AMENDMENT TO CONTRIBUTION AND SUBSCRIPTION AGREEMENT
EXHIBIT
10.35
AMENDMENT
TO
This
AMENDMENT TO CONTRIBUTION AND SUBSCRIPTION
AGREEMENT
(this
“Amendment”),
dated
as of August 9, 2005, 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 S E 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 (the “Contribution
and Subscription Agreement”);
and
WHEREAS,
by an assignment dated May 31, 2005, RMG transferred all its shares of common
stock of the Company and all right, title, interest and obligations in and
to
the Contribution and Subscription Agreement to US Energy and Crested, which
transfers are permitted under the terms of 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(a) is hereby amended by deleting the first sentence thereof in its entirety
and replacing it with the following sentence:
“For
so
long as CCBM or any of its Permitted Transferees shall own of record Common
Stock, CCBM or, in the event CCBM has transferred all of the Common
Stock
it
holds to a Permitted Transferee, such Permitted Transferee shall have a
continuing option upon 10 Business Days’ notice to the Company, to purchase in
one or more transactions after the date of this Agreement (i) a Pro Rata
Portion
of up to 25,000 additional shares of Common Stock (“Tranche
A Shares”)
at a
purchase price per share equal to $100 as increased by 10% per annum compounded
quarterly beginning on the Closing Date and accruing daily through the date
of
the purchase of such shares (the “Tranche
A Price”)
and
(ii) a Pro Rata Portion of up to 25,000 additional shares of Common Stock
(“Tranche
B Shares”
and
together with the Tranche A Shares, “Additional
Shares”)
at a
purchase price equal to $100 per share as increased by 20% per annum compounded
quarterly beginning on the Closing Date and accruing daily through the date
of
the purchase of such shares (the “Tranche
B Price”).”
2.2 Section
2.3(b) is hereby amended by deleting the first sentence thereof and replacing
it
with the following sentence:
“For
so
long as US Energy, Crested or any of their Permitted Transferees shall own
of
record Common Stock, US Energy or Crested or, in the event US Energy or Crested
has transferred all of the Common Stock it holds to a Permitted Transferee,
such
Permitted Transferee shall have a continuing option upon 10 Business Days’
notice to the Company, to purchase in one or more transactions after the
date of
this Agreement (i) a Pro Rata Portion of up to 25,000 Tranche A Shares at
a
purchase price per share equal to the Tranche A Price and (ii) a Pro Rata
Portion of up to 25,000 Tranche B Shares at a purchase price per share equal
to
the Tranche B Price.”
ARTICLE
3
Acknowledgement
For
the
avoidance of doubt, each of the parties hereto acknowledge that the assignment
by RMG to US Energy and Crested of all of its Capital Stock in the Company
and
all of its rights, title and interest under the Contribution and Subscription
Agreement and the Securityholders Agreement constitute transfers to Permitted
Transferees (as such term is defined in the Securityholders Agreement) permitted
by the terms of the Contribution Agreement and Securityholders Agreement,
and
that such assignments were effected in accordance with the terms
thereof.
ARTICLE
4
Miscellaneous
4.1 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.
4.2 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.
2
4.3 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.
4.4 Notices.
All
communications and notices to the parties hereunder shall be given as provided
in the Contribution and Subscription Agreement.
4.5 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.
4.6 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]
3
IN
WITNESS WHEREOF,
the
undersigned have executed this Amendment as of the date first set forth
above.
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PINNACLE
GAS RESOURCES, INC.
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By: /s/
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Name: ▇▇▇▇
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Title: CEO
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CCBM,
INC.
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By: /s/
▇.▇. ▇▇▇▇▇▇▇ ▇▇
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Name: ▇.▇.
▇▇▇▇▇▇▇ ▇▇
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Title: President
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U.S.
ENERGY CORP.
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By: /s/
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Name: ▇▇▇▇▇
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Title: President
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CRESTED
CORP.
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By: /s/
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Name: ▇▇▇
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Title: President
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MILLENNIUM
PARTNERS II,
L.P.
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By:
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DLJ
Merchant Banking III, Inc.,
a
Managing General Partner
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By: /s/
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Name: ▇▇▇
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Title: Vice
President
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[Signature
page to Amendment to Contribution and Subscription
Agreement]
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DLJ
MERCHANT BANKING III, INC.,
as
Advisory General Partner on behalf of DLJ Offshore Partners III,
C.V.
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By: /s/
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Name: ▇▇▇
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Title: President
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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.
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By: /s/
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Name: ▇▇▇
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Title: President
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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.
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By: /s/
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Name: ▇▇▇
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Title: Vice
President
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DLJ
MERCHANT BANKING PARTNERS III, L.P.
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By: DLJ
Merchant Banking III, Inc.,
as
Managing General Partner
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By: /s/
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Name: ▇▇▇
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Title: Vice
President
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[Signature
page to Amendment to Contribution and Subscription
Agreement]
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DLJ
MB PARTNERS III GMBH & CO. KG
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By: DLJ
Merchant Banking III, L.P.,
as
Managing Limited Partner
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By: DLJ
Merchant Banking III, LLC,
as
General Partner
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By: DLJ
Merchant Banking III, Inc., as Managing Member
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By: /s/
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Name: ▇▇▇
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Title: Vice
President
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MBP
III PLAN INVESTORS, L.P.
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By: DLJ
Merchant Banking III, Inc.,
as
General Partner
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By: /s/
▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇
▇▇▇▇▇▇
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Title: Vice
President
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[Signature
page to Amendment to Contribution and Subscription
Agreement]