Document:

Exhibit
10.14

 

Consent Order

 

FEDERAL DEPOSIT INSURANCE
CORPORATION

 

WASHINGTON, D.C.

 

	
   

  	
  )

  	
   

  
	
  In the Matter of

  	
  )

  	
   

  
	
   

  	
  )

  	
  CONSENT ORDER

  
	
  COMMUNITYSOUTH BANK AND

  	
  )

  	
   

  
	
  TRUST

  	
  )

  	
  FDIC-09-698b

  
	
  EASLEY, SOUTH CAROLINA

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  (Insured State Nonmember
  Bank)

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  

 

The
Federal Deposit Insurance Corporation (“FDIC”) is the appropriate Federal
banking agency for CommunitySouth Bank and Trust, Easley, South Carolina (“Bank”),
under 12 U.S.C. § 1813(q).

 

The
Bank, by and through its duly elected and acting Board of Directors (“Board”),
has executed a “Stipulation to the Issuance of a Consent Order” (“STIPULATION”),
dated February 23, 2010, that is accepted by the FDIC and the Commissioner
of Banking (“Commissioner”) on behalf of the State Board of Financial
Institutions for the State of South Carolina (“State Board”).  With the Stipulation, the Bank has consented,
without admitting or denying any charges of unsafe or unsound banking practices
relating to asset quality, capital adequacy, earnings, management
effectiveness, and liquidity, to the issuance of this Consent Order (“ORDER”)
by the FDIC and the State Board.

 

Having
determined that the requirements for issuance of an order under 12 U.S.C. §
1818(b) and S.C. Code Ann. § 34-1-60 have been satisfied, the FDIC and the
State Board hereby order that:

 

1

 

BOARD OF DIRECTORS

 

1.             (a)           As of the effective date of
this ORDER, the Board shall increase its participation in the affairs of the
Bank, assuming full responsibility for the approval of sound policies and
objectives and for the supervision of all of the Bank’s activities, consistent
with the role and expertise commonly expected for directors of banks of
comparable size.  The Board shall prepare
in advance and follow a detailed written agenda for each meeting, including
consideration of the actions of any committees. 
Nothing in the foregoing sentences shall preclude the Board from
considering matters other than those contained in the agenda.  This participation shall include meetings to
be held no less frequently than monthly at which, at a minimum, the following
areas shall be reviewed and approved: 
reports of income and expenses; new, overdue, renewal, insider,
charged-off, and recovered loans; investment activity; operating policies; and
individual committee actions.  Board
minutes shall document these reviews and approvals, including the names of any
dissenting directors.

 

(b)           Within 30 days from the effective date of this ORDER,
the Board shall have in place a program that will provide for monitoring of the
Bank’s compliance with this ORDER. 
Following the adoption of the program, the Board shall review the Bank’s
compliance with this ORDER and record its review in the minutes of each
regularly scheduled Board meeting.  Establishment
of this program does not in any way diminish the responsibility of the entire
Board to ensure compliance with the provisions of this ORDER.

 

2

 

MANAGEMENT

 

2.             (a)           During the life of this ORDER, the Bank
shall have and retain qualified management with the qualifications and
experience commensurate with assigned duties and responsibilities at the
Bank.  Each member of management shall be
provided appropriate written authority from the Bank’s Board to implement the
provisions of this ORDER.

 

(b)           Within 45 days from the effective date of this ORDER,
the Bank shall develop and approve a written analysis and assessment of the
Bank’s management and staffing needs (“Management Plan”) for the purpose of
providing qualified management for the Bank. 
The Management Plan shall be forwarded to the Regional Director of the
FDIC’s Atlanta Regional Office (“Regional Director”) and to the Commissioner on
behalf of the State Board (collectively “Supervisory Authorities”) for review
and comment and shall address, at a minimum, the following:

 

(i)            A review of each officer’s performance, abilities and
assignments to positions within the Bank;

 

(ii)           identification of both the type and number of officer
positions needed to properly manage and supervise the affairs of the Bank;

 

(iii)          identification and establishment of such Bank
committees as are needed to provide guidance and oversight to active
management;

 

(iv)          annual written evaluations of all Bank officers, and
staff members to determine whether these individuals possess the ability,
experience and other qualifications required to perform present and anticipated
duties, including, but not limited to, adherence to the Bank’s established
policies 

 

3

 

and practices, and
restoration and maintenance of the Bank in a safe and sound condition;

 

(v)           a plan to recruit and hire any additional or
replacement personnel with the requisite ability, experience and other
qualifications to fill those officer or staff member positions consistent with
the needs identified in the Management Plan; and

 

(vi)          an
organizational chart.

 

CAPITAL

 

3.             (a)           Within 90 days from the effective date of
this ORDER the Bank shall achieve and maintain the following minimum capital
levels as defined in Part 325 of the FDIC Rules and Regulations, 12
C.F.R. Part 325, after establishing an adequate allowance for loan and
lease losses (“ALLL”):

 

(i)            Tier 1 capital at least equal to eight (8.0%) percent
of total assets; and

 

(ii)           Total risk-based capital at least equal to ten (10.0%)
percent of total risk-weighted assets.

