<B>Form SC 13D

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GceH+4KKoUj7uYLqp8I2g1numCHAzQ0i4o+bnef+ke+n3eqIpqzG6PxvRk+h4s2s IsjBDHMSiwbZmS+AVf52/Q== 0001397151-07-000001.txt : 20070427 0001397151-07-000001.hdr.sgml : 20070427 20070427115438 ACCESSION NUMBER: 0001397151-07-000001 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20070427 DATE AS OF CHANGE: 20070427 GROUP MEMBERS: CHANDLER ENERGY, LLC GROUP MEMBERS: COLLIS P. CHANDLER, III SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: GEORESOURCES INC CENTRAL INDEX KEY: 0000041023 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 840505444 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-17772 FILM NUMBER: 07794185 BUSINESS ADDRESS: STREET 1: 1407 W DAKOTA PKWY CITY: WILLISTON STATE: ND ZIP: 58801 BUSINESS PHONE: 7015722020 MAIL ADDRESS: STREET 1: P O BOX 1505 CITY: WILLISTON STATE: ND ZIP: 58802-1505 FORMER COMPANY: FORMER CONFORMED NAME: GEORESOURCES EXPLORATION INC DATE OF NAME CHANGE: 19710422 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Chandler Collis Paul III CENTRAL INDEX KEY: 0001397151 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: BUSINESS PHONE: 303-297-2028 MAIL ADDRESS: STREET 1: 475 17TH STREET, SUITE 1210 CITY: DENVER STATE: CO ZIP: 80202 SC 13D 1 chandler13d004.htm CHANDLER SCHEDULE 13D <B>Form SC 13D

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

GEORESOURCES, INC.

(Name of Issuer)

Common Stock, par value $0.01

(Title of Class of Securities)

372476 10 1

(CUSIP Number)

April 17, 2007

(Date of Event which Requires Filing of this Statement)

Collis P. Chandler, III

Chandler Energy, LLC

475 17th Street, Suite 1210

Denver, Colorado 80202

Telephone: (303) 297-2028

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box [ ].

*The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on this cover page shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of the Act but shall be subject to all other provisions of the Act (however, see the Notes)

SCHEDULE 13D

CUSIP No. 372476 10 1

Page 2

NAME OF REPORTING PERSONS

Collis P. Chandler, III

S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) X (b)

SEC USE ONLY

SOURCE OF FUNDS

OO – Exchange of limited liability company membership interests

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT

TO ITEMS 2(d) OR 2(e)

CITIZENSHIP OR PLACE OF ORGANIZATION

USA

NUMBER OF

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON WITH

SOLE VOTING POWER

1,595,711

SHARED VOTING POWER

50,000

SOLE DISPOSITIVE POWER

1,595,711

SHARED DISPOSITIVE POWER

50,000

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

1,645,711

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

11.3%

TYPE OF REPORTING PERSON*

SCHEDULE 13D

CUSIP No. 372476 10 1

Page 3

NAME OF REPORTING PERSONS

Chandler Energy, LLC

S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) X (b)

SEC USE ONLY

SOURCE OF FUNDS

OO – Exchange of limited liability company membership interests

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT

TO ITEMS 2(d) OR 2(e)

CITIZENSHIP OR PLACE OF ORGANIZATION

Colorado

NUMBER OF

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON WITH

SOLE VOTING POWER

1,595,711

SHARED VOTING POWER

50,000

SOLE DISPOSITIVE POWER

1,595,711

SHARED DISPOSITIVE POWER

50,000

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

1,645,711

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

11.3%

TYPE OF REPORTING PERSON*

PN (limited liability company)

CUSIP No. 372476 10 1

Page 4

Item 1. Security and Issuer

The class of equity security to which this statement relates is the Common Stock, $0.01 par value (the “Common Stock”), of GeoResources, Inc., a Colorado corporation (the “Issuer”). The principal executive office of the Issuer is 110 Cypress Station Drive, Suite 220, Houston, Texas 77090.

Item 2. Identity and Background

This statement is being jointly filed by the following persons pursuant to Rule 13d-1(k) promulgated by the Securities and Exchange Commission (the “Commission”) pursuant to Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”): Collis P. Chandler, III, an individual, and Chandler Energy, LLC (“CEL”), a Colorado limited liability company. The principal purpose of CEL is to be an investment entity for Mr. Chandler. Mr. Chandler owns 100% of CEL and is its President (Manager of the LLC).

The principal business address of Collis P. Chandler and CEL is 475 17^th Street, Suite 1210, Denver, Colorado 80202. In addition to being the owner of 100% of CEL, on April 17, 2007, Mr. Chandler, as his present principal occupation and employment, became the Executive Vice President and Chief Operating Officer, Northern Region, and a director of the Issuer.

