  

REGISTRATION RIGHTS AGREEMENT 
  
 REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of June 16, 2005, by and among Gastar Exploration Ltd., an Alberta
corporation, with headquarters located at 2480 West Campus Drive, Building C, Mt. Pleasant, Michigan 48858 (the “Company”), and the undersigned buyers (each, a “Buyer” and collectively, the
“Buyers”). 
  
 WHEREAS: 
  
 A. In connection with the Securities Purchase Agreement by and among
the parties hereto of even date herewith (the “Securities Purchase Agreement”), the Company has agreed, upon the terms and subject to the conditions of the Securities Purchase Agreement, to sell at the Initial Closing to the Buyers
(1) the Initial Notes (as defined in the Securities Purchase Agreement), such Initial Notes to be issued to the Buyers on the Initial Closing Date (as defined in the Securities Purchase Agreement), and (ii) the Initial Shares (as defined in the
Securities Purchase Agreement”), such Initial Shares to be issued to the Buyers on the Initial Closing Date and the other times set forth in the Securities Purchase Agreement. 
  
 B. In connection with the Securities Purchase Agreement, the Company has the option, upon the terms and subject to the
conditions of the Securities Purchase Agreement, to sell to the Buyers, from time to time during the Additional Note Issuance Period (as defined in the Securities Purchase Agreement) (i) Additional Notes (as defined in the Securities Purchase
Agreement), such Additional Notes to be issued on the applicable Additional Closing Dates (as defined in the Securities Purchase Agreement), and (ii) Additional Shares (as defined in the Securities Purchase Agreement), such Additional Shares to be
issued at the times set forth in the Securities Purchase Agreement (such Additional Shares, together with the Initial Shares, being collectively referred to herein as the “Shares”). 
  
 C. To induce the Buyers to execute and deliver the Securities Purchase
Agreement, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the “1933 Act”), and
applicable state securities laws. 
  
 NOW, THEREFORE, in
consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and each of the Buyers hereby agree as follows: 

 
 1. DEFINITIONS. 
  
 As used in this Agreement, the following terms shall have the following meanings: 
  
 a. “Additional Registrable Securities” means, with respect
to each Delivery Date (as defined in the Securities Purchase Agreement), other than the Initial Closing Date, (i) the Shares required to be issued on such Delivery Date pursuant to the Securities Purchase Agreement and any Shares that, but for the
limitation on issuance of Common Shares set forth in Section 1 (e)(iv) of the Securities Purchase Agreement, would have been required to be issued on such Delivery Date, and (ii) any shares in capital issued or issuable with respect to such Shares
as a result of any share split, share dividend, recapitalization, exchange or similar event or otherwise, without regard to any limitations on issuances of the Initial Shares or the Additional Shares. 
  
 b. “Additional Registration Statement” means a registration
statement or registration statements of the Company filed under the 1933 Act covering Additional Registrable Securities. 
  
 c. “Canadian Securities Laws” means the securities legislation and regulations of, and the instruments, policies, rules, orders, codes,
notices and interpretation notes, of the securities regulation authorities (including the Toronto Stock Exchange) of any applicable jurisdiction, or jurisdictions collectively, in Canada. 
  
 d. “Common Shares” means the common shares of the Company. 
  
 e. “Effectiveness Deadline” means the Initial Effectiveness
Deadline or an Additional Effectiveness Deadline (each as defined below), as applicable. 








 f. “Excluded Taxes” means, with respect to any Investor, or any other recipient of
payment to be made by or on account of any obligations of the Company under this Agreement, income or franchise taxes imposed on (or measured by) its net income by the United States of America or such other jurisdiction under the laws of which such
recipient is organized or its principal offices are located. 
  
 g. “Filing Deadline” means the Initial Filing Deadline or an Additional Filing Deadline (each as defined below), as applicable. 
  
 h. “Governmental Authority” means the government of the United States of America, the government of Canada or the government of any other
nation, or any political subdivision thereof, whether state, provincial or local, or any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or
administration powers or functions of or pertaining to government over the Company or any of its Subsidiaries, or any of their respective properties, assets or undertakings. 
  
 i. “Indemnified Taxes” means Taxes (as defined in the Notes) other than Excluded Taxes. 
  
 j. “Initial Registrable Securities” means (i) the Shares
required to be issued on the Initial Closing Date and (ii) any shares in capital issued or issuable with respect to such Initial Shares as a result of any share split, share dividend, recapitalization, exchange or similar event or otherwise, without
regard to any limitations on issuances of the Initial Shares. 
  
 k. “Initial Registration Statement” means a registration statement or registration statements of the Company filed under the 1933 Act covering the Initial Registrable Securities. 
  
 l. “Investor” means a Buyer, any transferee or assignee
thereof to whom a Buyer assigns its rights under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 9 and any transferee or assignee thereof to whom a transferee or assignee assigns its
rights under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 9. 
  
 m. “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a governmental or any department or agency thereof. 
  
 n. “Register,” “registered,” and “registration” refer to a registration effected by preparing and filing one or more Registration Statements (as defined below) in compliance with the 1933
Act and pursuant to Rule 415 under the 1933 Act or any successor rule providing for offering securities on a continuous or delayed basis (“Rule 415”), and the declaration or ordering of effectiveness of such Registration
Statement(s) by the United States Securities and Exchange Commission (the “SEC”). 
  
 o. “Registrable Securities” means the Initial Registrable Securities and the Additional Registrable Securities with respect to any Delivery Dates; provided, however, that any such Registrable
Securities shall cease to be Registrable Securities when (1) a Registration Statement with respect to the sale of such securities becomes effective under the 1933 Act and such securities are disposed of in accordance with such Registration
Statement, (ii) such securities are sold in accordance with Rule 144 (as defined in Section 8), or (iii) such securities become transferable without any restrictions in accordance with Rule 144(k) (or any successor provision). 
  
 p. “Registration Statement” means the Initial Registration
Statement or any Additional Registration Statement. 
  
 q.
“Trading Day” means any day on which the Common Shares are traded on the principal securities exchange or securities market in the United States or Canada on which the Common Shares are then traded; provided that “Trading
Day” shall not include any day on which the Common Shares are scheduled to trade, or actually trade on such exchange or market, for less than 4.5 hours. 
  
 Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Securities Purchase Agreement.

  

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 2. REGISTRATION. 
  
 a. Mandatory Registration. 
  
 (i) Initial Mandatory Registration. The Company shall prepare and, as soon as practicable but in no event later than 90 days after the Initial
Closing Date (the “Initial Filing Deadline”), file with the SEC the Initial Registration Statement on Form S-I (or on Form S-3, if Form S-3 is then available for the registration of the resale of the Registrable Securities
hereunder), covering the resale by each of the Investors of all of the Initial Registrable Securities issued or issuable to such Investor. The Company shall use its reasonable best efforts to have the Initial Registration Statement declared
effective by the SEC as soon as practicable, but in no event later than the date that is 180 days after the Initial Closing Date (the “Initial Effectiveness Deadline”). 
  
