Document:

Exhibit
10.2

EXECUTION
COPY

CONVERTIBLE
NOTES REGISTRATION RIGHTS AGREEMENT

THIS CONVERTIBLE NOTES
REGISTRATION RIGHTS AGREEMENT (this “Agreement”), is made and entered into this 19th day of
January, 2007, by and among Storm Cat Energy Corporation, a company
incorporated under the laws of the Province of British Columbia, Canada (the “Company”), and the undersigned
Purchasers, in their capacity as both purchasers of Series A Notes (as defined
below) and Series B Notes (as defined below) (each, a “Purchaser”, and collectively, the “Purchasers”).

Recitals:

A.            In
connection with that certain Series A Note Purchase Agreement, dated as of
January 19, 2007, by and among the Company and each of the Purchasers (the “Series A Note Purchase Agreement”), the
Company has agreed, upon the terms and subject to the conditions set forth in
the Series A Note Purchase Agreement, to issue and sell to each of the
Purchaser party thereto the Company’s Series A Subordinated Convertible Notes
due March 31, 2012 (the “Series A Notes”)
which will, among other things, be convertible into the Company’s common
shares, without par value per share (the “Common
Shares”) (as converted, the “Series A Conversion Shares”) in
accordance with the terms of the Series A Notes.

B.            In
connection with that certain Series B Note Purchase Agreement, dated as of
January 19, 2007, by and among the Company and each of the Purchasers (the “Series B Note Purchase Agreement” and
together with the Series A Note Purchase Agreement, the “Note
Purchase Agreements”), the Company has agreed, upon the terms
and subject to the conditions set forth in the Series B Note Purchase
Agreement, to issue and sell to each of the Purchaser party thereto the Company’s
Series B Subordinated Convertible Notes due March 31, 2012 (the “Series B Notes” and together with the
Series A Notes, the “Notes”)
which will, among other things, be convertible into the Company’s Common Shares
(as converted, the “Series B Conversion Shares” and
together with the Series A Conversion Shares, the “Conversion
Shares”) in accordance with the terms of the Series B Notes.

C.            To
induce the Purchasers to execute and deliver the Note Purchase Agreements, the
Company has agreed to provide certain registration rights with respect to the
Conversion Shares 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 Purchasers hereby agree as
follows:

1.             Definitions.  Capitalized terms used herein and not
otherwise defined herein shall have the respective meanings set forth in the
Note Purchase Agreements. As used in this Agreement, the following terms shall
have the following meanings:

“Additional
Effectiveness Date” means the date any Additional Registration
Statement is declared effective by the SEC.

 

“Additional
Effectiveness Deadline” means the earlier to occur of (i) the
date which is five (5) days after the Company learns that no review of an
Additional Registration Statement will be made by the staff of the SEC or that
the staff has no further comments on such Additional Registration Statement,
and (ii) the date which is sixty (60) days after the Additional Filing Date (as
defined below) of such Additional Registration Statement, or if there is a full
review of such Additional Registration Statement by the SEC, one hundred and
twenty (120) days, and if such review of such Additional Registration Statement
by the SEC includes a comment on the applicablility of Rule 415 to register the
Additional Registrable Securities on such Additional Registration Statement
then one hundred and fifty (150) days, after the Additional Filing Date for
such Additional Registration Statement.

“Additional Filing Date” means
the date on which an Additional Registration Statement is filed with the SEC.

“Additional
Filing Deadline” means (i) the date thirty (30) days after the
Series B Note Closing Date, or (ii) if Holdback Shares are being included in
such Additional Registration Statement, then, the date six (6) months from the
last Additional Filing Date or, if there was no previous Additional Filing
Date, the Initial Filing Date.

“Additional
Registrable Securities” means (i) the Series B Conversion
Shares, (ii) any Holdback Shares, and (iii) any share capital of the Company
issued or issuable with respect to the Series B Notes, the Series B Conversion
Shares or the Holdback Shares as a result of any share split, share dividend,
recapitalization, exchange or similar event or otherwise, without regard to any
limitations on conversions of Series B Notes.

“Additional
Registration Statement” means a registration statement or
registration statements of the Company filed under the 1933 Act covering any
Additional Registrable Securities.

“Additional
Required Registration Amount” means the number of Series B
Conversion Shares (which may include Holdback Shares) as of the trading day
immediately preceding the applicable date of determination, without regard to
any limitations on conversions of the Notes.

“Business Day”
means a day, other than a Saturday or Sunday, on which banks in New York City
are open for the general transaction of business.

“Effective Date”
means the Initial Effective Date and each Additional Effective Date, as
applicable.

“Effectiveness
Deadline” means the Initial Effectiveness Deadline and each
Additional Effectiveness Deadline, as applicable.

“Equity
Conditions” means each of the following conditions on each
applicable date of determination: (i) the Common Shares are designated for
quotation on the Principal Market or any applicable Eligible Market (each as
defined in the Note Purchase Agreements) and shall not have been suspended from
trading on such exchange or market (other than suspensions of not more than
three (3) days and occurring prior to the applicable date of determination due
to

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business announcements by the Company) nor shall delisting or
suspension by such exchange or market been threatened or pending either (A) in
writing by such exchange or market or (B) by falling below the then effective
minimum listing maintenance requirements of such exchange or market; (ii) the
Company shall have delivered Conversion Shares upon conversion of the Notes to
the holders on a timely basis as set forth in Section 4.1(b)(ii) of the
Note Purchase Agreements; (iii) any applicable Common Shares to be issued in
connection with the event requiring determination may be issued in full without
violating Section 4.5 of the Note Purchase Agreements or the rules or
regulations of the exchange or market upon which the Company’s Common Shares is
then listed or quoted; (iv) the Company shall not have failed to timely make
any payments within five (5) Business Days of when such payment is due pursuant
to any Note Document (as defined in the Note Purchase Agreements); (v) there
shall not have occurred either (A) the public announcement of a pending,
proposed or intended Fundamental Transaction (as defined in the Note Purchase
Agreements) which has not been abandoned, terminated or consummated, or (B) an
Event of Default (as defined in the Note Purchase Agreements) or (C) an event
that with the passage of time or giving of notice would constitute an Event of
Default; and (vi) the Company otherwise shall have been in material compliance
with and shall not have materially breached any provision, covenant,
representation or warranty of the Note Purchase Agreements or the Notes.

“Equity
Conditions Failure” means that on any day during the period
commencing ten (10) Trading Days prior to the applicable Registration Delay
Payments Payment Date through the applicable Registration Delay Payments
Payment Date, the Equity Conditions have not been satisfied (or waived in
writing by the applicable holder of Registrable Securities).

“Filing Deadline”
means the Initial Filing Deadline and any Additional Filing Deadline, as
applicable.

“Holdback Shares”
means the number of Series B Conversion Shares that the SEC determines would
result in a violation of Rule 415 if included in an Additional Registration
Statement.

“Initial
Effective Date” means the date the Initial Registration
Statement is declared effective by the SEC.

“Initial
Effectiveness Deadline” means the earlier to occur of (i) the
date which is five (5) days after the Company learns that no review of the
Initial Registration Statement will be made by the staff of the SEC or that the
staff has no further comments on the Initial Registration Statement, (ii) the
date which is ninety (90) days after the Series A Note Closing Date, or if
there is a full review of the Initial Registration Statement by the SEC, one hundred
and fifty (150) days after the Series A Note Closing Date.

“Initial Filing
Date” means the date on which the Initial Registration Statement
(as defined below) is filed with the SEC.

“Initial Filing
Deadline” means the date thirty (30) days after the Series A
Note Closing Date.

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“Initial
Registrable Securities” means (i) the Series A Conversion Shares
and (ii) any share capital of the Company issued or issuable with respect to
the with respect to the Series A Notes or the Series A Conversion Shares as a
result of any share split, share dividend, recapitalization, exchange or
similar event or otherwise, without regard to any limitations on conversions of
the Series A Notes.

“Initial Required
Registration Amount” means the number of Series A Conversion Shares
as of the trading day immediately preceding the applicable date of
determination, without regard to any limitations on conversions of the Series A
Notes.

“Initial
Registration Statement” means a registration statement or
registration statements of the Company filed under the 1933 Act covering the
Initial Registrable Securities.

“Person”
means an individual, a limited liability company, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.

“Purchaser”
means a Purchaser or any transferee or assignee thereof to whom a Purchaser
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.

“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 and the
declaration or ordering of effectiveness of such Registration Statement(s) by
the SEC.

“Registrable
Securities” means the Initial Registrable Securities and the
Additional Registrable Securities.

“Registration
Statement” means a registration statement or registration
statements of the Company filed under the 1933 Act covering the Registrable Securities.

“Required Holders” means the
holders of at least a majority of the Initial Registrable Securities or
Additional Registrable Securities, as applicbale.

“Rule 415” means Rule 415 under
the 1933 Act or any successor rule providing for offering securities on a
continuous or delayed basis.

“SEC” means the United States
Securities and Exchange Commission.

“Series A Note Closing Date” means the
date on which the transaction contemplated in the Series A Note Purchase
Agreements is consummated.

“Series B Note Closing Date” means the
date on which the transaction contemplated in the Series B Note Purchase
Agreements is consummated.

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“Shareholder
Approval” has the meaning as set forth in the Note Purchase
Agreements.

2.                                       Registration.

(a)           Initial
Mandatory Registration. The Company shall prepare, and, as soon as
practicable, but in no event later than the Initial Filing Deadline, file with
the SEC the Initial Registration Statement on Form S-1 covering the resale of
all of the Initial Registrable Securities. The Initial Registration Statement
prepared and filed pursuant hereto shall register for resale at least the
number of Common Shares equal to the Initial Required Registration Amount
determined as of the date the Initial Registration Statement is filed with the
SEC. The Initial Registration Statement shall contain (except if otherwise
directed by the Required Holders) the “Plan of Distribution” section in
substantially the form attached hereto as Exhibit A.
The Company shall use its commercially reasonable efforts to have the Initial
Registration Statement declared effective by the SEC as soon as practicable,
but in no event later than the Initial Effectiveness Deadline. By 9:30 am on
the date following the Initial Effective Date, the Company shall file with the
SEC in accordance with Rule 424 under the 1933 Act the final prospectus to be
used in connection with sales pursuant to such Registration Statement.

(b)           Additional
Mandatory Registrations. The Company shall prepare, and, as soon as
practicable but in no event later than the Additional Filing Deadline, file
with the SEC an Additional Registration Statement on Form S-1 (or Form S-3 if
then available) covering the resale of all of the Additional Registrable
Securities.  To the extent the staff of
the SEC does not permit the entire Additional Required Registration Amount to
be registered on an Additional Registration Statement, the Company shall
continue to file Additional Registration Statements successively for the
purpose of registering on each such Additional Registration Statement the
maximum number of remaining Additional Registrable Securities until,
cumulatively with all previously filed Additional Registration Statements, the
Additional Required Registration Amount has been registered with the SEC.  Each Additional Registration Statement
prepared and filed pursuant hereto shall register for resale that number of
Conversion Shares equal to (i) the Additional Required Registration Amount as
of date the first Additional Registration Statement is filed with the SEC minus
(ii) the aggregate number Conversion Shares registered for resale pursuant to
all previously filed Additional Registration Statements. Each Additional
Registration Statement shall contain (except if otherwise directed by the
Required Holders) the “Plan of Distribution” section in substantially
the form attached hereto as Exhibit A.
The Company shall use its commercially reasonable efforts to have each
Additional Registration Statement declared effective by the SEC as soon as
practicable, but in no event later than the Additional Effectiveness Deadline
for such Additional Registration Statement. By 9:30 am on the date following
the Additional Effective Date for such Additional Registration Statement, the
Company shall file with the SEC in accordance with Rule 424 under the 1933 Act
the final prospectus to be used in connection with sales pursuant to such
Additional Registration Statement.