Neither Mr. Chandler nor CEL has been convicted in a criminal proceeding in the last five years. Mr. Chandler is a citizen of the United States. CEL is a Colorado limited liability company.

During the last five years, neither Mr. Chandler nor CEL has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Item 3. Source and Amount of Funds or Other Consideration.

On April 17, 2007, transactions contemplated by a Merger Agreement, dated September 14, 2006 and amended on February 16, 2007, were completed, in which Southern Bay Oil & Gas, L.P. (“Southern Bay”) and PICA Energy, LLC, a wholly-owned subsidiary of CEL (“PICA”), were each respectively merged with two subsidiaries of the Issuer (the “Mergers”), which were formed for that purpose. The Merger Agreement provided in substance for the mergers of the business of Southern Bay and CEL, each of which was an independent oil and gas exploration and development company, into these two subsidiaries. To accomplish the merger of CEL’s business, CEL transferred all but a small portion of its business and assets to PICA on April 17, 2007, and PICA was immediately merged into the Issuer’s wholly-owned subsidiary, Chandler Acquisition, LLC.

In the Mergers, the Issuer issued a total of 1,645,771 shares of Common Stock to CEL, consisting of (a) 31,329 shares to CEL as a limited partner of Southern Bay, in exchange for 100% of CEL’s limited partnership interests in Southern Bay, and (b) 1,614,382 shares to CEL in exchange for 100% of CEL’s membership interests of PICA. Of these 1,645,771 shares, 50,000 shares were granted to four CEL employees.

Item 4. Purpose of the Transaction

The purpose of the transactions discussed in Item 3 above was to complete the Mergers. The Mergers resulted in a change of control of the Issuer, and its board of directors and executive officers now include Mr. Chandler and several persons appointed by Southern Bay. Other than the transactions discussed above, the reporting persons are not aware of any plans, or proposals or arrangements which may, at a future date, result in a change of control of the Issuer or any actions described in Item 4 of Schedule 13D.

CUSIP No. 372476 10 1

Page 5

Item 5. Interest in Securities of the Issuer

The number of shares of Common Stock of the Issuer issued to CEL in its name in the Mergers was 1,595,711, or 10.9% of the issued and outstanding stock of the Issuer at the conclusion of the Mergers on April 17, 2007. Because Mr. Chandler owns 100% of CEL, he may be deemed the beneficial owner of all of such shares. In addition, in connection with the Mergers, on April 17, 2007 four employees of CEL received a total of 50,000 shares of Common Stock, amounting to an additional 0.3% of the issued and outstanding shares of the Common Stock, as merger consideration. Of these 50,000 shares, 25,000 are subject to additional vesting requirements and may be reallocated by CEL to CEL employees, including Mr. Chandler, in the event the shares do not vest. The four employees of CEL entered into a Stock Grant and Shareholder Agreement (the “Shareholder Agreement”) among themselves and CEL. Pursuant to the Shar eholder Agreement, the employees agreed to vote their shares in accordance with the directions of CEL until December 31, 2009. The four employees have the right to sell the 25,000 shares in the aggregate that are fully vested but do not have the right to sell the 25,000 shares that are not fully vested. Therefore, Mr. Chandler and CEL each beneficially own the shares subject to the Shareholder Agreement by virtue of their ability to vote the shares held by the four CEL employees, or, in total, 11.3% of the issued and outstanding Common Stock.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

In addition to the Shareholder Agreement discussed in Item 5 above, CEL entered into an agreement with Morrison Enterprises LLC (“Morrison”), under which Morrison agreed to extinguish a $2,000,000 principal note due from CEL in exchange for 250,000 shares of the Issuer’s Common Stock that otherwise would have been issued to CEL on April 17. In addition, CEL has agreed that, if the daily Nasdaq closing price of the Common Stock is not at least $8.00 for any period of 20 consecutive trading days from April 17 through December 31, 2007, then CEL will, on or before January 31, 2008, assign to Morrison additional shares of the Issuer’s Common Stock according to the formula of 2,000,000/X minus 250,000, where X equals the average of the highest 20 consecutive trading days of Nasdaq quoted stock price during the period from April 17 to December 31, 2007. Other than the foregoing, the reporting persons are not awa re of any contracts, agreements, understandings or relationships between them and any other persons with respect to the Common Stock of the Issuer.

