Document:

ex10_3.htm

    
      

    

    
       

      October
        15, 2007

      

      

      Greg
        LeClaire

      Clear
        One
        Inc.

      1825
        Research Way

      S.L.C.
        UT    84119

      

      Re:  Lease
        Addendum –2007 - 2740 w. California Ave. suite
        4  S.L.C.  UT

      

      Greg,

      

      In
        following up on a couple of conversations with Kneel Robinson at NAI – Utah over
        the last couple  days, I wanted to clarify a number of items in
        writing in order to avoid any future misunderstandings.  Woodenshoe
        Development agrees to modify your lease at 2740 west California Ave. suite
        4
        with the following changes and clarifications:

      

      1)   Lease
        Space :  Suite 4 only that would consist of approximately 6,500 square
        feet  (52’ x 126’)

      

      2)   Lease
        Term :  45 months   April 1, 2008 through December 31,
        2011, this commencement date may be earlier if a potential tenant for Suite
        5
        requires an earlier occupancy.  The January timetable for some of the
        current stock to be relocated will be taken into consideration.

      

      3)   Lease
        Rate :  $3,200.00 / month

      

      4)   Security
        Deposit :  A security deposit of  $7,000.00 was received
        from Clear One on  Sept. 13th 2006
        and will be
        credited as follows:  $3,200.00 for first months rent  and
        the remaining balance of  $3,800.00 will remain as the new security
        deposit for Suite 4.

      

      5)   A
        restroom for suite 4 and a divider wall between suite 4 and suite 5 will
        be
        constructed on our schedule between January 15, 2008 and March 31, 2008 with
        a
        minimum of 2 weeks notice prior to commencing construction.  The
        January timetable for some of the current stock to be relocated will be taken
        into consideration.

      

      6)   The
        divider wall will be floor to ceiling, 2 x 6 construction, insulated,
        sheetrocked, painted and particle board on the bottom 8’ of both sides.  The restroom will
        be
        located as per the original building floor plan against the east wall in
        order
        to tie into the existing sewer and water lines.

      

      7)   All
        terms, conditions and guidelines outlined in our original lease agreement
        dated
        September 10th,
        2006 will remain in place.

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      If
        you
        are in agreement with the information as outlined above, please sign in the
        space provided below and return to our office with an original
        signature.  If you have any additional questions, please give me a
        call at (801) 266- 8856.

       

       

      
        	
                Sincerely,

              	
                Accepted
                  and Approved by

              
	
                WOODENSHOE
                  DEVELOPMENT

              	
                CLEAR
                  ONE INC.

              
	 	 
	 	 
	
                Greg
                  Robinson

              	
                Greg
                  LeClaire

              
	
                Property
                  Management

              	
                V.P.
                  Financeex4_1.htm

    
      

    

    Exhibit
      4.1

    

    THIRD
      AMENDMENT TO SECURITIES PURCHASE AGREEMENT

    

    This
      THIRD AMENDMENT TO SECURITIES PURCHASE AGREEMENT (this
      "Amendment"), dated as of November 6, 2007 (this
      "Effective Date"), is by and among Gastar Exploration Ltd., an
      Alberta corporation (the "Company"), Field Point III, Ltd., a
      Delaware limited liability partnership ("Field III"), Field
      Point IV, Ltd., a Delaware limited partnership ("Field IV"),
      SPF CDO I, Ltd., a Delaware limited partnership ("SPF I"),
      Wayzata Recovery Fund, LLC, a Delaware limited liability company
      ("Wayzata"), Cyrus Opportunities Master Fund II, Ltd., a
      Delaware limited partnership ("Cyrus" and together with SPCP,
      SPF I and Wayzata, the "Buyers" with each being a
      "Buyer").  Capitalized terms used in this Amendment
      but not defined herein have the meaning set forth in the Securities Purchase
      Agreement (as defined below).

    

    PRELIMINARY
      STATEMENT

    

    WHEREAS,
      Company, Promethean Asset Management L.L.C., a Delaware limited liability
      company, as collateral agent ("Former Collateral Agent"), HFTP
      Investments LLC, a Delaware limited liability company ("HFTP"),
      Promethean I Master Ltd. (formerly known as GAIA Offshore Master Fund, Ltd.),
      a
      Cayman Islands corporation ("Prom I"), Promethean II Master,
      L.P., a Cayman Islands exempted limited partnership ("Prom
      II"), Leonardo, L.P., a Cayman Islands limited partnership
      ("Leonardo" and together with HFTP, Prom I, and Prom II,
      "Sellers" with each being a "Seller"),
      Wayzata, for itself and as successor in interest to Wayland Recovery Fund,
      LLC,
      and Cyrus, as successor in interest to Cyrus Opportunities Fund, L.P. and Cyrus
      Opportunities II, L.P., were parties to the Securities Purchase Agreement dated
      as of June 16, 2005, as amended by the First Amendment to Securities Purchase
      Agreement dated September 6, 2005 and the Consent and Omnibus Amendment to
      Transaction Documents dated January 5, 2006 (as so amended, the
      "Securities Purchase Agreement"), whereby, among other things,
      initial and additional senior secured notes issued by the Company were purchased
      for an aggregate principal amount of $73,000,000 (the
      "Notes");