(c)           Allocation
of Registrable Securities. The initial number of Registrable Securities
included in any Registration Statement and any increase in the number of
Registrable Securities included therein shall be allocated pro rata among the
Purchasers based on the number of Registrable Securities held by each Purchaser
at the time the Registration Statement covering

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such initial number of Registrable Securities or increase thereof is
declared effective by the SEC. In the event that a Purchaser sells or otherwise
transfers any of such Purchaser’s Registrable Securities, each transferee shall
be allocated a pro rata portion of the then remaining number of Registrable
Securities included in such Registration Statement for such transferor. Any
Common Shares or Conversion Shares, as applicable, included in a Registration
Statement and which remain allocated to any Person that ceases to hold any
Registrable Securities covered by such Registration Statement shall be
allocated to the remaining Purchasers, pro rata based on the number of
Registrable Securities then held by such Purchasers which are covered by such
Registration Statement. In no event shall the Company include any securities
other than Registrable Securities on any registration statement filed with the
SEC during the 6-month period following the Note Closing Date without the prior
written consent of the Required Holders of Additional Registrable Securities.
If the SEC requires that the Company register less than the amount of the
Conversion Shares originally included on any Registration Statement at the time
it was filed, the Registrable Securities on such Registration Statement and any
other securities allowed to be registered on such Registration Statement (as
set forth below) shall be decreased on a pro rata basis.

(d)           Legal
Counsel. Subject to Section 5 hereof, the Required Holders of both
the Initial Registrable Securities and the Additional Registrable Securities
shall have the right to select one legal counsel to review and oversee any
registration pursuant to this Section 2 (“Legal Counsel”), which shall be [                         ]
or such other counsel as thereafter designated by the Required Holders. The
Company and Legal Counsel shall reasonably cooperate with each other in
performing the Company’s obligations under this Agreement.

(e)           Ineligibility
for Form S-3. The Purchasers acknowledge that the Company is not eligible
as of the date hereof to file a Registration Statement on Form S-3.

(f)            Sufficient
Number of Shares Registered. In the event the number of Conversion Shares
available under the Initial Registration Statement filed pursuant to Section
2(a), or Conversion Shares available under an Additional Registration
Statement filed pursuant to Section 2(b), is insufficient to cover all
of the Registrable Securities required to be covered by such Registration
Statement under Section 2(a) or Section 2(b), as applicable, or a
Purchaser’s allocated portion of the Registrable Securities pursuant to Section
2(c), the Company shall file a new Registration Statement (on the form
available therefor, if applicable), or both, so as to cover at least the
Initial Required Registration Amount or Additional Required Registration
Amount, as applicable, as of the trading day immediately preceding the date of
the filing of such new Registration Statement as soon as practicable, but in
any event not later than fifteen (15) days after the necessity therefor arises.
The Company shall use its commercially reasonable efforts to cause such new
Registration Statement to become effective as soon as practicable following the
filing thereof. For purposes of the foregoing provision, the number of shares
available under a Registration Statement shall be deemed “insufficient to cover
all of the Registrable Securities” if at any time the number of Conversion
Shares available for resale under such Registration Statement is less than the
product determined by multiplying (i) the Initial Required Registration Amount
or Additional Required Registration Amount, as applicable, as of such time by
(ii) 0.90.  In the case of Conversion
Shares, the calculation set forth in the foregoing sentence shall be made
without regard to any limitations on the conversion of the Notes and such
calculation shall

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assume that the Notes are then convertible into Conversion Shares at
the then prevailing Conversion Rate.

(g)           Effect
of Failure to File and Obtain and Maintain Effectiveness of Registration
Statement.

(i)            If
(A) a Registration Statement covering all of the Registrable Securities
required to be covered thereby and required to be filed by the Company pursuant
to this Agreement is (x) not filed with the SEC on or before the respective
Filing Deadline (a “Filing Failure”)
or (y) not declared effective by the SEC on or before the respective
Effectiveness Deadline (an “Effectiveness
Failure”) or (B) on any day after an Effective Date sales of all
of the Registrable Securities required to be included on such Registration
Statement cannot be made (other than during an Allowable Grace Period (as
defined in Section 3(r)) pursuant to such Registration Statement or
otherwise (including, without limitation, because of a failure to keep such
Registration Statement effective, to disclose such information as is necessary
for sales to be made pursuant to such Registration Statement, to register a
sufficient number of Conversion Shares or to maintain the listing of the Common
Shares) (a “Maintenance Failure”)
then, as liquidated damages and not as a penalty to any holder by reason of any
such delay in or reduction of its ability to sell the Conversion Shares covered
thereby (which remedy shall be the exclusive economic remedy available with
respect to Filing Failures, Effectiveness Failures and Maintenance Failures),
the Company shall pay to each holder of Registrable Securities covered by such
Registration Statement an amount equal to one percent (1.0%) of the Aggregate Purchase
Price (as such term is defined in the Note Purchase Agreements) of such
Purchaser’s Registrable Securities included in such Registration Statement on
each of the following dates: (I) the day of a Filing Failure and on every
thirtieth day (pro rated for periods totaling less than thirty days) thereafter
until such Filing Failure is cured; (II) the day of an Effectiveness Failure
and on every thirtieth day (pro rated for periods totaling less than thirty
days) thereafter until such Effectiveness Failure is cured; (III) the initial
day of a Maintenance Failure and on every thirtieth day (pro rated for periods
totaling less than thirty days) thereafter until such Maintenance Failure is
cured.  If all of the Holdback Shares, if
any, have not been registered on an Additional Registration Statement which has
been declared effective by the SEC on or before one hundred and fifty (150)
days after the Additional Filing Date (a “Holdback Failure”) then, as
liquidated damages and not as a penalty to any holder by reason of any such
delay in or reduction of its ability to sell any Holdback Shares (which remedy
shall be the exclusive economic remedy available with respect to Holdback
Failures), the Company shall pay to each holder of Holdback Shares relating to
such Registration Statement an amount equal to one half of a percent (0.5%) of
the Aggregate Purchase Price (as such term is defined in the Note Purchase
Agreements) of such Purchaser’s Holdback Shares not included in such Additional
Registration Statement on the day of a Holdback Failure and on every thirtieth
day (pro rated for periods totaling less than thirty days) thereafter until
such Holdback Failure is cured. The payments to which a holder shall be
entitled pursuant to this Section 2(g) are referred to herein as “Registration Delay Payments.”  Each date a Registration Delay Payment is due
shall be referred to herein as a “Registration
Delay Payments Payment Date.” Notwithstanding anything herein or
in the Note Purchase Agreements to the contrary, in no event shall the
aggregate amount of Registration Delay Payments in respect of the Conversion
Shares (other than Registration Delay Payments payable pursuant to events that
are within the control of the Company) exceed, in the aggregate, 10% of the
Aggregate Purchase Price therefor.

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(ii)           Registration
Delay Payments shall be payable on each Registration Delay Payments Payment
Date, to each holder of Registrable Securities covered by a Registration
Statement, in Common Shares (“Registration
Delay Payments Shares”) so long as on such date there is no
Equity Conditions Failure; provided, however, that the Company,
at its option following notice to the holder of Registrable Securities, may pay
Registration Delay Payments on any Registration Delay Payments Payment Date in
cash (“Cash Registration Delay Payments”)
or in a combination of Cash Registration Delay Payments and Registration Delay
Payments Shares. The Company shall deliver a written notice (each, a “Registration Delay Payments Election Notice”)
to each holder of Registrable Securities covered by such Registration Statement
on or prior to the Registration Delay Payments Payment Date (the date such
notice is delivered to all of the holders, the “Registration Delay Payments Notice Date”) which notice (A)
either (x) confirms that Registration Delay Payments to be paid on such
Registration Delay Payments Payment Date shall be paid entirely in Registration
Delay Payments Shares or (y) elects to pay Registration Delay Payments as Cash
Registration Delay Payments or a combination of Cash Registration Delay
Payments and Registration Delay Payments Shares and specifies the amount of
Registration Delay Payments that shall be paid as Cash Registration Delay
Payments and the amount of Registration Delay Payments, if any, that shall be
paid in Registration Delay Payments Shares and (B) certifies that there is no
Equity Conditions Failure. If the Equity Conditions are not satisfied as of the
Registration Delay Payments Notice Date, then unless the Company has elected to
pay such Registration Delay Payments as Cash Registration Delay Payments, the
Registration Delay Payments Election Notice shall indicate that unless the
holder waives the Equity Conditions, the Registration Delay Payment shall be
paid as Cash Registration Delay Payments. If the Equity Conditions were
satisfied as of the Registration Delay Payments Notice Date but the Equity
Conditions are no longer satisfied at any time prior to the Registration Delay
Payments Payment Date, the Company shall provide the holder a subsequent notice
to that effect indicating that unless the holder waives the Equity Conditions,
the Registration Delay Payments shall be paid as Cash Registration Delay
Payments. Registration Delay Payments to be paid on a Registration Delay
Payments Payment Date in Registration Delay Payments Shares shall be paid in a
number of fully paid and nonassessable (rounded to the nearest whole share in
accordance) Common Shares having a fair market value equal to the amount of
Registration Delay Payments payable on such Registration Delay Payments Payment
Date less any Cash Registration Delay Payments paid.  Notwithstanding the foregoing, if the Company
elects to pay any Registration Delay Payments in Registration Delay Payment
Shares and the Shareholder Approval has not been obtained by the applicable
Registration Delay Payments Payment Date, the Registration Delay Payments shall
be paid as Cash Registration Delay Payments.

3.             Related Obligations.  At such time as the Company is obligated to
file a Registration Statement with the SEC pursuant to Section 2(a), 2(b)
or 2(f), the Company will use its commercially reasonable 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 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 a
particular Registration Statement, as the case may be, a request for
acceleration of effectiveness of such Registration

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Statement to a time and date not later than 48 hours after the
submission of such request. 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 Purchasers may sell all of the Registrable Securities covered
by such Registration Statement without restriction pursuant to Rule 144(k) (or
any successor thereto) promulgated under the 1933 Act or (ii) the date on which
the Purchasers shall have sold all of the Registrable Securities covered by
such Registration Statement (the “Registration
Period”). The Company shall ensure that each 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 the case of prospectuses, in the light of the
circumstances in which they were made) not misleading.

(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 which 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-Q, Form 10-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 such Registration Statement, if
applicable, or shall file such amendments or supplements with the SEC on the
same day on which the 1934 Act report is filed which created the requirement for
the Company to amend or supplement such Registration Statement.