 

(b)           Thereafter during the life of this ORDER, the Bank
shall maintain Tier 1 capital in such an amount as to equal or exceed eight
(8%) percent of the Bank’s total assets; and a Total risk-based capital ratio
of at least ten (10%) percent as those risk based capital ratios are described
in the FDIC Statement of Policy on Risk-Based Capital contained in Appendix A
to Part 325 of the FDIC Rules and Regulations, 12 C.F.R. Part 325,
Appendix A.

 

4

 

(c)           Within 30 days of the last
day of each calendar quarter, the Bank shall determine, from its Reports of
Condition and Income, its capital ratios for that calendar quarter.  If any capital measure falls below the
established minimum, within 30 days of such required determination of capital
ratios, the Bank shall submit a written plan to the FDIC, describing the means
and timing by which the Bank shall increase such ratios up to or in excess of
the established minimum.

 

ALLOWANCE
FOR LOAN AND LEASE LOSSES

 

4.             Within 60 days from the effective date of this ORDER,
the Board shall review the adequacy of the ALLL and establish a comprehensive
policy for determining the adequacy of the ALLL.  For the purpose of this determination, the
adequacy of the ALLL shall be determined after the charge-off of all loans or
other items classified “Loss”.  The
policy shall provide for a review of the ALLL at least once each calendar quarter.  Said review shall be completed in time to
properly report the ALLL in the quarterly Reports of Condition and Income.  The review shall focus on the results of the
Bank’s internal loan review, loan and lease loss experience, trends of
delinquent and non-accrual loans, an estimate of potential loss exposure of
significant credits, concentrations of credit, and present and prospective
economic conditions.  A deficiency in the
ALLL shall be remedied in the calendar quarter it is discovered, prior to
submitting the Reports of Condition and Income, by a charge to current
operating earnings.  The minutes of the
Board meeting at which such review is undertaken shall indicate the results of
the review.  The Bank’s policy for
determining the adequacy of the ALLL and its implementation shall be
satisfactory to the Supervisory Authorities.

 

5

 

REDUCTION
OF CLASSIFIED ASSETS

 

5.             (a)           Within 60 days from the effective date of
this ORDER, the Bank shall submit to the Supervisory Authorities, for review
and comment, a written plan to reduce the Bank’s risk position in each asset in
excess of $250,000, which is classified “Substandard” or “Doubtful” in the FDIC’s
Visitation Report dated October 26, 2009 (“Report”).  Within 10 days from the receipt of any
comment from the Supervisory Authorities, and after due consideration of any
recommended changes, the Bank shall approve the plan, which approval shall be
recorded in the minutes of a Board meeting. 
Thereafter, the Bank shall implement and follow this plan.

 

(b)           The
written plan mandated by this provision shall further require a reduction in
the aggregate balance of assets classified “Substandard” and “Doubtful” in the
Report in accordance with the following schedule.  For purposes of this
paragraph, “number of days” means number of days from the effective date of
this ORDER.

 

(i)            Within
180 days, a reduction of twenty-five percent (25%) in the balance of assets
classified “Substandard” or “Doubtful.”

 

(ii)           Within
360 days, a reduction of forty-five percent (45%) in the balance of assets
classified “Substandard” or “Doubtful.”

 

(iii)          Within
540 days, a reduction of sixty-five percent (65%) in the balance of assets
classified “Substandard” or “Doubtful.”

 

(iv)          Within
720 days, a reduction of seventy-five percent (75%) in the balance of assets
classified “Substandard” or “Doubtful.”

 

6

 

NO
ADDITIONAL CREDIT

 

6.             (a)           As of the effective date of this ORDER,
the Bank shall not extend, directly or indirectly, any additional credit to, or
for the benefit of, any borrower who has a loan or other extension of credit
from the Bank that has been charged off or classified, in whole or in part, “Loss”
or “Doubtful” and is uncollected.  The
requirements of this paragraph shall not prohibit the Bank from renewing (after
collection in cash of interest due from the borrower) any credit already
extended to any borrower.

 

(b)           Additionally, as of the effective date of this ORDER,
the Bank shall not extend, directly or indirectly, any additional credit to, or
for the benefit of, any borrower who has a loan or other extension of credit
from the Bank that has been classified, in whole or part, “Substandard” and is
uncollected.

 

(c)           Paragraph 6(b) shall not apply if the Bank’s
failure to extend further credit to a particular borrower would be detrimental
to the best interests of the Bank.  Prior
to the extending of any additional credit pursuant to this paragraph, either in
the form of a renewal, extension, or further advance of funds, such additional
credit shall be approved by a majority of the Board or a designated committee
thereof, who shall certify in writing as follows:

 

(i)            why
the failure of the Bank to extend such credit would be detrimental to the best
interests of the Bank;

 

(ii)           that
the Bank’s position would be improved thereby; and

 

(iii)          how
the Bank’s position would be improved.