    

    WHEREAS,
      pursuant to a Note Sale Agreement dated May 18, 2007 (the
      "NSA"), each of SPF I and SPCP Group, LLC, a Delaware limited
      liability company ("SPCP"), purchased, among other things, the
      rights, title and interests of the Sellers in and to the Notes held by such
      Sellers and became a "Buyer" for purposes of the Securities Purchase Agreement;
      

    

    WHEREAS,
      pursuant to certain assignment agreements, SPCP assigned all of its interests
      in
      the Notes to each of Field III and Field IV, and each of Field III and Field
      IV
      and became a "Buyer" for purposes of the Securities Purchase
      Agreement

    

    WHEREAS,
      in connection with the NSA, Former Collateral Agent resigned and each Buyer
      appointed Silver Point Finance, LLC as the new Collateral Agent (the
      "Collateral Agent") under the Securities Purchase Agreement and
      related security documents; and

    

    WHEREAS,
      the Company and each Buyer desires to amend the Securities Purchase Agreement
      as
      provided herein;

    

    AGREEMENT

    

    NOW,
      THEREFORE, in consideration of the mutual covenants and agreements set forth
      herein and for other good and valuable consideration, the receipt and adequacy
      of which are hereby acknowledged, the parties hereto agree as
      follows:

    

    Section
      1.   Amendments to
      Securities Purchase Agreement:

    

    (a)           The
      fourth sentence of Section 3(a) of the Securities Purchase Agreement is hereby
      amended and restated in its entirety to read as follows:

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    As
      used
      in this Agreement, “Material Adverse Effect” means any material
      adverse effect on (I) the business, properties, assets, operations, results
      of
      operations or condition (financial or otherwise) of the Company and its
      Subsidiaries taken as a whole, (II) the transactions contemplated hereby, (III)
      the agreements and instruments to be entered into in connection herewith, (IV)
      the authority or ability of the Company or any Subsidiary to perform its
      obligations under the Transaction Documents or (V) the Liens of the Collateral
      Agent (as defined in the Security Agreement referred to in the Notes) on the
      Collateral (as defined in the Security Agreement) or the priority of such
      Liens.

    

    (b)           The
      last sentence of Section 3(s) of the Securities Purchase Agreement is hereby
      amended and restated in its entirety to read as follows:

    

    “Property
      Material Adverse Effect” means any material adverse effect on the
      business, properties, assets, operations, results of operations or condition
      (financial or otherwise) of any Real Property of the Company and its
      Subsidiaries, taken as a whole, that could (alone or together with any other
      events, occurrences and/or conditions) cause or result in (x) a decrease of
      at
      least $2,500,000 of revenues from production of the Company and its
      Subsidiaries, taken as a whole or (y) a diminution in the value of any Real
      Property by at least $2,500,000.

    

    (c)           Section
      4(c) of the Securities Purchase Agreement is hereby amended and restated in
      its
      entirety to read as follows:

    

    Reporting
      Status.  Until the latest of (i) the date that is one (1) year after
      the date as of which the Investors (as that term is defined in the Registration
      Rights Agreement  may sell all of the Shares issued hereunder without
      restriction pursuant to rule 144(k) promulgated under the 1933 Act (or successor
      thereto), (ii) the date on which no Notes remain outstanding, (iii) the date
      that is the last day on which any Notes or Shares may be issued hereunder,
      the
      Company shall timely file all periodic reports or current reports described
      in
      Section 7(a)(vii) of the Note that are required to be filed pursuant to
      applicable securities laws in the United States, and the Company shall not
      terminate its status as an issuer required to file Securities Law Documents
      (excluding those to be filed in Canada) under applicable laws in the United
      States even if such laws would otherwise permit such termination; provided,
      however, that the Company shall not be obligated hereby to maintain such status
      at any time after a Change of Control, so long as no Notes are outstanding
      and
      no Notes may be issued hereunder.