(c)           The
Company shall permit Legal Counsel to review and comment upon (i) a
Registration Statement at least three (3) Business Days prior to its filing
with the SEC and (ii) all amendments and supplements to all Registration
Statements (except for Annual Reports on Form 10-K, and Reports on Form 10-Q
and any similar or successor reports) within a reasonable number of days prior
to their filing with the SEC. The Company shall furnish to Legal Counsel,
without charge, (i) copies of any correspondence from the SEC or the staff of
the SEC to the Company or its representatives relating to any Registration
Statement, (ii) 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, if requested by a Purchaser, and all exhibits, and (iii) 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 Purchaser 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

 9
 

amendment(s) thereto, including financial statements and schedules, all
documents incorporated therein by reference, if requested by a Purchaser, 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 Purchaser may reasonably request), and (iii)
such other documents, including copies of any preliminary or final prospectus,
as such Purchaser may reasonably request from time to time in order to
facilitate the disposition of the Registrable Securities owned by such
Purchaser.

(e)           The
Company shall use its commercially reasonable efforts to (i) register and
qualify, unless an exemption from registration and qualification applies, the
resale by Purchasers of the Registrable Securities covered by a Registration
Statement under such other securities or “blue sky” laws of all applicable
jurisdictions in 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),
(y) subject itself to general taxation in any such jurisdiction, or (z) file a
general consent to service of process in any such jurisdiction. The Company
shall promptly notify Legal Counsel and each Purchaser 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 Purchaser 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 the 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, subject to Section 3(r),
promptly prepare a supplement or amendment to such Registration Statement to
correct such untrue statement or omission, and, if such supplement or amendment
is typeset and printed, deliver ten (10) copies of such supplement or amendment
to Legal Counsel and each Purchaser (or such other number of copies as Legal
Counsel or such Purchaser may reasonably request). The Company shall also
promptly notify Legal Counsel and each Purchaser 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 Purchaser 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.

 10
 

(g)           The
Company shall use its commercially reasonable 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
Securities for sale in any jurisdiction and, if such an order or suspension is
issued, to obtain the withdrawal of such order or suspension at the earliest
possible moment and to notify Legal Counsel and each Purchaser 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)           If
any Purchaser is required under applicable securities laws to be described in
the Registration Statement as an underwriter, at the reasonable request of such
Purchaser, the Company shall furnish to such Purchaser, on the date of the
effectiveness of the Registration Statement and thereafter from time to time on
such dates as a Purchaser 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
Purchasers, 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 Purchasers.

(i)            Upon
the request of any Purchaser in connection with such Purchaser’s due diligence
requirements, if any, the Company shall make available for inspection by (i)
any Purchaser, (ii) Legal Counsel and (iii) one firm of accountants or other
agents retained by the Purchasers (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 which 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 a Purchaser) or use of any Record or other information
which the Company determines in good faith to be confidential, and of which
determination the Inspectors are so notified, unless (x) 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, (y) 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 (z) 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 Purchaser 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. Nothing herein (or in any other confidentiality agreement
between the Company and any Purchaser) shall be deemed to limit the Purchasers’
ability to sell Registrable Securities in a manner which is otherwise
consistent with applicable laws and regulations.

(j)            The
Company shall hold in confidence and not make any disclosure of information
concerning a Purchaser provided to the Company unless (i) disclosure of such
information is necessary to comply with federal or state or provincial
securities laws, (ii) the disclosure of such information is necessary to avoid
or correct a misstatement or omission in any

 11
 

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 a Purchaser
is sought in or by a court or governmental body of competent jurisdiction or
through other means, give prompt written notice to such Purchaser and allow
such Purchaser, at the Purchaser’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 commercially reasonable efforts either to (i) cause all
of the Registrable Securities covered by a Registration Statement to be listed
on the Principal Market and each securities exchange on which securities of the
same class or series issued by the Company are then listed, if any, if the
listing of such Registrable Securities is then permitted under the rules of such
exchange. 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 Purchasers 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 Purchasers may reasonably request and registered in such
names as the Purchasers may request.

(m)          If
requested by a Purchaser, the Company shall (i) as soon as practicable
incorporate in a prospectus supplement or post-effective amendment such
information as a Purchaser reasonably requests to be included therein relating
to the sale and distribution of Registrable Securities, including, without
limitation, 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 a Purchaser holding any
Registrable Securities.

(n)           The
Company shall use its commercially reasonable efforts to cause the Registrable
Securities covered by a Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to consummate the disposition of such Registrable Securities.

(o)           The
Company shall make generally available to its security holders as soon as
practical, but not later than ninety (90) days after the close of the period
covered thereby, an earnings statement (in form complying with, and in the
manner provided by, 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.

 12

  
  (p)           The
Company shall otherwise use its commercially reasonable efforts to comply with
all applicable rules and regulations of the SEC in connection with any
registration hereunder.
  (q)           Within
two (2) Business Days after a Registration Statement which covers 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 Purchasers whose Registrable
Securities are included in such Registration Statement) confirmation that such
Registration Statement has been declared effective by the SEC.
  (r)            Notwithstanding
anything to the contrary herein, at any time after an Effective Date, 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; provided that each such period shall not exceed
fifteen (15) consecutive days or an aggregate of forty-five (45) days during
any three hundred sixty five (365) day period (each, an “Allowable Grace Period”). The provisions
of Section 3(f) hereof shall not be applicable during the period of any
Allowable Grace Period. Upon expiration of the Allowable 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. Notwithstanding anything to the contrary,
the Company shall cause its transfer agent to deliver unlegended Common Shares
to a transferee of a Purchaser in accordance with the terms of the Note
Purchase Agreements in connection with any sale of Registrable Securities with
respect to which a Purchaser has entered into a contract for sale, and
delivered a copy of the prospectus included as part of the applicable
Registration Statement (unless an exemption from such prospectus delivery
requirements exists), prior to the commencement of an Allowable Grace Period
and for which the Purchaser has not yet settled.
  (s)           The
Company shall make any filing as may be required by NASD Rule 2710 in
connection with the offering under any Registration Statement of the applicable
Registrable Securities and shall make any such filing concurrently with its
initial filing of such Registration Statement with the SEC.
  (t)            From
the date hereof until the date that is ninety (90) days following the later to
occur of (i) the Initial Effective Date and (ii) the Additional Effective Date,
the Company will not, directly or indirectly, file any registration statement
(other than on Form S-8 or the filing of any post-effective amendments filed
solely for the purpose of updating financial or other information in any
registration statement of the Company that has been declared effective by the
SEC prior to the date of this Agreement) with the SEC other than the Registration
Statements.
  4.             Obligations of the Purchasers.
  (a)           At
least five (5) Business Days prior to the first anticipated filing date of a
Registration Statement, the Company shall notify each Purchaser in writing of
the information the Company requires from each such Purchaser if such Purchaser
elects to have any of such Purchaser’s Registrable Securities included in such
Registration Statement. It shall be a

 13
 

    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 Purchaser that such Purchaser shall furnish to the
Company 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 effectiveness of the
registration of such Registrable Securities and shall execute such documents in
connection with such registration as the Company may reasonably request.
  (b)           Each
Purchaser, by such Purchaser’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 Purchaser has notified the Company in writing of such
Purchaser’s election to exclude all of such Purchaser’s Registrable Securities
from such Registration Statement.
  (c)           Each
Purchaser agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3(f), such
Purchaser will immediately discontinue disposition of Registrable Securities
pursuant to any Registration Statement(s) covering such Registrable Securities
until such Purchaser’s receipt of the copies of the supplemented or amended
prospectus contemplated by Section 3(f) or receipt of notice that no
supplement or amendment is required. Notwithstanding anything to the contrary,
the Company shall cause its transfer agent to deliver unlegended Common Shares
to a transferee of a Purchaser in accordance with the terms of the Note
Purchase Agreements in connection with any sale of Registrable Securities with
respect to which a Purchaser has entered into a contract for sale prior to the
Purchaser’s receipt of a notice from the Company of the happening of any event
of the kind described in Section 3(f) and for which the Purchaser has
not yet settled.
  (d)           Each
Purchaser covenants and agrees that it will comply with the prospectus delivery
requirements of the 1933 Act as applicable to it or an exemption therefrom in
connection with sales of Registrable Securities pursuant to the Registration
Statement.
  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, without limitation, all registration, listing, qualifications and
NASD filing (if necessary) fees, printers and accounting fees, and fees and
disbursements of counsel for the Company shall be paid by the Company. The
Company shall also reimburse the Purchasers for the fees and disbursements of
Legal Counsel in connection with registration, filing or qualification pursuant
to Sections 2 and 3 of this Agreement which amount shall be
limited to US$10,000.
  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 Purchaser, the directors, officers, members,
partners, employees, agents, representatives of, and each Person, if any, who
controls any Purchaser within the meaning of the 1933 Act or the 1934 Act
(each, an “Indemnified Person”),
against any losses, claims, damages, liabilities, judgments, fines, penalties,
charges, costs, reasonable

 14
 

    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,
body or the SEC, whether pending or threatened, whether or not an indemnified
party is or may be a party 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 or any “misrepresentation” within
the meaning of Canadian securities laws 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 or any “misrepresentation”
within the meaning of Canadian securities laws 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 the 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 other law, including,
without limitation, any state or provincial 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 violation of this
Agreement (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 which 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) and (ii) shall not be available to the extent such Claim
is based on a failure of the Purchaser to deliver or to cause to be delivered
the prospectus made available by the Company, including a corrected prospectus,
if such prospectus or corrected prospectus was timely made available by the
Company pursuant to Section 3(d); and (iii) 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 or delayed. 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 Purchasers pursuant
to Section 9.
  (b)           In
connection with any Registration Statement in which a Purchaser is participating,
each such Purchaser 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

 15
 

    each Person, if any, who controls the Company within the meaning of the
1933 Act or the 1934 Act (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 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 Purchaser expressly for use in connection with such
Registration Statement; and, subject to Section 6(c), such Purchaser
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 Purchaser,
which consent shall not be unreasonably withheld or delayed; provided, further,
however, that the Purchaser shall be liable under this Section 6(b) for
only that amount of a Claim or Indemnified Damages as does not exceed the net
proceeds to such Purchaser as a result of the sale of Registrable Securities
pursuant to such Registration Statement. 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 Purchasers pursuant to Section 9.
  (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; provided, however, that an Indemnified Person or Indemnified
Party shall have the right to retain its own counsel with the fees and expenses
of not more than one counsel for such Indemnified Person or Indemnified Party
to be paid by the indemnifying party, if, in the reasonable opinion of counsel
retained by the indemnifying party, the representation by such counsel of 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 the case of an Indemnified Person, legal counsel
referred to in the immediately preceding sentence shall be selected by the
Purchasers holding at least a majority 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 reasonably
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