Item 7. Material to be filed as Exhibits

The following exhibits are filed herewith:

Exhibit 10.1 Stock Grant and Shareholder Agreement*

Exhibit 10.2 Agreement to Exchange – Morrison Enterprises LLC*

Exhibit 10.3 Agreement and Plan of Merger among GeoResources, Inc.; Southern Bay Energy Acquisition, LLC; Chandler Acquisition, LLC; Southern Bay Oil & Gas, L.P.; Chandler Energy, LLC; and PICA Energy, LLC dated September 14, 2006 and as amended February 16, 2007⁽¹⁾

Exhibit 99.1 Joint Filing Agreement and Power of Attorney*

_________________

*Filed herewith

(1) Filed as Annex A to the Issuer’s definitive proxy statement dated February 23, 2007, filed with the Commission on February 23, 2007 and incorporated herein by reference

SIGNATURES

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

April 26, 2007

	COLLIS P. CHANDLER, III

	By:	/s/ Collis P. Chandler, III

	CHANDLER ENERGY, LLC

	By:	/s/ Collis P. Chandler, III
	Name: Collis P. Chandler, III
	Title: President

EX-10 2 shareholderagreement002for13.htm STOCK GRANT & SHAREHOLDER AGREEMENT <B>SASMF

CHANDLER ENERGY, LLC

STOCK GRANT AND SHAREHOLDER AGREEMENT

APRIL 17, 2007

This Stock Grant and Shareholder Agreement (this “Agreement”), is made and entered into effective as of the 17^th day of April among the shareholders listed on the signature page hereto (the “Shareholders”) and Chandler Energy, LLC (the “Chandler”) a Colorado limited liability company, will become a material share owner of GeoResources, Inc., a Colorado corporation (“GeoResources”) effective upon closing of the pending merger (the “Merger”) of PICA Energy, LLC, a Colorado limited liability company and wholly owned subsidiary of Chandler (“PICA”) with a subsidiary of GeoResources.

WHEREAS, the Shareholders are currently employees of Chandler, and in connection therewith, have earned an equity grant from Chandler (the “Grant”).

WHEREAS, on September 14, 2006, Chandler entered into an Agreement and Plan of Merger with GeoResources and certain other parties providing for the acquisition of PICA in exchange for shares of common stock of GeoResources (the “Stock”). In connection therewith, Chandler’s employees will become employees of GeoResources.

WHEREAS, pursuant to the pending merger, a fixed number of shares of Stock have been allocated to Chandler.

WHEREAS, the management of Chandler, has determined that it is appropriate to assign voting rights in the Stock to be issued to Chandler, and to permit it to administer any continuing voting rights in the Stock received by Shareholders.

WHEREAS, the parties deem it to be in their respective best interests to enter into this Agreement.

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements hereinafter set forth Chandler and the undersigned enter into this agreement so that Chandler may grant said shares subject to the following terms and conditions:

Section 1.

Definitions.

As used herein, the following terms will have the following respective meanings, which will be equally applicable to both the singular and plural forms:

“Affiliate” means, with respect to any specified Person, any other Person directly or indirectly controlling, controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“Approved Sale” will have the meaning set forth in Section 4.

“Board” means the Board of Directors of GeoResources.

“Cause” means (a) any Shareholder’s conviction of, or plea of nolo contendere to, any felony or to any crime or offense causing substantial harm to the business or reputation of GeoResources, including any Affiliates (whether or not the crime or offense was for the Shareholder’s personal gain) or involving acts of theft, dishonesty, fraud or embezzlement; (b) willful and intentional misuse or diversion of any of GeoResources’, including Affiliates and subsidiaries, funds or assets; (c) embezzlement; (d) fraudulent or willful and material misrepresentations or concealments on any written reports submitted to GeoResources or any Affiliate or subsidiary; (e) any Shareholder’s material failure to perform the duties of his or her position in a satisfactory manner or material failure to follow or comply with the reasonable and lawful dir ectives of the Board of Directors or President of GeoResources.

“Change of Control” means (i) upon (A) the sale, or other disposition of all or substantially all of the assets of GeoResources or (B) an acquisition of GeoResources by another corporation or entity by consolidation, merger or other reorganization in which the holders of GeoResources’ outstanding voting stock immediately prior to such transaction own, immediately after such transaction, securities representing less than fifty percent (50%) of the voting power of GeoResources or other entity surviving such transaction (25% if the senior management is retained), provided that a “Change of Control” will not apply to a merger effected exclusively for the purpose of changing the domicile of GeoResources. A “Change in Control” will also not apply to a reduction in voting control resulting from the issuance of equity secur ities in the normal course of business.

“Charter” means the Articles of Incorporation of GeoResources, as amended from time to time.

“Commission” means the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.

“Common Stock” means the common stock of GeoResources.