    

    (d)           The
      penultimate sentence of Section 4(i) of the Securities Purchase Agreement is
      hereby amended and restated in its entirety to read as follows:

    

    As
      soon
      as available but in any event on or before each of (i) the date on which the
      Company is required to file its Periodic Report on Form 10-K and (ii) the date
      on which the Company is required to file its Periodic Report on Form 10-Q for
      the quarter ending June 30th of each
      year (as
      the date for such filings may be extended as permitted by Rule 12b-25 under
      the
      1934 Act pursuant to a timely filed Form 12b-25), the Company shall furnish
      to
      the Collateral Agent and, upon written request, any Buyer, an Independent
      Reserve Report (as defined in the Notes) dated effective as of the preceding
      December 31 or June 30, as applicable; provided, however, that any
      such request by such Buyer shall constitute a waiver, with respect to any
      material non-public information regarding the Company and its Subsidiaries
      contained in such Independent Reserve Report, of the restriction herein on
      the
      Company's disclosure to a Buyer of material non-public information.

    

    (e)           Section
      4(n), clause (a)(VI), of the Securities Purchase Agreement is hereby amended
      and
      restated in its entirety to read as follows:

    

    (VI)
      reimbursement obligations at any one time in respect of letters of credit or
      lines of credit issued by one or more financial institutions for the account
      of
      the Company or any of its Subsidiaries in connection with the Company’s
      establishment and maintenance of a Hedged (as defined in Section 4(r)) position
      with respect to, at any time, a maximum of 75% of the Company’s estimate of its
      proved producing oil and gas reserves anticipated to be produced for the
      succeeding 24 calendar months on a rolling 24 calendar-month basis, so long
      as
      the aggregate amount of all such letters of credit and lines of credit does
      not
      exceed $5,000,000 at any one time.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    (f)           Section
      4(o), clause (i), of the Securities Purchase Agreement is hereby amended and
      restated in its entirety to read as follows

    

    (i)
      except for Permitted Investments (as defined herein) in which the holders of
      the
      Notes have a valid, perfected first priority security interest, make any loans
      to, or investments in, any other person or entity, including through lending
      money, deferring the purchase price of property or services (other than trade
      accounts receivable on terms of ninety (90) days or less), purchasing any note,
      bond (excluding surety and similar bonds obtained by the Company and its
      Subsidiaries in the ordinary course of their business to the extent permitted
      by
      clause (a)(IV) of Section 4(n)), debenture or similar instrument, entering
      into
      any letter of credit (except as permitted by clause (a)(VI) or (a)(VII) of
      Section 4(n)), guaranteeing (or taking any action that has the effect of
      guaranteeing) any obligations of any other person or entity, or acquiring any
      equity securities of, or other ownership interest in, or making any capital
      contribution to any other entity (provided, however, that, (A) the
      Company and its Subsidiaries may make capital contributions to (1) domestic
      Subsidiaries so long as the Company and its Subsidiaries comply with Section
      4(t)(vi) and (2) foreign Subsidiaries so long as  the Company and its
      Subsidiaries comply with Section 4(t)(vi) and the amount of all capital
      contributions made to foreign Subsidiaries does not exceed $7,500,000 in the
      aggregate and (B) the Company and its U.S. and Canadian Subsidiaries may make
      loans to each other to the extent the incurrence of the Indebtedness represented
      by such loans would be permitted by Section 4(n)(a)(III) and not otherwise
      be prohibited by Section 4(n)),

    

    (g)           Section
      4(o), clause (ii), of the Securities Purchase Agreement is hereby amended and
      restated in its entirety to read as follows:

    

    (ii)           invest
      in, participate in, lease, purchase, obtain or otherwise acquire any real
      property, facilities, or oil, gas or other mineral drilling, exploration or
      development rights, concessions, working interests or participation interests
      (collectively, "Interests"), and shall not have done any of the
      foregoing since April 30, 2005, unless (A) with respect to Interests located
      in
      Australia, all investments, participations, leases, purchases or acquisitions
      together with capital contributions permitted under Section 4(o)(i) and made
      to
      foreign Subsidiaries organized under the laws of Australia do not exceed
      $50,000,000 in the aggregate at any one time and such Interests remain free
      and
      clear of any Lien in favor of any third party (other than Permitted Liens),
      (B)
      with respect to Interests located in Kansas, California or Canada, the Buyers
      or
      Collateral Agent are provided a valid, perfected first priority security
      interest in such Interests in accordance with Section 4(t)(vii) of this
      Agreement and (C) with respect to any other Interests, the Buyers or the
      Collateral Agent are provided with a valid, perfected first priority security
      interest in such Interests on or prior to the date that is (I) ten (10) days
      after the date on which the  investments, participations, leases,
      purchases or acquisitions exceed $2,000,000 in the aggregate at any one time
      and
      (II) concurrently with any investment, participation, lease, purchase or
      acquisition that individually exceeds $2,000,000,

    

    (h)           Section
      4(p) of the Securities Purchase Agreement is hereby amended and restated in
      its
      entirety to read as follows:

    