 

7

 

(d)           The signed certification shall be made a part of the
minutes of the Board or its designated committee and a copy of the signed
certification shall be retained in the borrower’s credit file.

 

REDUCE CONCENTRATIONS OF CREDIT

 

7.             Within 45 days from the
effective date of this ORDER, the Bank shall perform a risk segmentation
analysis with respect to the Concentrations of Credit discussed in the
Report.  Concentrations should be
identified by product type, geographic distribution, underlying collateral or
other asset groups, which are considered economically related and in the
aggregate represent a large portion of the Bank’s Tier 1 Capital.  The Bank shall develop a written plan
approved by its Board and acceptable to the Supervisory Authorities to
systematically reduce any segment of the portfolio which the Supervisory Authorities
deems to be an undue concentration of credit in relation to the Bank’s Tier 1
Capital.  At a minimum the plan must
provide for written procedures for the ongoing measurement and monitoring of
the concentrations of credit, and a limit on concentrations commensurate with
the Bank’s capital position, safe and sound banking practices, and the overall
risk profile of the Bank.

 

INTERNAL
LOAN REVIEW

 

8.             Within 60 days from the effective date of this ORDER,
the Bank shall adopt an effective internal loan review and grading system to
provide for the periodic review of the Bank’s loan portfolio in order to
identify and categorize the Bank’s loans, and other extensions of credit which
are carried on the Bank’s books as loans, on the basis of credit quality.  Such system and its implementation shall be
satisfactory to the Supervisory 

 

8

 

Authorities as determined
at their initial review and at subsequent examinations and/or visitations.  At a minimum, the grading system shall
provide for the following:

 

(a)           specification of standards and criteria for assessing
the credit quality of the Bank’s loans;

 

(b)           application of loan grading standards and criteria to
the Bank’s loan portfolio;

 

(c)           categorization of the Bank’s loans into groupings
based on the varying degrees of credit and other risks that may be presented
under the applicable grading standards and criteria, but in no case, will a
loan be assigned a rating higher than that assigned by examiners at the last visitation
and/or examination of the Bank without prior written notification to the
Supervisory Authorities;

 

(d)           assessment of the likelihood that each loan exhibiting
credit and other risks will not be repaid according to its terms and
conditions;

 

(e)           identification of any loan that is not in conformance
with the Bank’s loan policy;

 

(f)            identification of any loan which presents any unsafe
or unsound banking practice or condition or is otherwise in violation of any
applicable State or Federal law, regulation, or statement of policy;

 

(g)           requirement of a written report to be made to the
Board, not less than quarterly after the effective date of this ORDER.  The report shall identify the status of those
loans that exhibit credit and other risks under the applicable grading
standards/criteria and the prospects for full collection and/or strengthening
of the quality of any such loans; and

 

9

 

(h)           specific policies governing Bank charge-offs of loans
and underlying collateral taken to repay loans.

 

PLAN FOR EXPENSES/PROFITABILITY

 

9.             (a)           Within 60 days from the
effective date of this ORDER, the Bank shall formulate and implement a written
profit plan and a realistic, comprehensive budget for all categories of income
and expense.  This plan shall be
forwarded to the Supervisory Authorities for review and comment and shall
address, at a minimum, the following:

 

(i)            goals and strategies for
improving and sustaining the earnings of the Bank;

 

(ii)           the major areas in, and
means by which the Bank will seek to improve the Bank’s operating performance;
and

 

(iii)          the operating assumptions
that form the basis for, and adequately support, major projected income and
expense components.

 

(b)           Following the end of each
calendar quarter, the Board shall evaluate the Bank’s actual performance in
relation to the plan required by this paragraph and shall record the results of
the evaluation, and any actions taken by the Bank in the minutes of the Board
meeting at which such evaluation is undertaken.

 

FUNDS
MANAGEMENT PLAN

 

10.           Within 60 days from the effective date of this ORDER,
the Bank shall adopt and implement a written plan addressing liquidity,
contingent funding, and asset liability management.  A copy of the plan shall be submitted to the
Supervisory Authorities upon its completion for review and comment.  Within 30 days from the receipt of any
comments from the Supervisory Authorities, the Bank shall incorporate those
recommended changes.  Thereafter, the
Bank shall implement and follow the plan. 

 

10

 

Annually during the life
of this ORDER, the Bank shall review this plan for adequacy and, based upon
such review, shall make appropriate revisions to the plan that are necessary to
strengthen funds management procedures and maintain adequate provisions to meet
the Bank’s liquidity needs.

 

BROKERED DEPOSITS

 

11.           (a)           Throughout the life of this
ORDER, the Bank shall not accept, renew, or rollover any brokered deposit, as
defined by 12 C.F.R. § 337.6(a)(2), unless it is in compliance with the
requirements of 12 C.F.R. § 337.6(b), governing solicitation and acceptance of
brokered deposits by insured depository institutions.