“Discretionary Shares” means the Shares derived from the Grant that are not vested.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor Federal statute, and the rules and regulations of the Commission promulgated thereunder, all as the same will be in effect from time to time.

“GeoResources” is as defined in the introductory clauses hereof.

“Grant” is as defined in the introductory clause hereof.

“Majority in Interest” means, at any point in time, the Shareholders owning, in the aggregate, at least 50.1% of the Shares.

“Merger” is as defined in the introductory clauses hereof.

“Person” means any individual, corporation, limited liability company, firm, Chandler, joint venture, association, joint-stock company, trust, unincorporated organization or any other entity or organization, including a government, a governmental body, a political subdivision or an agency or instrumentality thereof.

“Prime Rate” means the prime rate announced in the Wall Street Journal, or a comparable publication, as of the close of business on the day before the execution of any promissory note pursuant to this Agreement.

“Shareholders” as defined in the introductory clauses hereof and also includes any other Person who acquires Shares and becomes a party hereto and who will be designated as a Shareholder hereunder.

“Shares” means (i) the presently issued and outstanding shares of Stock to be issued to the Shareholders in connection with the closing of the Merger, any Common Stock subsequently acquired, and any options or stock subscription warrants exercisable therefore (which options and warrants will be deemed to be that number of outstanding shares of Stock for which they are exercisable), (ii) any additional shares of capital stock of GeoResources hereafter issued and outstanding to any Shareholder and any options or warrants exercisable therefore, (iii) any other shares of capital stock of GeoResources which may be converted, exchanged or exercised into Stock, and (iv) any stock, security or interest issued or issuable directly or indirectly with respect to any Stock in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization.

“Stock” is as defined in the introductory clauses hereof.

“Subsidiary” means, when used with reference to an entity, any other entity of which securities or other ownership interests having ordinary voting power sufficient to elect a majority of the board of directors or other governing persons, or a majority of the outstanding voting securities of which, are owned directly or indirectly by such entity.

“Transfer” as to any Shares, means to sell, transfer, assign, pledge, distribute, encumber or otherwise dispose of such Shares, either voluntarily or involuntarily, and with or without consideration.

Section 2.

Shares and Restrictions on Transfer.

The total number of shares of Stock to be issued to Chandler is 1,645,711 and of that total, 50,000 shares of Stock will be issued to the Shareholders pursuant to this Agreement. Each Shareholder represents and warrants that he or she has received a written disclosure from the Chandler setting forth the following:

(a)

For purposes of employee confidentiality, each Shareholder will be provided a copy of this Agreement and only his or her individual schedule, as described above. Chandler will maintain applicable records related to the sum total of the Shares included in this Agreement.

(b)

While the Shares will be initially issued without registration or otherwise restricted, each Shareholder additionally agrees not to Transfer all or any portion of the Shares other than in accordance with this Section 2 unless and until:

(i)

The Shareholder gives prior written notice to Chandler;

(ii)

If reasonably requested by Chandler, such Shareholder will have furnished Chandler with reasonably satisfactory evidence, that (i) such Transfer will either be subject to an effective registration statement under the Securities Act, or be exempt from registration under the Securities Act, and (ii) the Transfer complies with all of GeoResources’ policies and procedures concerning the Transfer of Stock by employees, officers and directors of GeoResources. It is agreed that Chandler will not require opinions of counsel for transactions made pursuant to Rule 144, except in unusual circumstances;

(iii)

The Shares are registered in accordance with federal and state securities regulations; and

(iv)

Notwithstanding the above, in no event may Discretionary Shares be Transferred until they are fully vested.

This section applies to all Shares for the term of this Agreement, or until they are properly Transferred to a Person that is not and will not become a Shareholder pursuant to the terms and conditions of this Agreement.

(c)

Each certificate representing the Shares will bear a legend containing the following words (in addition to any other legend required by law or applicable agreement):

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR STATE SECURITIES LAWS AND CANNOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF REGISTRATION OR THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS. THE VOTING RIGHTS WITH RESPECT TO, AND THE SALE OR OTHER DISPOSITION OF, THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED BY AND SUBJECT TO THE PROVISIONS OF A SHAREHOLDERS AGREEMENT DATED AS OF APRIL 17, 2007, A COPY OF WHICH IS AVAILABLE FOR INSPECTION AT THE OFFICES OF CHANDLER ENERGY, LLC.

(d)

No Shareholder will approve or enter into any other transaction that could reasonably be expected to result in a Change in Control unless such transaction has received the Board's prior written consent.

(e)

Any attempted Transfer not in strict accordance with this Section 2 shall be null and void and of no force or effect whatsoever and the purported transferee shall have no rights as a shareholder of GeoResources.

