Document:

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]Subscription Agreement for Common Shares - United States

 EXHIBIT 4.10 
  
 UNITED STATES 
  
 SUBSCRIPTION AGREEMENT FOR 
 COMMON
SHARES 
  

			
	TO:	  	Gastar Exploration Ltd. (the “Corporation”)
	AND TO:	  	Pritchard Capital Partners, LLC

  
 The undersigned (hereinafter referred
to as the “Subscriber”) hereby irrevocably subscribes for and agrees to purchase the number of common shares of the Corporation set forth below (the “Common Shares”), for the aggregate subscription price set forth
below (the “Aggregate Subscription Price”), representing a subscription price of $2.65 (U.S.) per Common Share, upon and subject to the terms and conditions set forth in “Terms and Conditions of Subscription for Common Shares
of Gastar Exploration Ltd.” attached hereto (together with this page and the attached Exhibits, the “Subscription Agreement”). In addition to this face page, the Subscriber must also complete all applicable Exhibits attached
hereto. 
  

					
	  
  

	  	 Number of Common
Shares:                                       
            
  
 Aggregate Subscription Price (U.S.):
$                                

	 (Name of Subscriber - please print)
	  	 
			
	By:	  	  

 (Authorized Signature)
	  	 Deliver the Common Shares as set forth below:
  

 

 (Name)
  

	  

 (Official Capacity or Title - please print)
  
  

 (Please print name of individual whose signature appears above if
 different than the name of the subscriber printed above.)
  
  

 (Subscriber’s Address, including ZIP code)
  
  

	  	  

 (Account reference, if applicable)
  
  

 (Contact Name)
  
  

 (Address, including ZIP
code)
  
  

  
  
 Register
the Common Shares as set forth below:

	  
  

	  	 
	 (Telephone
Number)                            (E-Mail Address)
  
  

 (Taxpayer Identification Number)
	  	
 (Name)
  
  

 (Account reference, if applicable)
  
  

 (Address, Including ZIP code )
  
  

  
 ACCEPTANCE: The Corporation
hereby accepts the subscription as set forth above on the terms and conditions contained in this Subscription Agreement.              Dated:     June
                    , 2005 
  

									
	GASTAR EXPLORATION LTD.	  	 	  	 	  	 Subscription No:

					
	 By:
	 	  

	  	Title:	  	  

	  	  

  
 This is the first
page of an agreement comprised of 11 pages (not including Exhibits). 

 TERMS AND CONDITIONS OF SUBSCRIPTION FOR 
 COMMON SHARES OF 
 GASTAR EXPLORATION LTD. 
  
 Terms of the Offering 
  
 1. The Subscriber acknowledges (on its own behalf and, if applicable, on behalf of each person on whose behalf the Subscriber is
contracting) that this subscription is subject to rejection or allotment by the Corporation in whole or in part. 
  
 2. The Subscriber acknowledges (on its own behalf and, if applicable, on behalf of each person on whose behalf the Subscriber is contracting) that: 
  

	( )	the Common Shares subscribed for by it hereunder form part of a larger issuance and sale by the Corporation of up to 6,646,526 Common Shares at an issue price of $2.65 (U.S.) per
Common Share on a best efforts marketed offering basis through the Agent (the “Offering”); and 

  

	( )	subject to Section 10, the Offering is not subject to any minimum subscription level, and therefore, any funds invested are available to the Corporation and will be paid to the
Corporation on the Closing Date. 

  
 Representations, Warranties
and Covenants by Subscriber 
  
 3. The Subscriber (on its own behalf and, if
applicable, on behalf of each person on whose behalf the Subscriber is contracting) represents, warrants and covenants to the Corporation and the Agent and their respective counsel (and acknowledges that the Corporation and the Agent, and their
respective counsel, are relying thereon) that both at the date hereof and at the Closing Time (as defined herein): 
  

	( )	Subscriber (i) has been advised that trading in the Common Shares will be subject to various limitations and holding periods of up to two years under the securities laws of the
United States and four months under the securities laws of Canada regardless of the residence of the Subscriber; (ii) has been independently advised as to restrictions with respect to trading in the Common Shares imposed by applicable securities
legislation in the jurisdiction in which it resides; (iii) confirms that no representation has been made to it by or on behalf of the Corporation with respect thereto; it acknowledges that it is aware of the characteristics of the Common Shares, the
risks relating to an investment therein, and of the fact that it may not be able to resell the Common Shares except in accordance with limited exemptions under applicable securities legislation and regulatory policy until expiry of the applicable
restricted period and compliance with the other requirements of applicable law; and 

  

	( )	Other than the documents listed on Exhibit 2 hereto, which have been previously provided to, or obtained by, Subscriber (the “Disclosure Documents”), Subscriber has not
received or been provided with, nor has it requested, nor does it have any need to receive, any offering memorandum, any prospectus, sales or advertising literature, or any other document describing or purporting to describe the business and affairs
of the Corporation which has been prepared for delivery to, and review by, prospective purchasers in order to assist it in making an investment decision in respect of the Common Shares; and 

  

	( )	Subscriber has not become aware of any advertisement in printed media of general and regular paid circulation (or other printed public media), radio, television or
telecommunications or other form of advertisement (including electronic display) with respect to the distribution of the Common Shares; and 

  

	( )	Subscriber is, and at all times since the Subscriber received a copy of the Disclosure Documents, was, a resident of and was offered the Common Shares in the jurisdiction set forth
as the “Subscriber’s Address” under its signature on the face page of this Subscription Agreement; if the state of his or her principal residence, or the state of its principal office or principal place of business, changes, or his,
her or its address changes in any other respect, before the consummation of his, her or its purchase of the Common Shares subscribed for under this Subscription Agreement, he, she or it will promptly notify the Corporation, and if the change in the
state or his or her principal residence, or its principal office or principal place of business, is to a state in which an offer and/or sale of the Common Shares is prohibited by applicable law, any offer to sell Common Shares to him, her or it made
before notification of the change in the state of his or her principal residence, or its principal office or principal place of business, shall be deemed retracted and he, she or it shall cease to be entitled to purchase Common Shares pursuant to
such offer; and 