 

(b)           Within 30 days of the
effective date of this ORDER, the Bank shall submit a written plan for
eliminating its reliance on brokered deposits to the FDIC for review and
comment.  The plan shall detail the
current composition of brokered deposits by maturity and explain the means by
which such deposits will be paid.  Within
30 days of receipt of all such comments from the FDIC, and after consideration
of all such comments, the Bank shall approve the revised plan, which approval
shall be recorded in the minutes of the Board meeting.  Thereafter, the Bank shall implement and
fully comply with the plan.

 

(c)           The Bank shall comply with
the restrictions on the effective yields on deposits described in 12 C.F.R. §
337.6.

 

ASSET GROWTH LIMITATIONS

 

12.           During the life of this
ORDER, the Bank shall limit asset growth to ten percent (10.0%) per annum and
in no event shall asset growth result in noncompliance with the capital
maintenance provisions of this ORDER without receiving prior written approval 

 

11

 

of
the Supervisory Authorities.  In no event
shall asset growth result in noncompliance with the capital maintenance
provisions of this ORDER unless the Bank receives prior written approval from
the Supervisory Authorities.

 

RESTRICTIONS
ON CERTAIN PAYMENTS

 

13.           (a)           While this ORDER is in effect, the Bank shall not declare or
pay dividends or bonuses without the prior written approval of the Supervisory
Authorities.  All requests for prior
approval shall be received at least 30 days prior to the proposed dividend
declaration date (at least 5 days with respect to any request filed within the
first 30 days after the date of this ORDER) and shall contain, but not be
limited to, an analysis of the impact such dividend or bonus payment would have
on the Bank’s capital, income, and/or liquidity positions.  The Supervisory Authorities will approve a
dividend or any other form of payment representing a reduction in capital
provided that the Supervisory Authorities determine that such dividend or
payment will not have an unacceptable impact on the Bank’s capital position,
cash flow, concentrations of credit, asset quality and ALLL needs.

 

(b)           During
the term of this ORDER, the Bank shall not make any distributions of interest,
principal or other sums on subordinated debentures, if any, without the prior
written approval of the Supervisory Authorities.

 

DISCLOSURE

 

14.           Following the effective date
of this ORDER, the Bank shall send to its shareholders or otherwise furnish a
description of this ORDER in conjunction with the Bank’s next shareholder
communication and also in conjunction with its notice or proxy statement
preceding the Bank’s next shareholder meeting. 
The description shall fully describe the ORDER in all material
respects.  The description and any
accompanying 

 

12

 

communication,
statement or notice shall be sent to the FDIC, Division of Supervision and Consumer
Protection, Accounting and Securities Disclosure Section, 550 17th Street, N.W., Room F-6066, Washington,
D.C. 20429 and to the Commissioner for the State Board, 1205 Pendleton Street, Suite 305,
Columbia, SC 29201, at least fifteen (15) days prior to dissemination to
shareholders.  Any changes requested to
be made by the Supervisory Authorities shall be made prior to dissemination of
the description, communication, notice, or statement.

 

PROGRESS
REPORTS

 

15.           Within 45 days from the end of the first quarter
following the effective date of this ORDER, and within 45 days of the end of
each quarter thereafter, the Bank shall furnish written progress reports to the
Supervisory Authorities detailing the form and manner of any actions taken to
secure compliance with this ORDER and the results thereof.  Such reports shall include a copy of the Bank’s
Reports of Condition and of Income.  Such
reports may be discontinued when the corrections required by this ORDER have
been accomplished and the Supervisory Authorities have released the Bank in
writing from making further reports.  All
progress reports and other written responses to this ORDER shall be reviewed by
the Board and made a part of the minutes of the appropriate Board meeting.

 

The
provisions of this ORDER shall not bar, estop, or otherwise prevent the FDIC,
the State Board, or any other federal or state agency or department from taking
any other action against the Bank or any of the Bank’s current or former
institution-affiliated parties.

 

This
ORDER shall be effective on the date of issuance.

 

13

 

The
provisions of this ORDER shall be binding upon the Bank, its
institution-affiliated parties, and any successors and assigns thereof.

 

The
provisions of this ORDER shall remain effective and enforceable except to the
extent that and until such time as any provision has been modified, terminated,
suspended, or set aside in writing.

 

Issued
Pursuant to Delegated Authority

 

	
   

  	
  Dated this 23rd day of February,
  2010.

  
	
   

  	
   

  
	
   

  	
  /s/ Doreen R. Eberley

  
	
   

  	
  Doreen R. Eberley

  
	
   

  	
  Acting Regional
  Director

  
	
   

  	
  Division of Supervision
  and Consumer Protection

  
	
   

  	
  Atlanta Region

  
	
   

  	
  Federal Deposit
  Insurance Corporation

  

 

 

The
Commissioner, having duly approved the foregoing ORDER on behalf of the State
Board, and the Bank, through its Board, agree that the issuance of said ORDER
by the FDIC shall be binding as between the Bank and the State Board to the
same degree and to the same legal effect that such ORDER would be binding if
the State Board had issued a separate ORDER that included and incorporated all
of the provisions of the foregoing ORDER, pursuant to S.C. Code Ann. § 34-1-60
(1976).

