Common use of Resale Restrictions and Legends Clause in Contracts

Resale Restrictions and Legends. The Purchaser acknowledges that the certificates representing the Purchased Securities will bear the following legends: FOR US PURCHASERS: "THE SECURITIES REPRESENTED HEREBY (and if a warrant, the legend shall include the following: AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF) HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"). THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT OR: (A) TO THE ISSUER, (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE 1933 ACT, (C) IN COMPLIANCE WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE 1933 ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, OR (D) WITH THE PRIOR CONSENT OF THE ISSUER, IN A TRANSACTION T HAT DOES NOT REQUIRE REGISTRATION UNDER THE 1933 ACT OR ANY APPLICABLE STATE SECURITIES LAWS, AND THE HOLDER HAS FURNISHED TO THE ISSUER AN OPINION TO SUCH EFFECT FROM COUNSEL OF RECOGNIZED STANDING REASONABLY SATISFACTORY TO THE ISSUER PRIOR TO SUCH OFFER, SALE, PLEDGE OR TRANSFER." FOR NON-U.S. PURCHASERS: THIS PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT (THE "SUBSCRIPTION AGREEMENT") RELATES TO AN OFFERING OF SECURITIES IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"). NONE OF THE SECURITIES TO WHICH THIS SUBSCRIPTION AGREEMENT RELATES HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. Purchasers are advised to consult with their own legal counsel or advisors to determine the resale restrictions that may be applicable to them.

Resale Restrictions and Legends. The Purchaser Purchased Securities will be subject to a four month and one day hold period that commences on Closing. The Subscriber acknowledges that the certificates representing the Purchased Securities may bear the following legends: “UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE [INSERT THE DATE THAT IS FOUR MONTHS AND A DAY AFTER THE DISTRIBUTION DATE.]” “WITHOUT PRIOR WRITTEN APPROVAL OF THE TSX VENTURE EXCHANGE AND COMPLIANCE WITH ALL APPLICABLE SECURITIES LEGISLATION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE TRADED ON OR THROUGH THE FACILITIES OF THE TSX VENTURE EXCHANGE OR OTHERWISE IN CANADA OR TO OR FOR THE BENEFIT OF A CANADIAN RESIDENT UNTIL [DATE THAT IS FOUR MONTHS AND A DAY AFTER THE CLOSING].” If the Subscriber is a resident of the United States, then the Subscriber acknowledges that the certificates representing the Purchased Securities will bear the additional following legendslegend or such other legend as legal counsel for the Corporation may advise: FOR US PURCHASERS: "“THE SECURITIES REPRESENTED HEREBY (and if a warrant, the legend shall include the following: AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF) HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "“1933 ACT"”). THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT OR: (A) TO THE ISSUERCOMPANY, (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE 1933 ACT, (C) IN COMPLIANCE WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE 1933 ACT PROVIDED BY RULE 144 OR RULE 144A THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, OR (D) WITH THE PRIOR CONSENT OF THE ISSUER, IN A TRANSACTION T HAT THAT DOES NOT REQUIRE REGISTRATION UNDER THE 1933 ACT OR ANY APPLICABLE STATE SECURITIES LAWS, AND THE HOLDER HAS HAS, PRIOR TO SUCH SALE, FURNISHED TO THE ISSUER COMPANY AN OPINION TO SUCH EFFECT FROM OF COUNSEL OR OTHER EVIDENCE OF RECOGNIZED STANDING EXEMPTION, IN EITHER CASE REASONABLY SATISFACTORY TO THE ISSUER PRIOR TO SUCH OFFER, SALE, PLEDGE OR TRANSFERCOMPANY. