ex10-1.htm


    Exhibit
      10.1

    


    IN
      THE UNITED STATES BANKRUPTCY COURT

    FOR
      THE SOUTHERN DISTRICT OF TEXAS

    HOUSTON
      DIVISION

    


    
      	
              IN
                RE:

            	
              §

            	 
	 	
              §

            	 
	
              BLAST
                ENERGY SERVICES, INC.

            	
              §

            	
              CASE
                NO. 07-30424-H4-11

            
	 	
              §

            	 
	
              EAGLE
                DOMESTIC DRILLING

            	
              §

            	
              CASE
                NO. 07-30426-H4-11

            
	
              OPERATIONS
                LLC

            	
              §

            	 
	 	
              §

            	
              Jointly
                Administered Under

            
	
              DEBTORS

            	
              §

            	
              Case
                No. 07-30424-H4-11

            
	 	
              §

            	 


    

    


    AGREED
      ORDER GRANTING CONTINUANCE OF CONFIRMATION HEARING

    


    CAME
      ON for hearing confirmation of the
      First Amended Joint Plan of Reorganization of Blast Energy Services, Inc.,
      Debtor and Eagle Domestic Drilling Operations LLC, Debtor (collectively, the
      “Debtors”) filed on September 11, 2007 [Docket No. 673] and Corrections
      and Technical Amendments to First Amended Joint Plan of Reorganization of Blast
      Energy Services, Inc., Debtor and Eagle Domestic Drilling Operations LLC, Debtor
      filed on October 10, 2007 [Docket No. 700] (collectively, the
“Plan”)1.  Counsel for the
      Debtors, the Official Committee of Unsecured Creditors (the “Committee”),
      Laurus Master Fund, Ltd. (“Laurus”) and Eric McAfee, on behalf of Berg
      McAfee Companies, LLC have agreed to continue the hearing on confirmation of
      the
      Plan to January 30, 2008, at 9:00 a.m.  Upon consideration of the
      agreement of the undersigned counsel and parties, the Court finds that the
      continuance should be granted.  It is therefore

     

    ORDERED
      that the hearing on
      confirmation of the Plan is continued to January 30, 2008, at 9:00 a.m.
      conditioned upon the following:

     

    1.           The
      Plan shall be amended (as amended, the “Modified Plan”) by the Debtors by
      Monday, December 3, 2007, to provide the following:

     

    (a)           Classes
      5, 6, 7 and 8 shall receive Cash on the Effective Date equal to 100% of their
      respective Allowed Claims;

    
      
        

      

    

    
      1
        Any term not
        defined herein shall be as defined in the Plan.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    (b)           all
      current and future DIP loans made to the Debtors by Berg McAfee or any affiliate
      or party related thereto (collectively, “BMC”) shall be paid in full by
      converting the outstanding balance of such loans(s) as of the Effective Date
      into shares of Reorganized Blast Common Stock at the rate of $0.20 per share;
      and

     

    (c)           the
      subscription amount of the Convertible Preferred Stock shall be increased to
      $4,000,000, all other provisions of the Convertible Preferred Stock as set
      forth
      in the Plan shall remain unchanged.

     

    To
      the
      extent not modified herein all other provisions of the Plan remain applicable,
      including without limitation the requirement that the Plan Documents shall
      be in
      form and content acceptable to the Creditors Committee.

     

    2.           Berg
      McAfee Companies, LLC shall provide an irrevocable Agreement Regarding Purchase
      and Sale of Preferred Equity (the “Agreement”) in the principal amount of up to
      $4.0 million due and payable on or before January 25,  2008 which
      obligates their purchase of any Convertible Preferred Stock in the amount of
      any
      shortfall in receipt of subscription payments for the Convertible Preferred
      Stock such that the Debtors shall have $4,000,000 in cash by close of business
      on January 25, 2008.  The Agreement shall be subject to Texas law and
      the exclusive jurisdiction of the US Bankruptcy Court for the Southern District
      of Texas Houston Division.  A copy of the executed Agreement is
      attached hereto and made a part hereof.

     

    3.           All
      Claims of BMC, including all unsecured claims and claims arising from all DIP
      loans, shall hereby be deemed subordinated to payment in full of all unsecured
      creditors of the Debtors; provided, however, subject to the Modified Plan being
      confirmed on January 30, 2008, and the Effective Date having occurred, the
      claims of BMC shall be treated as provided in the Modified Plan.