 

 

	
   

  	
  Dated this 23rd day of February, 2010.

  
	
   

  	
   

  
	
   

  	
  /s/ Louie A. Jacobs

  
	
   

  	
  Louie
  A. Jacobs

  
	
   

  	
  Commissioner
  of Banking

  
	
   

  	
  South
  Carolina

  
	
   

  	
  State
  Board of Financial Institutions

  

 

14Exhibit 10.1

 

Execution
Version

 

VOTING AGREEMENT

 

VOTING AGREEMENT, dated as of February 23, 2010 (this “Agreement”),
by and among Powder Holdings, LLC, a Delaware limited liability company (“Parent”) and each of the other parties signatory hereto (each a “Stockholder” and collectively, the “Stockholders”), and solely for the purposes of Section 5.2
hereof, Pinnacle Gas Resources, Inc., a Delaware corporation (the “Company”).

 

W I T N E S S E T H:

 

WHEREAS, concurrently with the execution of this Agreement,
Parent, Powder Acquisition Co., a Delaware corporation and a direct, wholly
owned subsidiary of Parent (“Merger Sub”), and the Company are entering into an Agreement and Plan of Merger, dated
as of the date hereof (as amended, supplemented, restated or otherwise modified
from time to time, the “Merger Agreement”)
pursuant to which, among other things, the Company and Merger Sub will merge
(the “Merger”) and, except as otherwise
provided in the Merger Agreement, each issued and outstanding share of the Company’s
common stock, par value $0.01 per share (the “Common Stock”)
will be converted into the right to receive the merger consideration specified
therein.

 

WHEREAS, as a condition and inducement to Parent entering
into the Merger Agreement, Parent has required that the Stockholders agree, and
the Stockholders have agreed, to enter into this Agreement and abide by the
covenants and obligations with respect to the Covered Shares (as hereinafter
defined) set forth herein.

 

NOW THEREFORE, in consideration of the foregoing and the
mutual representations, warranties, covenants and agreements herein contained,
and intending to be legally bound hereby, the parties hereto agree as follows:

 

ARTICLE
I

GENERAL

 

Section 1.1                                      Defined
Terms.   The following capitalized terms, as used
in this Agreement, shall have the meanings set forth below. Capitalized terms
used but not otherwise defined herein shall have the meanings ascribed thereto
in the Merger Agreement.

 

“Beneficial Ownership” by a Person of
any securities includes ownership by any other Person if such Person, directly
or indirectly, through any contract, arrangement, understanding, relationship
or otherwise, has or shares with such other Person (i) voting power which
includes the power to vote, or to direct the voting of, such security; and/or (ii) investment
power which includes the power to dispose, or to direct the disposition, of
such security; and shall otherwise be interpreted in accordance with the term “beneficial
owner” as defined in Rule 13d-3 adopted by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended; provided that
for purposes of determining Beneficial Ownership, a Person shall be deemed to
be the Beneficial Owner of any securities which may be acquired by such Person
pursuant to any agreement, arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options, or otherwise
(irrespective of whether the right to 

 

1

 

acquire
such securities is exercisable immediately or only after the passage of time,
including the passage of time in excess of 60 days, the satisfaction of
any conditions, the occurrence of any event or any combination of the
foregoing). The terms “Beneficially Own” and “Beneficially Owned”
shall have a correlative meaning.

 

“Contribution Agreement” means that
certain Contribution Agreement, dated as of the date hereof, by and among
Parent, Scotia Waterous (USA) Inc., DLJ Merchant Banking Partners III, L.P. and
affiliated investment funds.

 

“Covered Shares” means, with respect to each Stockholder, such Stockholder’s
Existing Shares, together with any shares of Common Stock or other voting
capital stock of the Company and any securities convertible into or exercisable
or exchangeable for shares of Common Stock or other voting capital stock of the
Company, in each case, that such Stockholder acquires Beneficial Ownership of
on or after the date hereof.  For the
avoidance of doubt, with respect to DLJ Merchant Banking III, Inc.,
Covered Shares shall include the Transferred Shares.

 

“Encumbrance” means any security interest, pledge, mortgage, deed of trust,
lien (statutory or other), charge, option to purchase, lease or other right to
acquire any interest or any claim, restriction, covenant, title defect,
hypothecation, assignment, deposit arrangement or other encumbrance of any kind
or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
other title retention agreement).

 

“Existing Shares” means, with respect to each Stockholder, the shares of Common
Stock Beneficially Owned or owned of record by such Stockholder.