 (ii) Additional Mandatory Registration. The Company shall prepare and, as soon as practicable but in no event later
than 30 days after each Delivery Date other than the Initial Closing Date (each, an “Additional Filing Deadline”), file with the SEC an Additional Registration Statement on Form S-I (or on Form S-3, if Form S-3 is then available for
the registration of the resale of the Registrable Securities hereunder), covering the resale by each of the Investors of all of the Additional Registrable Securities issued or issuable to such Investor with respect to such Delivery Date. The Company
shall use its reasonable best efforts to have the Additional Registration Statement declared effective by the SEC as soon as practicable, but in no event later than the date which is 120 days after such Delivery Date (the “Additional
Effectiveness Deadline”). 
  
 b. Holdings of
Registrable Securities. For purposes hereof, the number of Registrable Securities held by, or issuable to, an Investor includes all Registrable Securities issuable to such Investor, without regard to any limitation on the issuance of the Shares.

  
 c. Legal Counsel. Subject to Section 5 hereof,
the Buyers holding securities representing at least two-thirds (2/3) of the Registrable Securities shall have the right to select one legal counsel to review, on behalf of the Buyers, any registration pursuant to this Section 2 (“Legal
Counsel”), which shall be Katten Muchin Rosenman LLP, or such other counsel as thereafter designated in writing to the Company by the holders of at least two-thirds (2/3) of the Registrable Securities. The Company shall reasonably cooperate
with Legal Counsel in performing the Company’s obligations under this Agreement. 
  
 d. Ineligibility for Form S-3. In the event that Form S-3 is not available for the registration of the resale of Registrable Securities hereunder, the Company shall undertake to register the Registrable
Securities on Form S-3 as soon as such form is available, provided that the Company shall maintain the effectiveness of the Registration Statement then in effect until such time as a Registration Statement on Form S-3 covering the Registrable
Securities has been declared effective by the SEC. 
  
 e.
Effect of Failure to File and Obtain and Maintain Effectiveness of Registration Statement. 
  
 (i) If (A) the Initial Registration Statement is not filed with the SEC on or before the Initial Filing Deadline, (B) the Initial Registration Statement
is not declared effective by the SEC on or before the Initial Effectiveness Deadline or (C) on any day after the Initial Registration Statement has been declared effective by the SEC sales of all the Initial Registrable Securities required to be
included on the Initial Registration Statement cannot be made (other than during a Current Report Update Grace Period (as defined in Section 3(b)) or a Post-Effectiveness Grace Period (as defined in Section 3(t)) that is an Allowable Grace Period
(as defined in Section 3(t)) pursuant to the Initial Registration Statement (including because of a failure to keep the Registration Statement effective, to disclose such information as is necessary for sales to be made pursuant to the Registration
Statement or to register sufficient Initial Registrable Securities), then in each case, as partial relief for the damages to any holder of the Initial Registrable Securities by reason of any such delay in or reduction of its ability to sell the
Initial Registrable Securities (which remedy shall not be exclusive of any other remedies available at law or in equity), the Company shall pay to such holder an amount in cash equal to the product of (X) the product of (I) the total number of
Initial Registrable Securities held by such holder, multiplied by (II) the arithmetic average of the Weighted Average Price of the Common Shares on each of the five (5) consecutive Trading Days immediately preceding the Initial Closing Date
(subject to appropriate adjustment for any share dividend, share split, share combination or other similar transaction occurring during such period), multiplied by (Y) the product of 0.000333 multiplied by, as the case may be, (I) in the event of an
occurrence described in clause (A) of this paragraph 2(e)(i), the number of days after the applicable Filing Deadline that the Initial Registration Statement is not filed with the SEC, or (II) in the event of an occurrence described in clause (B) of
this paragraph 2(e)(i), the number of days after the Initial Effectiveness Deadline that the Initial Registration Statement is not initially declared effective by the SEC (without duplication of days accounted for in the immediately preceding clause
(I)), or (III) in the event of an 

  

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occurrence described in clause (C) of this paragraph 2(e)(i), the number of days after the Initial Registration Statement has been declared effective by the
SEC that the Initial Registration Statement is not available (other than during a Current Report Update Grace Period or a Post-Effectiveness Grace Period that is an Allowable Grace Period) for the sale of at least all the Initial Registrable
Securities required to be included and maintained on the Registration Statement; provided, however, that the Company shall not be obligated to pay any amounts to such holder pursuant to this paragraph 2(e)(i) in respect of any days after the first
date on which such holder may sell all of the Initial Registrable Securities held by such holder without restriction pursuant to Rule 144(k) (or successor thereto) promulgated under the 1933 Act. 
  
 (ii) If (A) an Additional Registration Statement covering any Additional
Registrable Securities and required to be filed by the Company pursuant to Section 2(a)(ii) of this Agreement is not filed with the SEC on or before the applicable Additional Filing Deadline, (B) an Additional Registration Statement covering any
Additional Registrable Securities and required to be filed by the Company pursuant to Section 2(a)(ii) is not declared effective by the SEC on or before the applicable Additional Effectiveness Deadline or (C) on any day after such Additional
Registration Statement has been declared effective by the SEC sales of all the Additional Registrable Securities required to be included on such Registration Statement cannot be made (other than during a Current Report Update Grace Period or a
Post-Effectiveness Grace Period that is an Allowable Grace Period) pursuant to such Registration Statement (including because of a failure to keep the Registration Statement effective, to disclose such information as is necessary for sales to be
made pursuant to the Registration Statement or to register sufficient Additional Registrable Securities), then in each case, as partial relief for the damages to any holder of such Additional Registrable Securities by reason of any such delay in or
reduction of its ability to sell such Additional Registrable Securities (which remedy shall not be exclusive of any other remedies available at law or in equity), the Company shall pay to such holder an amount in cash equal to the product
(calculated separately for Additional Registrable Securities with respect to each Delivery Date) of (X) the product of (I) the total number of such Additional Registrable Securities held by such holder, multiplied by (11) the arithmetic average of
the Weighted Average Price of the Common Shares on each of the five (5) consecutive Trading Days immediately preceding the Delivery Date on which such Additional Registrable Securities were issuable (subject to appropriate adjustment for any
share dividend, share split, share combination or other similar transaction occurring during such period), multiplied by (Y) the product of 0.000333 multiplied by, as the case may be, (I) in the event of an occurrence described in clause (A) of this
paragraph 2(e)(ii), the number of days after the applicable Additional Filing Deadline that such Additional Registration Statement is not filed with the SEC, or (II) in the event of an occurrence described in clause (B) of this paragraph 2(e)(ii),
the number of days after the Additional Effectiveness Deadline that such Additional Registration Statement is not initially declared effective by the SEC (without duplication of days accounted for in the immediately preceding clause (I)), or (III)
in the event of an occurrence described in clause (C) of this paragraph 2(e)(ii), the number of days after such Additional Registration Statement has been declared effective by the SEC that such Additional Registration Statement is not available
(other than during a Current Report Update Grace Period or a Post-Effectiveness Grace Period that is an Allowable Grace Period) for the sale of at least all the Additional Registrable Securities required to be included and maintained on the
Additional Registration Statement; provided, however, that the Company shall not be obligated to pay any amounts to such holder pursuant to this paragraph 2(e)(ii) in respect of any days after the first date on which such holder may sell all of such
Additional Registrable Securities held by such holder without restriction pursuant to Rule 144(k) (or successor thereto) promulgated under the 1933 Act. 
  
 (iii) The payments to which a holder shall be entitled pursuant to Sections 2(e)(i) and 2(e)(ii) are referred to herein as “Registration Delay
Payments.” Registration Delay Payments shall be made on the earlier of (A) the last day of the calendar month during which such Registration Delay Payments are incurred and (B) the third Business Day after the event or failure giving rise to
the Registration Delay Payments is cured. 
  
