SIMPSON THACHER & BARTLETT LLP

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July 23, 2013

Re: Warberg Opportunistic Trading Fund L.P., et al. v. GeoResources. Inc., Index No. 652332/2012

Honorable Barbara R. Kapnick Part 39 Supreme Court, New York County 60 Centre Street New York, New York 10007

Dear Justice Kapnick:

E-MAIL ADDRESS gwang@stblaw.com

We represent Defendant GeoResources and, in anticipation of tomorrow's conference, write about deficiencies in the document production and privilege log of Plaintiffs Warberg, Option Opportunities, and Waterstone (collectively, "Plaintiffs"). We have previously corresponded with Plaintiffs' counsel about discovery issues in letters on July 2 and July 19, and in Plaintiffs' counsel's letter of July 12.

1. Outside Counsel Files

In accordance with the discussion with the Court, GeoResources produced all non-privileged, responsive documents received from Jones & Keller, the only law firm that appears on GeoResources' privilege log. Plaintiffs, by contrast, have refused to search the files of a large number of persons and law firms that appear on their privilege log. These law firms include Kopecky Schumacher Bleakley Rosenberg PC, Alston Hunt Floyd & Ing and O'Melveny & Myers LLP. 1

We understand that O'Melveny & Myers' files is a separate issue since they are litigation counsel. We have served a subpoena for the deposition of 0 'Melveny & Myers through Stephen Warren and continue to reserve all rights with respect to Plaintiffs' failure to produce documents from O'Melveny & Myers. As discussed at a prior telephonic conference, Plaintiffs' interrogatory responses make clear that O'Melveny lawyers are fact witnesses in this case and indeed the only fact witnesses to participate in the telephonic conversations and communications that Plaintiffs contend in their interrogatory responses gave rise to their breach of contract and repudiation claim.

BEIJING HONG KONG HOUSTON LONDON LOS ANGELES PALO ALTO SAO PAULO TOKYO WASHINGTON, D.C.

SIMPSON THACHER & BARTLETT LLP

Honorable Barbara R. Kapnick -2- July 23, 2013

2. Privilege Log Issues

We have been corresponding with Plaintiffs about deficiencies in their privilege log that render it difficult or impossible to evaluate their claims of privilege. Through this process, Plaintiffs have amended and supplemented their privilege log to provide more detail. But deficiencies still remain. We would like to discuss with the Court a process for addressing Plaintiffs' improper withholding and redaction of documents based on improper assertions of privilege.

A. Identification of Outside Counsel

Plaintiffs' privilege log claims privilege over communications with Kopecky Schumacher Bleakley Rosenberg PC and Alston Hunt Floyd & Ing. But Plaintiffs have provided little to no information about what role these law firms played or even who exactly they represented. All we have received is the boilerplate statement that these firms were contacted "in anticipation of litigation." That is conclusory and does not permit reasonable evaluation of their privilege assertion. It would be highly inefficient to have to depose a corporate representative of or an individual at each law firm to learn this information.

B. Facially Non-Privileged Documents Between Non-Lawyers

Plaintiffs have withheld a number of communications between non-lawyers that appear, on their face, not to be privileged. For example, there are principal-to-principal emails showing that Plaintiffs have made improper privilege redactions of discussion that is plainly not privileged. W AR0000698 is a July 22, 2011 chain between David Dury of Option Opportunities and Jonathan Blumberg ofWarberg discussing efforts to retain an attorney to file suit. Warberg left unredacted two parts of the email chain that it likes:

• "the aholes wont give us the adjustments we are due on our warrants. I hate these people ... hate em.";

• "that's why we've got an atty on it."

Warberg redacted the two parts of the email chain that it does not like. But Option Opportunities has produced this document without redaction, making clear that the redacted portions of the email chain are not privileged:

• "They are not working on it because they would not do it on contingency and none of the other funds wanted to pay for it.";

• "oohhhh .... not good." (OOC0000322).

This email chain simply is not privileged, was not properly redacted by Warberg and raises serious questions about the propriety of the remaining myriad of redactions by Plaintiffs.

Several documents are, on the face of Plaintiffs' privilege log descriptions, not privileged. For example, PRIV000490 is a June 8, 2012 email from Daniel Warsh ofWarberg to Keith Menzel ofWaterstone, described as "E-mail prepared in anticipation of litigation and discussing engagement of counsel in connection with GeoResources warrants." PRIV000026 is

SIMPSON THACHER & BARTLETT LLP

Honorable Barbara R. Kapnick -3- July 23, 2013

a December 4, 2011 email between non-lawyers at Warberg, described as "Email prepared in anticipation of litigation discussing engagement of counsel concerning GeoResources warrants."

While withholding these documents, Plaintiffs selectively produced documents they believe are favorable to them on the same topic of retention of lawyers. See, e.g., May 2, 2011 email from Keith Menzel ofWaterstone to Daniel Warsh ofWarberg, WAR0001875 ("[W]e can set up a call with our attorney to fire off a letter stating our case if you think that would help.").

Plaintiffs have also improperly withheld emails between non-lawyers where an attorney is copied. For example,

• PRIV000493 is a June 5, 2011 email from Keith Menzel to Shawn Bergerson, cc Jeff Erb, Esq. and JeffDavies and Keith Menzel, all ofWaterstone, described as "reflecting request for legal advice" from JeffErb.

• PRIV000505 is a May 2, 2011 email from Daniel Warsh of Warberg to Keith Menzel ofWaterstone, copied to Edmond Coller of Ferber Chan, described as "E-mail chain drafted in anticipation of litigation and reflecting request for legal advice from Edmond Coller, Esq. regarding GeoResources warrant dispute."

There are other issues with Plaintiffs' privilege log. The privilege log claims privilege over a number of communications with Bob Felsenthal of Crestview Capital. We have asked Plaintiffs' counsel for an explanation of how communications with Crestview Capital are privileged and have yet to receive any explanation. The same applies to Kurt Lageschulte and N. Subin of Broadbill Partners. Also, Plaintiffs have previously stated that Ferber Chan Essner & Coller represented Warberg but they have withheld communications between Ferber Chan and its non-client Option Opportunities.

3. Document Production Deficiencies

Plaintiffs have failed to produce virtually any documents responsive to several of Defendant's document requests, including (i) "negotiation, drafting, and execution of the Warrants" (Request No. 2); (ii) "NASDAQ Marketplace Rule 4350" or "Plaintiffs' understanding or interpretation of the relationship between NASDAQ Marketplace Rule 4350 and the Warrants" (No.4); (iii) the negotiation or drafting of the agreements by which Warberg and Option Opportunities purchased the Warrants (No.8, 10); (iv) "Plaintiffs' decision to exercise or not to exercise the Warrants at any time, including documents sufficient to identify any and all Persons who participated in the decision-making process to exercise or not to exercise the Warrants" (No. 11); and (v) damages (No. 16).

We would be happy to address these issues further with the Court tomorrow.

Respectfully submitted,

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