SECOND AMENDMENT TO CONTRIBUTION AND SUBSCRIPTION AGREEMENT
Exhibit
10.2
Execution
Version
SECOND
AMENDMENT TO
This
SECOND AMENDMENT TO CONTRIBUTION AND SUBSCRIPTION AGREEMENT (this “Amendment’),
dated
as of March 31, 2006, is entered into by and among Pinnacle Gas Resources,
Inc.,
a Delaware corporation (the “Company”),
CCBM,
Inc., a Delaware corporation (“CCBM”),
U.S.
Energy Corp., a Wyoming corporation (“US
Energy”),
Crested Corp., a Colorado corporation (“Crested”),
and
each of the CSFB Parties (as defined in the Contribution and Subscription
Agreement (defined herein), and collectively with CCBM, US Energy and Crested,
the “Investors”).
W
I T
N E S SE T H:
WHEREAS,
the Company, CCBM, Rocky Mountain Gas, Inc., a Wyoming corporation
(“RMG”),
and
the CSFB Parties (collectively, the “Parties”)
are
parties to that certain Contribution and Subscription Agreement, dated as of
June 23, 2003 and amended by an Amendment to Contribution and Subscription
Agreement dated August 9, 2005 (as so amended, the “Contribution
and Subscription Agreement”);
and
WHEREAS,
the Parties desire to amend certain terms of the Contribution and Subscription
Agreement.
NOW,
THEREFORE, in consideration of the premises, mutual covenants and agreements
hereinafter contained and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties agree as
follows:
ARTICLE
1
Definitions
All
capitalized terms used in the recitals above and the succeeding provisions
of
this Amendment which are not defined herein shall have the meaning ascribed
to
such terms in the Contribution and Subscription Agreement, as amended by this
Amendment. All sections referred to in this Amendment shall be references to
sections in the Contribution and Subscription Agreement unless otherwise
noted.
ARTICLE
2
Amendments
2.1 Section
2.3
is
hereby amended by adding the following after subsection
(e):
(f) Effective
as of the closing of the first Private Offering (as defined below) after the
date hereof (such closing date, the “Exercise
Date”),
the
options to purchase Additional Shares shall be exercised, and hereby will be
deemed exercised, in full by each of (i) CCBM or any of its Permitted
Transferees, in the case of the option described in Section
2.3( a),
and
(ii) US Energy, Crested or any
of
their
Permitted Transferees, in the case of the option described in Section
2.3(b),
on a
“cashless” net exercise basis, in which case the Company will issue to the
holder of the option the number of shares of Common Stock computed using the
following formula:
X
=
Y(A-B)
A
Where:
X
=
number of shares of Common Stock to be issued to the option holder upon exercise
of the option;
Y
= total
number of shares of Common Stock purchasable under the option;
A
= the
Current Market Price of one share of Common Stock; and
B
= the
Tranche A Price, to the extent the option relates to the Tranche A Shares,
and
the Tranche B Price, to the extent the option relates to the Tranche B Shares;
provided,
however,
that
the Tranche A Price and the Tranche B Price shall each be adjusted to take
into
account the 25-for-1 stock split with respect to the Company’s Common Stock in
the form of a stock dividend of twenty-four (24) shares of Common Stock on
each
outstanding share of Common Stock, payable by distribution of newly issued
shares.
For
purposes of this Section
2.3,
“Current
Market Price”
means
the price at which shares of Common Stock are offered and sold in the Private
Offering. “Private
Offering”
means
a
private placement of the Common Stock of the Company to “qualified institutional
buyers” pursuant to Rule 144A and/or to “accredited investors” pursuant to
Regulation D with net proceeds to the Company of not less than $100.0
million.