 (iv) In the event
that a Registration Statement covering any Registrable Securities and required to be filed by the Company pursuant to Section 2(a)(i) or 2(a)(ii) of this Agreement is not declared effective by the SEC on or before the applicable Effectiveness
Deadline, then, in addition to the applicable Registration Delay Payments and as additional partial relief for the damages to any holder of such Registrable Securities by reason of any such delay in its ability to sell such Registrable Securities
(which remedy shall not be exclusive of any other remedies available at law or in equity), the Company shall, no later than the third Business Day after the applicable Registration Statement is declared effective by the SEC, pay such holder an
amount in cash equal to the amount (if greater than $0) equal to the product of (A) the total number of such Registrable Securities held by such holder, multiplied by (B) the result of (I) the arithmetic average of the Weighted Average Price of the
Common Shares on each of the five (5) consecutive Trading Days immediately preceding the applicable Effectiveness Deadline (subject to appropriate adjustment for any share dividend, share split, share combination or other similar transaction
occurring during such period), minus (II) the arithmetic average of the Weighted Average Price of the Common Shares on each of the five (5) consecutive Trading Days immediately preceding the date on which such Registration Statement is declared
effective by the SEC. The payments to which a holder shall be entitled pursuant to this Section 2(e)(iii) are referred to herein as “Additional Registration Delay Payments.” 
  

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 (v) In the event the Company fails to make Registration Delay Payments or Additional Registration Delay
Payments in a timely manner, such Registration Delay Payments or Additional Registration Delay Payments, as the case may be, shall bear interest, in each case until paid in full, at a rate equal to the lesser of (A) 1.5% per month (equivalent to a
per annum rate of 18.0%), prorated for partial months, and (B) the highest lawful interest rate. 
  
 3. RELATED OBLIGATIONS. 
  
 At such time as the Company is obligated, or elects, to file a Registration Statement with the SEC pursuant to Section 2(a), the Company will use its reasonable best efforts to effect the registration of the Registrable Securities in
accordance with the intended method of disposition thereof and, pursuant thereto, the Company shall have the following obligations: 
  
 a. The Company shall promptly prepare and file with the SEC a Registration Statement with respect to the applicable Registrable Securities (but in no
event later than the applicable Filing Deadline) and use its reasonable best efforts to cause such Registration Statement to become effective as soon as practicable after such filing (but in no event later than the applicable Effectiveness
Deadline). The Company shall keep each Registration Statement effective pursuant to Rule 415 at all times until the earlier of (i) the date as of which the Investors may sell all of the Registrable Securities covered by such Registration Statement
without restriction pursuant to Rule 144(k) (or successor thereto) promulgated under the 1933 Act or (ii) the date on which the Investors shall have sold all the Registrable Securities covered by such Registration Statement to Persons that are not
Investors (the “Registration Period”). Such Registration Statement (including any amendments or supplements thereto and prospectuses contained therein) shall not contain any 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 light of the circumstances in which they were made, not misleading. The term “reasonable best efforts” shall mean, among other things, that the
Company shall submit to the SEC, within three (3) Business Days after the Company learns that no review of a particular Registration Statement will be made by the staff of the SEC or that the staff has no further comments on the Registration
Statement, as the case may be, a request for acceleration of effectiveness of such Registration Statement to a time and date not later than 48 hours after the submission of such request; provided, however, that, subject to Section 3(t), the Company
may delay (an “Effectiveness Request Grace Period”) such submission of a request for acceleration of effectiveness of such Registration Statement if, in the good faith opinion of the Company and its counsel, such Effectiveness
Request Grace Period is necessary to avoid disclosure of material non-public information concerning the Company the disclosure of which at the time is not, in the good faith opinion of the Board of Directors of the Company and its counsel, in the
best interest of the Company and, in the opinion of counsel to the Company, otherwise required; provided that the Company shall (i) promptly notify the Investors in writing of the existence of material non-public information giving rise to such an
Effectiveness Request Grace Period (provided that in each notice the Company shall not disclose the content of such material non-public information to the Investors), (ii) submit such request for acceleration of effectiveness as soon as, in the good
faith opinion of Company and its counsel, such Effectiveness Request Grace Period is no longer necessary (subject to Section 3(t)), and (iii) notify the Investors in writing of the date on which the Effectiveness Request Grace Period ends; and
provided, further, that the foregoing proviso shall not in any way delay or otherwise affect the applicable Effectiveness Deadline. 
  
 b. The Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to a Registration Statement and
the prospectus used in connection with such Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may be necessary to keep such Registration Statement effective at all times during the
Registration Period, and, during such period, comply with the provisions of the 1933 Act with respect to the disposition of all Registrable Securities of the Company covered by such Registration Statement until such time as all of such Registrable
Securities shall have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in such Registration Statement. In the case of amendments and supplements to a Registration Statement that
are required to be filed pursuant to this Agreement (including pursuant to this Section 3(b)) by reason of the Company filing a report on Form 10-K, Form 10-Q or Form 8-K or any analogous report under the Securities Exchange Act of 1934, as amended
(the “1934 Act”), the Company shall have incorporated such report by reference into the Registration Statement, if applicable and permitted by law, or shall file such amendments or supplements with the SEC on the same day; provided,
however, that in the case of a Form 10-Q or Form 10-K, the Company may delay the filing of any applicable supplement or amendment by up to ten (10) days after the date of filing of the Form 10-Q or Form 10-K, as the case may be, subject to Section
3(t) (any such delay, a “Current Report Update Grace Period”). 
  

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 c. The Company shall (A) permit Legal Counsel to review and comment upon (i) the Initial Registration
Statement at least five (5) Business Days prior to its filing with the SEC. (ii) any Additional Registration Statement at least three (3) Business Days prior to its filing with the SEC and (iii) all other Registration Statements and all amendments
and supplements to all Registration Statements (except for Annual Reports on Form 10-K, Quarterly Reports on Form l0-Q and Current Reports on Form 8-K and any similar or successor reports) within a reasonable number of days prior to their filing
with the SEC, and (B) not file any document, registration statement, amendment or supplement described in the foregoing clause (A) in a form to which Legal Counsel reasonably objects. The Company shall not submit a request for acceleration of the
effectiveness of a Registration Statement or any amendment or supplement thereto without providing prior notice thereof to Legal Counsel and each Investor. The Company shall furnish to Legal Counsel, without charge, (i) promptly after the same is
prepared and filed with the SEC, one copy of any Registration Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference that have not been filed, or are not immediately
available electronically, via EDGAR, and all exhibits, and (ii) upon the effectiveness of any Registration Statement, one copy of the prospectus included in such Registration Statement and all amendments and supplements thereto. The Company shall
reasonably cooperate with Legal Counsel in performing the Company’s obligations pursuant to this Section 3. 
  
 d. The Company shall furnish to each Investor whose Registrable Securities are included in any Registration Statement, without charge, (i) promptly after
the same is prepared and filed with the SEC, at least one copy of such Registration Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference that have not been filed, or
are not immediately available electronically, via EDGAR, all exhibits and each preliminary prospectus, (ii) upon the effectiveness of any Registration Statement, ten (10) copies of the prospectus included in such Registration Statement and all
amendments and supplements thereto (or such other number of copies as such Investor may reasonably request) and (iii) such other documents, including copies of any preliminary or final prospectus, as such Investor may reasonably request from time to
time in order to facilitate the disposition of the Registrable Securities owned by such Investor. 
  
 e. The Company shall use its reasonable best efforts to (i) register and qualify, unless an exemption from registration and qualification applies, the
resale by the Investors of the Registrable Securities covered by a Registration Statement under the securities or “blue sky” laws of all the states of the United States, (ii) prepare and file in those jurisdictions, such amendments
(including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain
such registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however,
that the Company shall not be required in connection therewith or as a condition thereto to (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(e) or (y) subject itself to general
taxation in any such jurisdiction. The Company shall promptly notify Legal Counsel and each Investor who holds Registrable Securities of the receipt by the Company of any notification with respect to the suspension of the registration or
qualification of any of the Registrable Securities for sale under the securities or “blue sky” laws of any jurisdiction in the United States or its receipt of actual notice of the initiation or threatening of any proceeding for such
purpose. 
  