	( )	Subscriber acknowledges that: 

  

	 	( )	no securities commission or similar regulatory authority has reviewed or passed on the merits of the Common Shares or the adequacy or accuracy of the information set forth in any
document provided to Subscriber; and 

  

	 	( )	there is no government or other insurance covering the Common Shares; and 

  

	 	( )	the Common Shares are a speculative investment that involves a high degree of risk of loss of entire investment; and 

  

	 	( )	there are substantial restrictions on the Subscriber’s ability to resell the Common Shares and it is the responsibility of the Subscriber to find out what those restrictions
are and to comply with them before selling the Common Shares; and 

  

	 	( )	the Corporation has advised the Subscriber that the Corporation is relying on an exemption from the requirements to provide the Subscriber with a prospectus and to sell securities
through a person or company registered to sell securities under the Securities Act (Alberta) and other applicable securities laws and, as a consequence of acquiring Common Shares pursuant to this exemption, certain protections, rights and
remedies provided by the Securities Act (Alberta) and other applicable securities laws, including statutory rights of rescission or damages, will not be available to the Subscriber; and 

  

	 	( )	the Common Shares shall not be resold until after the expiry of the applicable “hold” or “restricted” period attaching to such Common Shares under United States
and Canadian laws, unless sold pursuant to an exemption under all applicable securities laws, and the certificates evidencing the Common Shares which it shall receive will bear a legend referring to such restrictions on resale and neither the
Corporation nor any transfer agent of the Corporation will register any transfers of such Common Shares not made in compliance with such restrictions on resale; and 

  

	 	( )	the Common Shares have not been approved or disapproved by the United States Securities Exchange Commission (the “SEC”) or any state securities commission nor has
the SEC or any state securities commission passed upon the accuracy or adequacy of any representations of the Corporation; any representation to the contrary is a criminal offense. 

  

	( )	Subscriber is purchasing the Common Shares directly from the Corporation pursuant to Regulation D under U.S. Securities Act of 1933, as amended (the “1933
Act”), and: 

  

	 	( )	Subscriber is authorized to consummate the purchase of the Common Shares; and 

  

	 	( )	Subscriber understands and acknowledges that the Common Shares have not been registered under the 1933 Act, or any applicable state securities laws, and that the sale contemplated
hereby is being made in reliance on a private placement exemption to institutional “accredited investors” as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D Regulation D under the 1933 Act (“Institutional Accredited
Investors”) and similar exemptions under state law. Accordingly, the Common Shares will be “restricted securities” within the meaning of Rule 144 under the 1933 Act, and therefore may not be offered or sold by it, directly or
indirectly, in the United States without registration under United States federal and, if not preempted, state securities laws, except in compliance with paragraph 3(f)(v) and, the Subscriber understands that the certificates representing the Common
Shares issued to it will contain a legend in respect of such restrictions which is set out in (vi) below; and 

  

	 	( )	Subscriber has received, for its information only, a copy of this Subscription Agreement and a copy of each of the Disclosure Documents and has been offered the opportunity to ask
questions and receive answers concerning the terms and conditions of the Offering and to obtain any information the Subscriber deems necessary to verify the accuracy of any information regarding the Corporation; and has had access to such additional
information, if any, concerning the Corporation as it has considered necessary in connection with its investment decision to invest in the Common Shares; and 

  

 3 

	 	( )	Subscriber has a pre-existing personal or business relationship with the Corporation or one of its officers, directors or controlling persons, or by reason of the Subscriber’s
business or financial experience, that it has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its investment in the Common Shares and is able to bear the economic risks of such
investment and can be reasonably assumed to have the capacity to protect his, her or its own interests in connection with the transaction contemplated by this Subscription Agreement; and 

  

	 	( )	Subscriber agrees that if it decides to offer, sell or otherwise transfer any of the Common Shares, it will not offer, sell or otherwise transfer any of such Common Shares, directly
or indirectly, except: (A) to the Corporation, (B) outside the United States in accordance with Rule 903 or 904 of Regulation S under the 1933 Act, and in compliance with applicable local laws and regulations, (C) inside or outside the United States
after one year pursuant to the exemption from registration under the 1933 Act provided by Rule 144 thereunder, (D) to a person it reasonably believes is a “qualified institutional buyer” (as defined in Rule 144A under the 1933 Act)
purchasing for its own account or for the account of a qualified institutional buyer in a transaction meeting the requirements of Rule 144A, (E) inside the United States, in any other transaction exempt from registration under the 1933 Act and, in
any event, in compliance with any applicable state securities laws of the United States, provided that prior to any transfer pursuant to this clause (E), the Corporation may require a legal opinion reasonably satisfactory to the Corporation that
such transfer is exempt from registration under the 1933 Act and applicable state securities laws, and, in each instance, in compliance with any applicable state securities laws of the United States or (F) pursuant to a registration statement
effective under the 1933 Act and covering such offer, sale and transfer; and 

  

	 	( )	Subscriber understands that upon the original issuance thereof, and until such time as the same is no longer required under applicable requirements of the 1933 Act or state
securities laws, the certificates representing the Common Shares, and all certificates issued in exchange therefor or in substitution thereof, shall bear on the face of such certificates the following legend: 

