CHANDLER ENERGY, LLC Oil & Gas Exploration and Production
Exhibit 10.2
XXXXXXXX ENERGY, LLC
Oil & Gas Exploration and Production
February 27, 2007
Mr. Xxxxxxx Xxxxxxxx
Xxxxxxxx Enterprises
0000 Xxxx 00xx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Xxxxxxxx Energy LLC – Xxxxxxxx Enterprises
Subordinated Note
Dear Xxx:
With respect to that certain Subordinated, Convertible Promissory Note dated April 20, 2004 (the “Note”), made by Xxxxxxxx Energy, LLC (“Borrower”), payable to Xxxxxxxx Enterprises (“Xxxxxxxx”), Borrower and Xxxxxxxx have agreed to extinguish the entirety of the $2,000,000 principal amount of the Note and release any mortgages in exchange for 250,000 shares of common stock in GeoResources, Inc. (“GEOI Shares”) to be transferred and assigned to Xxxxxxxx Enterprises by Xxxxxxxx Energy, LLC subject to the following terms and conditions:
Condition to Conversion:
That the common shareholders of GeoResources, Inc. present in person or by proxy at the Special Meeting of Shareholders of GeoResources, Inc. scheduled to be held March 29, 2007 (or any adjournments or postponements thereof) approve the issuance of common shares pursuant to the “Agreement and Plan of Merger dated September 14, 2006 among GeoResources, Inc., Southern Bay Energy Acquisition, LLC, Xxxxxxxx Acquisition, LLC, Southern Bay Oil & Gas, L.P., Xxxxxxxx Energy, LLC and PICA Energy, LLC,” (the “Merger”).
Terms of Conversion:
·
The Effective Time of the conversion shall be immediately upon the closing of the Merger. The actual Note shall be retained by Xxxxxxxx pending receipt by Xxxxxxxx of the GEOI Shares.
·
The GEOI Shares shall be issued in the name of Xxxxxxxx and delivered to Xxxxxxxx by Borrower immediately upon their issuance by Xxxxx Fargo Shareowner Services in their capacity as Exchange Agent for GeoResources, Inc.
·
In the event that the daily NASDAQ quoted closing price of a common share of GeoResources, Inc. (“GEOI”) does not equal or exceed $8.00 for any period of 20 consecutive trading days from the Effective Time through December 31, 2007, Borrower, on a one time lookback basis, and on or before January 31, 2008, agrees to assign additional common shares of its GeoResources, Inc. held by Borrower to Xxxxxxxx according to the following formula:
[(2,000,000/X) – 250,000]
where “X” =
average of highest closing price of GEOI for any 20 consecutive trading days during the period from the Effective Date through December 31, 2007
If this is consistent with your understanding of our agreement, please return one fully executed agreement for closing.
Very truly yours,
/s/ Xxxxxx X. Xxxxxxxx, III
Xxxxxx X. Xxxxxxxx, III
President
Agreed to this 2nd day of March 2007.
XXXXXXXX ENTERPRISES, INC.
/s/ Xxxxxxx Morrison_________________
Xxxxxxx Xxxxxxxx