 f. The Company shall notify Legal Counsel and each
Investor in writing of the happening of any event, as promptly as practicable after becoming aware of such event, as a result of which the prospectus included in a Registration Statement, as then in effect, includes an untrue statement of a material
fact or omission to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (provided that in no event shall such notice contain any
material, nonpublic information), and promptly prepare a supplement or amendment to such Registration Statement to correct such untrue statement or omission, and deliver ten (10) copies of such supplement or amendment to Legal Counsel and each
Investor (or such other number of copies as Legal Counsel or such Investor may reasonably request). The Company shall also promptly notify Legal Counsel and each Investor in writing (i) when a prospectus or any prospectus supplement or
post-effective amendment has been filed, and when a Registration Statement or any post-effective amendment has become effective (notification of such effectiveness shall be delivered to Legal Counsel and each Investor by facsimile on the same day of
such effectiveness and by overnight mail), (ii) of any request by the SEC for amendments or supplements to a Registration Statement or related prospectus or related information, and (iii) of the Company’s reasonable determination that a
post-effective amendment to a Registration Statement would be appropriate. 
  
 g. The Company shall use its reasonable best efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Registration Statement, or the suspension of the qualification of any of the
Registrable 

  

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Securities for sale in any jurisdiction and, if such an order or suspension is issued, to obtain the withdrawal of such order or suspension as soon as
practicable and to notify Legal Counsel and each Investor who holds Registrable Securities being sold of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding for such
purpose. 
  
 h. At the reasonable request (in the context of the
securities laws) of any Investor, the Company shall furnish to such Investor, on the date of the effectiveness of the Registration Statement and thereafter from time to time on such dates as an Investor may reasonably request (i) a letter, dated
such date, from the Company’s independent certified public accountants in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the Investors, and
(ii) an opinion, dated as of such date, of counsel representing the Company for purposes of such Registration Statement, in form, scope and substance as is customarily given in an underwritten public offering, addressed to the Investors, provided
that such Investor shall reimburse the Company for its out-of-pocket expenses incurred in connection with the furnishing of any such letter and opinion. 
  
 i. At the reasonable request (in the context of the securities laws) of any Investor, the Company shall upon receipt of a waiver of such investor’s
non-public information requirements make available for inspection during regular business hours by (i) any Investor, (ii) Legal Counsel and (iii) one firm of accountants or other agents retained by the Investors (collectively, the
“Inspectors”), all pertinent financial and other records, and pertinent corporate documents and properties of the Company (collectively, the “Records”), as shall be reasonably deemed necessary by each Inspector, and
cause the Company’s officers, directors and employees to supply all information that any Inspector may reasonably request; provided, however, that each Inspector shall agree to hold in strict confidence and shall not make any disclosure (except
to an Investor) or use of any Record or other information that the Company determines in good faith to be confidential, and of which determination the Inspectors are so notified, unless (a) the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in any Registration Statement or is otherwise required under the 1933 Act, (b) the release of such Records is ordered pursuant to a final, non-appealable subpoena or order from a court or government body of
competent jurisdiction, or (c) the information in such Records has been made generally available to the public other than by disclosure in violation of this or any other agreement of which the Inspector has knowledge. Each Investor agrees that it
shall, upon learning that disclosure of such Records is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt notice to the Company and allow the Company, at its expense, to undertake appropriate
action to prevent disclosure of, or to obtain a protective order for, the Records deemed confidential. Each Inspector that exercises its rights under this Section 3(i) shall be obligated to execute a non-disclosure agreement containing such
reasonable terms as the Company may request. The fees and expenses of the Inspectors shall be borne by the applicable Investor. 
  
 j. The Company shall hold in confidence and not make any disclosure of information concerning an Investor provided to the Company unless (i) disclosure of
such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of such information
is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction, or (iv) such information has been made generally available to the public other than by disclosure in violation of
this Agreement or any other agreement. The Company agrees that it shall, upon learning that disclosure of such information concerning an Investor is sought in or by a court or governmental body of competent jurisdiction or through other means, give
prompt written notice to such Investor and allow such Investor, at the Investor’s expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information. 
  
 k. The Company shall use its reasonable best efforts to (i) maintain the
listing of the Common Shares on the Toronto Stock Exchange or, if listed on a U.S. national securities exchange, the NASDAQ National Market or the NASDAQ SmailCap Market, on such exchange or market, (ii) cause all the Registrable Securities covered
by a Registration Statement to be listed (or quoted, as applicable) on each United States or Canadian securities exchange or trading market on which securities of the same class or series issued by the Company are then listed or traded, and (iii)
without limiting the generality of the foregoing, to arrange for at least three market makers to register with the National Association of Securities Dealers, Inc. (“NASD”) as such with respect to such Registrable Securities. The Company
shall pay all fees and expenses in connection with satisfying its obligation under this Section 3(k). 
  
 l. The Company shall cooperate with the Investors who hold Registrable Securities being offered and, to the extent applicable, facilitate the timely
preparation and delivery of certificates (not bearing any restrictive legend) representing the Registrable Securities to be offered pursuant to a Registration Statement and enable such certificates to be in such denominations or amounts, as the case
may be, as the Investors may reasonably request and registered in such names as the Investors may request. 
  

 7 









 m. The Company shall provide a transfer agent and registrar of all such Registrable Securities not later
than the effective date of the applicable Registration Statement. 
  
 n. If requested by an Investor, the Company shall (i) as soon as practicable incorporate in a prospectus supplement or post-effective amendment such information as an Investor requests to be included therein relating to the sale and
distribution of Registrable Securities, including information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be
sold in such offering; (ii) as soon as practicable make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment;
and (iii) as soon as practicable, supplement or make amendments to any Registration Statement if reasonably requested by an Investor of such Registrable Securities. 
  
 o. The Company shall use its reasonable best efforts to cause the Registrable Securities covered by the applicable
Registration Statement to be registered with or approved by such other governmental agencies or authorities in the United States and Canada as may be necessary to consummate the disposition of such Registrable Securities. 
  
 p. The Company shall make generally available to its security holders, as
soon as practical, an earnings statement (in form complying with the provisions of Rule 158 under the 1933 Act) covering a twelve-month period beginning not later than the first day of the Company’s fiscal quarter next following the effective
date of a Registration Statement 
  
 q. The Company shall
otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the SEC in connection with any registration hereunder. 
  
 r. Within two (2) Business Days after a Registration Statement that covers applicable Registrable Securities is ordered effective by the SEC, the Company
shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable Securities (with copies to the Investors whose Registrable Securities are included in such Registration Statement) confirmation that
such Registration Statement has been declared effective by the SEC in substantially the form attached hereto as Exhibit A, provided that if the Company changes its transfer agent, it shall immediately deliver any previously delivered notices
under this Section 3(r) and any subsequent notices to such new transfer agent. 
  
 s. The Company shall make such filings with the NASD (including providing all required information and paying required fees thereto) as and when requested by an Investor and make all other filings and take all other
actions reasonably necessary to expedite and facilitate disposition by Investors of Registrable Securities pursuant to a Registration Statement. 
  