 16
 

    Indemnified Person, consent to entry of any judgment or enter into any
settlement or other compromise 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, and such settlement shall not include any admission as to fault on
the part of the Indemnified Party. 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 in amount to the net
amount of proceeds received by such seller from the sale of such Registrable
Securities pursuant to such Registration Statement.
  8.             Reports Under the 1934 Act.  With a view to making available to the
Purchasers 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
Purchasers to sell securities of the Company to the public without registration
(“Rule 144”), 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 reports and other documents required of the
Company under the 1933 Act and the 1934 Act so long as the Company remains
subject to such requirements and the filing of such reports and other documents
is required for the applicable provisions of Rule 144; and

 17
 

    (c)           furnish
to each Purchaser so long as such Purchaser owns Registrable Securities,
promptly upon request, (i) a written statement by the Company, if true, 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 Purchasers
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 Purchasers to any
transferee of all or any portion of such Purchaser’s Registrable Securities if:
(i) the Purchaser agrees in writing with the transferee or assignee to assign
such rights, and a copy of such agreement is furnished to the Company within a
reasonable time after such assignment; (ii) the Company is, within a reasonable
time after such transfer or assignment, furnished with written notice of (a)
the name and address of such transferee or assignee, and (b) the securities
with respect to which such registration rights are being transferred or
assigned; (iii) immediately following such transfer or assignment the further
disposition of such securities by the transferee or assignee is restricted
under the 1933 Act and applicable state or provincial 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; and (v) such
transfer shall have been made in accordance with the applicable requirements of
such applicable Note Purchase Agreement.
  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 the Required
Holders of the Initial Registrable Securities and the Additional Registrable
Securities voting together. Any amendment or waiver effected in accordance with
this Section 10 shall be binding upon each Purchaser 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.           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 such
record 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 Business Day after deposit with a nationally

 18
 

    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:
  Storm Cat Energy
Corporation
  1125 17th Street;
Suite 2310
  Denver, CO 80202
  Attn: J. Scott
Zimmerman
  Fax:  (303) 991-5075
  With a copy to:
  Hogan & Hartson L.L.P.
  One Tabor Center, Suite 1500
  1200 Seventeenth Street
  Denver, CO 80202
  Attn: Richard J. Mattera
  Fax:  (303) 899-7333
  and to:
  Bull, Housser
& Tupper LLP
  Suite 3000 Royal
Centre
  1055 West Georgia
Street
  Vancouver, British
Columbia
  Attn: David M.
Hunter
  Fax: (604)
646-2634
   
  If to Legal Counsel:
   
  If to a Purchaser, to its address and facsimile number set forth on the
Schedule of Purchasers attached hereto, with copies to such Purchaser’s
representatives as set forth on the Schedule of Purchasers, or 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
five (5) days prior to the effectiveness of such change. 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

 19
 

    facsimile or receipt from 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 in 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, the Note Purchase Agreements and the Notes and the instruments
referenced herein and therein 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, the Note Purchase Agreements
and the Notes and the instruments referenced herein and therein 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.
  (g)           The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.

 20
 

    (h)           This
Agreement may be executed in identical counterparts, each of which shall be
deemed an original but all of which shall constitute one and the same
agreement. This Agreement, once executed by a party, may be delivered to the
other party hereto by facsimile transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement.
  (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 and documents, as any 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 required to be made by the Purchasers
pursuant to this Agreement shall be made, unless otherwise specified in this
Agreement, by the Required Holders of the Initial Registrable Securities and
the Additional Registrable Securities voting together.
  (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 is not for the benefit of, nor
may any provision hereof be enforced by, any other Person.
  (m)          The
obligations of each Purchaser hereunder are several and not joint with the
obligations of any other Purchaser, and no provision of this Agreement is
intended to confer any obligations on any Purchaser vis-à-vis any other
Purchaser. Nothing contained herein, and no action taken by any Purchaser
pursuant hereto, shall be deemed to constitute the Purchasers as a partnership,
an association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated herein.
  [Signature
Page to Follow.]

 21
 

    IN
WITNESS WHEREOF, each Purchaser and the Company have caused
their respective signature page to this Convertible Notes Registration Rights
Agreement to be duly executed as of the date first written above.
  	   
  	  COMPANY:
  
	   
  	   
  
	   
  	  STORM
  CAT ENERGY CORPORATION
  
	   
  	   
  
	   
  	   
  
	   
  	  By:
  	  /s/ J. Scott Zimmerman
  
	   
  	  Name: J. Scott Zimmerman
  
	   
  	  Title:   President
  and Chief Executive Officer
  

   

 22
 

    IN WITNESS WHEREOF, each Purchaser and the
Company have caused their respective signature page to this Convertible Notes
Registration Rights Agreement to be duly executed as of the date first written
above.
  	  
  	  PURCHASER:
  
	   
  	   
  
	   
  	  Crestview Capital Master, LLC
  
	   
  	  by Crestview Capital Partners, LLC
  
	   
  	  Its Sole Manager
  	   
  
	   
  	   
  
	   
  	   
  
	   
  	  By:
  	    /s/ Robert Hoyt
  	   
  
	   
  	  Name:
  	  Robert Hoyt
  	   
  
	   
  	  Title:
  	  Manager
  	   
  
							

   

 23
 

    IN WITNESS WHEREOF, each Purchaser and the
Company have caused their respective signature page to this Convertible Notes
Registration Rights Agreement to be duly executed as of the date first written
above.
  	  
  	  PURCHASER:
  
	   
  	   
  
	   
  	  GLG North American Opportunity Fund
  
	   
  	  By GLG Partners LP acting as investment manager
  
	   
  	  of GLG North American Opportunity Fund
  	   
  
	   
  	   
  
	   
  	   
  
	   
  	  By:
  	    /s/ Victoria Parry
  	   
  
	   
  	  Name:
  	  Victoria Parry
  	   
  
	   
  	  Title:
  	  Senior Legal Counsel, GLG Partners LP
  	   
  
	   
  	   
  
	   
  	  By:
  	    /s/ Simon White
  	   
  
	   
  	  Name:
  	  Simon White
  	   
  
	   
  	  Title:
  	  Chief Operating Officer, GLG Partners LP
  	   
  
										

   

 24
 

    IN WITNESS WHEREOF, each Purchaser and the
Company have caused their respective signature page to this Convertible Notes
Registration Rights Agreement to be duly executed as of the date first written
above.
  	  
  	  PURCHASER:
  
	   
  	   
  
	   
  	  Capital Ventures International
  
	   
  	  By Heights Capital Management, Inc.,
  
	   
  	  Its authorized agent
  	   
  
	   
  	   
  
	   
  	   
  
	   
  	  By:
  	    /s/ Martin Kobinger
  	   
  
	   
  	  Name:
  	  Martin Kobinger
  	   
  
	   
  	  Title:
  	  Investment Manager
  	   
  
						

   

 25
 

    IN WITNESS WHEREOF, each Purchaser and the
Company have caused their respective signature page to this Convertible Notes
Registration Rights Agreement to be duly executed as of the date first written
above.
  	  
  	  PURCHASER:
  
	   
  	   
  
	   
  	  Iroquois Master Fund Ltd.
  	   
  
	   
  	   
  
	   
  	   
  
	   
  	  By:
  	    /s/ Joshua Silverman
  	   
  
	   
  	  Name:
  	  Joshua Silverman
  	   
  
	   
  	  Title:
  	  Authorized signator
  	   
  
						

   

 26
 

    IN WITNESS WHEREOF, each Purchaser and the
Company have caused their respective signature page to this Convertible Notes
Registration Rights Agreement to be duly executed as of the date first written
above.
  	  
  	  PURCHASER:
  
	   
  	   
  
	   
  	  Kellogg Capital Group LLC
  	   
  
	   
  	   
  
	   
  	   
  
	   
  	  By:
  	    /s/ Nicholas Cappelleni
  	   
  
	   
  	  Name:
  	  Nicholas Cappelleni
  	   
  
	   
  	  Title:
  	  Director of Finance & Operations
  	   
  
							

   

 27
 

    IN WITNESS WHEREOF, each Purchaser and the
Company have caused their respective signature page to this Convertible Notes
Registration Rights Agreement to be duly executed as of the date first written
above.
  	  
  	  PURCHASER:
  
	   
  	   
  
	   
  	  William Herbert Hunt Trust Estate
  	   
  
	   
  	   
  
	   
  	   
  
	   
  	  By:
  	    /s/ J.W. Beavers, Jr.
  	   
  
	   
  	  Name:
  	  J.W. Beavers, Jr., Trustee
  	   
  
	   
  	  Title:
  	  Trustee
  	   
  
						

   

 28
 

    IN WITNESS WHEREOF, each Purchaser and the
Company have caused their respective signature page to this Convertible Notes
Registration Rights Agreement to be duly executed as of the date first written
above.
  	  
  	  PURCHASER:
  
	   
  	   
  
	   
  	  Sandelman Partners Multi Strategy Master Fund.
  
	   
  	  Ltd.
  	   
  
	   
  	   
  
	   
  	   
  
	   
  	  By:
  	    /s/ Trevor Ganshaw
  	   
  
	   
  	  Name:
  	  Trevor Ganshaw
  	   
  
	   
  	  Title:
  	   
  	   
  
						

   

 29
 

    IN WITNESS WHEREOF, each Purchaser and the
Company have caused their respective signature page to this Convertible Notes
Registration Rights Agreement to be duly executed as of the date first written
above.
  	  
  	  PURCHASER:
  
	   
  	   
  
	   
  	  Summit Capital Partners, LP
  	   
  
	   
  	   
  	   
  
	   
  	   
  	   
  
	   
  	  By:
  	    /s/ Matthew C. Rudolf
  	   
  
	   
  	  Name:
  	  Matthew C. Rudolf
  	   
  
	   
  	  Title:
  	  Managing Director
  	   
  
						

   

 30
 

    IN WITNESS WHEREOF, each Purchaser and the
Company have caused their respective signature page to this Convertible Notes
Registration Rights Agreement to be duly executed as of the date first written
above.
  	  
  	  PURCHASER:
  
	   
  	   
  
	   
  	  Trapeze Asset Management Inc. on behalf of
  	   
  
	   
  	  Managed Accounts
  	   
  
	   
  	   
  	   
  
	   
  	   
  	   
  
	   
  	  By:
  	    /s/ Randall Abramson
  	   
  
	   
  	  Name:
  	  Randall Abramson
  	   
  
	   
  	  Title:
  	  Chief Executive Officer
  	   
  
						

   

 31
 

    IN WITNESS WHEREOF, each Purchaser and the
Company have caused their respective signature page to this Convertible Notes
Registration Rights Agreement to be duly executed as of the date first written
above.
  	  
  	  PURCHASER:
  
	   
  	   
  
	   
  	  Trapeze Capital Corp., on behalf of Managed
  
	   
  	  Accounts
  
	   
  	   
  
	   
  	   
  
	   
  	  By:
  	    /s/ Randall Abramson
  
	   
  	  Name:
  	  Randall Abramson
  
	   
  	  Title:
  	  President
  
					

   

 32
 

    IN WITNESS WHEREOF, each Purchaser and the
Company have caused their respective signature page to this Convertible Notes
Registration Rights Agreement to be duly executed as of the date first written
above.
  	  