    Restriction
      on Purchases, Payments or Dividends.  From the date of this
      Agreement until the first date following the Initial Closing Date on which
      no
      Notes are outstanding, the Company shall not, and shall not permit any of its
      Subsidiaries to:

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    (i)           declare,
      set aside or pay any dividends on or make any other distributions (whether
      in
      cash, stock, equity securities or property) in respect of any capital stock
      (including the Common Shares as defined in the Notes) or issue or authorize
      the
      issuance of any other securities in respect of, in lieu of, or in substitution
      for any capital stock or establish or set any record date with respect to any
      of
      the foregoing; provided, however that:

    

    (A)           any
      Subsidiary may declare, set aside or pay any dividends on or make any other
      distributions (whether in cash, stock, equity securities or property) in respect
      of any of its capital stock that is held solely by the Company or by a U.S.
      or
      Canadian Subsidiary so long as (1) all of the equity of such Subsidiary
      (excluding directors' qualifying shares to the extent that the issuance thereof
      is required by law), is controlled and directly or indirectly owned by the
      Company, (2) such Subsidiary is party to the Guaranty and the Security
      Agreement, and (3) the holders of the Notes have a valid, perfected first
      priority security interest in substantially all of the assets of such Subsidiary
      (other than assets located in Australia or as provided in Section
      4(o)(ii));

    

    (B)           the
      Company may issue or authorize the issuance of any preferred stock with the
      prior written consent of the holders of at least two-thirds (2/3) of the
      aggregate principal of the Notes then outstanding (which consent will not be
      unreasonably withheld); and

    

    (C)           the
      Company may declare cash dividends on preferred stock of the Company so long
      as
      the Company has delivered an officer's certificate certifying that no Default
      (as defined in Section 4(u)(i)) exists or would be caused thereby and
      demonstrating that, immediately before and after giving effect to such dividend,
      no Reserve Test Failure exists or would exist, or

    

    (ii)           purchase,
      redeem or otherwise acquire, directly or indirectly, any shares in the Company's
      capital or any shares of the capital stock of any of its Subsidiaries, except
      repurchases of unvested shares at cost in connection with the termination of
      the
      employment relationship with any employee pursuant to share option or purchase
      agreements in effect on the date of this Agreement, or cashless exercise of
      options by employees under existing share options or purchase agreements, in
      each case as set forth on Schedule 3(c).

    

    (i)           The
      first sentence of Section 4(r) of the Securities Purchase Agreement is hereby
      amended and restated in its entirety to read as follows:

    

    Except
      as
      set forth in the following sentence, none of the Company’s estimate of its oil
      and gas reserves shall be protected from price fluctuations using derivatives,
      fixed price agreements and/or volumetric production payments
      ("Hedged").  As of each date
      (a “Determination Date”) that is the end of a quarterly or
      annual period covered by a Periodic Report filed, or required to be filed,
      by
      the Company with the SEC or under Canadian Securities Laws, as the case may
      be,
      from the date of this Agreement until the first date following the Initial
      Closing Date on which no Notes are outstanding, the Company may maintain a
      Hedged position with respect to no more than 75% of the Company’s estimate of
      its proved producing oil and gas reserves anticipated to be produced for each
      rolling 24-month period commencing immediately after such Determination
      Date.

    

    (j)           Section
      4(t)(i) and Section 4(t)(ii) of the Securities Purchase Agreement is hereby
      amended and restated in their entirety to read as follows:

    

    (i)           All
      Production Proceeds (as defined in the Mortgages) received by Company or any
      of
      its Subsidiaries shall initially be deposited in a Deposit Account that is
      covered by an Account Control Agreement (as defined in the Security Agreement)
      (the "Segregated Account").  The Company shall, and
      shall cause each Subsidiary to, use its best efforts to provide that all
      Production Proceeds in the Segregated Account consisting of (A) payment of
      oil
      or gas proceeds received on account of, or for the benefit of, any third-party
      owner of oil or gas interests, including royalty, rentals, overriding royalties
      and third party working interest payments, or (B) taxes, charges, costs and
      expenses that are required to be paid on account of such Production Proceeds
      on
      account of, or for the benefit of, any third-party owner of oil or gas interests
      (the items in clauses (A) and (B), the "Third-Party Production
      Proceeds") be periodically (and in no event less frequently than
      monthly) transferred to a Deposit Account of the Company or one of its
      Subsidiaries that is not covered by an Account Control Agreement (the
      "Third Party Production Account").

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    (ii)           The
      Company shall not, and shall not permit its Subsidiaries to, deposit funds
      other
      than Third Party Production Proceeds in the Third Party Production
      Account.  The Company shall provide written notice to the holders of
      the Notes and the Collateral Agent as to which Deposit Account is the Segregated
      Account.  If the Company or any Subsidiary uses funds from a Deposit
      Account other than the Third Party Production Account to pay Third-Party
      Production Proceeds, then the Company or such Subsidiary shall promptly (and
      in
      any event within 3 Business Days) transfer funds from the Third Party Production
      Account to the Segregated Account in an amount equal to such Third-Party
      Production Proceeds so transferred from such Deposit Account other than the
      Third Party Production Account.