 t. Notwithstanding anything to the contrary in Section 3(f), at any time after the applicable Registration Statement has been declared effective by the
SEC, the Company may delay the disclosure of material non-public information concerning the Company the disclosure of which at the time is not, in the good faith opinion of the Board of Directors of the Company and its counsel, in the best interest
of the Company and, in the opinion of counsel to the Company, otherwise required (a “Post-Effectiveness Grace Period,” and along with each Effectiveness Request Grace Period and Current Report Update Grace Period, each a
“Grace Period”); provided that the Company shall promptly (i) notify the Investors in writing of the existence of material non-public information giving rise to a Post-Effectiveness Grace Period (provided that in each notice the
Company shall not disclose the content of such material nonpublic information to the Investors) and the date on which the Post-Effectiveness Grace Period will begin, and (ii) notify the Investors in writing of the date on which the
Post-Effectiveness Grace Period ends. Notwithstanding anything to the contrary contained herein, no Grace Period shall exceed 30 consecutive days, any Grace Periods during any 365-day period shall not exceed an aggregate of 60 days, and the first
day of any Grace Period must be at least two (2) Trading Days after the last day of any prior Grace Period (a Grace Period that satisfies all of the requirements of Sections 3(a) and 3(b) arid this Section 3(t), as applicable, being referred to as
an “Allowable Grace Period”). For purposes of determining the length of a Post-Effectiveness Grace Period under this Section 3(t), the Post-Effectiveness Grace Period shall begin on and include the date the holders receive the
notice referred to in clause (i) and shall end on and include the later of the date the holders receive the notice referred to in clause (ii) and the date referred to in such notice. The provisions of Section 3(g) hereof shall not be applicable
during the period of any Allowable Grace Period. Upon expiration of a Post-Effectiveness 

  

 8 









 
Grace Period, the Company shall again be bound by the first sentence of Section 3(f) with respect to the information giving rise thereto unless such material
non-public information is no longer applicable. Any payment of damages by the Company shall be free and clear of any withholding taxes. 
  
 4. OBLIGATIONS OF THE INVESTORS. 
  
 a. At least six (6) Business Days prior to the first anticipated filing date of a Registration Statement and at least five (5) Business Days prior to the
filing of any amendment or supplement to a Registration Statement, the Company shall notify each Investor in writing of the information, if any, the Company requires from each such Investor if such Investor elects to have any of such Investor’s
Registrable Securities included in such Registration Statement or, with respect to an amendment or a supplement, if such Investor’s Registrable Securities are included in such Registration Statement (each an “Information
Request”). Provided that the Company shall have complied with its obligations set forth in the preceding sentence, it shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement
with respect to the Registrable Securities of a particular Investor that such Investor shall furnish to the Company, in response to an Information Request, such information regarding itself; the Registrable Securities held by it and the intended
method of disposition of the Registrable Securities held by it as shall be reasonably required to effect the registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company may
reasonably request. 
  
 b. Each Investor, by such Investor’s
acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of any Registration Statement hereunder, unless such Investor has notified the
Company in writing of such Investor’s election to exclude all of such Investor’s Registrable Securities from such Registration Statement. 
  
 c. Each Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(g) or the first
sentence of 3(1) or written notice from the Company of a Grace Period, such Investor will immediately discontinue disposition of Registrable Securities pursuant to any Registration Statement(s) covering such Registrable Securities until such
Investor’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 3(g) or the first sentence of 3(f) or receipt of notice that no supplement or amendment is required or that the Grace Period has ended.
Notwithstanding anything to the contrary, the Company shall cause its transfer agent to deliver unlegended Common Shares to a transferee of an Investor in connection with any sale of Registrable Securities pursuant to a Registration Statement
covering such Registrable Securities with respect to which an Investor has entered into a contract for sale prior to the Investor’s receipt of a notice from the Company of the happening of any event of the kind described in Section 3(g) or the
first sentence of 3(f) and for which the Investor has not yet settled. 
  
 5.
EXPENSES OF REGISTRATION. 
  
 All reasonable expenses,
other than underwriting discounts and commissions, incurred in connection with registrations, filings or qualifications pursuant to Sections 2 and 3, including all registration, listing and qualifications fees, printers and accounting fees, and fees
and disbursements of counsel for the Company shall be paid by the Company, except as provided in Section 3(h). The Company shall also reimburse the Investors for the reasonable fees and disbursements of Legal Counsel in connection with registration,
filing or qualification pursuant to Sections 2 and 3 of this Agreement, up to a maximum of $10,000 per Registration Statement. 
  
 6. INDEMNIFICATION. 
  
 In the event any Registrable Securities are included in a Registration Statement under this Agreement: 
  
 a. To the fullest extent permitted by law, the Company will, and hereby
does, indemnify, hold harmless and defend each Investor, the directors, officers, partners, employees, agents, representatives of, and each Person, if any, who controls any Investor within the meaning of the 1933 Act, the 1934 Act or the Canadian
Securities Laws (each, an “Indemnified Person”), against any losses, claims, damages, liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys’ fees, amounts paid in settlement or expenses, joint or
several (collectively, “Claims”) incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental, administrative
or other regulatory agency or body (including the SEC or any state or provincial securities commission authority or self-regulatory organization, in the United States, Canada or anywhere else in the world), whether pending or threatened, whether or
not an indemnified party is or may be a party 

  

 9 









 
thereto (“Indemnified Damages”), to which any of them may become subject insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in a Registration Statement or any post-effective amendment thereto or in any filing made in
connection with the qualification of the offering under the securities or other “blue sky” laws of any jurisdiction in which Registrable Securities are offered (“Blue Sky Filing”), or the omission or alleged omission to
state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus if used prior to the
effective date of such Registration Statement, or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any
material fact necessary to make the statements made therein, in light of the circumstances under which the statements therein were made, not misleading, (iii) any violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any of
the Canadian Securities Laws, any other law, including any state, provincial or foreign securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement or (iv) any
material violation of this Agreement by the Company (the matters in the foregoing clauses (i) through (iv) being, collectively, “Violations”). Subject to Section 6(c), the Company shall reimburse the Indemnified Persons, promptly as
such expenses are incurred and are due and payable, for any legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(a): (i) shall not apply to a Claim by an Indemnified Person arising out of or based upon a Violation that occurs in reliance upon and in conformity with information furnished in writing to the
Company by such Indemnified Person for such Indemnified Person expressly for use in connection with the preparation of the Registration Statement or any such amendment thereof or supplement thereto, if such prospectus was timely made available by
the Company pursuant to Section 3(d); (ii) with respect to any preliminary prospectus, shall not inure to the benefit of any such person from whom the person asserting any such Claim purchased the Registrable Securities that are the subject thereof
(or to the benefit of any person controlling such person) if the untrue statement or omission of material fact contained in the preliminary prospectus was corrected in the prospectus, as then amended or supplemented, if such prospectus was timely
made available by the Company pursuant to Section 3(d), and the Indemnified Person was promptly advised in writing not to use the incorrect preliminary prospectus prior to the use giving rise to a violation and such Indemnified Person,
notwithstanding such advice, used it; (iii) shall not be available to the extent such Claim is based on a failure of the Investor to deliver or to cause to be delivered the prospectus made available by the Company, if such prospectus was timely made
available by the Company pursuant to Section 3(d); and (iv) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably
withheld. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall survive the transfer of the Registrable Securities by the Investors pursuant to Section 9.

  
 b. In connection with any Registration Statement in which an
Investor is participating, each such Investor agrees to severally and not jointly indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section 6(a), the Company, each of its directors, each of its
officers who signs the Registration Statement, and each Person, if any, who controls the Company within the meaning of the 1933 Act, the 1934 Act or the Canadian Securities Laws (each an “Indemnified Party”), against any Claim or
Indemnified Damages to which any of them may become subject, under the 1933 Act, the 1934 Act, the Canadian Securities Laws or otherwise, insofar as such Claim or Indemnified Damages arise out of or are based upon any Violation, in each case to the
extent, and only to the extent, that such Violation occurs in reliance upon and in conformity with written information furnished to the Company by such Investor expressly for use in connection with such Registration Statement; and, subject to
Section 6(c), such Investor will reimburse any legal or other expenses reasonably incurred by an Indemnified Party in connection with investigating or defending any such Claim; provided, however, that the indemnity agreement contained in this
Section 6(b) and the agreement with respect to contribution contained in Section 7 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of such Investor, which consent shall not
be unreasonably withheld; provided, further, however, that the aggregate liability of the Investor in connection with any Violation shall not exceed the net proceeds to such Investor as a result of the sale of Registrable Securities pursuant to the
Registration Statement giving rise to such Claim. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Indemnified Party and shall survive the transfer of the Registrable Securities by the
Investors pursuant to Section 9. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(b) with respect to any preliminary prospectus shall not inure to the benefit of any Indemnified
Party if the untrue statement or omission of material fact contained in the preliminary prospectus was corrected on a timely basis in the prospectus, as then amended or supplemented. 
  