  	  PURCHASER:
  
	   
  	   
  
	   
  	  Wolverine Convertible Arbitrage Fund Trading
  
	   
  	  LTD
  	   
  
	   
  	   
  
	   
  	   
  
	   
  	  By:
  	    /s/ James V. Harkness
  	   
  
	   
  	  Name:
  	  James V. Harkness
  	   
  
	   
  	  Title:
  	  Director
  	   
  
						

   

 33
 

    IN WITNESS WHEREOF, each Purchaser and the
Company have caused their respective signature page to this Convertible Notes
Registration Rights Agreement to be duly executed as of the date first written
above.
  	  
  	  PURCHASER:
  
	   
  	   
  
	   
  	  GPX LX, LLC
  
	   
  	  By Wolverine Asset Management, LLC, its
  	   
  
	   
  	  investment manager
  	   
  
	   
  	   
  	   
  
	   
  	   
  	   
  
	   
  	  By:
  	    /s/ Andrew R. Sujdak
  	   
  
	   
  	  Name:
  	  Andrew R. Sujdak
  	   
  
	   
  	  Title:
  	  Trader
  	   
  
						

   

 34
 

    IN WITNESS WHEREOF, each Purchaser and the
Company have caused their respective signature page to this Convertible Notes
Registration Rights Agreement to be duly executed as of the date first written
above.
  	  
  	  PURCHASER:
  
	   
  	   
  
	   
  	  UBS AG Canada Branch
  	   
  
	   
  	   
  
	   
  	   
  
	   
  	  By:
  	    /s/ James Estey
  	   
  
	   
  	  Name:
  	  James Estey
  	   
  
	   
  	  Title:
  	  Principal Officer
  	   
  
						

   

 35
 

    IN WITNESS WHEREOF, each Purchaser and the
Company have caused their respective signature page to this Convertible Notes
Registration Rights Agreement to be duly executed as of the date first written
above.
  	  
  	  PURCHASER:
  
	   
  	   
  
	   
  	  Small Ventures USA
  	   
  
	   
  	   
  	   
  
	   
  	   
  	   
  
	   
  	  By:
  	    /s/ William O. Perkins III
  	   
  
	   
  	  Name:
  	  William O. Perkins III
  	   
  
	   
  	  Title:
  	  Managing Member
  	   
  
						

   

 36
 

    IN WITNESS WHEREOF, each Purchaser and the
Company have caused their respective signature page to this Convertible Notes
Registration Rights Agreement to be duly executed as of the date first written
above.
  	  
  	  PURCHASER:
  
	   
  	   
  
	   
  	  Guy O. Dove, III
  	   
  
	   
  	   
  
	   
  	   
  
	   
  	  By:
  	    /s/ Guy O. Dove, III
  	   
  
	   
  	  Name:
  	  Guy O. Dove, III
  	   
  
	   
  	  Title:
  	   
  	   
  
						

   

 37
 

    IN WITNESS WHEREOF, each Purchaser and the
Company have caused their respective signature page to this Convertible Notes
Registration Rights Agreement to be duly executed as of the date first written
above.
  	  
  	  PURCHASER:
  
	   
  	   
  
	   
  	  J. Scott Zimmerman
  	   
  
	   
  	   
  	   
  
	   
  	   
  	   
  
	   
  	  By:
  	    /s/ J. Scott Zimmerman
  	   
  
	   
  	  Name:
  	  J. Scott Zimmerman
  	   
  
	   
  	  Title:
  	   
  	   
  
					

   

 38
 

    IN WITNESS WHEREOF, each Purchaser and the
Company have caused their respective signature page to this Convertible Notes
Registration Rights Agreement to be duly executed as of the date first written
above.
  	  
  	  PURCHASER:
  
	   
  	   
  
	   
  	  Paul Wiesner
  	   
  
	   
  	   
  
	   
  	   
  
	   
  	  By:
  	    /s/ Paul Wiesner
  	   
  
	   
  	  Name:
  	  Paul Wiesner
  
	   
  	  Title:
  	   
  
						

   

 39
 

    IN WITNESS WHEREOF, each Purchaser and the
Company have caused their respective signature page to this Convertible Notes
Registration Rights Agreement to be duly executed as of the date first written
above.
  	  
  	   
  	  PURCHASER:
  
	   
  	   
  	   
  
	   
  	   
  	  Robert J. Clark
  
	   
  	   
  	   
  
	   
  	   
  	   
  
	   
  	   
  	  By:
  	    /s/ Robert J. Clark
  
	   
  	   
  	  Name:
  	  Robert J. Clark
  
	   
  	   
  	  Title:
  	   
  
						

   

 40
 

    IN WITNESS WHEREOF, each Purchaser and the
Company have caused their respective signature page to this Convertible Notes
Registration Rights Agreement to be duly executed as of the date first written
above.
  	  
  	  PURCHASER:
  
	   
  	   
  
	   
  	  David Wight
  	   
  
	   
  	   
  
	   
  	   
  
	   
  	  By:
  	    /s/ David Wight
  	   
  
	   
  	  Name:
  	  David Wight
  
	   
  	  Title:
  	   
  
						

   

 41
 

    IN WITNESS WHEREOF, each Purchaser and the
Company have caused their respective signature page to this Convertible Notes
Registration Rights Agreement to be duly executed as of the date first written
above.
  	  
  	  PURCHASER:
  
	   
  	   
  
	   
  	  Donald R. Martin
  
	   
  	   
  
	   
  	   
  
	   
  	  By:
  	    /s/ Donald R. Martin
  
	   
  	  Name:
  	  Donald R. Martin
  
	   
  	  Title:
  	   
  
					

   

 42
 

    SCHEDULE
OF PURCHASERS
  	  Purchaser
  	   
  	  Purchaser’s Address and Facsimile Number
  	   
  	  Purchaser’s Legal Representative’s Address and
  Facsimile Number
  
	  Crestview Capital Master,

  LLC
  	   
  	  95 Revere Drive,

  Suite A,

  Northbrook, IL 60062

  Attn: Robert Hoyt

  Fax: 847-559-0060
  	   
  	  N/A
  
	   
  	   
  	   
  	   
  	   
  
	  GLG North American

  Opportunity Fund
  	   
  	  GLP Partners

  Attn: Jim O’Sullivan

  One Curzon Street

  London W1J 5HB

  United Kingdom

  Fax: 44 20 7016 7200
  	   
  	  George Chang

  GLG Inc.

  390 Park Avenue

  20th Floor

  New York, NY 10022

  Fax: 212-224-7210
  
	   
  	   
  	   
  	   
  	   
  
	  Capital Ventures International
  	   
  	  c/o Heights Capital Management,

  Inc.

  101 California St.,

  Suite 3250 San Francisco, CA 94111

  Attn: Sam Winer or Martin

  Kobinger

  Fax: 415-403-6525
  	   
  	  Andrew Singer

  c/o Heights Capital

  Management, Inc.

  101 California St.,

  Suite 3250

  San Francisco, CA 94111

  Fax: 610-747-2117
  
	   
  	   
  	   
  	   
  	   
  
	  Iroquois Master Fund Ltd.
  	   
  	  641 Lexington Avenue

  26th Floor

  New York, NY 10022

  Attn: Josh Silverman

  Fax: 212-207-3452
  	   
  	  N/A
  
	   
  	   
  	   
  	   
  	   
  
	  Kellogg Capital Group LLC
  	   
  	  55 Broadway

  4th Floor

  New York, NY 10006

  Attn: Nick Cappelleni

  Fax: 212-380-5665
  	   
  	  Nicholas Cappelleni

  55 Broadway

  4th Floor

  New York, NY 10006

  Fax: 212-380-5665
  
	   
  	   
  	   
  	   
  	   
  
	  William Herbert Hunt Trust

  Estate
  	   
  	  Attn: David S. Hunt

  1601 Elm Street

  Suite 3400

  Dallas, Texas 75201

  Fax: 214-880-7101
  	   
  	  N/A
  
	   
  	   
  	   
  	   
  	   
  
	  Sandelman Partners Multi-
  	   
  	  Citco Funds Services
  	   
  	  N/A
  

   

 43
 

     
  	  Strategy Master Fund, Ltd.
  	   
  	  Regatta Office Park

  West Bay Road

  Grand Cayman, Cayman Islands

  Fax: 212-299-7666
  	   
  	   
  
	   
  	   
  	   
  	   
  	   
  
	  Summit Capital Partners, LP
  	   
  	  One Union Square

  Suite 2304

  600 University Street

  Seattle, WA 98101

  Attn: Matt Rudolf

  Fax: 206-447-6204
  	   
  	  N/A
  
	   
  	   
  	   
  	   
  	   
  
	  Trapeze Asset Management

  Inc.
  	   
  	  22 St. Clair Ave East

  18th Floor

  Toronto, ON M4T 253

  Attn: Randall Abramson

  Fax: 416-867-9771
  	   
  	  Adam Abramson

  22 St. Clair Ave East

  18th Floor

  Toronto, ON M4T 253

  Fax: 416-867-9771
  
	   
  	   
  	   
  	   
  	   
  
	  Trapeze Capital Corp.
  	   
  	  22 St. Clair Ave East

  18th Floor

  Toronto, ON M4T 253

  Attn: Randall Abramson

  Fax: 416-867-9771
  	   
  	  Adam Abramson

  22 St. Clair Ave East

  18th Floor

  Toronto, ON M4T 253

  Fax: 416-867-9771
  
	   
  	   
  	   
  	   
  	   
  
	  Wolverine Convertible

  Arbitrage Fund Trading Ltd.
  	   
  	  c/o Wolverine Asset Management

  LLC

  175 West Jackson,

  Suite 208

  Chicago, IL 60604

  Attn: Andrew Sujdak

  Fax: 312-884-3831
  	   
  	  Megan Flaherty

  175 West Jackson,

  Suite 200Chicago, IL 60604

  Fax: 312-884-3831
  
	   
  	   
  	   
  	   
  	   
  
	  GPC LX, LLC
  	   
  	  c/o Wolverine Asset Management

  LLC

  175 West Jackson,

  Suite 208

  Chicago, IL 60604

  Attn: Andrew Sujdak

  Fax: 312-884-3831
  	   
  	  N/A
  
	   
  	   
  	   
  	   
  	   
  
	  UBS AG Canada Branch
  	   
  	  161 Bay Street

  Suite 4100

  Toronto, ON M5J 251

  Canada
  	   
  	  Liz Jordan

  161 Bay Street

  Suite 4100

  Toronto, ON M5J 251
  
	   
  	   
  	   
  	   
  	   
  

   

 44
 

     
  	  
  	   
  	  Attn: Dave Hanslip

  Fax: 416-364-1221
  	   
  	  Canada

  Fax: 416-364-1438
  
	   
  	   
  	   
  	   
  	   
  
	  Small Ventures USA, LP
  	   
  	  5161 San Felipe,

  Suite 320

  Houston, TX 77056

  Attn: William O. Perkins III

  Fax: 713-630-0791
  	   
  	  N/A
  
	   
  	   
  	   
  	   
  	   
  
	  Guy O. Dove III
  	   
  	  P.O. Box 796

  Middleburg, VA 20118

  Fax: 540-687-6351
  	   
  	  N/A
  
	   
  	   