(f)

Other than set forth above, and any rules or procedures applicable to employees, officers and directors of GeoResources and the Registration Rights Agreement executed by the Shareholders, there will be no restriction on the sale or transfer of the Shares other than Discretionary Shares.

(g)

The Shareholders agree to allow Chandler to hold all of the Discretionary Shares until they are vested.

Section 3.

Agreements Concerning Employment.

Each Shareholder hereby agrees that during the term of this Agreement, in the event that the Shareholder ceases to be an employee of GeoResources (or any Affiliate) as a result of the resignation of that Shareholder or as a result of termination by GeoResources for Cause, the Shareholder will forfeit all Discretionary Shares that have not vested. The Discretionary Shares will vest 50% as to each Shareholder upon closing of the Merger, and the remainder will vest 100% on the date of the first anniversary of the Merger. Notwithstanding the above, Chandler is expressly authorized hereby to shorten or waive any vesting provisions, in its sole discretion.

(a)

To the extent that any Shareholder forfeits any Shares during the term hereof, all such Stock will be retained by Chandler and may be allocated by Chandler among the remaining Shareholders in whole or in part, in its sole discretion.

(b)

The Shareholders agree to deliver the certificates representing the Discretionary Shares, along with duly executed stock powers in blank, to Chandler, who will hold all of the Discretionary Shares in trust until the Discretionary Shares are vested in accordance with the terms hereof. Chandler will be expressly required to return to the Shareholder any Shares that have properly vested hereunder. Chandler will further be expressly authorized, pursuant to the stock power, to Transfer those shares of Discretionary Shares to those Persons, as it may determine, including any of the remaining Shareholders in the event of any forfeiture of Discretionary Shares pursuant to these provisions.

(c)

Upon the expiration of the restrictions set forth herein, Chandler will either deliver the certificates representing shares of Discretionary Shares to the Shareholders entitled to those certificates, and the Shareholders may present all of their certificates to the Transfer Agent of GeoResources to request the removal of the legend required by this Agreement, and GeoResources will use its reasonable good faith efforts to cause the removal of the legend. Notwithstanding the above, the Shareholders will remain subject to any restrictions on Transfer that are imposed by policy or rules and regulations of GeoResources in connection with employees, officers and directors of GeoResources.

Section 4.

Drag-Along Rights.

(a)

If the Board approves a Change of Control transaction (an “Approved Sale”) for consideration in the form of cash or securities or a combination thereof, each Shareholder will consent to and raise no objections against such Approved Sale (including refraining from exercising any rights of appraisal) and will take all reasonably necessary actions in his, her or its capacity as a shareholder, director, member of any committee or officer of GeoResources or any of its subsidiaries or Affiliates in connection with the consummation of such Approved Sale. If the Approved Sale is structured as a sale of stock, each Shareholder will agree to sell all of his, her or its Shares and rights to acquire Shares which are subject to such Approved Sale on the terms and conditions approved by the Board.

(b)

The obligations of the Shareholders with respect to any Approved Sale are subject to the condition that, upon the consummation of such Approved Sale, all of the Shareholders will receive the same form and amount of consideration per Share, or if any holders are given an option as to the form and amount of consideration to be received, all Shareholders will be given substantially the same option, provided, however, for this purpose, (i) any payments to an employee under a bona fide employment agreement for the provision of services as an employee will not constitute consideration for such Shares, and (ii) each Shareholder will sell the same percentage of Shares as the percentage of Stock being sold by the other shareholders of GeoResources and the Shares will be sold on at least as favorable terms upon which such Stock is being sold by the other shareholders of GeoResources.

(c)

No Shareholder will be obligated to make any out-of-pocket expenditure prior to the consummation of the Approved Sale (excluding expenditures for his, her or its own postage, copies, etc., and the fees and expenses of his, her or its own counsel retained by him, her or it). Each Shareholder will be obligated to pay his, her or its pro rata share (on a fully-diluted basis) of the expenses incurred by the sellers in connection with such Transfer for the benefit of all Shareholders. No Shareholder will be obligated to pay more than his, her or its pro rata share (excluding expenditures for his, her or its own postage, copies, etc., and the fees and expenses of his, her or its own counsel retained by him, her, or it) or reasonable expenses incurred in connection with such Approved Sale to the extent such costs are incurred for the benef it of all Shareholders and are not otherwise paid by GeoResources or the purchaser, it being understood that costs incurred by or on behalf of a Shareholder for his, her or its sole benefit will not be considered costs of the transaction hereunder, and provided that a Shareholder’s liability for his, her or its pro rata share of such allocated expenses will be limited to the total purchase price received in cash by the Shareholder for its or his Shares.