 10 









 c. Promptly after receipt by an Indemnified Person or Indemnified Party under this Section 6 of notice of
the commencement of any action or proceeding (including any governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in respect thereof is to be made against any indemnifying party under
this Section 6, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party, as the case may be. In any such proceeding, any
Indemnified Person or Indemnified Party may retain its own counsel, but, except as provided in the following sentence, the fees and expenses of that counsel will be at the expense of that Indemnified Person or Indemnified Party, as the case may be,
unless (i) the indemnifying party and the Indemnified Person or Indemnified Party, as applicable, shall have mutually agreed to the retention of that counsel, (ii) the indemnifying party does not assume the defense of such proceeding in a timely
manner or (iii) in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel for the Indemnified Person or Indemnified Party and the indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any other party represented by such counsel in such proceeding, in which case the Company shall pay reasonable fees for up to one separate legal counsel for the Investors,
and such legal counsel shall be selected by the Investors holding at least two-thirds (2/3) in interest of the Registrable Securities included in the Registration Statement to which the Claim relates. The Indemnified Party or Indemnified Person
shall cooperate fully with the indemnifying party in connection with any negotiation or defense of any such action or Claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnified
Party or Indemnified Person which relates to such action or Claim. The indemnifying party shall keep the Indemnified Party or Indemnified Person fully apprised at all times as to the status of the defense or any settlement negotiations with respect
thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its prior written consent, provided, however, that the indemnifying party shall not unreasonably withhold, delay or condition its
consent. No indemnifying party shall, without the prior written consent of the Indemnified Party or Indemnified Person, consent to entry of any judgment or enter into any settlement or other compromise with respect to any pending or threatened
action or claim in respect of which indemnification or contribution may be or has been sought hereunder (whether or not the Indemnified Party or Indemnified Person is an actual or potential party to such action or claim), which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified Person of a release from all liability in respect to such Claim or litigation. Following indemnification as provided for hereunder, the
indemnifying party shall be subrogated to all rights of the Indemnified Party or Indemnified Person with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. The failure to deliver
written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party under this Section 6, except to the
extent that the indemnifying party is prejudiced in its ability to defend such action. 
  
 d. The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or Indemnified Damages are
incurred. 
  
 e. The indemnity agreements contained herein shall
be in addition to (i) any cause of action or similar right of the Indemnified Party or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to pursuant to the law. 
  
 7. CONTRIBUTION. 
  
 To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to
make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however, that: (i) no Person involved in the sale of Registrable Securities which
Person is guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) in connection with such sale, shall be entitled to contribution from any Person involved in such sale of Registrable Securities who was not guilty
of fraudulent misrepresentation; and (ii) contribution by any seller of Registrable Securities shall be limited to an amount equal to the net amount of proceeds received by such seller from the sale of such Registrable Securities pursuant to the
Registration Statement giving rise to such action or claim for indemnification less the amount of any damages that such seller has otherwise been required to pay in connection with such sale. 
  

 11 









 8. REPORTS UNDER THE 1934 ACT. 
  
 With a view to making available to the Investors the benefits of Rule 144 promulgated under the 1933 Act or any other
similar rule or regulation of the SEC that may at any time permit the Investors to sell securities of the Company to the public without registration (“Rule 144”), after the Company first becomes subject to reporting obligations
under the 1934 Act, the Company agrees to: 
  
 a. make and keep
public information available, as those terms are understood and defined in Rule 144; 
  
 b. file with the SEC in a timely manner all Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on 8-K (other than Current Reports on Form 8-K that are required solely pursuant to Item
1.01, 1.02, 2.03, 2.04, 2.05, 2.06 or 4.02(a) of Form 8-K) and any similar or successor reports required of the Company under the 1934 Act so long as the Company remains subject to such requirements (it being understood that nothing herein shall
limit the Company’s obligations under Section 4(c) of the Securities Purchase Agreement) and the filing of such reports and other documents is required for the applicable provisions of Rule 144 (provided, however, that this covenant shall not
be deemed breached upon (i) the Company’s first late filing after the date hereof of an Annual Report on Form 10-K or Quarterly Report on Form 10-Q (a “Periodic Report”) and (ii) the Company’s first late filing after the
date hereof of a Current Report on Form 8-K (other than a Current Report on Form 8-K that is required solely pursuant to Item 1.01, 1.02, 2.03, 2.04, 2.05, 2.06 or 4.02(a) of Form 8-K), so long as in either such case, such Periodic Report or Current
Report on Form 8-K, as the case may be, is filed with the SEC no later than five (5) Business Days after the due date thereof); and 
  
 c. furnish to each Investor so long as such Investor owns Registrable Securities, promptly upon written request, (i) a written statement by the Company
that it has complied with the reporting requirements of Rule 144, the 1933 Act and the 1934 Act, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such
other information as may be reasonably requested to permit the Investors to sell such securities pursuant to Rule 144 without registration. 
  
 9. ASSIGNMENT OF REGISTRATION RIGHTS. 
  
 The rights under this Agreement shall be automatically assignable by the Investors to any transferee or assignee of all or any portion of Registrable
Securities if: (i) the Investor agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within five (5) Business Days after such transfer or assignment; (ii) the
Company is, within five (5) Business Days after such transfer or assignment, furnished with written notice of (a) the name and address of such transferee or assignee, arid (b) the securities with respect to which such registration rights are being
transferred or assigned; (iii) immediately following such transfer or assignment the further disposition of such securities by the transferee or assignee is restricted under the 1933 Act or any applicable state securities laws; (iv) at or before the
time the Company receives the written notice contemplated by clause (ii) of this sentence, the transferee or assignee agrees in writing with the Company to be bound by all of the provisions contained herein; (v) such transfer or assignment is made
in accordance with the applicable requirements of the Securities Purchase Agreement, and (vi) in the case of a transfer or assignment of fewer then all of the Registrable Securities then held by the Investor to a Person that is not an affiliate of
the Investor, at least 50,000 Registrable Securities (subject to adjustment for stock splits, stock dividends, stock combinations and similar transactions after the date of this Agreement) are transferred or assigned to the transferee or assignee.

  
 10. AMENDMENT OF REGISTRATION RIGHTS. 
  
 Provisions of this Agreement may be amended and the observance thereof may
be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and Investors who then hold at least two-thirds (2/3) of the Registrable Securities. Any amendment or
waiver effected in accordance with this Section 10 shall be binding upon each Investor and the Company. No such amendment shall be effective to the extent that it applies to less than all of the holders of the Registrable Securities. No
consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of this Agreement unless the same consideration also is offered to all of the parties to this Agreement. 
  