    

    (k)           Section
      4(t)(vi) of the Securities Purchase Agreement is hereby amended and restated
      in
      its entirety to read as follows

    

    (vi)           Immediately
      upon creation of a direct or indirect Subsidiary or acquisition of an equity
      interest in any entity, the Company shall (A) immediately pledge, or cause
      its
      Subsidiaries to pledge, to the Buyers (1) 100% of the equity interests
      of  each newly formed direct or indirect domestic Subsidiary, (2) 65%
      of the equity interests of each newly formed direct or indirect foreign
      Subsidiary, and (3) 100% of the equity interests held by the Company and its
      Subsidiaries in any other entity, in each case, including any securities
      representing such equity interests and in accordance with the terms of the
      applicable Pledge Agreement, (B) cause such newly formed domestic Subsidiary
      or
      other entity (other than any foreign Subsidiary) to enter into the Guaranty
      and
      (C) cause such newly formed domestic Subsidiary or other entity (other than
      any
      foreign Subsidiary) to enter into the Security Agreement and such other Security
      Documents as necessary to grant to the Buyers a valid, perfected first priority
      security interest in, and lien on, substantially all of the assets of such
      Subsidiary (other than assets located in Australia or as provided in Section
      4(n)(d) or 4(o)(ii)), and comply with the terms thereof.

    

    (l)           Section
      4(u)(i) of the Securities Purchase Agreement is hereby amended and restated
      in
      its entirety to read as follows:

    

    (i)           Neither
      the Company nor any of its Subsidiaries shall sell, transfer, farm-out, assign
      or otherwise dispose of any Real Property (and any of the Collateral used in
      connection with the operation of such Real Property) without the prior written
      consent of the holders of at least two-thirds (2/3) of the aggregate principal
      of the Notes then outstanding (a "Real Property Disposition"),
      except in a good faith, arm's length transaction with Persons who are not
      Related Parties, providedthat (1) the consideration for the Real
      Property Disposition does not consist, in whole or in part, of any Indebtedness
      of the Company or any of its Subsidiaries (or the forgiveness, cancellation
      or
      termination of any such Indebtedness), (2) the net cash proceeds of the Real
      Property Disposition are immediately deposited into the Segregated Account,
      or,
      if any of the consideration consists of Real Property or other assets, the
      Buyers or the Collateral Agent are provided with a valid, perfected first
      priority security interest therein within two (2) Business Days of the Real
      Property Disposition, and (3) immediately before and immediately after giving
      effect to the Real Property Disposition, no Reserve Test Failure, Event of
      Default, or event which, with the passage of time or the giving of notice or
      both, would constitute an Event of Default (such event, a
      "Default") shall exist (any such Real Property Disposition, a
      "Permitted Real Property Disposition").

    

    Upon
      a
      Permitted Real Property Disposition, each of the Buyers shall, and shall cause
      the Collateral Agent (if applicable), at the Company's sole expense, to promptly
      release any Lien encumbering that portion of the Real Property and any of the
      Collateral used in connection with the operation of such Real Property that
      is
      sold, transferred, farmed-out, assigned, or disposed of, provided that the
      Company and each applicable Subsidiary shall deliver to the Buyers or their
      collateral agent (if applicable) a written notice from the Company and each
      applicable Subsidiary, which notice shall contain no material non-public
      information, (I) requesting the release of the Liens encumbering the Real
      Property and Collateral sold, transferred, farmed-out, assigned or disposed
      of,
      (II) describing the proposed Real Property and Collateral sold, transferred,
      farmed-out, assigned or disposed of, (III) stating the purchase price or other
      property to be received in consideration for such sale or disposition of such
      Real Property and Collateral, (IV) if there is to be a substitution of Real
      Property or other assets for the Real Property (and any related collateral)
      that
      is subject to the Real Property Disposition, specifying the Real Property or
      other assets intended to be substituted therefor, (V) attaching an officer's
      certificate in form and substance reasonably acceptable to the Buyers certifying
      that the Permitted Real Property Disposition is in compliance with each of
      the
      requirements of the immediately preceding paragraph and including details of
      the
      calculations and components of the Reserve Test Failure calculations, (VI)
      attaching the form of release requested by the Company or its applicable
      Subsidiary to be authorized or, if necessary, executed by the Buyers (or their
      collateral agent, as applicable) and (VII) stating whether any Disposition
      Redemption Offer is required pursuant to Section 4(b) of the
      Notes.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    (m)           Section
      4(aa) of the Securities Purchase Agreement is hereby amended and restated in
      its
      entirety to read as follows:

