exv10w1



 





Exhibit 10.1




SUPPORT AGREEMENT




     THIS SUPPORT AGREEMENT (this “Agreement”), dated as of October 15, 2007, is by and
between Quest Resource Corporation, a Nevada corporation (“Quest”), and the stockholders of
Pinnacle Gas Resources, Inc., a Delaware corporation (“Pinnacle” or the “Company”),
set forth on Schedule I hereto (each a “Stockholder” and collectively the
“Stockholders”).



     WHEREAS, Quest and Pinnacle have entered into an Agreement and Plan of Merger, dated as of
October 15, 2007, 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 $0.01 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 Quest to enter into the Merger Agreement, and as
an inducement to it to do so, the Stockholders have agreed for the benefit of Quest 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 VoteAt 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 adoption of the Merger Agreement by the Company, (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 Pinnacle Takeover Proposal (as defined in the Merger Agreement)
in the absence of a Pinnacle 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”).



 









 





     Section 1.2 Proxies and Voting AgreementsEach 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 StockholderPrior 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 WarrantiesEach Stockholder represents and warrants to
Quest 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 AssurancesFrom time to time, at the reasonable request of Quest, 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 PerformanceEach Stockholder agrees that Quest would be irreparably damaged if
for any reason the Stockholder fails to perform any of its obligations under this Agreement, and
that Quest would not have an adequate remedy at law for money damages in such event. Accordingly,
Quest 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 Quest may have against the Stockholder for any failure to perform its
obligations under this Agreement.



     Section 2.3 NoticesAll 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 InterpretationCapitalized 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 CounterpartsThis 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 AssignmentThis 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 Quest may assign its rights
under this Agreement to a wholly owned subsidiary of Quest, but any such assignment shall not
relieve Quest 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 TrialTo 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 WaiversThis 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 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 SeverabilityWhenever 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’ FeesIf 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 TerminationThis 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 Pinnacle determines in accordance with Section 7.3 of the Merger Agreement to make a
Pinnacle Adverse Recommendation Change (as defined in the Merger Agreement).



     Section 2.12 HSR Filing Fee. 



     At the Effective Time of the Merger, Quest hereby agrees to reimburse the Stockholders for any
applicable filing fees paid by the Stockholders (assuming one filing for the entire group) pursuant
to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.



[signature page follows]




 









 





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



	 	 	 	 	 
	 	Quest Resource Corporation

 	 
	 	By:  	/s/ Jerry D. Cash
 	 
	 	 	Name:  	Jerry D. Cash 	 
	 	 	Title:  	Chief Executive Officer 	 
	 
	 	DLJ MERCHANT BANKING PARTNERS III, L.P.



By: DLJ Merchant Banking III, Inc.,
as Managing 
       General Partner

 	 
	 	By:  	/s/ Kenneth Lohsen
 	 
	 	 	Name:  	Kenneth Lohsen 	 
	 	 	Title:  	Vice President 	 
	 
	 	DLJ Merchant Banking III, Inc., as Advisory
General Partner on behalf of DLJ OFFSHORE PARTNERS III, C.V.

 	 
	 	By:  	/s/ Kenneth Lohsen
 	 
	 	 	Name:  	Kenneth Lohsen 	 
	 	 	Title:  	Vice President 	 
	 
	 	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/ Kenneth Lohsen
 	 
	 	 	Name:  	Kenneth Lohsen 	 
	 	 	Title:  	Vice 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.

 	 
	 	By:  	/s/ Kenneth Lohsen
 	 
	 	 	Name:  	Kenneth Lohsen 	 
	 	 	Title:  	Vice President 	 
	 
	 	MILLENNIUM PARTNERS II, L.P.



By: DLJ Merchant Banking III, Inc.,
as Managing 
       General Partner

 	 
	 	By:  	/s/ Kenneth Lohsen
 	 
	 	 	Name:  	Kenneth Lohsen 	 
	 	 	Title:  	Vice President 	 
	 
	 	MBP III PLAN INVESTORS, L.P.



By: DLJ LBO Plans Management Corporation II,
its 
       General Partner

 	 
	 	By:  	/s/ Kenneth Lohsen
 	 
	 	 	Name:  	Kenneth Lohsen 	 
	 	 	Title:  	Vice President 	 



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	 	DLJ Merchant Banking III, LLC, as General Partner
of DLJ Merchant Banking III, L.P., and as attorney-
in-fact for DLJ Merchant Banking III, L.P., as
Managing Limited Partner for and on behalf of
DLJ MB PARTNERS III GMBH & CO. KG

 	 
	 	By:  	/s/ Kenneth Lohsen
 	 
	 	 	Name:  	Kenneth Lohsen 	 
	 	 	Title:  	Vice President 	 
	 
	 	DLJ MB GmbH, as General Partner for and on
behalf of DLJ MB PARTNERS III GMBH &
CO. KG

 	 
	 	By:  	/s/ Kenneth Lohsen
 	 
	 	 	Name:  	Kenneth Lohsen 	 
	 	 	Title:  	Vice President 	 
	 



Address for Notice for each of the above
Stockholders:




DLJ Merchant Banking Partners

2121 Avenue of the Stars

Los Angeles, 90067 CA

Attention:   Susan Schnabel

Facsimile:    (310) 712-2734




with a copy to (which does not constitute notice):




Credit Suisse Private Equity

Eleven Madison Avenue, 16th Floor

New York, New York 10010

Attention:   Daniel Gewirtz

Facsimile:    (212) 743-1053




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Schedule I




	 	 	 	 	 
	Stockholder	 	Number of Shares
	DLJ MB Partners III GmbH & Co. KG,
	 	 	61,263	 
	a limited company organized under the laws of
Germany
	 	 	 	 
	DLJ Offshore Partners III, C.V.,
	 	 	390,820	 
	a partnership organized under the laws of the
Netherland Antilles
	 	 	 	 
	DLJ Offshore Partners III-1, C.V.,
	 	 	129,635	 
	a partnership organized under the laws of the
Netherland Antilles
	 	 	 	 
	DLJ Offshore Partners III-2, C.V.,
	 	 	92,338	 
	a partnership organized under the laws of the
Netherland Antilles
	 	 	 	 
	Millennium Partners II, L.P.,
	 	 	41,643	 
	a Delaware limited partnership
	 	 	 	 
	DLJ Merchant Banking Partners III, L.P.,
	 	 	7,264,092	 
	a Delaware limited partnership
	 	 	 	 
	MBP III Plan Investors, L.P.,
	 	 	1,619,711	 
	a Delaware limited partnership
	 	 	 	 
	 
	 	 	 	 
	TOTAL:
	 	 	9,599,502	 








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