  	   
  	   
  	   
  
	  J. Scott Zimmerman
  	   
  	  1550 Larimer Street, No. 265

  Denver, CO 80202

  Fax: 303-991-9773
  	   
  	  N/A
  
	   
  	   
  	   
  	   
  	   
  
	  Paul Wiesner
  	   
  	  1998 Green Oake Drive

  Greenwood Village,

  CO 80121

  Fax: 303-991-5075
  	   
  	  N/A
  
	   
  	   
  	   
  	   
  	   
  
	  Robert J. Clark
  	   
  	  27250 Craig Lane

  Golden, CO

  80401-9760

  Fax: 303-626-8259
  	   
  	  Michael J. Wozniak

  216 Sixteenth Street

  Suite 1100

  Denver, CO 80202

  Fax: 303-407-4494
  
	   
  	   
  	   
  	   
  	   
  
	  David G. Wight
  	   
  	  12130 Lilac Drive

  Anchorage, AK 99516
  	   
  	  N/A
  
	   
  	   
  	   
  	   
  	   
  
	  Donald R. Martin
  	   
  	  623 Tuscany Springs Blvd. NW

  Calgary, Alberta

  Canada T3L 242

  Fax: 403-451-5075
  	   
  	  N/A
  

   

 45
 

    EXHIBIT
A
  PLAN OF DISTRIBUTION
  We are registering
the Common Shares issuable upon conversion of the convertible notes to permit
the resale of these Common Shares by the holders of the convertible notes from
time to time after the date of this prospectus. 
We will not receive any of the proceeds from the sale by the selling
shareholders of the Common Shares. We will bear all fees and expenses incident
to our obligation to register the Common Shares.
  The selling
shareholders may sell all or a portion of the Common Shares beneficially owned
by them and offered hereby from time to time directly or through one or more
underwriters, broker-dealers or agents. If the Common Shares are sold through
underwriters or broker-dealers, the selling shareholders will be responsible
for underwriting discounts or commissions or agent’s commissions. The Common
Shares may be sold in one or more transactions at fixed prices, at prevailing
market prices at the time of the sale, at varying prices determined at the time
of sale, or at negotiated prices. These sales may be effected in transactions,
which may involve crosses or block transactions,
  ·                     on any
national securities exchange or quotation service on which the securities may
be listed or quoted at the time of sale;
  ·                     in the
over-the-counter market;
  ·                     in
transactions otherwise than on these exchanges or systems or in the
over-the-counter market;
  ·                     through the
writing of options, whether such options are listed on an options exchange or
otherwise;
  ·                     ordinary
brokerage transactions and transactions in which the broker-dealer solicits
purchasers;
  ·                     block trades
in which the broker-dealer will attempt to sell the shares as agent but may
position and resell a portion of the block as principal to facilitate the
transaction;
  ·                     purchases by
a broker-dealer as principal and resale by the broker-dealer for its account;
  ·                     an exchange
distribution in accordance with the rules of the applicable exchange;
  ·                     privately
negotiated transactions;
  ·                     short sales
entered into after the effective date of the registration statement of which
this prospectus is a part;

 46
 

    ·                     sales
pursuant to Rule 144;
  ·                     broker-dealers
may agree with the selling securityholders to sell a specified number of such
shares at a stipulated price per share;
  ·                     a combination
of any such methods of sale; and
  ·                     any other
method permitted pursuant to applicable law.
   
  If the selling
shareholders effect such transactions by selling Common Shares to or through
underwriters, broker-dealers or agents, such underwriters, broker-dealers or
agents may receive commissions in the form of discounts, concessions or
commissions from the selling shareholders or commissions from purchasers of the
Common Shares for whom they may act as agent or to whom they may sell as
principal (which discounts, concessions or commissions as to particular
underwriters, broker-dealers or agents may be in excess of those customary in
the types of transactions involved). In connection with sales of the Common
Shares or otherwise, the selling shareholders may enter into hedging
transactions with broker-dealers, which may in turn engage in short sales of
the Common Shares in the course of hedging in positions they assume. The
selling shareholders may also sell Common Shares short and deliver Common
Shares covered by this prospectus to close out short positions and to return
borrowed shares in connection with such short sales. The selling shareholders
may also loan or pledge Common Shares to broker-dealers that in turn may sell such
shares.
  The selling
shareholders may pledge or grant a security interest in some or all of the
convertible notes or Common Shares issuable upon conversion thereof owned by
them and, if they default in the performance of their secured obligations, the
pledgees or secured parties may offer and sell the Common Shares from time to
time pursuant to this prospectus or any amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act of 1933, as
amended, amending, if necessary, the list of selling shareholders to include
the pledgee, transferee or other successors in interest as selling shareholders
under this prospectus. The selling Shareholders also may transfer and donate
the Common Shares in other circumstances in which case the transferees, donees,
pledgees or other successors in interest will be the selling beneficial owners
for purposes of this prospectus.
  The selling
shareholders and any broker-dealer participating in the distribution of the
Common Shares may be deemed to be “underwriters” within the meaning of the
Securities Act, and any commission paid, or any discounts or concessions
allowed to, any such broker-dealer may be deemed to be underwriting commissions
or discounts under the Securities Act. At the time a particular offering of the
Common Shares is made, a prospectus supplement, if required, will be
distributed which will set forth the aggregate amount of Common Shares being
offered and the terms of the offering, including the name or names of any
broker-dealers or agents, any discounts, commissions and other terms
constituting compensation from the selling shareholders and any discounts,
commissions or concessions allowed or reallowed or paid to broker-dealers.

 47
 

    Under the
securities laws of some states, the Common Shares may be sold in such states
only through registered or licensed brokers or dealers. In addition, in some
states the Common Shares may not be sold unless such shares have been
registered or qualified for sale in such state or an exemption from
registration or qualification is available and is complied with.
  There can be no
assurance that any selling shareholder will sell any or all of the Common
Shares registered pursuant to the registration statement, of which this
prospectus forms a part.
  The selling
shareholders and any other person participating in such distribution will be
subject to applicable provisions of the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder, including, without
limitation, Regulation M of the Exchange Act, which may limit the timing of
purchases and sales of any of the Common Shares by the selling shareholders and
any other participating person. Regulation M may also restrict the ability of
any person engaged in the distribution of the Common Shares to engage in
market-making activities with respect to the Common Shares. All of the
foregoing may affect the marketability of the Common Shares and the ability of
any person or entity to engage in market-making activities with respect to the Common
Shares.
  We will pay all
expenses of the registration of the Common Shares pursuant to the registration
rights agreement, estimated to be US$[     ] in total,
including, without limitation, Securities and Exchange Commission filing fees and
expenses of compliance with state or provincial securities or “blue sky” laws;
provided, however, that a selling shareholder will pay all underwriting
discounts and selling commissions, if any. We will indemnify the selling
Shareholders against liabilities, including some liabilities under the
Securities Act, in accordance with the registration rights agreements, or the
selling shareholders will be entitled to contribution. We may be indemnified by
the selling shareholders against civil liabilities, including liabilities under
the Securities Act, that may arise from any written information furnished to us
by the selling shareholder specifically for use in this prospectus, in
accordance with the related registration rights agreement, or we may be
entitled to contribution.
  Once sold under
the registration statement, of which this prospectus forms a part, the Common
Shares will be freely tradable in the hands of persons other than our
affiliates.

 48Exhibit
10.3
  FIRST
AMENDMENT TO COMBINED CREDIT AGREEMENTS
  THIS FIRST AMENDMENT TO COMBINED CREDIT AGREEMENTS, dated as of January
30, 2007 (this “Amendment”),  is
by and among STORM CAT ENERGY CORPORATION, a
company incorporated under the laws of the Province of British Columbia, Canada
(the “Canadian Borrower”),
STORM CAT ENERGY (USA) CORPORATION, a Colorado corporation (the “U.S.  Borrower”),
JPMORGAN CHASE BANK, N.A., as Global Administrative Agent (in such
capacity, the “Global Administrative Agent”)  and the sole financial institution a party to the U.S. Credit Agreement as
a Lender thereunder (in such capacity, the “U.S.  Lender”), JPMORGAN CHASE BANK,
N.A., TORONTO BRANCH, as Canadian Administrative Agent (in such capacity,
the “Canadian Administrative Agent”)  and the sole financial institution a party to the Canadian Credit Agreement
as a Lender thereunder (in such capacity, the “Canadian Lender,”  and together with the U.S. Lender, the “Combined  Lenders”).
  WITNESSETH:
  1.               The
U.S. Borrower, the Canadian Borrower (as the parent entity of the U.S.
Borrower), the Global Administrative Agent, and the U.S. Lender are parties to
that certain Credit Agreement dated as of July 28, 2006 (as previously amended
by that certain First Amendment to Credit Agreement dated as of August 29,
2006, the “U.S.  Credit Agreement”),  pursuant to which the U.S. Lender agreed to make
loans to, and extensions of credit on behalf of, the U.S. Borrower.
  2.               The
Canadian Borrower, the Global Administrative Agent, the Canadian Administrative
Agent, and the Canadian Lender are parties to that certain Credit Agreement dated as of July 28, 2006 (the  “Canadian Credit Agreement,”  and
together with the U.S. Credit Agreement, the “Combined Credit Agreements”),  pursuant
to which the Canadian Lender agreed to make loans to, and extensions of credit
on behalf of, the Canadian Borrower.
  3.               The parties to the Combined Credit Agreements intend
to amend the Combined Credit Agreements as follows:
  NOW, THEREFORE, in consideration of the premises and
the mutual covenants herein contained, the parties hereto agree as follows:
  I.               Amendments to U.S. Credit
Agreement.
  A.             Section 1.1 of the U.S. Credit Agreement is hereby
amended by inserting the following definitions to such Section:
  “Permitted
Subordinated Debt”  means subordinated unsecured
Indebtedness of Parent resulting from the issuance by Parent of its (a) Series
A Subordinated Convertible Notes due March 31, 2012, and (b) Series B
Subordinated Convertible Notes due March 31, 2012, in an aggregate outstanding
principal balance at any time of not greater than $50,195,000, a portion of the
proceeds of which shall be used to repay in full the Indebtedness evidenced by
the Secured Bridge Note, and which Indebtedness (i) has a coupon rate of not
greater than 9.25%, (ii) has a due date not earlier than March 31, 2012, (iii)
is not subject to negative covenants, financial covenants or events of default
(or other provisions which have the same effect as negative covenants,
financial covenants or events of default) which have not been approved by the
Global Administrative Agent, and (iv) is subordinated to the 