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA." FOR NON-U.S. PURCHASERS: THIS PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT (THE "SUBSCRIPTION AGREEMENT") RELATES TO AN OFFERING OF SECURITIES IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT")” The Corporation agrees that the Purchased Securities will bear no legends other than those set out here. NONE OF THE SECURITIES TO WHICH THIS SUBSCRIPTION AGREEMENT RELATES HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. Purchasers Subscribers are advised to consult with their own legal counsel or advisors to determine the resale restrictions that may be applicable to them.. CLOSING DATE Payment for the Units is required as soon as possible, and the delivery of the Units is scheduled to occur following receipt of the required approval of the Exchange or on such date as may be designated by the Corporation (the “Closing Date”). Subsequent closings may take place from time to time at later dates as may be determined by the Corporation. ADDITIONAL DEFINITIONS In this Subscription Agreement, the following words have the following meanings unless otherwise indicated:

Resale Restrictions and Legends. The Purchaser Securities will be subject to a four month and one day hold period that commences on Closing. The Subscriber acknowledges that the certificates representing the Purchased Securities will bear the following legends: “UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE [INSERT THE DATE THAT IS FOUR MONTHS AND A DAY AFTER THE DISTRIBUTION DATE.]” “WITHOUT PRIOR WRITTEN APPROVAL OF THE TSX VENTURE EXCHANGE AND COMPLIANCE WITH ALL APPLICABLE SECURITIES LEGISLATION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE TRADED ON OR THROUGH THE FACILITIES OF THE TSX VENTURE EXCHANGE OR OTHERWISE IN CANADA OR TO OR FOR US PURCHASERSTHE BENEFIT OF A CANADIAN RESIDENT UNTIL [DATE THAT IS FOUR MONTHS AND A DAY AFTER THE CLOSING].” If the Subscriber is a resident of the United States, then the Subscriber acknowledges that the certificates representing the Securities will bear the additional following legend or such other legend as legal counsel for the Corporation may advise: "“THE SECURITIES REPRESENTED HEREBY (and if a warrant, the legend shall include the following: AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF) HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "“1933 ACT"”). THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT OR: (A) TO THE ISSUERCOMPANY, (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE 1933 ACT, (C) IN COMPLIANCE WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE 1933 ACT PROVIDED BY RULE 144 OR RULE 144A THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, OR (D) WITH THE PRIOR CONSENT OF THE ISSUER, IN A TRANSACTION T HAT THAT DOES NOT REQUIRE REGISTRATION UNDER THE 1933 ACT OR ANY APPLICABLE STATE SECURITIES LAWS, AND THE HOLDER HAS HAS, PRIOR TO SUCH SALE, FURNISHED TO THE ISSUER COMPANY AN OPINION TO SUCH EFFECT FROM OF COUNSEL OR OTHER EVIDENCE OF RECOGNIZED STANDING EXEMPTION, IN EITHER CASE REASONABLY SATISFACTORY TO THE ISSUER PRIOR TO SUCH OFFER, SALE, PLEDGE OR TRANSFERCOMPANY. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA." FOR NON-U.S. PURCHASERS: THIS PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT (THE "SUBSCRIPTION AGREEMENT") RELATES TO AN OFFERING OF SECURITIES IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT")” The Corporation agrees that the Securities will bear no legends other than those set out here. NONE OF THE SECURITIES TO WHICH THIS SUBSCRIPTION AGREEMENT RELATES HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. Purchasers Subscribers are advised to consult with their own legal counsel or advisors to determine the resale restrictions that may be applicable to them. CLOSING DATE Payment for the Units is required as soon as possible, and the delivery of the Units is scheduled to occur following receipt of the required approval of the Exchange or on such date as may be designated by the Corporation (the “Closing Date”). Subsequent closings may take place from time to time at later dates as may be determined by the Corporation. USE OF PROCEEDS Proceeds of the Private Placement will be used for product research, aquaculture and KLH production development, capital expenditures and working capital.

