Opinion ID: 2978493
Heading Depth: 4
Heading Rank: 1

Heading: The Conversion Agreement

Text: On October 25, 2002, the Hubbards, through S & K Breeders, invested $255,900 in an oil and gas drilling program. (Conversion Agreement, Record on Appeal (“ROA”) at 102.) The investment was made with GeoStar, and the drilling program was run by one of its affiliates, Gastar Exploration, Ltd. (“Gastar”). (Id.) Based on the Conversion Agreement memorialized by the parties, 2 the Hubbards had the right to convert this investment into shares of Gastar common stock.2 (Id.) The Conversion Agreement included a provision that “[a]ny Gastar stock that you acquire in this conversion shall be restricted from trading for a period of one (1) year following the date of the conversion.” (Conversion Agreement, ROA at 101.) If the Hubbards elected to convert their interest into shares of Gastar, the Conversion Agreement required that they give their “assurances of compliance with the appropriate securities laws . . .” (Conversion Agreement, ROA at 102.)