Exhibit 10.3
SUPPORT AGREEMENT
     THIS SUPPORT AGREEMENT (this “Agreement”), dated as of February 5, 2008 is
by and between Pinnacle Gas Resources, Inc., a Delaware corporation
(“Pinnacle”), and certain stockholders of Quest Resource Corporation, a Nevada
corporation (“Quest” or the “Company”), set forth on Schedule I hereto (each a
“Stockholder” and collectively the “Stockholders”).
     WHEREAS, Quest and Pinnacle have entered into an Amended and Restated
Agreement and Plan of Merger, dated as of February 5, 2008, by and among
Pinnacle, Quest, and a wholly-owned subsidiary of Quest (the “Merger
Agreement”); and
     WHEREAS, each Stockholder is the beneficial owner, for itself or the
benefit of certain funds and/or accounts managed by it, of that number of shares
of common stock, par value $0.001 per share, of the Company (the “Shares”) set
forth below the Stockholder’s name on the signature page hereto (the Shares
owned by such Stockholder, together with any additional Shares of the Company
acquired after the date hereof, being collectively referred to herein as the
Stockholder’s “Subject Shares”); and
     WHEREAS, as a condition to the willingness of Pinnacle to enter into the
Merger Agreement, and as an inducement to it to do so, the Stockholders have
agreed for the benefit of Pinnacle as set forth in this Agreement;
     NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained in this Agreement, the parties hereto hereby severally, and
not jointly, agree as follows:
ARTICLE I
VOTING AGREEMENT AND PROXY
     Section 1.1 Agreement to Vote. At any meeting of the holders of the
Company’s Shares held prior to the termination of Article I of this Agreement
pursuant to Section 2.11 hereof (the “Article I Termination Date”), however
called, and at every adjournment or postponement thereof prior to the Article I
Termination Date, each Stockholder shall vote or cause to be voted the Subject
Shares (a) in favor of (i) the issuance of Quest common stock to Pinnacle’s
stockholders pursuant to the merger, (ii) the merger (the “Merger”) and other
transactions contemplated by the Merger Agreement, and (iii) any actions
required in furtherance of the Merger and the other transactions contemplated by
the Merger Agreement, and (b) against (i) any Quest Takeover Proposal (as
defined in the Merger Agreement) in the absence of a Quest Adverse
Recommendation Change (as defined in the Merger Agreement), (ii) any proposal
for action or agreement that is reasonably likely to result in a breach of any
covenant, representation or warranty or any other obligation or agreement of the
Company under the Merger Agreement or that is reasonably likely to result in any
of the conditions to the obligations of the Company under the Merger Agreement
not being fulfilled, or (iii) any other action which could reasonably be
expected to impede, interfere with, delay, postpone or materially affect the
transactions contemplated by the Merger Agreement or the likelihood of such
transactions being consummated (clauses (a) and (b) together, the “Proxy
Matters”).

 