 11. TAXES. 
  
 a. Payments Free of Taxes. Any and all payments by or on account of any obligation of the Company under this
Agreement shall be made without any set-off, counterclaim or deduction and free and clear of, and without deduction for, any Indemnified Taxes; provided that if the Company shall be required to deduct any Indemnified Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all required deductions 

  

 12 









 
(including deductions applicable to additional sums payable under this Section 11(a)), the Investor to whom such payments are owed receives an amount equal
to the sum it would have received had no such deductions been made, (ii) the Company shall make such deductions and (iii) the Company shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law;
provided, further, that if the Company is required to make any additional payment to an Investor under this Section 11(a), and if such Investor is entitled to a cash refund or credit against cash taxes payable which is both identifiable and
quantifiable by such Investor as being attributable to the imposition of such Indemnified Taxes (a “Tax Refund”), and such Tax Refund may be obtained without increased liability or obligation to such Investor (including any
obligation of such Investor to file tax returns in jurisdictions where it would not otherwise be obligated to file tax returns), then, upon the written request of the Company, such Investor shall apply for such Tax Refund and, to the extent such Tax
Refund is received by such Investor, shall reimburse the Company for such amount as such Investor shall determine to be the proportion of the Tax Refund attributable to such additional payment as will leave such Investor after the reimbursement in
the same position as it would have been if the additional payment had not been required; provided that, if any Tax Refund reimbursed by such Investor to the Company is subsequently disallowed, the Company shall repay such Investor such amount
(together with interest and any applicable penalty payable by such Investor to the relevant taxing authority) promptly after such Investor notifies the Company of such disallowance. The Company agrees to reimburse such Investor for such
Investor’s reasonable out-of-pocket expenses, if any, incurred in complying with any request hereunder and agrees that all costs incurred by such Investor in respect of this Section 11(a) may be deducted from the amount of any reimbursement to
the Company in respect of any Tax Refund pursuant to this Section 11(a). 
  
 b. Indemnification by the Company. The Company shall indemnify each Investor, within ten (10) days after written demand therefor, for the full amount of any Indemnified Taxes paid by such Investor on or with
respect to any payment by or on account of any obligation of the Company under this Agreement (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section Il) and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate of such Investor as to the amount of such payment or
liability under this Section 1! shall be delivered to the Company and shall be conclusive absent demonstrable error 
  
 12. MISCELLANEOUS. 
  
 a. A Person is deemed to be a holder of Registrable Securities whenever such Person owns or is deemed to own of record such Registrable Securities. If the
Company receives conflicting instructions, notices or elections from two or more Persons with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from the registered owner of
such Registrable Securities. 
  
 b. Any notices, consents, waivers
or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one (1) Business Day after deposit with a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be: 
  
 If to the Company: 
  

			
	Gastar Exploration Ltd.
	1331 Lamar Street, Suite 1080
	Houston, Texas 77010
	Telephone:	  	(713) 739-1800
	Facsimile:	  	(713) 739-0458
	Attention:	  	Chief Executive Officer

  
 With a copy to:

  

			
	Vinson & Elkins, L.L.P.
	First City Tower
	1001 Fannin Street, Suite 2300
	Houston, Texas 77002-6760
	Telephone:	  	(713) 758-2222
	Facsimile:	  	(713) 758-2346
	Attention:	  	1. Mark Kelly, Esq.

  

 13 









 If to Legal Counsel: 
  

			
	Katten Muchin Rosenman LLP
	525 West Monroe Street
	Chicago, Illinois 60661-3693
	Telephone:	  	(312) 902-5200
	Facsimile:	  	(312) 902-1061
	Attention:	  	Mark D. Wood, Esq.

  
 If to a Buyer, to its
address and facsimile number set forth on the Schedule of Buyers attached hereto, with copies to such Buyer’s representatives as set forth on the Schedule of Buyers, or if, in the case of a Buyer or other party named above, to such other
address and/or facsimile number and/or to the attention of such other person as the recipient party has specified by written notice given to each other party at least five (5) days prior to the effectiveness of such change. 
  
 If to an Investor (other than a Buyer), to such Investor at the address
and/or facsimile number reflected in the records of the Company. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s
facsimile machine containing the time, date, recipient facsimile number and an image of the first page of such transmission or (C) provided by a courier or overnight courier service shall be rebuttable evidence of personal service, receipt by
facsimile or deposit with a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively. 
  
 c. Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall
not operate as a waiver thereof. 
  
 d. All questions concerning
the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of
New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting the
City of New York, borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each
party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees
that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. If any provision of this Agreement
shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of
this Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR
ANY TRANSACTION CONTEMPLATED HEREBY. 
  
 e. This Agreement and the
other Transaction Documents constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to
herein and therein. This Agreement and the other Transaction Documents supersede all prior agreements and understandings among the parties hereto with respect to the subject matter hereof and thereof. 
  
 f. Subject to the requirements of Section 9, this Agreement shall inure to
the benefit of and be binding upon the permitted successors and assigns of each of the parties hereto. 
  

 14 









 g. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise
affect the meaning hereof. 
  
 h. This Agreement may be executed
in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party; provided that a facsimile signature
shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile signature. 
  
 i. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute
and deliver all such other agreements, certificates, instruments arid documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions
contemplated hereby. 
  
 j. All consents and other determinations
to be made by the Investors pursuant to this Agreement shall be made, unless otherwise specified in this Agreement, by Investors holding at least two-thirds (2/3) of the Registrable Securities, determined without regard to any limitations on the
issuance of the Shares. Any consent or other determination approved by Investors as provided in the immediately preceding sentence shall be binding on all Investors. 
  
 k. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual
intent and no rules of strict construction will be applied against any party. 
  
 l. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and, to the extent provided in Sections 6(a) and 6(b) hereof, each Investor, the directors,
officers, partners, employees, agents, representatives of, and each Person, if any who controls any Investor within the meaning of the 1933 Act, the 1934 Act or the Canadian Securities Laws and each of the Company’s directors, each of the
Company’s officers who signs the Registration Statement, and each Person, if any, who controls the Company within the meaning of the 1933 Act, the 1934 Act or the Canadian Securities Laws, and is not for the benefit of, nor may any provision
hereof be enforced by, any other Person. 
  
 m. Unless the context
otherwise requires, (a) all references to Sections, Schedules or Exhibits arc to Sections, Schedules or Exhibits contained in or attached to this Agreement, (b) words in the singular or plural include the singular and plural and pronouns stated in
either the masculine, the feminine or neuter gender shall include the masculine, feminine and neuter, and (c) the use of the word “including” in this Agreement shall be by way of example rather than limitation. 
  
 * * * * * * 
  

 15 









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

							
	COMPANY:	 	BUYERS:
		
	GASTAR EXPLORATION LTD.	 	HFTP INVESTMENT L.L.C.,
				
	 	 	 	 	By:	 	Promethean Asset Management L.L.C.
	By:	 	  

	 	Its:	 	Investment Manager
	Name:	 	J. Russell Porter	 	 	 	 
	Title:	 	President and Chief Execute Officer	 	By:	 	  


	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 
			
	 	 	 	 	GAIA OFFSHORE MASTER FUND, LTD.
				
	 	 	 	 	By:	 	Promethean Asset Management L.L.C.
	 	 	 	 	Its:	 	Investment Manager
				
	 	 	 	 	By:	 	  


	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 
			
	 	 	 	 	LEONARDO, L.P.
				