(d)

Each Shareholder will be obligated to join on a pro rata but several (and not joint) basis (based on the number of Shares to be Transferred by such Shareholder) in any indemnification or other obligations that the Majority in Interest agree to provide in connection with such Approved Sale (other than any such obligations that relate specifically to a Shareholder, such as indemnification with respect to representations and warranties given by a Shareholder regarding such Shareholder’s title to and ownership of Shares); provided that no Shareholder will be obligated to indemnify or hold harmless the transferees with respect to an amount in excess of the net cash proceeds and an amount equal to the fair market value (determined at the time of such Approved Sale) of the non-cash proceeds received by such Shareholder in respect of such Approved Sale.

(e)

If GeoResources or the other shareholders of GeoResources enter into any Approved Sale for which Rule 506 promulgated by the Commission (or any similar rule then in effect) may be available with respect to such Approved Sale, each Shareholder who is not an Accredited Investor (as such term is defined in Rule 501 promulgated by the Commission (or any similar rule then in effect)) will, at the request of the Board, appoint either a purchaser representative (as such term is defined in Rule 501 promulgated by the Commission (or any similar rule then in effect)) designated by GeoResources, in which event GeoResources will pay the fees of such purchaser representative, or another purchaser representative (reasonably acceptable to GeoResources), in which event such Shareholder will be responsible for the fees of the purchaser representative so appointed.

Section 5.

Voting Agreements.

(a)

Each Shareholder will vote all of such Shareholder’s Shares and will take all other necessary or desirable actions within such Shareholder’s control (whether in such Shareholder’s capacity as a Shareholder of GeoResources or otherwise, and including, without limitation, attendance at meetings, in person or by proxy, for purposes of obtaining a quorum and execution of written consents in lieu of meetings), in the same manner as directed by Chandler.

(b)

The obligations of the Shareholders pursuant to this Section 5 will include any shareholder vote to amend the Charter or the bylaws of GeoResources as required to effect the intent of this Section 5.

Each of the Shareholders represents that he, she or it has not voted and is not a party to any proxy, voting agreement or similar arrangement that is inconsistent with or conflicts with the provisions of this Section 5, and no Shareholder will hold any proxy or become party to any voting agreement or similar arrangement which is inconsistent with or conflicts with the provisions hereof.

Section 6.

Additional Shares of Stock.

In the event additional shares of Common Stock are issued by GeoResources to a Shareholder or any Affiliate of that Shareholder, at any time during the term of this Agreement, either directly or upon the exercise or exchange of securities of GeoResources exercisable for or exchangeable into shares of Stock, the Shareholder will cause such additional shares of Common Stock, as a condition to such issuance, to become subject to the terms and provisions of this Agreement by requiring all persons to whom such shares are to be issued to enter into a Joinder Agreement in the form attached hereto as Exhibit A.

Section 7.

Termination.

The rights and obligations of each Shareholder and Chandler under this Agreement will terminate as to such Shareholder upon the earlier to occur of (a) the Transfer of all of the Shares owned by such Shareholder in accordance with the provisions of this Agreement, or (b) December 31, 2009. Chandler reserves the right to waive any provisions hereof upon a Change of Control.

Section 8.

Severability; Governing Law; Specific Performance.

(a)

If any provision of this Agreement will be determined to be illegal and unenforceable by any court of law, the remaining provisions will be severable and enforceable in accordance with their terms.

(b)

This Agreement will be governed by and construed and enforced in accordance with the laws of the State of Colorado (without regard to principles of conflicts of laws).

(c)

In addition to any other remedies that the Shareholders may have at law or in equity, the parties hereby acknowledge that the harm which might result to a Shareholder from breaches by Chandler or the Shareholders of their respective obligations under Section 5 cannot be adequately compensated by damages, and each of Chandler and the Shareholders accordingly agrees that each Shareholder and Chandler will have the right to have all obligations and undertakings set forth in Section 5 specifically performed by Chandler or the other Shareholders, as the case may be, and that Chandler or any Shareholder will have the right to obtain an order or decree of such specific performance in any of the courts of the United States of America or of any state or other political subdivision thereof.

Section 9.

Successors and Assigns.

This Agreement will bind and inure to the benefit of the parties hereto and their respective heirs, legal representatives and permitted successors and assigns.

Section 10.

Notices.