    

    Title
      Opinions.  Prior to the Company's or any of its Subsidiaries'
      drilling of any well on any of the Hydrocarbon Property (as defined in the
      Mortgages) that it operates, the Company or such Subsidiary will obtain a
      customary drilling title opinion with respect to such Hydrocarbon Property
      (as
      defined in the Mortgages).  The Company shall promptly provide the
      Collateral Agent and, upon written request, any Buyer with a copy of such
      drilling title opinion subject to such Buyer's execution of a confidentiality
      agreement reasonably acceptable to the Company with respect thereto;
provided, however, that any such request by a Buyer shall
      constitute a waiver, with respect to any material non-public information
      regarding the Company and its Subsidiaries contained in such drilling title
      opinion, of the restriction herein on the Company's disclosure to such Buyer
      of
      material non-public information.  Upon the request of the Collateral
      Agent, the Company and any of its Subsidiaries shall use commercially reasonable
      efforts to obtain and provide copies of any other title opinions with respect
      to
      Real Property that is a Producing Property which the Company or its Subsidiaries
      has access to or is entitled to receive or request.

    

    (n)           The
      second sentence of Section 9(e) of the Securities Purchase Agreement is hereby
      amended and restated in its entirety to read as follows:

    

    No
      provision of this Agreement may be amended, modified or supplemented other
      than
      by an instrument in writing signed by the Company and the Buyers holding at
      least two-thirds (2/3) of the aggregate principal amount of the Notes then
      outstanding.

    

    (o)           Schedule
      3(a) of the Securities Purchase Agreement is hereby replaced with the
Schedule 3(a) attached hereto.  Schedule 3(c) -
      Capitalization of the Securities Purchase Agreement is hereby replaced with
      the Schedule 3(c) - Capitalization attached
      hereto.  Schedule 3(h) – Litigation of the Securities Purchase
      Agreement is hereby replaced with the Schedule 3(h) attached
      hereto.  Schedule 3(w) – Transactions with Affiliates of the
      Securities Purchase Agreement is hereby replaced with the Schedule 3(w) –
Transactions with Affiliates attached hereto.  Schedule 3(bb) –
Outstanding Indebtedness; Liens of the Securities Purchase Agreement is
      hereby replaced with the Schedule 3(bb) – Outstanding Indebtedness; Liens
      attached hereto.  With respect to Real Property located in Texas and
      Australia only, Schedule 3(cc) – Real Property of the Securities Purchase
      Agreement is hereby replaced with the Schedule 3(cc) – Real Property
      attached hereto.

    

    Section
      2.   Representations
      and Warranties.  The Company represents and warrants that
      (a) the execution, delivery and performance of this Amendment are within
      the corporate power and authority of the Company and have been duly authorized
      by appropriate proceedings, (b) the Liens of the Collateral Agent under the
      Security Documents (as defined in the Notes) are valid and subsisting and
      secure, among other things, the Company's obligations under the Notes,
      (c) this Amendment constitutes the legal, valid, and binding obligation of
      the Company, enforceable in accordance with its terms, except as limited by
      applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
      affecting the rights of creditors generally and general principles of equity,
      (d) the representations and warranties of the Company contained in the
      Securities Purchase Agreement, the Notes and the Security Documents after giving
      effect to the amendments contemplated hereby and in the Notes as amended and
      restated as of the date hereof are true and correct as of the date hereof,
      and
      (e) after giving effect to the amendments contemplated hereby and in the Notes
      as amended and restated as of the date hereof, no Event of Default has occurred
      and is continuing as of the date hereof (other than the Events of Default
      specified in the Waiver dated as of the date hereof and made by the Buyers
      in
      favor of the Company); provided, however, notwithstanding clause (d) above,
      the
      Company makes no representation and warranty as to the truth or correctness
      of
      the second and third sentences of the representation and warranty contained
      in
      Section 3(f) of the Securities Purchase Agreement.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    Section
      3.   Effectiveness.  The
      Securities Purchase Agreement shall be amended as provided in this Amendment
      on
      the date first set forth above when:

     

    (a)           Buyer
      Documentation.  Each Buyer shall have received each of the
      following:

    

    (1)           Note
      Certificates (in the principal amounts as such Buyer shall request) in the
      form
      of the attached Exhibit A representing such principal amount of the Notes
      that such Buyer has purchased under or in connection with the Securities
      Purchase Agreement;

    

    (2)           the
      Boards of Directors of the Company and the other Loan Parties shall have adopted
      resolutions authorizing the execution and delivery of this Amendment and the
      Transaction Documents listed on Schedule I hereto and in a form
      reasonably acceptable to such Buyer (the
      "Resolutions");