  
 THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”) OR STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF GASTAR EXPLORATION LTD. THAT SUCH SECURITIES MAY BE OFFERED, SOLD
OR OTHERWISE TRANSFERRED ONLY (A) TO GASTAR EXPLORATION LTD., (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 903 OR 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT, (C) INSIDE OR OUTSIDE THE UNITED STATES, PURSUANT TO THE EXEMPTION FROM
REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, (D) TO A PERSON THE HOLDER REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE U.S. SECURITIES ACT) PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, OR (E) PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE UNDER THE U.S. SECURITIES ACT AND COVERING SUCH OFFER, SALE OR TRANSFER (IT
BEING UNDERSTOOD THAT THE ISSUER SHALL BE UNDER NO OBLIGATION TO FILE SUCH REGISTRATION STATEMENT). HEDGING TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED HEREBY MAY NOT BE CONDUCTED EXCEPT IN COMPLIANCE WITH THE U.S. SECURITIES ACT; 

 
 provided, that if Common Shares are being sold in compliance with
the requirements of Rule 144 under the 1933 Act or pursuant to an effective registration statement under the 1933 Act, the above legend may be removed by delivery of (i) an opinion of counsel of recognized standing reasonably satisfactory to the
Corporation to the effect that such Common Shares held by it are being sold pursuant to Rule 144 of the 1933 Act or pursuant to an effective registration statement under the 1933 Act, as the case may be, and (ii) such other documentation reasonably
requested by the Corporation or its transfer agent; 
  
 provided, further, that if (i) it is not an “affiliate” (as defined in Rule 405 under the 1933 Act) of the 

  

 4 

 
Corporation, (ii) it has not been such an affiliate in the preceding three months, and (iii) at least two years (or such shorter period as may be permitted
under Rule 144(k) or any successor rule) have elapsed since the later of the date the Common Shares were acquired from the Corporation or from an affiliate of the Corporation, then the above legend may be removed from any certificates representing
such Common Shares held by it by delivery to the Corporation of an opinion of counsel of recognized standing reasonably satisfactory to the Corporation, to the effect that any such Common Shares held by it may be sold pursuant to Rule 144(k) (or any
successor rule) of the 1933 Act and such legend is no longer required under applicable requirements of the 1933 Act or state securities laws; 
  
 and the Corporation shall use its reasonable best efforts to cause the registrar and transfer agent of the Corporation to remove the foregoing U.S. legend
within three business days (excluding weekends and holidays) of receipt of the foregoing, as applicable; and 
  

	 	( )	Each certificate representing the Common Shares will carry a legend, and any ownership statement issued under a direct registration system or other electronic book-entry system
acceptable to the applicable Canadian securities regulator will bear a legend restriction notation, stating “Unless permitted under securities legislation, the holder of this security must not trade the security before [insert the date that
is 4 months and a day after the distribution date.]” 

  

	 	( )	Subscriber is an Institutional Accredited Investor as set forth in Exhibit 1 hereto and is acquiring the Common Shares as principal for its own account for investment, and
not with a view to any resale, distribution or other disposition of the Common Shares, in violation of United States securities laws; the Subscriber has no contract, undertaking, agreement or arrangement with any person to sell, transfer, assign or
pledge to such person or anyone else all or any part of the Common Shares for which the Subscriber hereby subscribes, and the Subscriber has no plans or intentions to enter into any such contract, undertaking or arrangement; and

  

	 	( )	Subscriber has concurrently executed and delivered Exhibit 1 hereto with this Subscription Agreement which Exhibit is incorporated into and forms a part of this Subscription
Agreement; and 

  

	 	( )	Subscriber has read, is fully familiar with, and completely understands, the Disclosure Documents and any other documents and information which he, she or it deems material to
making an investment decision with respect to the Common Shares; and 

  

	 	( )	the financial condition of the Subscriber is such that he, she or it has no need for liquidity with respect to his, her or its investment in the Common Shares to satisfy any
existing or contemplated undertaking or indebtedness, and he, she or it has no need for a current return on his, her or its investment in the Common Shares; he, she or it is able to bear the economic risk of his, her or its investment in the Common
Shares for an indefinite period of time, including the risk of losing all of his, her or its investment, and the loss of his, her or its entire investment in the Common Shares would not materially adversely affect the standard of living of the
Subscriber or his or her family; and 

  

	 	( )	all information that the Subscriber has provided in this Subscription Agreement concerning the Subscriber and his, her or its financial condition is correct and complete as of the
date set forth below, and if there should by any material change in such information prior to the acceptance of the Subscriber’s subscription for the Common Shares subscribed for under this Subscription Agreement, the Subscriber will
immediately so notify the Corporation; and 

  

	( )	Subscriber understands and acknowledges that the certificates representing the Common Shares will also bear a legend that the securities cannot be traded through the facilities of
stock exchanges in Canada since the certificate is not freely transferable and consequently is not “good delivery” in transactions on such stock exchanges unless on or prior to such trade, arrangements have been made to remove the legends
as provided in the provisos of paragraph 3(f)(vi) hereof, and it acknowledges that such stock exchanges would deem the selling security holder to be responsible for any loss incurred on a sale made by such security holder in such securities; and

  

	( )	Subscriber understands and acknowledges that the Corporation has the right to instruct the transfer agent for the Common Shares not to record a transfer by any person in the United
States without first being notified by the Corporation that it is satisfied that such transfer is exempt from or not subject to registration under the 1933 Act and any applicable state securities laws; and 

  

 5 

	( )	Subscriber acknowledges that it has not purchased the Common Shares as a result of any general solicitation or general advertising, as such terms are defined in Regulation D under
the 1933 Act, including, without limitation, advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio or television, or any seminar or meeting whose attendees have been
invited by general solicitation or general advertising; and 

  

	( )	except as provided herein, no person has made to the Subscriber any written or oral representation: 

  

	 	( )	that any person will resell or repurchase the Common Shares; 

  

	 	( )	that any person will refund the purchase price of the Common Shares; or 

  