Resale Restrictions and Legends. The Purchaser acknowledges that Debentures will be distributed pursuant to exemptions from Applicable Securities Laws and accordingly there will be resale restrictions imposed by Applicable Securities Laws on the certificates representing Debentures, the Purchased Common Shares issuable upon conversion thereof, and Surge U.S. Common Shares issuable upon exchange thereof. All resales of Debentures, the Common Shares issuable upon conversion thereof, and Surge U.S. Common Shares issuable on the exchange thereof are subject to restrictions in the United States and Canada as a result of Applicable Securities will Laws. A description of restrictions on resale of the Debentures, Common Shares issuable upon conversion thereof, and Surge U.S. Common Shares issuable on the exchange thereof in the United States and Canada is set forth below. (a) The Debentures and Surge U.S. Common Shares issuable on the exchange thereof have not been initially registered under the U.S. Securities Act. Accordingly, all Debentures and Surge U.S. Common Shares, as the case may be, shall bear the following legends: FOR legend (the “US PURCHASERS: "Legend”): “THE SECURITIES REPRESENTED HEREBY (and if a warrant, the legend shall include the following: AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF) HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 “U.S. SECURITIES ACT"”). THESE SECURITIES ; AND MAY BE OFFEREDOFFERED FOR SALE, SOLD, PLEDGED EXCHANGED, OR OTHERWISE TRANSFERRED OR ASSIGNED FOR VALUE ONLY PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT OR: (A) TO THE ISSUER, CORPORATION; (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S 144 OR RULE 144A UNDER THE 1933 ACT, U.S. SECURITIES ACT (C) IN COMPLIANCE WITH THE EXEMPTION FROM THE PURSUANT TO REGISTRATION REQUIREMENTS UNDER THE 1933 ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE U.S. SECURITIES LAWSACT, OR (D) WITH THE PRIOR CONSENT OF THE ISSUER, IN A TRANSACTION T HAT DOES NOT REQUIRE THAT IS OTHERWISE EXEMPT FROM REGISTRATION UNDER THE 1933 U.S. SECURITIES ACT OR ANY APPLICABLE AND STATE SECURITIES LAWS, AND PROVIDED THE CORPORATION SHALL HAVE RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO IT AS TO THE AVAILABILITY OF THE EXEMPTIONS RELIED ON. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE GOOD DELIVERY IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA.”; provided, that if Debentures or Surge U.S. Shares are being sold in compliance with the requirements of Rule 144 under the U.S. Securities Act or pursuant to an effective registration statement under the U.S. Securities Act, the above legend may be removed by delivery of (i) an opinion of counsel of recognized standing reasonably satisfactory to the Corporation or Surge U.S., as applicable, to the effect that such Debentures or Surge U.S. Shares held by it are being sold pursuant to Rule 144 of the U.S. Securities Act or an effective registration statement under the U.S. Securities Act, as the case may be, and (ii) such other documentation reasonably requested by the registrar and transfer agent or the Corporation or Surge U.S., as applicable; (b) The Debentures and the Common Shares issuable upon conversion thereof have been issued in Canada pursuant to exemptions from prospectus requirements of Applicable Securities Laws and each Debenture and the Common Shares issuable upon conversion thereof shall bear a legend to the following effect (the “Canadian Legend”): “UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER HAS FURNISHED TO OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE THE DATE THAT IS FOUR MONTHS AND A DAY AFTER THE LATER OF (i) THE DATE OF THIS DEBENTURE CERTIFICATE, AND (ii) THE DATE THE ISSUER AN OPINION TO SUCH EFFECT FROM COUNSEL OF RECOGNIZED STANDING REASONABLY SATISFACTORY TO THE BECAME A REPORTING ISSUER PRIOR TO SUCH OFFERIN ANY PROVINCE OR TERRITORY.” (c) If Debentures or certificates for Common Shares or Surge U.S. Common Shares bearing a US Legend and/or Canadian Legend are presented to the Trustee for exchange, SALEthe Trustee shall deliver to the holder thereof new certificates bearing the US Legend and/or Canadian Legend, PLEDGE OR TRANSFERas applicable, in the name requested, representing the appropriate aggregate number of securities." FOR NON-U.S. PURCHASERS: THIS PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT (THE "SUBSCRIPTION AGREEMENT") RELATES TO AN OFFERING OF SECURITIES IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"). NONE OF THE SECURITIES TO WHICH THIS SUBSCRIPTION AGREEMENT RELATES HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. Purchasers are advised to consult with their own legal counsel or advisors to determine the resale restrictions that may be applicable to them.