     

    4.           All
      unsecured claims of the Debtors’ directors shall hereby be deemed subordinated
      to payment in full of all unsecured creditors; provided, however, subject to
      the
      Modified Plan being confirmed on January 30, 2008, and the Effective Date having
      occurred, the claims of the directors shall be treated as provided in Class
      12
      of the Modified Plan.

     

    5.           BMC
      shall provide the Debtors up to $300,000 in additional DIP loans; $200,000
      of
      which shall be payable to the Debtors by 5 p.m. central on December 4,
      2007.  The provisions of paragraphs 1(b) and 3 shall be applicable to
      such $300,000 in additional DIP loans.   The Debtors agree to pay
      the aggregate amount of $250,000 on or before close of business on December
      14,
      2007 to Debtors’ bankruptcy counsel and the Committee’s professionals on a pro
      rata basis based on the proportion that a professional’s unpaid fees and
      expenses reported to the Debtors from the Petition Date thru the period ending
      October 31, 2007 bears to the aggregate of all unpaid fees and expenses of
      such
      professionals through that date or as otherwise agreed between the
      professionals.

     

    6.           Within
      24 hours of the Debtors’ receipt, the Debtors shall provide counsel to the
      Committee copies of executed subscription agreements and any evidence of receipt
      of funding.

     

    7.           The
      provisions of any DIP order or order confirming any plan that is entered shall
      be subject to the provisions of this order which shall not be superseded without
      agreement of the Debtors and the Committee.  The terms of this order
      are applicable to any trustee that subsequently becomes appointed or upon
      conversion of one of more of these cases to chapter 7.

     

    8.           All
      objections of any party, including Laurus, to the Plan and any objections to
      the
      Modified Plan are not waived and are preserved.

     

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    


    
      	
              DATE:
                11/28/2007

            	
              /s/Jeff
                Bohm                                                     

            
	 	
              HONORABLE
                JEFF BOHM

            
	 	
              UNITED
                STATES BANKRUPTCY JUDGE

            


    

    


    AGREED
      AS
      TO FORM AND SUBSTANCE:

    


    Counsel
      to the Debtors

    


    


    By:
      /s/ H. Rey
      Stroube                                                                

    H.
      Rey
      Stroube, III

    18510
      Kingsland Blvd.

    Houston,
      TX  77094

    281-599-3011

    


    


    


    By:
      /s/Eric A.
      McAfee                                                                

    Eric
      A.
      McAfee, President,

    Berg
      McAfee Companies, LLC

    


    


    


    AKIN
      GUMP
      STRAUSS HAUER & FELD LLP

    Co-Counsel
      to the Committee

    


    


    By:
      /s/S. Margie
      Venus                                                                

    S.
      Margie
      Venus

    1111
      Louisiana, 44th Floor

    Houston,
      TX  77002

    713-220-5800

    


    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    


    AGREEMENT
      TO CAUSE DEBTORS’ CONVERTIBLE PREFERRED STOCK TO BE PURCHASED AND TO PERSONALLY
      PURCHASE ANY UNPURCHASED DEBTORS’ CONVERTIBLE PREFERRED STOCK OR BE PERSONALLY
      LIABLE

     

    Agreement
      dated as of November 28, 2007 (this “Agreement”), by Blast Energy
      Services, Inc. and Eagle Domestic Drilling Operations LLC (collectively the
      “Debtors”) and Berg McAfee Companies, LLC (“Berg LLC”), in
      connection with the First Amended Joint Plan of Reorganization of Blast Energy
      Services, Inc., Debtor, and Eagle Domestic Drilling Operations LLC, Debtor,
      filed on September 11, 2007 [Case No. 07-30424, Docket No. 673] and Corrections
      and Technical Amendments to First Amended Joint Plan of Reorganization of Blast
      Energy Services, Inc., Debtor, and Eagle Domestic Drilling Operations LLC,
      Debtor, filed on October 10, 2007 [Case No. 07-30424, Docket No. 700]
      (collectively, the “Plan”), as the same shall be amended to provide for
      the sale of preferred equity for net proceeds of FOUR MILLION AND NO/100
      DOLLARS ($4,000,000.00), as set out below, for the benefit
      of the Debtors.

     

    WHEREAS,
      the Debtors proposed the Plan.

     

    WHEREAS,
      Berg LLC will derive substantial direct and indirect benefits from
      the
      issuance and sale of the Convertible Preferred Stock.

