Exhibit 10.2
Execution Version
SECOND AMENDMENT TO
CONTRIBUTION AND SUBSCRIPTION AGREEMENT
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 = 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, pay