Resale Restrictions and Legends. The Purchaser Purchased Securities will be subject to a four month and one day hold period that commences on Closing. The Subscriber acknowledges that the certificates representing the Purchased Securities may bear the following legends: “UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE [INSERT THE DATE THAT IS FOUR MONTHS AND A DAY AFTER THE DISTRIBUTION DATE.]” “WITHOUT PRIOR WRITTEN APPROVAL OF THE TSX VENTURE EXCHANGE AND COMPLIANCE WITH ALL APPLICABLE SECURITIES LEGISLATION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE TRADED ON OR THROUGH THE FACILITIES OF THE TSX VENTURE EXCHANGE OR OTHERWISE IN CANADA OR TO OR FOR THE BENEFIT OF A CANADIAN RESIDENT UNTIL [DATE THAT IS FOUR MONTHS AND A DAY AFTER THE CLOSING].” If the Subscriber is a resident of the United States, then the Subscriber acknowledges that the certificates representing the Purchased Securities will bear the additional following legendslegend or such other legend as legal counsel for the Corporation may advise: FOR US PURCHASERS: "“THE SECURITIES REPRESENTED HEREBY (and if a warrant, the legend shall include the following: AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF) HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "“1933 ACT"”). THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT OR: (A) TO THE ISSUERCOMPANY, (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE 1933 ACT, (C) IN COMPLIANCE WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE 1933 ACT PROVIDED BY RULE 144 OR RULE 144A THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, OR (D) WITH THE PRIOR CONSENT OF THE ISSUER, IN A TRANSACTION T HAT THAT DOES NOT REQUIRE REGISTRATION UNDER THE 1933 ACT OR ANY APPLICABLE STATE SECURITIES LAWS, AND THE HOLDER HAS HAS, PRIOR TO SUCH SALE, FURNISHED TO THE ISSUER COMPANY AN OPINION TO SUCH EFFECT FROM OF COUNSEL OR OTHER EVIDENCE OF RECOGNIZED STANDING EXEMPTION, IN EITHER CASE REASONABLY SATISFACTORY TO THE ISSUER PRIOR TO SUCH OFFER, SALE, PLEDGE OR TRANSFERCOMPANY. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA." FOR NON-U.S. PURCHASERS: THIS PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT (THE "SUBSCRIPTION AGREEMENT") RELATES TO AN OFFERING OF SECURITIES IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT")” The Corporation agrees that the Purchased Securities will bear no legends other than those set out here. NONE OF THE SECURITIES TO WHICH THIS SUBSCRIPTION AGREEMENT RELATES HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. Purchasers Subscribers are advised to consult with their own legal counsel or advisors to determine the resale restrictions that may be applicable to them. CLOSING DATE Payment for the Units is required as soon as possible, and the delivery of the Units is scheduled to occur following receipt of the required approval of the Exchange or on such date as may be designated by the Corporation (the “Closing Date”). Subsequent closings may take place from time to time at later dates as may be determined by the Corporation.

Resale Restrictions and Legends. The Purchaser acknowledges that Initial Debentures will be distributed pursuant to exemptions from the certificates representing prospectus and/or registration requirements of Applicable Securities Legislation and accordingly there will be restrictions imposed by Applicable Securities Legislation on the Purchased Securities will resale of the Initial Debentures and the Common Shares issuable upon conversion thereof. All resales of Initial Debentures and the Common Shares issuable upon conversion thereof are subject to restrictions in the United States and Canada as a result of application of the 1933 Act and rules promulgated thereunder. A description of restrictions on resales of the Initial Debentures and Common Shares issuable upon conversion thereof in the United States and Canada is set forth below in Section 2.14(a). In Canada, in addition to the restrictions set forth below in Section 2.14(a), resales of Initial Debentures and Common Shares issuable upon conversion thereof may only be made under a further exemption and all Initial Debentures shall bear the legend set forth below in Section 2.14(b). (a) The Initial Debentures and the Common Shares issuable upon conversion thereof have not been initially registered under the 1933 Act. Accordingly, all Initial Debentures and the Common Shares issuable upon conversion thereof, as, shall bear the following legends: FOR legend (the “US PURCHASERS: "Legend”): “THE SECURITIES REPRESENTED HEREBY (and if a warrant, the legend shall include the following: AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF) HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 “U.S. SECURITIES ACT")”) OR STATE SECURITIES LAWS. THESE THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF GASTAR EXPLORATION LTD. THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED SOLD OR OTHERWISE TRANSFERRED ONLY PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT OR: (A) TO THE ISSUERGASTAR EXPLORATION LTD., (B) OUTSIDE THE UNITED STATES IN COMPLIANCE ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE 1933 U.S. SECURITIES