All notices, requests, consents and other communications hereunder to any party will be deemed to be sufficient if contained in a written instrument delivered in person or by facsimile or sent by nationally recognized overnight courier or first class registered or certified mail, return receipt requested, postage prepaid, addressed to such party at the address set forth below or at such other address as may hereafter be designated in writing by such party to the other parties:

If to Chandler:

475 17^th Street, Suite 1210

Denver, Colorado 80202

Telephone:

(303) 297-2028

Facsimile:

(303) 297-2196

Attention:

President

If to any Shareholder, to such Shareholder’s address as maintained in the regular records at the offices of Chandler or GeoResources, after the Merger, or to such address as provided in the Joinder Agreement.

All such notices, requests, consents and other communications will be deemed to have been delivered (a) in the case of personal delivery or delivery by facsimile, on the date of such delivery, (b) in the case of dispatch by nationally recognized overnight courier, on the next business day following such dispatch, and (c) in the case of mailing, on the third business day after the posting thereof.

Section 11.

Amendments.

Except as otherwise provided herein, neither this Agreement nor any provisions hereof can be amended, modified, changed, discharged or terminated except by an instrument in writing signed by (a) Chandler, and (b) a Majority in Interest; provided, however, that no amendment or modification will be effective to reduce the percentage of the Shares the consent of the holders of which is required under this Section 11 nor will any amendment or modification discriminate against any Shareholder without the consent of such Shareholder.

Section 12.

Headings.

The headings of sections of this Agreement have been inserted for convenience of reference only and will not be deemed to be a part of this Agreement.

Section 13.

Nouns and Pronouns.

Whenever the context may require, any pronouns used herein will include the corresponding masculine, feminine or neuter forms, and the singular form of names and pronouns will include the plural and vice versa.

Section 14.

Entire Agreement.

This Agreement and the other writings referred to herein or delivered pursuant hereto contain the entire agreement among the parties hereto with respect to the subject matter hereof and supersede all prior and contemporaneous agreements and understandings with respect thereto. In the event of any conflict between this Agreement and the Registration Rights Agreement of even date herewith, the terms and conditions of this Agreement will control and supercede.

Section 15.

Counterparts; Facsimile.

This Agreement may be executed in any number of counterparts, each of which will be deemed to be an original instrument and all which together will constitute one and the same agreement. This Agreement may be executed by facsimile.

[SIGNATURE PAGES TO FOLLOW]

IN WITNESS WHEREOF, the parties hereto have executed this Stock Grant and Shareholder Agreement as of the date first written above.

CHANDLER ENERGY, LLC

By:

/s/ Collis P. Chandler, III____________

Name:

Collis P. Chandler, III
Title:

President

EXECUTED by the undersigned in their respective capacities indicated below to be effective as of the 17^th day of April, 2007.

SHAREHOLDERS:

/s/ Jim K, Glenn___________________________

Jim K. Glenn

/s/ Jennifer Foy____________________________

Jennifer Foy

/s/ Leslie Tamura___________________________

Leslie Tamura

/s/ Sarah Carson-Lowe_______________________

Sarah Carson-Lowe

EXHIBIT A

STOCK GRANT AND SHAREHOLDER AGREEMENT

JOINDER AGREEMENT

The undersigned, Jim K. Glenn, (hereinafter “Shareholder”) hereby agrees to enter into, execute and deliver Stock Grant and Shareholder Agreement, hereby joins in, and becomes a party to, and agrees to be bound by, the terms of that Agreement effective as of April 17, 2007, as the same may be amended from time to time (the “Shareholder Agreement”).

Shareholder acknowledges receipt of a copy of the Shareholder Agreement and agrees that 20,000 Shares are subject to the Shareholder Agreement.

IN WITNESS WHEREOF, intending to be legally bound, the undersigned has executed this Joinder Agreement as of April 17, 2007.

SHAREHOLDER:

/s/ Jim K, Glenn__________________________

Jim K. Glenn

EXHIBIT A

STOCK GRANT AND SHAREHOLDER AGREEMENT

JOINDER AGREEMENT

The undersigned, Jennifer Foy, (hereinafter “Shareholder”) hereby agrees to enter into, execute and deliver Stock Grant and Shareholder Agreement, hereby joins in, and becomes a party to, and agrees to be bound by, the terms of that Agreement effective as of April 17, 2007, as the same may be amended from time to time (the “Shareholder Agreement”).

Shareholder acknowledges receipt of a copy of the Shareholder Agreement and agrees that 10,000 Shares are subject to the Shareholder Agreement.

IN WITNESS WHEREOF, intending to be legally bound, the undersigned has executed this Joinder Agreement as of April 17, 2007.

SHAREHOLDER:

/s/ Jennifer Foy____________________________

Jennifer Foy

EXHIBIT A

STOCK GRANT AND SHAREHOLDER AGREEMENT

JOINDER AGREEMENT

The undersigned, Leslie Tamura, (hereinafter “Shareholder”) hereby agrees to enter into, execute and deliver Stock Grant and Shareholder Agreement, hereby joins in, and becomes a party to, and agrees to be bound by, the terms of that Agreement effective as of April 17, 2007, as the same may be amended from time to time (the “Shareholder Agreement”).