     
  Obligations on
terms acceptable to the Global Administrative Agent, including, without
limitation, pursuant to the terms of the Subordination Agreement.
  “Permitted
Subordinated Debt Documents”  means, collectively, all
note purchase agreements, indentures, promissory notes, guarantees or other
documents or instruments issued, given or delivered in connection with,
evidencing and/or otherwise pertaining to, the Permitted Subordinated Debt.
  “Subordination
Agreement”  means that certain Subordination and
Intercreditor Agreement executed by and among the Global Administrative Agent,
the Canadian Administrative Agent, the Combined Lenders, Parent, Borrower and
the Noteholders (as therein defined) party thereto, as amended, supplemented,
restated or otherwise modified from time to time in accordance with the terms
thereof, and in accordance with the terms of the Loan Documents.
Notwithstanding anything to the contrary contained in this Agreement, the terms
“Canadian Loan Documents”  and
“Loan Document”  shall each
include the Subordination Agreement.
  B.              The definitions of “Change in Control” and “Restricted
Payments” contained in Section 1.1 of the U.S. Credit Agreement are hereby
amended to read in full as follows:
  “Change
in Control”  means (a) the failure of Parent to own,
directly or indirectly, 100% of the Equity Interests of Borrower or any other
Loan Party, (b) a “Change in Control” under the Canadian Credit Agreement, or
(c) a “Change of Control” (or similar defined term) under any Permitted
Subordinated Debt Document.
  “Restricted
Payment”  means (a) any dividend or other distribution
(whether in cash, securities or other Property, real, personal or mixed) with
respect to any Equity Interests in Borrower, Parent or any Restricted
Subsidiary, (b) any payment (whether in cash, securities or other Property,
real, personal or mixed), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any Equity Interests in Borrower, Parent or any Restricted
Subsidiary or any option, warrant or other right to acquire any such Equity
Interests in Borrower, Parent or any Restricted Subsidiary, or (c) the
retirement, redemption, defeasance, repurchase, prepayment or payment by Parent
or any Loan Party of any part of the principal of the Permitted Subordinated
Debt (other than, for the sake of clarity, the conversion of any Subordinated
Note (as defined in the Subordination Agreement) into common shares of Parent)
at any time prior to the termination of all Combined Commitments and the
payment and performance in full of the Combined Obligations, or otherwise in
breach or violation of the terms of the Subordination Agreement.
  C.              Section 2.10 of the U.S. Credit Agreement is hereby
amended by inserting the following Subsection 2.10(e) after Subsection 2.10(d):
  “               (e)           Notwithstanding
any other provision of this   Section 2.10, if at any time Parent or
Borrower becomes obligated to pay or prepay all or part of the Permitted
Subordinated Debt, Borrower shall, prior to any payment or prepayment of the
Permitted Subordinated Debt, prepay the Loans and reduce the Commitments in
full.”
  D.              Section 3.3 of the U.S. Credit Agreement is hereby
amended by revising the current 

 2
 

     
  Section 3.3 to read in full as follows:
  “Section 3.3 Approvals:
No Conflicts. The execution, delivery and performance by Borrower and
Parent of this Agreement and each other Loan Document executed or to be
executed by it, and the execution, delivery and performance by each other Loan
Party of each Loan Document executed or to be executed by such other Loan
Party, (a) do not require any Governmental Approval or third party approvals,
except such as have been obtained or made and are in full force and effect and
except filings necessary to perfect Liens created under the Loan Documents, (b) will not violate any applicable
Governmental Rule or the Organic Documents of Borrower, Parent or any
such other Loan Party or any order of any Governmental Authority, (c) will not
violate or result in a default under any indenture, agreement or other
instrument (including, without limitation, any Permitted Subordinated Debt
Document) binding upon Borrower, Parent or any such other Loan Party or its
assets, or give rise to a right thereunder to require any payment to be made by
Borrower, Parent or any such other Loan Party, and (d) will not result in the
creation or imposition of any Lien on any asset of Borrower, Parent or any such
other Loan Party, except Liens created under the Loan Documents.”
  E.              Section
5.1 of the U.S. Credit Agreement is hereby amended by (a) deleting the “and” at
the end of Subsection (f) thereof, (b) deleting the period at the end of
Subsection (g) thereof, and inserting in lieu of such period a semi-colon, and
(c) adding thereto new Subsections (h) and (i) which shall read in full as
follows:
  “(h) Promptly upon
the closing and consummation of any issuance of Permitted Subordinated Debt, a
true and correct copy of each material Permitted Subordinated Debt Document
executed, given and/or delivered in connection therewith; and
  (i) Promptly after
such delivery or receipt, copies of any financial or other report or notice
delivered to, or received from, any holders of Permitted Subordinated Debt,
which report or notice has not been delivered to the Global Administrative
Agent and Lenders hereunder.”
  F.              Section 6.2 of the U.S. Credit Agreement is hereby
amended to read in full as follows:
  “Section 6.2 Ratio
of Current Assets to Current Liabilities.  As of the end of any fiscal quarter,
commencing with the fiscal quarter ending March 31, 2007, Parent will not
permit its ratio of Current Assets to Current Liabilities to be less than 1.00
to 1.00.”
  G.                Section
7.1 of the U.S. Credit Agreement is hereby amended by (a) deleting the “and” at
the end of Subsection (xi) thereof, (b) deleting the period at the end of
Subsection (xii) thereof, and inserting in lieu of such period a semi-colon,
and (c) adding thereto a new Subsection (xiii) which shall read in full as
follows:
  “(xiii) Permitted Subordinated Debt.”
  H.               Section 8.1 of the U.S. Credit Agreement is hereby
amended by adding thereto new Subsections (m) and (n) which shall read in full
as follows:

 3
 

     
  “(m) Default
under Permitted Subordinated Debt Documents. Any default or event of
default shall occur under any Permitted Subordinated Debt Document, which such
default or event of default shall continue unremedied prior to the expiration
of any applicable period of grace or cure under the applicable Permitted
Subordinated Debt Document.
  (n) Subordination.
All or any portion of the Permitted Subordinated Debt shall cease, for any
reason, to be validly subordinated to the Combined Obligations, as provided in
the Subordination Agreement, or any holder of Permitted Subordinated Debt or
any Loan Party, or any affiliate thereof, shall so assert in writing.”
  II.               Amendments to Canadian Credit
Agreement.
  A.               Section 1.1 of the Canadian Credit Agreement is hereby
amended by inserting the following definitions to such Section:
  “Permitted
Subordinated Debt”  means subordinated unsecured
Indebtedness of Borrower resulting from the issuance by Borrower of its (a)
Series A Subordinated Convertible Notes due March 31, 2012, and (b) Series B
Subordinated Convertible Notes due March 31, 2012, in an aggregate outstanding
principal balance at any time of not greater than $50,195,000, and which
Indebtedness (i) has a coupon rate of not greater than 9.25%, (ii) has a due
date not earlier than March 31, 2012, (iii) is not subject to negative
covenants, financial covenants or events of default (or other provisions which
have the same effect as negative covenants, financial covenants or events of
default) which have not been approved by the Global Administrative Agent, and
(iv) is subordinated to the Obligations on terms acceptable to the Global
Administrative Agent, including, without limitation, pursuant to the terms of
the Subordination Agreement.
  “Permitted
Subordinated Debt Documents”  means, collectively, all
note purchase agreements, indentures, promissory notes, guarantees or other
documents or instruments issued, given or delivered in connection with,
evidencing and/or otherwise pertaining to, the Permitted Subordinated Debt.
  “Subordination
Agreement”  means that certain Subordination and
Intercreditor Agreement executed by and among the Global Administrative Agent,
the Canadian Administrative Agent, the Combined Lenders, Borrower, U.S.
Borrower and the Noteholders (as therein defined) party thereto, as amended,
supplemented, restated or otherwise modified from time to time in accordance
with the Loan Documents. Notwithstanding anything to the contrary contained in
this Agreement, the terms “Loan Document”  and “U.S.  Loan Documents”  shall each include the
Subordination Agreement.
  B.              The definition of “Change in Control” contained in
Section 1.1 of the Canadian Credit Agreement is hereby amended to read in full
as follows:
  “Change
in Control”  means (a) the failure of Borrower to own or
control, directly or indirectly, 100% of the outstanding Equity Interests of
any other Loan Party, (b) a “Change in Control” under the U.S. Credit
Agreement, or (c) a “Change of Control” (or similar defined term) under any
Permitted Subordinated Debt Document.
  C.              Section 2.10 of the Canadian Credit Agreement is hereby
amended by inserting the 

 4
 

     
  following Subsection 2.10(e) after Subsection 2.10(d):
  “                 (e)     Notwithstanding
any other provision of this Section 2.10, if at any time Borrower
becomes obligated to pay or prepay all or part of the Permitted Subordinated
Debt, Borrower shall, prior to any payment or prepayment of the Permitted
Subordinated Debt, prepay the Loans and reduce the Commitments in full.”
  D.              Section 3.3 of the Canadian Credit Agreement is hereby
amended by revising the current Section 3.3 to read in full as follows:
  “Section 3.3 Approvals;
No Conflicts. The execution, delivery and performance by Borrower of this
Agreement and each other Loan Document executed or to be executed by it, and
the execution, delivery and performance by each other Loan Party of each Loan
Document executed or to be executed by such other Loan Party, (a) do not
require any Governmental Approval or third party approvals, except such as have
been obtained or made and are in full force and effect and except filings
necessary to perfect Liens created under the Loan Documents, (b) will not
violate any applicable Governmental Rule or the Organic Documents of Borrower
or any such other Loan Party or any order of any Governmental Authority, (c)
will not violate or result in a default under any indenture, agreement or other
instrument (including, without limitation, any Permitted Subordinated Debt
Document) binding upon Borrower or any such other Loan Party or its assets, or
give rise to a right thereunder to require any payment to be made by Borrower
or any such other Loan Party, and (d) will not result in the creation or
imposition of any Lien on any asset of Borrower or any such other Loan Party,
except Liens created under the Loan Documents.”
  E.              Section 8.1 of the Canadian Credit Agreement is hereby
amended by adding thereto new Subsections (1) and (m) which shall read in full
as follows:
  “(1) Default
under Permitted Subordinated Debt Documents. Any default or event of
default shall occur under any Permitted Subordinated Debt Document, which such
default or event of default shall continue unremedied prior to the expiration
of any applicable period of grace or cure under the applicable Permitted
Subordinated Debt Document.
  (m) Subordination.
All or any portion of the Permitted Subordinated Debt shall cease, for any
reason, to be validly subordinated to the Combined Obligations, as provided in
the Subordination Agreement, or any holder of Permitted Subordinated Debt or
any Loan Party, or any affiliate thereof, shall so assert in writing.”
  III.             Global
Borrowing Base.
  (a)             The
Global Administrative Agent and the Combined Lenders shall have the right, in
connection with the issuance of any Permitted Subordinated Debt, to reduce the
Global Borrowing Base and the U.S. Borrowing by an amount agreed to by the
Global Administrative Agent and the Combined Lenders in accordance with their
customary practices and standards for oil and gas loans and in the exercise of
their sole and reasonable discretion. In connection with any such reduction,
the Global Administrative Agent shall 