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     Section 1.2 Proxies and Voting Agreements. Each Stockholder hereby revokes
any and all previous proxies granted with respect to the Subject Shares with
respect to the Proxy Matters. Prior to the Article I Termination Date, each
Stockholder agrees not to, directly or indirectly, with respect to the Subject
Shares (a) grant any proxies or powers of attorney (other than pursuant to the
Merger proxy statement), (b) deposit any of such Shares into any voting trust or
(c) enter into any other voting agreement or understanding, in each case
relating to the Proxy Matters.
     Section 1.3 Transfer of Shares by the Stockholder. Prior to the Article I
Termination Date, each Stockholder agrees not to sell, transfer, assign, convey
or otherwise dispose of, directly or indirectly, any of the Subject Shares held
by the Stockholder to any persons controlling, controlled by or under common
control with the Stockholder who do not agree to become bound by the terms of
this Agreement or to any other Person for the primary purpose of the
circumvention of the obligations under this Agreement.
     Section 1.4 Stockholder Representations and Warranties. Each Stockholder
represents and warrants to Pinnacle that (i) the Stockholder has duly
authorized, executed and delivered this Agreement and that this Agreement
constitutes a valid and binding agreement, (ii) the consummation by the
Stockholder of the transactions contemplated hereby will not violate, or require
any consent, approval or notice under, any provision of law applicable to the
Stockholder, other than notice filings or other information required to be
included in filings pursuant to the Securities Exchange Act of 1934, as amended,
and, if applicable, filings under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, (iii) there are no outstanding options, warrants or
rights to purchase or acquire, or proxies, powers-of-attorney or voting
agreements relating to, the Subject Shares, other than this Agreement, (iv) the
Shares set forth below the Stockholder ’s name on the signature page hereto
constitute all of the securities of the Company owned of record by the
Stockholder on the date hereof and (v) the Stockholder has the present power and
right to direct, as to the voting of all of the issued and outstanding Shares
set forth below the Stockholder ’s name on the signature page hereto, the record
owner thereof as contemplated herein.
ARTICLE II
MISCELLANEOUS
     Section 2.1 Further Assurances. From time to time, at the reasonable
request of Pinnacle, each Stockholder shall execute and deliver or cause to be
executed and delivered such additional documents and instruments and take all
such further action as may be reasonably necessary or desirable to consummate
the transactions contemplated by this Agreement.
     Section 2.2 Specific Performance. Each Stockholder agrees that Pinnacle
would be irreparably damaged if for any reason the Stockholder fails to perform
any of its obligations under this Agreement, and that Pinnacle would not have an
adequate remedy at law for money damages in such event. Accordingly, Pinnacle
shall be entitled to seek specific performance and injunctive and other
equitable relief to enforce the performance of this Agreement by the
Stockholder. This provision is without prejudice to any other rights that
Pinnacle may have against the Stockholder for any failure to perform its
obligations under this Agreement.

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     Section 2.3 Notices. All notices to be given pursuant hereto shall be given
in accordance with Section 10.2 of the Merger Agreement, with the address for
the Stockholder as set forth on the signature page hereof.
     Section 2.4 Definitions and Interpretation. Capitalized terms that are used
but not defined herein shall have the meanings ascribed to them in the Merger
Agreement. Section 10.9 of the Merger Agreement shall govern the interpretation
hereof.
     Section 2.5 Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement.
     Section 2.6 Binding Effect and Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties hereto, their respective permitted
successors and assigns and any transferee of the Stockholder ’s Subject Shares.
This Agreement shall not be assignable by either party hereto without the
written consent of the other party hereto; provided that Pinnacle may assign its
rights under this Agreement to a wholly owned subsidiary of Pinnacle, but any
such assignment shall not relieve Pinnacle of its obligations hereunder. Nothing
in this Agreement, express or implied, is intended to confer upon any person
other than the parties hereto and their respective permitted successors and
assigns, any rights, benefits or obligations hereunder. No person other than the
parties hereto is an intended beneficiary of this Agreement or any portion
hereof.
     Section 2.7 Governing Law; Jurisdiction; Waiver of Jury Trial. To the
maximum extent permitted by Applicable Law, the provisions of this Agreement
shall be governed by and construed and enforced in accordance with the
Applicable Laws of the State of Delaware, without regard to principles of
conflicts of law. Each of the parties hereto agrees that this Agreement involves
at least U.S. $100,000 and that this Agreement has been entered into in express
reliance upon 6 Del. C. § 2708. Each of the parties hereto irrevocably and
unconditionally confirms and agrees that it is and shall continue to be
(i) subject to the jurisdiction of the courts of the State of Delaware and of
the federal courts sitting in the State of Delaware, and (ii) subject to service
of process in the State of Delaware. Each party hereto hereby irrevocably and
unconditionally (a) consents and submits to the exclusive jurisdiction of any
federal or state court located in the State of Delaware (the “Delaware Courts”),
including the Delaware Court of Chancery in and for New Castle County, for any
actions, suits or proceedings arising out of or relating to this Agreement or
the transactions contemplated by this Agreement (and agrees not to commence any
litigation relating thereto except in such courts), (b) waives any objection to
the laying of venue of any such litigation in the Delaware Courts and agrees not
to plead or claim in any Delaware Court that such litigation brought therein has
been brought in any inconvenient forum and (c) acknowledges and agrees that any
controversy that may arise under this Agreement is likely to involve complicated
and difficult issues, and therefore each such party hereby irrevocably and
unconditionally waives any right such party may have to a trial by jury in
respect of any litigation directly or indirectly arising or relating to this
Agreement or the transactions contemplated by this Agreement.
     Section 2.8 Entire Agreement; Amendments and Waivers. This Agreement
constitutes the entire agreement between the parties hereto pertaining to the
subject matter hereof and supersedes all prior agreements, understandings,
negotiations and discussions, whether oral