	 	( )	as to the future price or value of the Common Shares; and 

  

	( )	Subscriber understands and acknowledges that the Corporation (i) is not presently, nor is the Corporation under any obligation to become, a “foreign private issuer”, as
such term is defined in Regulation S of the 1933 Act and (ii) because the Corporation is not a foreign private issuer, the 1933 Act restricts the offer, sale or transfer of the Common Shares both within and outside of the United States, as set forth
in this Subscription Agreement; and 

  

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

  

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

  

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

  

	( )	except for the representations and warranties made by the Corporation in this Agreement and the Subscriber’s review of the Disclosure Documents, Subscriber has relied solely
upon publicly available information relating to the Corporation and not upon any verbal or written representation as to fact or otherwise made by or on behalf of the Corporation; and 

  

	( )	Subscriber acknowledges that the Corporation’s counsel and the Agent’s counsel are acting as counsel to the Corporation and the Agent, respectively, and not as counsel to
the Subscriber; and 

  

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

  

	( )	if required by applicable securities legislation, regulations, rules, policies or orders or by any securities commission, stock exchange or other regulatory authority, the
Subscriber will execute, deliver, file and otherwise assist the Corporation in filing, such reports, undertakings and other documents with respect to the issue of the Common Shares, including, without limitation, a duly completed copy of Exhibit
1; and 

  

	( )	the acquisition of the Common Shares hereunder by the Subscriber will not result in the Subscriber becoming a “control person”, as defined under applicable securities
laws; and 

  

 6 

	( )	the entering into of this Subscription Agreement and the completion of the transactions contemplated hereby do not and will not result in a violation of any of the terms or
provisions of any law applicable to the Subscriber, or if the Subscriber is not a natural person, any of the Subscriber’s constating documents, or any agreement to which the Subscriber is a party or by which it is bound; and

  

	( )	the Subscriber acknowledges that it has been encouraged to obtain independent legal, income tax and investment advice with respect to its subscription for the Common Shares and
accordingly, has had the opportunity to acquire an understanding of the meanings of all terms contained herein relevant to the Subscriber for purposes of giving representations, warranties and covenants under this Subscription Agreement; and

  
 Representations and Warranties of the Corporation

  
 4. The Corporation represents and warrants, as of the date of this
Agreement and the Closing Date, to the Subscriber, that: 
  

	( )	Each of the Corporation and its subsidiaries is a corporation, limited liability company, partnership or other entity and is duly organized and validly existing in good standing
under the laws of the jurisdiction in which it is organized, and is duly qualified to do business as a foreign corporation in all jurisdictions in which the failure to be so qualified would materially and adversely affect the business or financial
condition, properties or operations of the Corporation. Each of the Corporation and its subsidiaries has all requisite corporate, partnership, limited liability company or other organizational power and authority (i) to own and lease the properties
and assets it currently owns and leases (if any) and it contemplates owning and leasing and (ii) to conduct its activities as such activities (if any) are currently conducted and as currently contemplated to be conducted. 

 

	(a)	As of the date of this Agreement, the authorized capital of the Corporation consists of an unlimited number of Common Shares and preferred shares, of which as of the date of this
Agreement 119,326,298 Common Shares and no preferred shares are issued and outstanding, 16,934,600 Common Shares are reserved for issuance pursuant to the Corporation’s share option, restricted shares and share purchase plans; and 11,846,603
Common Shares are issuable and reserved for issuance pursuant to securities exercisable or exchangeable for, or convertible into, Common Shares. All of such outstanding or issuable shares have been, or upon issuance will be, validly issued and are,
or upon issuance will be, fully paid and nonassessable. 

  

	( )	The Corporation has duly authorized the issuance and sale of the Common Shares in accordance with the terms of this Agreement. This Agreement constitutes a valid and legally binding
obligation of the Corporation, enforceable in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies, and (iii) to the extent the indemnification provisions contained herein may be limited by applicable federal or
state securities laws. 

  

	( )	The Common Shares, when issued and paid for in accordance with this Agreement, will represent validly authorized, duly issued and fully paid and nonassessable Common Shares of the
Corporation, and the issuance thereof will not conflict with the organizational documents of the Corporation. 

  

	( )	The execution and delivery of this Agreement, the fulfillment of the terms set forth herein and the consummation of the transactions contemplated hereby will not conflict with, or
constitute a breach of or default under, any agreement, indenture or instrument by which the Corporation is bound or any law, administrative rule, regulation or decree of any court or any governmental body or administrative agency applicable to the
Corporation. 

  

	( )	As of the date of this Agreement, the offering documents do not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. 

  

	( )	Subsequent to the dates as of which information is given in the offering documents, except as described therein, there has not been any material adverse change with regard to the
assets or properties, results of operations or financial condition of the Corporation. 

  

	( )	 Other than as publicly disclosed by the Corporation, there is no litigation or governmental or other proceeding or investigation at law or in equity before any
court or before any federal, provincial, state, municipal or other governmental or public department, commission, board, agency or body, domestic or foreign, pending or, to the 

  

 7 

	 	 
Corporation’s knowledge, threatened (and the Corporation does not know of any basis therefor) against, or involving the assets, property or business of,
the Corporation or any of its subsidiaries, nor are there any matters under discussion with any governmental authority relating to taxes, governmental charges or assessments asserted by any such authority that would materially adversely affect the
value or the operation of such assets or properties or the business, results of operations, prospects or condition (financial or otherwise) of the Corporation and its subsidiaries, taken as a whole. 

  

	( )	To the knowledge of the Corporation, no securities commission, stock exchange or comparable authority has issued any order preventing the issue and sale of the Common Shares nor
instituted proceedings for that purpose, and, to the knowledge of the Corporation, no such proceedings are pending or contemplated. 