     

    WHEREAS,
      on or before Monday, December 5, 2007, Debtors will amend the Plan to increase
      the Subscription Amount to FOUR MILLION AND NO/100
      DOLLARS ($4,000,000.00).

     

    NOW
      THEREFORE, for good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, Berg LLC hereby agrees as set
      forth below.

     

    
      	
               

            	
              Section
                1.

            	
              Defined
                Terms.

            


    

     

    Capitalized
      terms used herein and not
      otherwise defined shall have the respective meanings set forth in the
      Plan.

     

    
      	
               

            	
              Section
                2.

            	
              Covenants
                Respecting Preferred Equity of
                Debtors.

            


    

     

    First
      Covenant.  Berg LLC promises to cause Debtors to comply with
      Section 8.1 of the Plan to have the sum of FOUR MILLION AND NO/100
      DOLLARS ($4,000,000.00) of net proceeds (“Net
      Proceeds”) from the sale of Cumulative Convertible Preferred Stock
      (“Preferred Equity”) placed into the Debtor’s Account, Wells Fargo Bank,
      Escrow Account # 22594300 (“Debtor’s Account”), on or before January 25,
      2008.

     

    Second
      Covenant.  Berg LLC, further promises that if the First Covenant
      is not fully complied with, it will personally purchase so much of the Preferred
      Equity as is necessary for the Net Proceeds in the aggregate amounts of FOUR
      MILLION AND NO/100 DOLLARS ($4,000,000) to have been placed in Debtors’ Account
      on or before January 25, 2008.

     

    
      	
               

            	
              Section
                3.

            	
              Attorney’s
                Fees and Expenses.

            


    

     

    If
      any sum payable under this Agreement
      is not paid when due and this Agreement is placed in the hands of an attorney
      for collection or enforcement of this Agreement or amounts due under this
      Agreement are collected through any legal proceedings, including, but not
      limited to
      suit,
      probate, insolvency or bankruptcy proceedings, the undersigned agrees to pay
      all
      fees and all expenses of collection and costs of court of the Debtors including,
      without limitation, attorney’s fees.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               

            	
              Section
                4.

            	
              Accrual
                of Interest.

            


    

     

    Amounts
      due under this Agreement and not paid when due shall bear interest at
      eight-percent (8%) per annum from the date when due through but not excluding
      the date of payment.

     

    
      	
               

            	
              Section
                5.

            	
              Service
                of Process.

            


    

     

    All
      communications and notices hereunder shall be in writing and given as provided
      under the Bankruptcy rules of the Southern District of Texas Houston Division,
      or in the alternative under the Texas Rules of Civil Procedure or the Federal
      Rules of Civil Procedure, as applicable.  Berg LLC acknowledges and
      agrees that all communications and notices hereunder to it shall be at the
      address specified by it herein.  The Debtors acknowledge and agree
      that all communications and notices hereunder to them shall be at the address
      or
      addresses specified by them under the Plan.

     

    
      	
               

            	
              Section
                6.

            	
              Governing
                Law and Consent to
                Jurisdiction.

            


    

     

    This
      Agreement shall be governed by and
      construed in accordance with the internal laws of the State of Texas (without
      regard to principles of choice of law).  The parties consent and agree
      that the Bankruptcy Court for the Southern District of Texas Houston Division
      (the “Bankruptcy Court”) shall have exclusive jurisdiction to hear and
      determine, while the bankruptcy cases of the Debtors are still pending, any
      claims and disputes pertaining to this Agreement or any matter arising out
      of or
      related to this Agreement.  To the extent the Bankruptcy Court
      declines to exercise such jurisdiction or no longer has such jurisdiction,
      the
      parties consent and agree that any state or federal court located in the County
      of Harris, State of Texas shall have exclusive jurisdiction to hear and
      determine any claims and disputes between the parties pertaining to this
      Agreement or any matter arising out of or related to this
      Agreement.

     

    


     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    


     

    IN
      WITNESS WHEREOF, the undersigned has duly executed this Agreement as of
      the day and year first above written.

     

    
      	 	
              Berg
                McAfee Companies, LLC

              By:/s/Eric
                A.
                McAfee                                           
                                                                                

                    Name:  Eric
                McAfee, President, on behalf of

                                Berg
                McAfee Companies, LLC

               

                    Address:
                10600 N. DeAnza Blvd.

                                   Suite
                250

                                   Cupertino,
                California 95014