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or written, of the parties, and there are no other agreements between the
parties in connection with the subject matter hereof except as set forth
specifically herein or contemplated hereby. No supplement, modification or
waiver of this Agreement shall be binding unless executed in writing by the
party to be bound thereby. The failure of a party to exercise any right or
remedy shall not be deemed or constitute a waiver of such right or remedy in the
future. No waiver of any of the provisions of this Agreement shall be deemed to
or shall constitute a waiver of any other provision hereof (regardless of
whether similar), nor shall any such waiver constitute a continuing waiver
unless otherwise expressly provided.
     Section 2.9 Severability. Whenever possible, each provision or portion of
any provision of this Agreement will be interpreted in such manner as to be
effective and valid but if any provision or portion of any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision, and this Agreement will be reformed, construed and
enforced as if such invalid, illegal or unenforceable provision or portion of
any provision had never been contained herein. The parties shall endeavor in
good faith negotiations to replace any invalid, illegal or unenforceable
provision with a valid provision the effects of which come as close as possible
to those of such invalid, illegal or unenforceable provision.
     Section 2.10 Attorneys’ Fees. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorneys’ fees, costs and necessary
disbursements, in addition to any other relief to which such party may be
entitled.
     Section 2.11 Termination. This Agreement shall terminate and be of no
further force and effect upon the first to occur of (i) the termination of the
Merger Agreement in accordance with its terms, (ii) the Effective Time (as
defined in the Merger Agreement) or (iii) at such time as the Board of Directors
of Quest determines in accordance with Section 7.2 of the Merger Agreement to
make a Quest Adverse Recommendation Change (as defined in the Merger Agreement).
[signature page follows]

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.

            Pinnacle Gas Resources, Inc.
      By:   /s/ Peter G. Schoonmaker         Peter G. Schoonmaker        Chief
Executive Officer     

                  JERRY D. CASH    
 
           
 
                 /s/ Jerry D. Cash
 
   
 
                JAMES B. KITE, JR.    
 
           
 
                 /s/ James B. Kite, Jr.
 
   
 
                JOHN C. GARRISON    
 
           
 
                 /s/ John C. Garrison
 
   
 
                JOHN H. RATEAU    
 
           
 
                 /s/ John H. Rateau
 
   
 
                N. MALONE MITCHELL III    
 
           
 
                 /s/ N. Malone Mitchell III
 
   
 
                WILLIAM H. DAMON III    
 
           
 
                 /s/ William H. Damon III
 
   

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Address for Notice for each of the above
Stockholders:
Quest Resource Corporation
210 Park Avenue, Suite 2750
Oklahoma City, OK 73102
Attention: Jerry D. Cash
Facsimile: (405) 600-7722

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Schedule I

          Stockholder   Number of Shares
Jerry D. Cash
    1,790,245  
James B. Kite, Jr.
    946,157  
John C. Garrison
    96,053  
Jon H. Rateau
    30,000  
N. Malone Mitchell III
    13,220  
William H. Damon III
    10,000  
 
       
TOTAL:
    2,885,675  
 
       

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