    

    (3)           a
      certificate evidencing the incorporation and good standing of the Company and
      each Loan Party in such entity's state or other jurisdiction of incorporation
      or
      organization issued by the Secretary of State (or other applicable authority)
      of
      such state or jurisdiction of incorporation or organization as of a date within
      ten (10) days of the Effective Date;

    

    (4)           a
      secretary's certificate of the Company and each other Loan Party, dated as
      of
      the Effective Date, certifying as to (i) the Resolutions, (ii) the
      organizational documents of the Company and such Subsidiary, as the case may
      be
      and certified as of a date within ten (10) days of the Effective Date by the
      applicable governmental authority of the applicable jurisdiction, and (iii)
      the
      by-laws, limited partnership agreement or limited liability company agreement
      of
      the Company and such Subsidiary, as the case may be; and

    

    (5)           an
      executed copy of the Amendment Fee Letter dated as of the Effective Date (the
      "Fee Letter").

    

    (b)           Collateral
      Agent Documentation.  The Collateral Agent shall have received
      each of the following:

    

    (1)           One
      fully executed original of each of the Notes and six (6) fully executed
      originals of each of the other Transaction Documents listed on Schedule I
      hereto; and

    

    (2)           copies
      of such title opinions with respect to the Hydrocarbon Property (as defined
      in
      the Mortgages) as have been prepared prior to the date of this Agreement and
      which the Company or its Subsidiaries have in their possession.

    

    (c)           Fees.  The
      Company shall pay to each Buyer for its own respective accounts fees in the
      amounts and at the times specified in the Fee Letter.  Such fees shall
      be fully earned when paid and shall not be refundable for any reason
      whatsoever.  The Company shall pay to the Collateral Agent and the
      Buyers all of their respective reasonable, out-of-pocket costs and expenses
      incurred in connection with the transactions evidenced by this Amendment
      (including reasonable fees and out-of-pocket expenses and fees owing to their
      respective counsels).

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    (d)           Satisfaction
      of Conditions.  To the extent that the satisfaction of the
      conditions in this Section 3 is subject to the Buyers or the Collateral Agent
      finding documents or other deliverables to be satisfactory or acceptable, such
      documents or other deliverables shall be deemed satisfactory or acceptable
      if
      delivered on or prior to the date of this Amendment unless the Buyers or the
      Collateral Agent shall have given written notice to the Company on or before
      the
      date of this Amendment of any deficiencies therein.

    

    Section
      4.   Post-Closing
      Covenant.

    

    (a)           The
      Company covenants and agrees with the Buyers that the Company shall deliver
      to
      the Collateral Agent, not later than 7 days after the date hereof (or such
      later
      date agreed to by the Majority Holders as defined in the Notes), (i) restricted
      account agreements with Wells Fargo Bank, National Association in form and
      substance satisfactory to the Collateral Agent, (ii) a securities account
      control agreement with Wells Fargo Brokerage Services, LLC in form and substance
      satisfactory to the Collateral Agent, (iii) the opinion of Burnet, Duckworth
      & Palmer LLP, which opinion will address, among other things, laws of the
      Provinces of Alberta and the federal laws of Canada applicable to the
      transactions contemplated hereby, in form, scope and substance reasonably
      satisfactory to the Buyers, (iv) the opinion of Warner Norcross & Judd LLP,
      which opinion will address, among other things, laws of the State of Michigan
      applicable to the transactions contemplated hereby and the security interests
      provided pursuant to the Security Agreement and the other Security Documents,
      in
      form, scope and substance reasonably satisfactory to the Buyers, and (v) the
      opinion of Vinson & Elkins L.L.P., which opinion will address, among other
      things, laws of the States of Delaware, New York and Texas applicable to the
      transactions contemplated hereby and the security interests provided pursuant
      to
      the Security Agreement and the other Security Documents, in form, scope and
      substance reasonably satisfactory to the Buyers.

    

    (b)           The
      Company covenants and agrees with the Buyers that the Company shall deliver
      to
      the Collateral Agent, not later than 60 days after the date hereof (or such
      later date agreed to by the Majority Holders as defined in the Notes), (i)
      an
      amended Schedule 3(cc) – Real Property of the Securities Purchase Agreement with
      respect to Real Property located in Wyoming and Montana, (ii) amended and
      restated mortgages or deeds of trust, as the case may be, granting a
      first-priority securing interest in the Real Property of the Company and its
      Subsidiaries located in Montana, Wyoming and West Virginia, in each case in
      form
      and substance satisfactory to the Collateral Agent, (iii) a pledge agreement
      governed by Australian law and in form and substance reasonably satisfactory
      to
      the Collateral Agent pledging 65% of the equity interests of Gastar Power Pty
      Ltd. and such other documents required to perfect the security interest of
      the
      Collateral Agent therein and (iv) a legal opinion of Australian counsel in
      form
      and substance reasonably satisfactory to the Majority Holders addressing the
      security interests provided pursuant to the pledge agreement referenced in
      clause (b)(iii) above.

