7 May 2010material agreement termination● NeutralMajor
GeoMet signed a preliminary commitment letter with Sherwood Energy to buy up to $40 million of convertible preferred stock if a proposed rights offering to common holders (4,000,000 shares at $10.00, convertible at $1.30) is not fully taken up. It replaces the March 29, 2010 backstop commitments from NGP Capital Resources and North Shore Energy (an affiliate of largest stockholder Yorktown), which the board judged inferior and dropped; those two were paid $500,000 up front and GeoMet must reimburse their expenses. Sherwood would get a $1.2 million backstop fee, board seats and consent rights over certain company actions, and the deal still needs a definitive agreement, due diligence and stockholder approval.