 

“Person” means any individual, corporation, limited liability company,
limited or general partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, government or any agency or
political subdivision thereof or any other entity, or any group comprised of
two or more of the foregoing.

 

“Representatives” means the officers, directors, employees, agents, advisors and
affiliates of a Person.

 

“Transfer” means, directly or indirectly, to sell, transfer, assign,
pledge, encumber, hypothecate or similarly dispose of (by merger, by testamentary
disposition, by operation of law or otherwise), either voluntarily or
involuntarily, or to enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, assignment, pledge,
Encumbrance, hypothecation or similar disposition of (by merger, by
testamentary disposition, by operation of law or otherwise).

 

“Transferred Shares” means all shares of Common Stock
Beneficially Owned or owned of record by Susan C. Schnabel as of the date
hereof, together with any shares of Common Stock or other voting capital stock
of the Company and any securities convertible into or exercisable or
exchangeable for shares of Common Stock or other voting capital stock of the
Company, in each case, that Susan C. Schnabel acquires Beneficial Ownership of
on or after the date hereof.

 

2

 

ARTICLE
II

VOTING

 

Section 2.1                                      Agreement to
Vote.    Each Stockholder hereby agrees that
during the term of this Agreement, at the Company Meeting or any other meeting
of the stockholders of the Company, however called, including any adjournment
or postponement thereof, or in connection with any written consent of the
stockholders of the Company, such Stockholder shall, in each case to the
fullest extent that such Stockholder’s Covered Shares are entitled to vote
thereon or consent thereto:

 

(a)                                  appear at
each such meeting or otherwise cause such Stockholder’s Covered Shares to be
cast in accordance with the applicable procedures relating thereto so as to ensure
that they are duly counted as present thereat for purposes of calculating a
quorum; and

 

(b)                                 vote (or
cause to be voted), in person or by proxy, or deliver (or cause to be
delivered) a written consent covering, all of such Stockholder’s Covered Shares
(i) in favor of the adoption of the Merger Agreement and any other action
reasonably requested by Parent in furtherance thereof; (ii) against any
action, proposal, transaction or agreement that would reasonably be expected to
result in a breach in any respect of any covenant, representation or warranty
or any other obligation or agreement of the Company contained in the Merger
Agreement, or of any Stockholder contained in this Agreement; and (iii) against
any Acquisition Proposal or any other action, agreement or transaction that is
intended, or could reasonably be expected, to materially impede, interfere
with, delay, postpone, discourage or adversely affect the Merger or any of the
other transactions contemplated by the Merger Agreement or this Agreement or
the performance by such Stockholder of its obligations under this Agreement,
including, without limitation: (A) any extraordinary corporate
transaction, such as a merger, consolidation or other business combination
involving the Company or its Subsidiaries (other than the Merger); (B) a
sale, lease or transfer of a material amount of assets of the Company or any of
its Subsidiaries or a reorganization, recapitalization or liquidation of the
Company or any of its Subsidiaries; (C) an election of new members to the
board of directors of the Company, other than nominees to the board of
directors of the Company who are serving as directors of the Company on the
date of this Agreement or as otherwise provided in the Merger Agreement; (D) any
material change in the present capitalization or dividend policy of the Company
or any amendment or other change to the Company’s articles of incorporation or
bylaws, except if approved by Parent; or (E) any other material change in
the Company’s corporate structure or business.

 

Section 2.2                                      No
Inconsistent Agreements.    Each
Stockholder hereby covenants and agrees that, except for this Agreement, the
Stockholders Agreement or as permitted by Section 2.1, such
Stockholder (a) has not entered into, and shall not enter into at any time
while this Agreement remains in effect, any voting agreement or voting trust
with respect to such Stockholder’s Covered Shares and (b) has not granted,
and shall not grant at any time while this Agreement remains in effect, a
proxy, consent or power of attorney with respect to such Stockholder’s Covered
Shares.

 

3

 

ARTICLE
III
  REPRESENTATIONS AND WARRANTIES OF THE
STOCKHOLDERS

 

Section 3.1                                      Representations
and Warranties of the Stockholders.   Each Stockholder
hereby represents and warrants to Parent as follows:

 

(a)                                  Organization;
Authorization; Validity of Agreement; Necessary Action. Such
Stockholder has the legal capacity and all requisite power and authority to
enter into this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. This Agreement has been duly
executed and delivered by such Stockholder and, assuming this Agreement
constitutes a valid and binding obligation of Parent and the Company, constitutes
a valid and binding obligation of such Stockholder, enforceable against it in
accordance with its terms, except as enforcement may be limited by general
principles of equity whether applied in a court of law or a court of equity and
by bankruptcy, insolvency and similar laws affecting creditors’ rights and
remedies generally.