Shareholder acknowledges receipt of a copy of the Shareholder Agreement and agrees that 10,000 Shares are subject to the Shareholder Agreement.

IN WITNESS WHEREOF, intending to be legally bound, the undersigned has executed this Joinder Agreement as of April 17, 2007.

SHAREHOLDER:

/s/ Leslie Tamura____________________

Leslie Tamura

EXHIBIT A

STOCK GRANT AND SHAREHOLDER AGREEMENT

JOINDER AGREEMENT

The undersigned, Sarah Carson-Lowe, (hereinafter “Shareholder”) hereby agrees to enter into, execute and deliver Stock Grant and Shareholder Agreement, hereby joins in, and becomes a party to, and agrees to be bound by, the terms of that Agreement effective as of April 17, 2007, as the same may be amended from time to time (the “Shareholder Agreement”).

Shareholder acknowledges receipt of a copy of the Shareholder Agreement and agrees that 10,000 Shares are subject to the Shareholder Agreement.

IN WITNESS WHEREOF, intending to be legally bound, the undersigned has executed this Joinder Agreement as of April 17, 2007.

SHAREHOLDER:

/s/ Sarah Carson Lowe________

Sarah Carson Lowe

EX-10 3 morrison.htm AGREEMENT TO EXCHANGE Converted by EDGARwiz

Exhibit 10.2

CHANDLER ENERGY, LLC

Oil & Gas Exploration and Production

February 27, 2007

Mr. Kenneth Morrison

Morrison Enterprises

3303 West 12^th Street

Hastings, Nebraska 68902

AGREEMENT TO EXCHANGE

Chandler Energy LLC – Morrison Enterprises

Subordinated Note

Dear Ken:

With respect to that certain Subordinated, Convertible Promissory Note dated April 20, 2004 (the “Note”), made by Chandler Energy, LLC (“Borrower”), payable to Morrison Enterprises (“Morrison”), Borrower and Morrison 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 Morrison Enterprises by Chandler 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, Chandler Acquisition, LLC, Southern Bay Oil & Gas, L.P., Chandler 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 Morrison pending receipt by Morrison of the GEOI Shares.

The GEOI Shares shall be issued in the name of Morrison and delivered to Morrison by Borrower immediately upon their issuance by Wells 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 Morrison 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/ Collis P. Chandler, III

Collis P. Chandler, III

President

Agreed to this 2^nd day of March 2007.

MORRISON ENTERPRISES, INC.

/s/ Kenneth Morrison_________________

Kenneth Morrison

EX-99.1 CHARTER 4 exhibit99.htm JOINT FILING AGREEMENT & POWER OF ATTORNEY Exhibit 99

Exhibit 99.1

Joint Filing Agreement

And

Power Of Attorney

In accordance with Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree to the joint filing on behalf of each of them of a statement on Schedule 13D (including amendments thereto) with respect to the Common Stock of GeoResources, Inc., and that this Agreement be included as an Exhibit to such statement.

Each of the undersigned does hereby constitute and appoint Collis P. Chandler, III as such undersigned’s true and lawful attorney-in-fact to execute for and on behalf of such undersigned any Schedule 13D (and any amendments thereto) which such undersigned is required to file with the United States Securities and Exchange Commission as a result of such undersigned’s ownership of or transactions in securities of GeoResources, Inc. Each of the undersigned acknowledges that the foregoing attorney-in-fact, in serving in such capacity at the request of such undersigned, is not assuming any of such undersigned’s responsibilities to comply with Section 13(d) of the Securities Exchange Act of 1934, as amended.

This Power of Attorney shall remain in full force and effect as to any of the undersigned until such undersigned is no longer required to file reports under Section 13(d) of the Securities Exchange Act of 1934, as amended, with respect to such undersigned’s holdings of and transactions in securities issued by GeoResources, Inc., unless earlier revoked by such undersigned in a signed writing delivered to the foregoing attorney-in-fact.

This Joint Filing Agreement and Power of Attorney may be executed at different times and in two or more counterparts, each of which shall be deemed an original but all of which shall constitute but one and the same instrument.

IN WITNESS WHEREOF, the undersigned hereby execute this Agreement effective as of the last date set forth below.

Date: April 26, 2007

/s/ Collis P. Chandler, III

Collis P. Chandler, III

CHANDLER ENERGY, LLC

By:

/s/ Collis P. Chandler, III

Collis P. Chandler, III, President

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