  

	( )	The Corporation is, and has been for the four months immediately preceding the Closing Date, a reporting issuer not in default of any requirement under the securities laws,
regulations, rules, orders and policies applicable in British Columbia, Alberta, Manitoba, Ontario, Quebec and Nova Scotia (the “Canadian Securities Laws”). The Corporation is in compliance with all timely disclosure obligations
under applicable Canadian Securities Laws, and none of the documents filed by or on behalf of the Corporation pursuant to such Canadian Securities Laws contains a misrepresentation at the date of the filing thereof. 

  

	( )	The first trade of the Common Shares purchased by the Subscriber is exempt from the prospectus requirements of the Canadian Securities Laws so long as: 

  

	 	(i)	at least four months have elapsed from the Closing Date; 

  

	 	(ii)	the trade is not a control distribution (as defined in Multilateral Instrument 45-102 promulgated under the securities laws of each Canadian jurisdiction other than Quebec);

  

	 	(iii)	no unusual effort is made to prepare the market or to create a demand for the security that is the subject of the trade; 

  

	 	(iv)	no extraordinary commission or consideration is paid to a person or company in respect of the trade; and 

  

	 	(v)	if the selling security holder is an insider or officer of the issuer, the selling security holder has no reasonable grounds to believe that the issuer is in default of securities
legislation; and 

  

	( )	The Corporation will continue to be a reporting issuer under applicable Canadian Securities Laws until that date that is four months and a day after the Closing Date.

  

	( )	Assuming the accuracy of the representations and warranties of the Subscriber set forth in this Agreement, the offer, issuance and delivery of the Common Shares are exempt from the
prospectus and dealer registration requirements of the relevant securities laws, and are exempt from or not subject to the registration requirements of the 1933 Act. 

  

	( )	The Common Shares will, prior to issuance, be conditionally listed for trading on the Toronto Stock Exchange. 

  
 Resale Commitments 
  
 5. The Corporation will use its reasonable commercial efforts to file a registration statement (the “Registration Statement”) on
proper form with the United States Securities and Exchange Commission (the “SEC”) covering the resale of all Common Shares that are restricted under the U.S. Securities Act within 90 days of the Closing Date. The Corporation shall use its
reasonable commercial efforts to cause the Registration Statement to be declared effective within 180 days of the Closing Date. The Corporation shall cause the Registration Statement to remain effective until the earlier of (i) 30 days after all the
Common Shares have been sold under the Registration Statement, or (ii) one year from the Closing Date. 
  
 6. The subscriber acknowledges and agrees that, if it chooses to avail itself of the use of the Registration Statement it will, upon request of the Corporation, timely furnish to the Corporation for use and
publication in the Registration Statement all selling shareholder information required to be included in the Registration Statement, and the subscriber will advise the Corporation whenever such information is incorrect and will furnish updated
information. The subscriber acknowledges that failure to timely provide such information, and to keep such information updated, will excuse the Corporation from maintaining or filing the 

  

 8 

 
Registration Statement for the benefit of such subscriber. The subscriber agrees to indemnify and hold harmless the Corporation, its respective officers,
directors, partners, employees, representatives and agents, or any controlling persons (any such person referred to hereinafter shall be referred to as an “Indemnified Holder”), against any losses, claims, damages or liabilities to which
such Indemnified Holder may become subject under the U.S. Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in any information furnished by the subscriber for use in the Registration Statement or related prospectus, or any amendment or supplement thereto or any related preliminary prospectus or (ii)
the omission or alleged omission to state therein a material fact required to be included in such information requested by the Corporation or necessary to make such information not misleading, in the light of the circumstances under which such
information is furnished. 
  
 7. The subscriber acknowledges that if the
Registration Statement is declared effective (i) the Corporation shall be under no obligation to arrange an underwriting or otherwise assist in providing for any proposed sales of Common Shares covered by the Registration Statement and (ii) in order
to update the Registration Statement with periodic information or material non-public information as required by the U.S. Securities Act, the effectiveness of the Registration Statement, and the ability of the subscriber to effect sales of Common
Shares covered thereby, will be periodically suspended from time to time upon notice to the holders of Common Shares. The Corporation shall not be required to specify in any notice to the nature of the event giving rise to the suspension. The
Corporation will use its reasonable efforts to limit these suspended periods to those required by the U.S. Securities Act. 
  
 8. The Corporation shall maintain its common stock as listed for trading on the Toronto Stock Exchange for one year after the Closing Date. 
  
 Closing 
  
 9. The Subscriber agrees to deliver to the Agent, not later than 12:00 p.m. (Houston Texas time) on the day that is two business days before
the Closing Date: (a) this duly completed and executed Subscription Agreement; and (b) Exhibit 1 duly completed. 
  
 10. Subscriber acknowledges that its obligation to purchase the Common Shares hereunder is not conditioned upon the issuance of senior secured notes described in Exhibit
3 hereto or the consummation of the proposed Geostar acquisition described in the Disclosure Documents. Subscriber acknowledges that it has made its investment decision to purchase the Common Shares, assuming that one or both such transactions may
not close or, if pursued by the Corporation, such transactions may close on terms that are materially different than previously disclosed. Subscriber acknowledges that the terms and existence of the proposed senior secured notes financing described
in Exhibit 3 are confidential non-public information concerning the Corporation, which should not be publicly disclosed by Subscriber. The Corporation agrees that, in the event it closes a debt transaction or series of debt transactions as an
alternative to the senior secured notes transaction described on Exhibit 3 hereto, it will not in connection with the alternative debt transaction or series of alternative debt transactions, without the consent of subscribers holding a majority of
the Common Shares issued pursuant to this Subscription Agreement and similar subscription agreements for Common Shares issued on the Closing Date, issue or commit to issue, within a period of 18 months from the Closing Date, a number of Common
Shares or any other equity securities, having an aggregate equity value in excess of that would would have been issued under the proposed senior secured notes transaction described in Exhibit 3. 
  