 

(b)                                 Ownership. Such
Stockholder’s (other than DLJ Merchant Banking III, Inc.) Existing Shares
are, and all of such Stockholder’s Covered Shares owned from the date hereof through
and on the Closing Date will be, Beneficially Owned or owned of record by such
Stockholder. In the case of DLJ Merchant Banking III, Inc., all of such
Stockholder’s Covered Shares owned on the Closing Date will be, Beneficially
Owned or owned of record by such Stockholder. 
Such Stockholder has good and marketable title to such Stockholder’s
Existing Shares (and will have good and marketable title to such Stockholder’s
Covered Shares), free and clear of any Encumbrances, except as provided in this
Agreement, the Contribution Agreement and the Stockholders Agreement and except
that DLJ Merchant Banking III, Inc. may be deemed to Beneficially Own the
shares of Common Stock owned of record by the other Stockholders listed under
the title “DLJ Stockholders” on Schedule 1 and shares of Common Stock
owned of record by Susan C. Schnabel.  As
of the date hereof, such Stockholder’s Existing Shares constitute all of the
shares of Common Stock Beneficially Owned or owned of record by such
Stockholder. Such Stockholder has and will have at all times through the
Closing Date sole voting power, sole power of disposition, sole power to issue
instructions with respect to the matters set forth in ARTICLE II hereof,
and sole power to agree to all of the matters set forth in this Agreement, in
each case with respect to all of such Stockholder’s Existing Shares and with
respect to all of the Covered Shares owned of record by such Stockholder at all
times through the Closing Date.

 

Section 3.2                                      Representations
and Warranties of Parent.    Parent
hereby represents and warrants to each Stockholder as follows:

 

(a)                                  Organization;
Authorization; Validity of Agreement; Necessary Action. Parent has
the legal capacity and all requisite power and authority to enter into this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by Parent and, assuming this Agreement constitutes a valid and
binding obligation of the Stockholders and the Company, constitutes a valid and
binding obligation of Parent, enforceable against it in accordance with its
terms, except as enforcement may be limited by general principles of equity
whether applied in a court of law 

 

4

 

or a
court of equity and by bankruptcy, insolvency and similar laws affecting
creditors’ rights and remedies generally.

 

ARTICLE
IV

OTHER COVENANTS

 

Section 4.1                                      Prohibition
on Transfers, Other Actions.   Except as provided
for in the Contribution Agreement, each Stockholder hereby agrees not to (i) Transfer
any of such Stockholder’s Covered Shares or any interest therein, (ii) enter
into any agreement, arrangement or understanding with any Person, or take any
other action, that violates or conflicts with or would reasonably be expected
to violate or conflict with, or result in or give rise to a violation of or
conflict with, such Stockholder’s representations, warranties, covenants and
obligations under this Agreement, or (iii) take any action that could
restrict or otherwise affect such Stockholder’s legal power, authority and
right to comply with and perform such Stockholder’s covenants and obligations
under this Agreement.

 

Section 4.2                                      Stock
Dividends, etc.   In the event of a
stock split, stock dividend or distribution, or any change in the Common Stock
by reason of any split-up, reverse stock split, recapitalization, combination,
reclassification, exchange of shares or the like, the terms “Existing Shares”
and “Covered Shares” shall be deemed to refer to and include such shares as
well as all such stock dividends and distributions and any securities into
which or for which any or all of such shares may be changed or exchanged or
which are received in such transaction.

 

Section 4.3                                      Further Assurances.   From
time to time, at Parent’s reasonable request and without further consideration,
each Stockholder shall execute and deliver such additional documents and take
all such further action as may be necessary or desirable to effect the actions
and consummate the transactions contemplated by this Agreement.

 

ARTICLE
V

MISCELLANEOUS

 

Section 5.1                                      Termination.    This
Agreement shall terminate and be of no further force or effect upon the earlier
to occur of (i) the Closing and (ii) the date of termination of the
Merger Agreement in accordance with its terms. 
Nothing in this Section 5.1 shall relieve any party of, or
otherwise limit any party’s, liability for willful breach of this Agreement.

 

Section 5.2                                      Stop
Transfer Order. 
In furtherance of this Agreement, each Stockholder hereby authorizes and
instructs the Company to instruct its transfer agent to enter a stop transfer
order with respect to all of such Stockholder’s Covered Shares.  The Company agrees that as promptly as
practicable after the date of this Agreement, it shall give such stop transfer
instructions to the transfer agent for the Common Stock.

 

Section 5.3                                      Director
Matters Excluded. 
Parent acknowledges and agrees that no provision of this Agreement shall
limit or otherwise restrict any Stockholder (or any employee of any Stockholder
or its affiliates) with respect to any act or omission that he or she may
undertake or authorize in his or her capacity as a member of Company’s Board of
Directors, including, without limitation, any vote that any Stockholder (or any
employee of any Stockholder or its 

 

5

 

affiliates)
may make as a director of the Company with respect to any matter presented to
the Company’s Board of Directors.