    

    Notwithstanding
      anything to the contrary in the Notes, the Company's failure to timely satisfy
      the covenants and agreements in this Section 4 shall be an Event of Default
      under the Notes.

    

    Section
      5.   Signatures;
      Counterparts.  Facsimile transmissions of any executed original
      document and/or retransmission of any executed facsimile transmission shall
      be
      deemed to be the same as the delivery of an executed original.  At the
      request of any party hereto, the other parties hereto shall confirm facsimile
      transmissions by executing duplicate original documents and delivering the
      same
      to the requesting party or parties.  This Amendment may be executed in
      any number of counterparts and by the parties hereto in separate 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.

    

    Section
      6.   Headings.  The
      headings in this Amendment are for convenience of reference only and shall
      not
      limit or otherwise affect the meaning hereof.

    

    Section
      7.   No Additional
      Sale Election Notice.  This Amendment shall in no way be construed
      as an Additional Sale Election Notice.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    Section
      8.   Ratification
      and
      Confirmation of the Securities Purchase Agreement.  The Company
      hereby adopts, ratifies and confirms the Securities Purchase Agreement, as
      amended hereby, and acknowledges and agrees that the Securities Purchase
      Agreement, as amended hereby, is and remains in full force and
      effect.  The execution, delivery and effectiveness of this Amendment
      shall not operate as a waiver of any right, power or remedy of any Buyer under
      the Securities Purchase Agreement or the other Transaction Documents, nor
      constitute an amendment or waiver of any other provision of the Transaction
      Documents.  All references to the Securities Purchase Agreement in any
      other document, instrument, agreement or writing shall hereafter be deemed
      to
      refer to the Securities Purchase Agreement as modified by this
      Amendment.

    

    Section
      9.   Entire
      Agreement.  The Securities Purchase Agreement, as amended by this
      Amendment, supersedes all other prior oral or written agreements between each
      Buyer, the company, their affiliates and persons acting on their behalf with
      respect to the matters discussed herein.

    

    Section
      10.   Successors and
      Assigns.  This Amendment shall be binding upon and inure to the
      benefit of the parties and their respect successors and assigns.

    

    Section
      11.   GOVERNING
      LAW.  THIS AMENDMENT SHALL BE GOVERNED BY, CONSTRUED IN ACCORDANCE
      WITH, AND ENFORCED UNDER, THE INTERNAL LAWS OF THE STATE OF NEW
      YORK.

    

    [Signature
      pages follow.]

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
      and delivered by their respective officers hereunto duly authorized as of the
      date first above written.

    

    
      	 	
              COMPANY:

            
	 	 	 
	 	
              GASTAR
                EXPLORATION LTD.

            
	 	 	 
	 	 	 
	 	
              By:

            	/s/
              Michael A. Gerlich
	 	
              Name:   Michael
                A. Gerlich

            
	 	
              Title:   Vice
                President and Chief Financial
                Officer

            

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    

    
      	 	
              BUYERS:

            
	 	 	 
	 	
              FIELD
                POINT III, LTD.

            
	 	 	 
	 	 	 
	 	
              By:

            	 
	 	
              Name:

            	 
	 	
              Title:

            	 
	 	 	 
	 	
              FIELD
                POINT IV, LTD.

            
	 	 	 
	 	 	 
	 	
              By:

            	 
	 	
              Name:

            	 
	 	
              Title:

            	 
	 	 	 
	 	
              SPF
                CDO I, LTD.

            
	 	 	 
	 	 	 
	 	
              By:

            	 
	 	
              Name:

            	 
	 	
              Title:

            	 
	 	 	 
	 	 	 
	 	
              CYRUS
                OPPORTUNITIES MASTER FUND II, LTD.

            
	 	
              By:

            	
              Cyrus
                Capital Partners, L.P.

            
	 	
              Its:

            	
              Investment
                Manager

            
	 	 	 
	 	
              By:

            	
              Cyrus
                Capital Partners GP, LLC,

            
	 	
              Its:

            	
              General
                Partner

            
	 	 	 
	 	 	 
	 	
              By:

            	 
	 	
              Name:

            	 
	 	
              Title:

            	 
	 	 	 
	 	
              WAYZATA
                RECOVERY FUND, LLC

            
	 	
              By:

            	
              Wayzata
                Investment Partners LLC

            
	 	
              Its:

            	
              Manager

            
	 	 	 
	 	 	 
	 	
              By:

            	 
	 	
              Name:

            	 
	 	
              Title:

            	 

    

     

     

     11

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