 11. The sale of the Common Shares pursuant to this Subscription Agreement will be completed
at the offices of Vinson & Elkins L.L.P., the Corporation’s counsel, in Houston, Texas at 10:00 a.m. or such other time as the Corporation and the Subscriber may agree (the “Closing Time”) on June 15, 2005 or such other
date as the Corporation and the Subscriber may agree (the “Closing Date”). 
  
 12. At or prior to the Closing Time, the Corporation will deliver to the Subscriber, or the Subscriber’s custodian as directed by the Subscriber, a certificate representing the Common Shares to be purchased by
the Subscriber, registered in the manner as set forth on the face page of this Agreement, in the Corporation’s transfer agent, which certificate will be held in escrow by the Subscriber or its custodian pending completion of the sale. Following
receipt of the certificate referred to in the previous sentence, the Subscriber will, at the Closing Time, pay for the Common Shares by wire transfer of immediately available funds. 
  
 13. The Corporation shall be entitled to rely on delivery of a facsimile copy of executed Subscription Agreements, and acceptance by the
Corporation of such facsimile subscriptions shall be legally effective to create a valid and binding agreement between the Subscriber and the Corporation in accordance with the terms hereof. In addition, this Subscription Agreement may be executed
in counterparts, each of which shall be deemed to be an original and all of which shall constitute one and the same document. 
  

 9 

 General 
  
 14. The Subscriber agrees that the representations, warranties and covenants of the Subscriber herein will be true and correct both as of the execution of this
Subscription Agreement and as of the Closing Time and will survive the completion of the issuance of the Common Shares. The representations, warranties and covenants of the Subscriber herein are made with the intent that they be relied upon by the
Corporation and the Agent and their respective counsel in determining the eligibility of a purchaser of Common Shares and the Subscriber agrees to indemnify and hold harmless the Corporation and the Agent and their respective affiliates,
shareholders, directors, officers, partners, employees and agents, from and against all losses, claims, costs, expenses and damages or liabilities whatsoever which any of them may suffer or incur which are caused or arise from a breach thereof. The
Subscriber undertakes to immediately notify the Corporation at Gastar Exploration Ltd., 888, 900 – 6th Avenue
S.W., Calgary, Alberta, T2P 3K2, Attention: Sara-Lane Sirey, Corporate Secretary (Fax Number: (403) 237-6518) of any change in any statement or other information relating to the Subscriber set forth herein which takes place prior to the Closing
Time. 
  
 15. The Subscriber acknowledges that the Agent has agreed to offer the
Common Shares on a best efforts marketed “private placement” basis and, in connection therewith, the Corporation and the Agent have entered into, or will enter into prior to the Closing Date, an agreement (the “Agency
Agreement”) pursuant to which the Agent, in connection with the issue and sale of the Common Shares, will receive a fee from the Corporation. 
  
 16. The Subscriber acknowledges that this Subscription Agreement and the Exhibits hereto require the Subscriber to provide certain personal information to the
Corporation. Such information is being collected by the Corporation for the purposes of completing the Offering, which includes, without limitation, determining the Subscriber’s eligibility to purchase the Common Shares under applicable
securities legislation, preparing and registering certificates representing Common Shares to be issued to the Subscriber and completing filings required by any stock exchange or securities regulatory authority. The Subscriber’s personal
information may be disclosed by the Corporation to: (a) stock exchanges or securities regulatory authorities, (b) the Corporation’s registrar and transfer agent; and (c) any of the other parties involved in the Offering, including legal
counsel, and may be included in record books in connection with the Offering. By executing this Subscription Agreement, the Subscriber is deemed to be consenting to the foregoing collection, use and disclosure of the Subscriber’s personal
information. The Subscriber also consents to the filing of copies or originals of any of the Subscriber’s documents described in paragraph 4 hereof as may be required to be filed with any stock exchange or securities regulatory authority in
connection with the transactions contemplated hereby. 
  
 17. To the best of its
knowledge (a) none of the subscription funds to be provided by the Subscriber (i) have been or will be derived from or related to any activity that is deemed criminal under the law of Canada, the United States of America, or any other jurisdiction,
or (ii) are being tendered on behalf of a person or entity who has not been identified to the Subscriber, and (b) it shall promptly notify the Corporation if the Subscriber discovers that any of such representations ceases to be true, and to provide
the Corporation with appropriate information in connection therewith. 
  
 18. The
obligations of the parties hereunder are subject to acceptance of the terms of the Offering by the Toronto Stock Exchange and all other required regulatory approvals. 
  
 19. The Subscriber acknowledges and agrees that all costs incurred by the Subscriber (including any fees and disbursements of any special
counsel retained by the Subscriber) relating to the sale of the Common Shares to the Subscriber shall be borne by the Subscriber. 
  
 20. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas, without regard to the principles of conflicts of law thereof that
would require the application of the laws of any jurisdiction other than Texas. 
  
 21. This Subscription Agreement represents the entire agreement of the parties hereto relating to the subject matter hereof and there are no representations, covenants or other agreements relating to the subject matter hereof except as
stated or referred to herein. 
  
 22. The terms and provisions of this
Subscription Agreement shall be binding upon and enure to the benefit of the Subscriber and the Corporation and their respective heirs, executors, administrators, successors and assigns; provided that, except for the assignment by a Subscriber who
is acting as nominee or agent for the beneficial owner and as otherwise herein provided, this Subscription Agreement shall not be assignable by any party without prior written consent of the other parties. 
  

 10 

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

  
 24. Subject to Section 12, neither this Subscription Agreement nor any
provision hereof shall be modified, changed, discharged or terminated except by an instrument in writing signed by the party against whom any waiver, change, discharge or termination is sought. 
  