 5
 

     
  promptly notify Borrower, the Canadian Borrower and the Combined
Lenders of the new Global Borrowing Base and U.S. Borrowing Base as so reduced,
which new Global Borrowing Base and U.S. Borrowing Base shall be effective as
of the date specified in such notice. Upon receipt of such notice from the
Global Administrative Agent, the U.S. Borrower shall designate the Allocated
U.S. Borrowing Base and the Allocated Canadian Borrowing Base to the Global
Administrative Agent in accordance with Section 2.7(d) of the U.S. Credit
Agreement.
  (b)             If
either a Global Borrowing Base Deficiency or a U.S. Borrowing Base Deficiency
occurs as a result of this Section III, then U.S. Borrower and Canadian
Borrower shall, within one (1) Business Day following receipt of the notice
described in clause (a) above, prepay Combined Loans in an aggregate
principal amount equal to such deficiency, together with interest on the
principal amount paid accrued to the date of such prepayment. The parties
hereto hereby agree that any redetermination of the Global Borrowing Base and
U.S. Borrowing Base provided in this Section III shall not be deemed a
discretionary redetermination of the Global Borrowing Base or U.S. Borrowing
Base for purposes of Section 2.7(e) of the U.S. Credit Agreement.
  IV.             Consent and Waiver.  U.S. Borrower and
Canadian Borrower have requested that the Combined Lenders (a) consent to the
issuance and incurrence of the Permitted Subordinated Debt (such issuance and
incurrence being referred to herein as the “Subject  Transaction”),  and (b) waive (i) any provision of the Combined
Credit Agreements and the other Combined Loan Documents to the extent such
provisions prohibit the consummation of the Subject Transaction, and (ii) any
and all remedies and other rights under the Combined Credit Agreements and the
other Combined Loan Documents in respect of any Default or Event of Default (as
defined under each Combined Credit Agreement) to the extent, but only to the
extent, occurring solely from the consummation of the Subject Transaction. In
reliance on the representations, warranties, covenants and agreements contained
in the Combined Credit Agreements and this Amendment, each Combined Lender
hereby (x) consents to the Subject Transaction, and (y) waives (i) any
provision of the Combined Credit Agreements and the other Combined Loan
Documents to the extent such provisions prohibit the consummation of the
Subject Transaction, and (ii) any and all remedies and other rights under the
Combined Credit Agreements and the other Combined Loan Documents in respect of
any Default or Event of Default (as defined under each Combined Credit
Agreement) to the extent, but only to the extent, occurring solely from the consummation
of the Subject Transaction. The consent and waiver contained in this Section
IV are limited solely to the Subject Transaction, and the applicable
provisions of the Combined Credit Agreements and the other Combined Loan
Documents to the extent they prohibit the consummation of, or provide rights
and remedies in respect of the consummation of, such transaction. Nothing
contained herein shall be deemed (1) a consent to any action other than the
consummation of the Subject Transaction, or (2) a waiver of any provisions of
the Combined Credit Agreements or any other Combined Loan Document except to
the extent any such provision prohibits the consummation of, or provides rights
and remedies in respect of the consummation of, the Subject Transaction.
  V.              Effectiveness.  This Amendment shall
become effective as of the date (the “Effective
Date”)  when the Global Administrative Agent shall have received
(a) counterparts hereof duly executed by the U.S. Borrower, the Canadian
Borrower, the Global Administrative Agent, the Canadian Administrative Agent
and the Combined Lenders (or, in the case of any party as to which an executed
counterpart shall not have been received, telegraphic, telex, or other written
confirmation from such party of execution of a counterpart hereof by such
party) and (b) 

 6
 

     
  counterparts of the Subordination Agreement duly executed by the U.S.
Borrower, the Canadian Borrower, the Global Administrative Agent, the Canadian
Administrative Agent, the Combined Lenders and each holder of Permitted
Subordinated Debt.
  VI.             Reaffirmation of Representations and Warranties.  To induce the Combined Lenders, the Global Administrative Agent and the
Canadian Administrative Agent to enter into this Amendment, the U.S. Borrower
and the Canadian Borrower hereby reaffirm, as of the date hereof, the
following:
  A.             The
representations and warranties of each Loan Party (as such term is defined in
the U.S. Credit Agreement and the Canadian Credit Agreement, collectively, the “Combined  Loan Parties”)  set
forth in the Combined Loan Documents to which it is a party are true and
correct on and as of the date hereof (or, if stated to have been made expressly
as of an earlier date, were true and correct in all material respects as of
such date).
  B.              Each
of the Combined Loan Parties (a) is a corporation, partnership or limited
liability company duly incorporated or organized (as applicable), validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization, (b) has all corporate, partnership or limited
liability company power (as applicable) and all material governmental licenses,
authorizations, consents and approvals required to carry on its businesses as
now conducted and as proposed to be conducted, and (c) is duly qualified to
transact business as a foreign corporation, partnership or limited liability
company in each jurisdiction where a failure to be so qualified would
reasonably be expected to have a Material Adverse Effect.
  C.              The
execution, delivery and performance of this Amendment and the other Combined
Loan Documents by each Combined Loan Party (to the extent each Loan Party is a
party to this Agreement and such Loan Documents) (a) are within such Loan Party’s
corporate, partnership or limited liability company powers, (b) when executed
will be duly authorized by all necessary corporate, partnership or limited
liability company action, (c) require no action by or in respect of, or filing
with, any Governmental Authority (other than (i) actions or filings pursuant to
the Exchange Act and (ii) actions or filings that have been taken or made and
are in full force and effect) and (d) do not contravene, or constitute a
default under, any provision of applicable Governmental Rule (including,
without limitation, Regulation U) or of the articles or certificate of
incorporation, bylaws, regulations, partnership agreement or comparable charter
documents of any Combined Loan Party or of any agreement, judgment, injunction,
order, decree or other instrument (including, without limitation, any Permitted
Subordinated Debt Document) binding upon any Combined Loan Party or result in
the creation or imposition of any Lien on any Borrowing Base Property or
Collateral other than the Liens securing the Combined Obligations.
  D.              This
Amendment and each of the other Combined Loan Document constitutes, or when
executed and delivered will constitute, valid and binding obligations of each
Combined Loan Party which is a party thereto, enforceable against each such
Combined Loan Party which executes the same in accordance with its terms except
as the enforceability thereof may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium, or similar Governmental Rules affecting creditors’
rights generally, and (b) equitable principles of general applicability
(whether enforcement is sought by proceedings at law or in equity).
  E.              Neither
a Default nor an Event of Default has occurred or will exist under either
Combined Credit Agreement after giving effect to the transactions contemplated
by this 

 7
 

     
  Amendment or the other Combined Loan Documents. Neither the U.S.
Borrower or any of its Subsidiaries nor the Canadian Borrower or any of its
Subsidiaries is in default under, nor has any event or circumstance occurred
which, but for the expiration of any applicable grace period or the giving of
notice, or both, would constitute a default under, any material agreement to
which the U.S. Borrower or any of its Subsidiaries or the Canadian Borrower or
any of its Subsidiaries is a party or by which the U.S. Borrower or any of its
Subsidiaries or the Canadian Borrower or any of its Subsidiaries is bound,
which default would reasonably be expected to have a Material Adverse Effect.
The Canadian Borrower and the U.S. Borrower are in compliance with the
financial covenants set forth in Article VI of the U.S. Credit Agreement.
  F.              No event or events have occurred since December 31,
2005 which individually or in the aggregate would reasonably be expected to
have a Material Adverse Effect.
  VII.           Defined Terms.  Except as amended hereby,
terms used herein when defined in the U.S. Credit Agreement shall have the same
meanings herein unless the context otherwise requires.
  VIII.          Reaffirmation of Combined Credit Agreements.  This Amendment shall be deemed to be an amendment to the Combined Credit
Agreements, and the Combined Credit Agreements, as amended hereby, are hereby
ratified, approved and confirmed in each and every respect. All references to
the Combined Credit Agreements herein and in any other document, instrument,
agreement or writing shall hereafter be deemed to refer to the Combined Credit
Agreements as amended hereby.
  IX.            Governing Law. THIS AMENDMENT
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
  NOTWITHSTANDING THE FOREGOING
SENTENCE AND AFTER GIVING EFFECT TO THE TEXTUAL AMENDMENTS CONTAINED IN
SECTIONS I AND II OF THIS AMENDMENT, (i) THE U.S. CREDIT AGREEMENT (AS AMENDED
HEREBY) SHALL CONTINUE TO BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAW SPECIFIED IN SECTION 10.9(a) OF THE U.S. CREDIT AGREEMENT, AND (ii) THE
CANADIAN CREDIT AGREEMENT (AS AMENDED HEREBY) SHALL CONTINUE TO BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAW SPECIFIED IN SECTION 10.9(a) OF THE
CANADIAN CREDIT AGREEMENT.
  X.              Severability of
Provisions.  Any provision of this Amendment held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.
  XI.            Counterparts.  This Amendment may be executed in counterparts (and by different parties
hereto on different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single contract.
Delivery of an executed counterpart of a signature page of this Amendment by
telecopy (or other electronic transmission acceptable to the Global
Administrative Agent) shall be effective as delivery of a manually executed
counterpart of this Amendment.
  XII.           Headings.  Article and Section headings used herein are for convenience of 

 8
 

     
  reference only, are not part of this Amendment and
shall not affect the construction of, or be taken into consideration in
interpreting, this Amendment.
  XIII.          Successors
and Assigns.  This Amendment shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns,
except that neither the U.S. Borrower nor the Canadian Borrower may assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of the Global Administrative Agent, each Issuing Bank and each
Combined Lender (and any attempted assignment or transfer by either the U.S.
Borrower or the Canadian Borrower without such consent shall be null and void).
  XIV.         No Oral Agreements. THIS
AMENDMENT, THE COMBINED CREDIT AGREEMENTS, AS AMENDED HEREBY, AND THE
OTHER COMBINED LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES
WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN
ORAL AGREEMENTS AMONG THE PARTIES.
  [SIGNATURES BEGIN
ON FOLLOWING PAGE]
   

 9

 

IN WITNESS WHEREOF, the U.S.
Borrower, the Canadian Borrower,
the Combined Lenders, the Global
Administrative Agent, and the Canadian Administrative Agent have executed this Amendment as of the date first above written.

	
  

  	
  U.S. BORROWER

  
	
   

  	
   

  	
   

  
	
   

  	
  STORM CAT ENERGY (USA) CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul Wiesner

  
	
   

  	
  Name:

  	
  Paul Wiesner

  
	
   

  	
  Title

  	
  CFO/Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  CANADIAN BORROWER

  
	
   

  	
   

  	
   

  
	
   

  	
  STORM CAT ENERGY CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul Wiesner

  
	
   

  	
  Name:

  	
  Paul Wiesner

  
	
   

  	
  Title

  	
  CFO/Secretary

  

 

 

	
  

  	
  AGENTS AND COMBINED LENDERS

  
	
   

  	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK, N.A., as
  Global

  
	
   

  	
  Administrative Agent and as a U.S. Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J. Scott Fowler

  
	
   

  	
   

  	
  J. Scott Fowler,

  
	
   

  	
   

  	
  Senior Vice President

  

 

 

	
  

  	
  JPMORGAN CHASE BANK, N.A.,

  
	
   

  	
  TORONTO BRANCH,

  
	
   

  	
  as Canadian Administrative Agent and as a Canadian

  
	
   

  	
  Lender

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J. Scott Fowler

  
	
   

  	
  Name:

  	
  J. Scott Fowler

  
	
   

  	
  Title

  	
  Senior Vice President

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