ACT, (C) IN COMPLIANCE WITH INSIDE OR OUTSIDE THE UNITED STATES, PURSUANT TO THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE 1933 U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND (D) TO A PERSON THE HOLDER REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN ACCORDANCE WITH APPLICABLE STATE RULE 144A UNDER THE U.S. SECURITIES LAWSACT) PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, OR (DE) PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE UNDER THE U.S. SECURITIES ACT AND COVERING SUCH OFFER, SALE OR TRANSFER (IT BEING UNDERSTOOD THAT THE ISSUER SHALL BE UNDER NO OBLIGATION TO FILE SUCH REGISTRATION STATEMENT). HEDGING TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED HEREBY MAY NOT BE CONDUCTED EXCEPT IN COMPLIANCE WITH THE PRIOR CONSENT U.S. SECURITIES ACT. A NEW CERTIFICATE BEARING NO LEGEND MAY BE OBTAINED FROM CIBC MELLON TRUST COMPANY UPON DELIVERY OF THE ISSUERAN OPINION OF COUNSEL, IN A TRANSACTION T HAT DOES NOT REQUIRE REGISTRATION UNDER THE 1933 ACT OR ANY APPLICABLE STATE SECURITIES LAWSFORM SATISFACTORY TO CIBC MELLON TRUST COMPANY AND GASTAR EXPLORATION LTD., AND THE HOLDER HAS FURNISHED TO THE ISSUER AN OPINION TO SUCH EFFECT FROM COUNSEL OF RECOGNIZED STANDING REASONABLY SATISFACTORY TO THAT THE ISSUER PRIOR TO SUCH OFFER, SALE, PLEDGE OR TRANSFER." FOR NON-U.S. PURCHASERS: THIS PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT (THE "SUBSCRIPTION AGREEMENT") RELATES TO AN OFFERING OF SECURITIES IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"). NONE SALE OF THE SECURITIES TO WHICH THIS SUBSCRIPTION AGREEMENT RELATES HAVE BEEN REGISTERED REPRESENTED HEREBY IS BEING MADE IN COMPLIANCE WITH RULE 144 UNDER THE SECURITIES ACT TOGETHER WITH OTHER DOCUMENTATION REASONABLY REQUESTED BY CIBC MELLON TRUST COMPANY OR GASTAR EXPLORATION LTD.” provided, that if the Initial Debentures or the Common Shares issuable upon conversion thereof are being sold in compliance with the requirements of Rule 144 under the 1933 ACTAct or pursuant to an effective registration statement under the 1933 Act, OR ANY the above legend may be removed by delivery to the Debenture Trustee of (i) an opinion of Counsel of recognized standing reasonably satisfactory to the Corporation to the effect that the Initial Debentures or Common Shares issuable upon conversion thereof, held by it are being sold pursuant to Rule 144 of the 1933 Act or pursuant to an effective Registration Statement under the 1933 Act, as the case may be, and (ii) such other documentation reasonably requested by the Debenture Trustee or the Corporation; and provided, further, that if (i) a holder of Initial Debentures is not an “affiliate” (as defined in Rule 405 under the 0000 Xxx) of the Corporation, (ii) the holder has not been such an affiliate in the preceding three months, and (iii) at least two years (or such shorter period as may be permitted under Rule 144(k) or any successor rule promulgated under the 0000 Xxx) have elapsed since the later of the date the Initial Debentures were acquired from the Corporation or from an affiliate of the Corporation, then the US Legend may be removed from any certificates representing the Initial Debentures or Common Shares issuable upon conversion thereof, held by it by delivery to the Debenture Trustee of an opinion of counsel of recognized standing reasonably satisfactory to the Corporation, to the effect that any such Initial Debentures or Common Shares issuable upon conversion thereof, held by it may be sold pursuant to Rule 144(k) (or any successor rule) promulgated under the 1933 Act and such legend is no longer required under applicable requirements of the 1933 Act or state securities laws; and the Corporation shall use its reasonable best efforts to cause the registrar and transfer agent of the Corporation to remove the foregoing U.S. STATE Legend within three business days (excluding weekends and holidays) of receipt of the foregoing, as applicable. (b) The Initial Debentures have been issued in Canada pursuant to exemptions from prospectus requirements of Applicable Securities Legislation and each Initial Debenture and, until March 13, 2005, the Common Shares issuable upon conversion thereof, shall bear a legend to the following effect (the “Canadian Legend”): “UNLESS PERMITTED UNDER SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TOLEGISLATION, THE REGISTRATION REQUIREMENTS HOLDER OF THIS SECURITY MUST NOT TRADE THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. Purchasers SECURITY BEFORE MARCH 13, 2005.” (c) If Initial Debentures or certificates for Common Shares bearing a US Legend and/or Canadian Legend are advised presented to consult with their own legal counsel or advisors the Debenture Trustee for exchange, the Debenture Trustee shall deliver to determine the resale restrictions holder thereof new certificates bearing the US Legend and/or Canadian Legend, as applicable, in the name requested, representing the appropriate aggregate number of securities; provided, that the legends may be applicable to them.removed in accordance with Section 2.14(a) and 2.14(b). Unless and until the US Legend is removed pursuant to