 25. The invalidity, illegality or unenforceability of any provision of this Subscription
Agreement shall not affect the validity, legality or enforceability of any other provision hereof. 
  
 26. The headings used in this Subscription Agreement have been inserted for convenience of reference only and shall not affect the meaning or interpretation of this Subscription Agreement or any provision hereof.

  
 27. The covenants, representations and warranties contained herein shall
survive the closing of the transactions contemplated hereby. 
  
 28. In this
Subscription Agreement (including the Exhibits hereto) all references to dollar amounts are to United States dollars, unless otherwise indicated. 
  

 11 

 EXHIBIT 1 
  

CERTIFICATE OF INSTITUTIONAL ACCREDITED INVESTOR STATUS 
  

Except as may be indicated by the undersigned below, the undersigned is an institutional “accredited investor,” as that term is defined in
Regulation D under the Securities Act of 1933, as amended (the “Securities Act”). The undersigned has checked the box below indicating the basis on which he is representing his status as an institutional “accredited
investor”: 
  

			
	_________            	 	(501(a)(1)) any bank as defined in Section 3(a)(2) of the U.S. Securities Act of 1933, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of such
Act whether acting in its individual or fiduciary capacity, any broker or dealer registered pursuant to Section 15 of the U.S. Securities Exchange Act of 1934, any insurance company as defined in Section 2(13) of the U.S. Securities Act of
1933, any investment company registered under the U.S. Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of the U.S. Investment Company Act of 1940, any small business investment
company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the U.S. Small Business Investment Act of 1958, any plan established and maintained by a state, its political subdivisions, or any agency or
instrumentality of a state or its political subdivisions for the benefit of its employees, if such plan has total assets in excess of $5,000,000, any employee benefit plan within the meaning of Title 1 of the U.S. Employee Retirement Income
Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of the U.S. Employee Retirement Income Security Act of 1974, which is either a bank, savings and loan association, insurance
company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors;
		
	_________	 	(501(a)(2)) any private business development company as defined in Section 202(a)(22) of the U.S. Investment Advisers Act of 1940;
		
	_________	 	(501(a)(3)) any organization described in Section 501(c)(3) of the U.S. Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the
specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000;
		
	_________	 	(501(a)(7)) any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person
as described in SEC Rule 506(b)(2)(ii).

  
 NOTE: The Subscriber
should initial beside the portion of the above definition applicable to it. 
  
 All monetary references in this Exhibit 1 are in United States Dollars. 
  
 IN WITNESS WHEREOF, the undersigned has executed this Certificate of Institutional Accredited Investor Status effective as of June
    , 2005. 
  

			
	  

 Name of
Subscriber

		
	By:	 	  

	Name:	 	  

	Title:	 	  

	

 . 

 EXHIBIT 2 
  

Disclosure Documents 
  
 1. Management Proxy and Information Circular dated June 1, 2005 
  
 2. Interim Consolidated Financial Statements for Three Months Ended March 31, 2005 (Unaudited - Canadian GAAP) 
  
 3. Management’s Discussion and Analysis - Quarter Ended March 31, 2005 (dated May 13,
2005) 
  
 4. Annual Information Form - Year Ended December 31, 2004 (dated March
29, 2005) 
  
 5. Annual Consolidated Financial Statements for Years Ended December
31, 2004 and 2003 (Audited - Canadian GAAP) 
  
 6. Company Press Releases dated
April 19 and May 2, 10, 17, 20, 25 of 2005 
  
 7. Term Sheet for Proposed Senior
Secured Note with Common Share Issuance attached as Exhibit 4 to this Subscription Agreement (Confidential) 
  
 The documents described in 1 through 6 above can be found under Gastar Exploration Ltd. Company Profile on www.sedar.com. The document described in 7 above is confidential and should not be distributed or disclosed.

 EXHIBIT 3 
  

GASTAR EXPLORATION LTD. 
  
 $90,000,000 SENIOR SECURED NOTES 
 With Common Share Issuance 
  
 TERM SHEET

 (Confidential) 
  

			
	Issuer:	    	Gastar Exploration Ltd. (“the Company”).
		
	Securities:	    	Senior Secured Notes (“the Notes”) issued at Par Value.
		
	Issuance Amount:	    	Up to $90,000,000. The Company would receive $70,000,000 at the Closing, and have an option to draw an additional $20,000,000 over the Term (on terms and conditions described
below).
		
	Rank/Security:	    	 Investor would have a first perfected security interest on all tangible and intangible assets now owned, and hereafter created or acquired by the
Company and its domestic (U.S.) subsidiaries, including but not limited to all accounts, notes, and contracts receivable, inventory, machinery and equipment, land and buildings, drilling and mineral rights, and general intangibles, and a first
perfected pledge of 100% of the stock of all subsidiaries (existing & future, direct and indirect), except (i) with respect to the Powder River Basin assets (which would be subject to a springing lien if not sold within 120 days) (ii) existing
Australian assets provided that pledge of 100% of stock of Subsidiary that owns such assets will remain in place at all times and (iii) California and Canadian oil and gas assets (which would be subject to a springing lien if value or investment to
develop exceed $250,000 in each jurisdiction). Negative covenants prohibiting the issuance or incurrence of debt or liens at the foreign subsidiary level would also be included. Neither the Company nor any of its subsidiaries may incur any
additional indebtedness unless such indebtedness (with certain exceptions) is subordinated to the Notes, in a form acceptable to Investor, is unsecured and matures after the maturity date of the Notes (‘Permitted Subordinated Debt”).
Existing indebtedness to be scheduled to include convertible debentures of $30,000,000, $25,000,000 unsecured subordinated note due to Geostar in January 2006 and $3,250,000 unsecured subordinated note due 2009.
  