(g) Within
three days after the Exercise Date, the Company, at its expense, shall cause
to
be issued in the name of, and delivered to, the option holder, or, subject
to
compliance with the provisions of this Agreement and the Securityholders
Agreement, as the option holder (upon payment by the option holder of any
applicable transfer taxes) may direct, a certificate(s) for the number of full
shares of Common Stock to which the option holder shall be entitled upon such
exercise plus, in lieu of any fractional share to which the option holder would
otherwise be entitled, cash.
ARTICLE
3
Miscellaneous
3.1 Descriptive
Headings.
The
descriptive headings of the several Sections of this Amendment are inserted
for
convenience only and do not constitute a part of this Amendment.
3.2 Governing
Law.
This
Amendment shall be construed and enforced in accordance with, and the rights
of
the parties shall be governed by, the law of the State of Texas, without giving
effect to the choice of law or conflicts principles thereof.
3.3 Counterparts.
This
Amendment may be executed by the parties hereto on separate counterparts
(including by facsimile), and such counterparts taken together shall be deemed
to constitute one and the same instrument.
3.4 Notices.
All
communications and notices to the parties hereunder shall be given as provided
in the Contribution and Subscription Agreement.
3.5 Severability.
Whenever possible, each provision of this Amendment will be interpreted in
such
manner as to be effective and valid under applicable Law, but if any provision
of this Amendment is held to be prohibited or unenforceable in any jurisdiction,
such provision will be ineffective only to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or
render unenforceable such provision in any other jurisdiction.
3.6 Further
Assurances.
In
connection with this Amendment and the transactions contemplated hereby, each
Party shall execute and deliver any additional documents and instruments and
perform any additional acts that may be necessary or appropriate to effectuate
and perform the provisions of this Amendment and those
transactions.
[Signature
Pages to Follow]
IN
WITNESS WHEREOF, the
undersigned have executed this Amendment as of the date first set forth
above.
PINNACLE
GAS RESOURCES, INC.
By: /s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Name:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title:
Chief
Executive Officer and President
CCBM,
INC.
By:
By: /s/
▇.▇. ▇▇▇▇▇▇▇
Name:
▇.▇. ▇▇▇▇▇▇▇
Title:
President
U.S.
ENERGY CORP.
By: /s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
Chief
Executive Officer
CRESTED
CORP.
By: /s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
Co-Chairman
MILLENNIUM
PARTNERS II, L.P.
|
By:
|
DLJ
Merchant Banking III, Inc.,
|
as
Managing General Partner
By: /s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
Title: Principal
DLJ
MERCHANT BANKING III, INC.,
as
Advisory General Partner on behalf of DLJ
Offshore
Partners III, C.V.
By: /s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
Title: Principal
DLJ
MERCHANT BANKING III, INC.,
as
Advisory General Partner on behalf of DLJ
Offshore
Partners III-1, C.V.
and as
attorney-in-
fact
for
DLJ Merchant Banking III, L.P., as
Associate
General Partner of DLJ Offshore Partners
III-1,
C.V.
By: /s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
Title: Principal
DLJ
MERCHANT BANKING III, INC.,
as
Advisory General Partner on behalf of DLJ
Offshore
Partners III-2, C.V.
and as
attorney-in-
fact
for
DLJ Merchant Banking III, L.P., as
Associate
General Partner of DLJ Offshore Partners
III-2,
C.V.
By: /s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
Title: Principal
DLJ
MERCHANT BANKING PARTNERS III, L.P.
|
By:
|
DLJ
Merchant Banking III, Inc.,
|
as
Managing General Partner
By: /s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
Title: Principal
DLJ
MB PARTNERS III GMBH & CO. KG
|
By:
|
DLJ
Merchant Banking III, L.P.,
|
as
Managing Limited Partner
By: DLJ
Merchant Banking III, Inc.,
as
General Partner
By: /s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
Title: Principal
By: DLJ
MB
GmbH, as General Partner
By: /s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
Title: Director
MBP
III PLAN INVESTORS, L.P.
|
By:
|
DLJ
LBO Plans Management Corporation II, as General
Partner
|
By: /s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
Title: Vice
President