	 	 	 	 	By:	 	Leonardo Capital Management, Inc.
	 	 	 	 	Its:	 	General Partner
				
	 	 	 	 	By:	 	Angelo, Gordon & Co., L.P.
	 	 	 	 	Its:	 	Director
				
	 	 	 	 	By:	 	  


	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 
			
	 	 	 	 	WAYLAND RECOVERY FUND, LLC
				
	 	 	 	 	By:	 	Wayzata Investment Partners LLC
	 	 	 	 	Its:	 	Manager
				
	 	 	 	 	By:	 	  


	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 
	 	 	 	 	WAYZATA RECOVERY FUND, LLC
				
	 	 	 	 	By:	 	Wayzata Investment Partners LLC
	 	 	 	 	Its:	 	Manager
				
	 	 	 	 	By:	 	  


	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 










			
	CYRUS OPPORTUNITIES FUND, L.P.
		
	By:	 	Cyrus Capital Partners, L.P.,
	 	 	as Investment Manager
		
	By:	 	Cyrus Capital Partners OP LLC,
	 	 	General Partner
		
	By:	 	  


	Name:	 	 
	Title:	 	 
	
	CYRUS OPPORTUNITIES FUND II, L.P.
		
	By:	 	Cyrus Capital Partners, L.P.,
	 	 	as Investment Manager
		
	By:	 	Cyrus Capital Partners GP, LLC
	 	 	General Partner
		
	By:	 	  


	Name:	 	 
	Title:	 	 










 SCHEDULE OF BUYERS 
  

					
	 Investor’s Name

	 	 Investor Address
 and Facsimile Number

	 	 Investor’s Legal Representative’s
 Address and Facsimile Number


	HFTP Investment L.L.C.	 	 c/o Promethean Asset Management L.L.C.
 750 Lexington
Avenue, 22nd Floor
 New
York, New York 10022
 Attention: Robert J. Brantman
 Telephone:
(212) 702-5200
 Facsimile: (212) 758-9620
	 	 Katten Muchin Rosenman LLP
 525 W. Monroe
Street
 Chicago, Illinois 6066 1-3693
 Attention: Mark D. Wood,
Esq.
 Telephone: (312) 902-5200
 Facsimile: (312)
902-1061

			
	Gala Offshore Master Fund, Ltd.	 	 %Promethean Asset Management L.L.C. 750 Lexington Avenue, 22nd Floor
 New York, New York 10022
 Attention: Robert J. Brantman
 Telephone: (212) 702-5200
 Facsimile: (212) 758-9620
	 	 Katten Muchin Rosenman LLP
 525 W. Monroe
Street
 Chicago, Illinois 6066 1-3693
 Attention: Mark D. Wood.
Esq.
 Telephone: (312) 902-5200
 Facsimile: (312)
902-1061

			
	Leonardo, L.P.	 	 c/o Angelo Gordon & Co.
 245 Park
Avenue
 New York, New York 10167
 Attention: Gary I.
Wolf
 Telephone: (212) 692-2058
 Facsimile: (212)
867-6449
	 	 Park, Weiss, Rifkind, Wharton & Garrison LLP
 1285
Avenue of the Americas
 New York, New York 10019-6064
 Attention:
Douglas A. Cifu, Esq.
 Telephone: (212) 373-3000
 Facsimile:
(212) 759-3990

			
	Wayland Recovery Fund, LLC	 	 701 E. Lake Street, Suite 300
 Wayzata, Minnesota
55391
 Attention: Blake Carison
 Telephone: (952)
345.0708
 Facsimile: (952) 345-8901
	 	 701 E. Lake Street, Suite 300
 Wayzata, Minnesota
55391
 Attention: Susan Peterson
 Telephone: (952)
345-0716
 Facsimile: (952) 345-8901

			
	Wayzata Recovery Fund, LLC	 	 701 E. Lake Street, Suite 300
 Wayzata, Minnesota
55391
 Attention: Blake Carlson
 Telephone: (952)
345-0708
 Facsimile: (952) 345-8901
	 	 701 E. Lake Street, Suite 300
 Wayzata, Minnesota
55391
 Attention: Susan Peterson
 Telephone: (952)
345-0716
 Facsimile: (952) 345-8901

			
	Cyrus Opportunities Fund, L.P.	 	 c/o Cyrus Capital Partners, L.P.
 390 Park Avenue, 21st
Floor
 New York, New York 10022
 Attention: Robert
Swenson
                 Jenna Hwang
                 Stephen D. Quinn
 Telephone: (212) 380-5904
 Facsimile: (212) 380-5801
	 	 c/o Cyrus Capital Partners, L.P.
 390 Park Avenue, 21st
Floor
 New York, New York 10022
 Attention: Robert Nisi,
Esq.
 Telephone: (212) 380-5904
 Facsimile: (212)
380-5801

			
	Cyrus Opportunities Fund II, L.P.	 	 c/o Cyrus Capital Partners, L.P.
 390 Park Avenue, 21st
Floor
 New York, New York 10022
 Attention: Robert
Swenson
                  Jenna Hwang
                 Stephen D. Quinn
 Telephone: (212) 380.5904
 Facsimile: (212) 380-5801
	 	 c/o Cyrus Capital Partners, L.P.
 390 Park Avenue,
21st Floor
 New York,
New York 10022
 Attention: Robert Nisi, Esq.
 Telephone: (212)
380-5904
 Facsimile: (212) 380-5801










 EXHIBIT A 
  
 FORM OF NOTICE OF EFFECTIVENESS 
 OF
REGISTRATION STATEMENT 
  
 [TRANSFER AGENT] 
 Attn:
                                       
                          
  

	 	Re:	Gastar Exploration Ltd. 

  
 Ladies and Gentlemen: 
  
 We are
counsel to Gastar Exploration Ltd., an Alberta corporation (the “Company”), and have represented the Company in connection with that certain Securities Purchase Agreement (the “Purchase Agreement”) entered into by
and among the Company and the buyers named therein (collectively, the “Holders”) pursuant to which the Company issued to the Holders an aggregate of
                     common shares of the Company (the “Common Shares”) in accordance with the terms of the Purchase
Agreement, subject to adjustment, and pursuant to which the Company shall issue additional Common Shares (such additional Common Shares together with the Initial Shares, the “Shares”), subject to adjustment and has the option to
issue additional Common Shares (the “Additional Shares”), and together with the Initial Shares, the “Shares”), as set forth in, and subject to the terms and conditions of, the Purchase Agreement. Pursuant to the
Purchase Agreement, the Company also has entered into a Registration Rights Agreement with the Holders (the “Registration Rights Agreement”) pursuant to which the Company agreed, among other things, to register the Registrable
Securities (as defined in the Registration Rights Agreement), including the Shares, under the Securities Act of 1933, as amended (the “1933 Act”). In connection with the Company’s obligations under the Registration Rights
Agreement, on                          , 200  , the Company filed a Registration Statement on Form
S-1 (File No. 333-                    ) (the “Registration Statement”) with the Securities and Exchange Commission (the
“SEC”) relating to                      Registrable Securities (subject to adjustment) issued on
                         , 200  , which names each of the Holders as a selling shareholder
thereunder. 
  
 In connection with the foregoing, we advise you
that a member of the SEC’s staff has advised us by telephone that the SEC has entered an order declaring the Registration Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and
we have no knowledge, after telephonic inquiry of a member of the SEC’s staff, that any stop order suspending its effectiveness has been issued or that any proceedings for that purpose are pending before, or threatened by, the SEC and the
Registrable Securities are available for resale under the 1933 Act pursuant to the Registration Statement. 
  

			
	Very truly yours,
	
	[ISSUER’S COUNSEL]
		
	By:	 	  




  

	cc:	[LIST NAMES OF HOLDERS]