 Permitted Indebtedness per industry standard for secured oil and gas
financings.

		
	Use of Proceeds:	    	Approximately $70,000,000 of the proceeds are to be used for general corporate purposes including re-financing existing debt, the

			
	 	    	acquisition of additional interests in the Company’s existing leasehold and working interest properties and the exploration and development of the Company’s East Texas, Powder River
Basin and Australian oil, natural gas and CBM assets. Approximately $29,000,000 of the proceeds are to be used to redeem the 15% outstanding senior unsecured notes owed to Ingalls & Snyder.
		
	Interest:	    	3 month Libor + 600 bps per annum, adjusted and payable quarterly in cash.
		
	Term/Maturity:	    	5 years and 1 day.
		
	 Company Cash/Equity
 Redemption
Right:
	    	The Company, at any time after year one from the Closing, would have the right to repay any or all outstanding Notes in cash, at a redemption price equal to 105% of par plus accrued Interest
for years 1 and 2, reducing prepayment penalty each year by 1% until at par plus accrued but unpaid Interest at the Maturity date.
		
	Asset Sales:	    	Asset Sales and farm-outs permitted so long as (i) no Event of Default exists, (ii) proceeds subject to Lien and permitted investment covenants and (iii) officers certificate delivered
verifying that after giving effect to disposition Company is in compliance with financial covenants.
		
	Change of Control:	    	Any increase in common shares due to the terms of the look-back provision or due to the terms of the option to acquire coal rights in Victoria, Australia contained in the definitive
documentation between Geostar and Gastar would be carved out of any change of control calculation for redemption purposes. Change of Control Redemption prepayment to match Company Redemption Right except for hostile takeover premium equal to 115% of
par.
		
	Company Draw Down Right:	    	During the period from the 3rd month through the 24th month following the initial Closing, provided the Notes remain outstanding and the Company remains in compliance with the Financial
Covenants listed below, the Company would have the right on a quarterly basis to require the Investor to purchase up to an additional $20 million aggregate principal amount of additional Notes (the “Additional Notes”). The Additional Notes
would be issued upon the same terms and conditions as the original Notes, including pro rata share issuance, except that these additional Notes would mature 5 years and 1 day from the date of their issuance.
		
	Financial Covenants:	    	 The following financial covenants would apply
  
 (i)     Hedging Requirement: The Company may not hedge more than 50% (on a forward rolling
12-month basis) of all oil and gas production;

			
	 	    	 (ii)    PV-10 Proved and Probable Oil and Gas reserves to Net Debt: The ratio
of the Company’s PV-10 for its total proved and probable oil and gas reserves to the Company’s net debt (debt attributable to this facility only less cash balances), must be at least 2:1 (1.5 for maintenance purposes) during one year,
2.5:1 starting in year two, 3:1 starting in year three, 3.5:1 starting in year four and 3.5:1 starting in year five and thereafter;
  
 (iii)  PV-10 Proved reserves to Net Debt: The ratio of the Company’s PV-10 for its total proved oil and gas
reserves to the Company’s net debt (debt attributable to this facility only less cash balances), must be at least 1:1 starting in year two, 1.5:1 starting in year three, 2:1 starting in year four and thereafter.
  
 The Company would have the continual obligation to repay at 100% of par plus accrued but
unpaid Interest the amount of Notes necessary to maintain compliance with the above covenants, except for year one under covenant (ii) above, which for maintenance purposes would be 1.5:1, but for additional draw down purposes, 2:1. Clause (ii) and
(iii) above will be calculated based on a price for gas per mcf of the lower of (a) $6.00 Henry Hub and (b) the then current Henry Hub prompt month price and price for oil per barrel of the lower of (a) $40 and (b) the then current NYMEX prompt
month price.

		
	Share Issuance:	    	 The Investor will receive at Closing and thereafter at each of the first three six-month anniversaries of the Closing, common shares equal to CND
$5,000,000 divided by the arithmetic average of the Volume Weighted Average Price (over five trading days) of the Common Stock for the five consecutive trading days prior to Closing or applicable six month anniversary date as the case may be. Common
shares to be issued at initial closing estimated to be approximately 1,300,000.
  
 On the take down of Additional Notes and on each of the first three six-month anniversaries of such Additional Note Closing Date (each an “Additional Delivery Date”), the Company shall issue to Investors that number of common
shares equal to the quotient of (A) one-fourteenth (1/14) of the Additional Note Issuance Amount Issuance Amount relating to such Additional Closing Date, divided by (B) the arithmetic average of the weighted average price of the common shares on
each of the five (5) consecutive trading days immediately preceding the Additional Delivery Date.

			
	 	    	Share issuance will be subject to a (i) deferred issuance if Investors would hold at the time of issuance in excess of 9.99% of the common shares outstanding after any issuance, and (ii)
limitation of issuance a maximum number of shares issued without breaching the rules or regulations of the TSX or such other principal market) (the “Exchange Cap”) with certain subsequent make-up cash payments, if
necessary.
		
	Registration:	    	The Company would be required to use reasonable best efforts to file with the U.S. SEC within 90 days of Closing a U.S. registration statement on Form S-1 and to use reasonable best efforts
to have such registration statement declared effective within 180 calendar days from Closing covering the resale of the Common Stock. Certain penalties will apply for failure to register, or subject to applicable grace periods, failure to keep
registration statement current.
		
	Closing, Funding, Reimbursements:	    	Closing and funding would occur after the completion of due diligence to the satisfaction of all parties and simultaneously with the mutual execution of the investment agreements. The
investment agreements would contain covenants and protections customary for an investment of this nature. The Company would pay to the Investor at each closing a non-accountable reimbursement amount (“Reimbursement”) equal to 1.0% of the
Issuance Amount at such closing. The Investor would cover its own due diligence and legal costs.

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