 

Section 5.4                                      No Ownership
Interest.  Nothing contained in
this Agreement shall be deemed to vest in Parent or any other Person any direct
or indirect ownership or incidence of ownership of or with respect to any
Covered Shares.  All rights, ownership
and economic benefits of and relating to the Covered Shares shall remain vested
in and belong to the applicable Stockholder, and neither Parent nor any Person
shall have authority to direct any Stockholder in the voting or disposition of
any of the Covered Shares, except as otherwise provided herein.

 

Section 5.5                                      Notices.    All
notices and other communications hereunder shall be in writing and shall be
given (and shall be deemed to have been duly given upon receipt) by delivery in
person, by facsimile or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties at the following addresses
(or at such other address for a party as shall be specified in a notice given
in accordance with this Section 5.5):

 

(a)                                  if to Parent
to:

 

c/o
Scotia Waterous

711
Louisiana Street, Suite 1400

Pennzoil
Place, South Tower

Houston,
Texas 77002

Attn:
Tym Tombar

Fax:                           (713) 759-7431

With
a copy to:

Vinson &
Elkins LLP

1001
Fannin Street, Suite 2500

Houston,
Texas 77002

Attn:
Nicole E. Clark

Fax:  (713) 615-5950

 

(b)                                 if to the
Company (for purposes of Section 5.2) to:

 

Pinnacle Gas Resources, Inc.

1 East Alger

Sheridan, Wyoming 82801

Attn: Tom McGonagle

Fax: (307) 673-9711

 

With a copy to:

 

Joe
Perillo

Locke Lord Bissell & Liddell LLP

600 Travis Street

Suite 2800

 

6

 

Houston,
Texas 77002

Fax: (713) 229-2610

 

(c)                                  if to any
Stockholder, then at the address set forth below its name on Schedule 1
hereto.

 

Section 5.6                                      Interpretation.   The
words “hereof,” “herein” and “hereunder” and words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and Section references are to this
Agreement unless otherwise specified. Whenever the words “include,” “includes”
or “including” are used in this Agreement, they shall be deemed to be followed
by the words “without limitation.” The meanings given to terms defined herein
shall be equally applicable to both the singular and plural forms of such terms.
The headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.

 

Section 5.7                                      Headings.   The
descriptive headings contained in this Agreement are included for convenience
of reference only and shall not affect in any way the meaning or interpretation
of this Agreement.

 

Section 5.8                                      Counterparts.   This
Agreement may be executed by facsimile and in counterparts, all of which shall
be considered one and the same agreement and shall become effective when
counterparts have been signed by each of the parties and delivered to the other
parties, it being understood that all parties need not sign the same
counterpart.

 

Section 5.9                                      Entire
Agreement.   This Agreement, the Contribution
Agreement and, to the extent referenced herein, the Merger Agreement, together
with the several agreements and other documents and instruments referred to
herein or therein or annexed hereto or thereto, constitute the entire
agreement, and supersede all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof.

 

Section 5.10                                Mutual
Drafting.   Each party has participated in the drafting of
this Agreement, which each party acknowledges is the result of extensive
negotiations between the parties.  If an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if it is drafted by all the parties, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of
authorship of any of the provisions of this Agreement.

 

Section 5.11                                Governing
Law; Consent to Jurisdiction; Waiver of Jury Trial.

 

(a)                                  This
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware, without giving effect to any choice or conflict of law
provision or rule (whether of the State of Delaware or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Delaware.

 

(b)                                 Each of the
parties irrevocably agrees that any legal action or proceeding with respect to
this Agreement and the rights and obligations arising hereunder, or for
recognition and enforcement of any judgment in respect of this Agreement and
the rights and obligations arising hereunder brought by the other party hereto
or its successors or assigns, shall 

 

7

 

be
brought and determined exclusively in the Delaware Court of Chancery and any
state appellate court therefrom within the State of Delaware (or, if the
Delaware Court of Chancery declines to accept jurisdiction over a particular
matter, any state or federal court within the State of Delaware).  Each of the parties hereby irrevocably
submits with regard to any such action or proceeding for itself and in respect
of its property, generally and unconditionally, to the personal jurisdiction of
the aforesaid courts and agrees that it will not bring any action relating to
this Agreement or any of the transactions contemplated by this Agreement in any
court other than the aforesaid courts. 
Each of the parties hereby irrevocably waives, and agrees not to assert
as a defense, counterclaim or otherwise, in any action or proceeding with
respect to this Agreement, (a) any claim that it is not personally subject
to the jurisdiction of the aforesaid courts for any reason other than the
failure to serve in accordance with this Section 5.11, (b) any
claim that it or its property is exempt or immune from jurisdiction of any such
court or from any legal process commenced in such courts (whether through
service of notice, attachment prior to judgment, attachment in aid of execution
of judgment, execution of judgment or otherwise) and (c) to the fullest
extent permitted by the applicable Law, any claim that (i) the suit,
action or proceeding in such court is brought in an inconvenient forum, (ii) the
venue of such suit, action or proceeding is improper or (iii) this
Agreement, or the subject matter hereof, may not be enforced in or by such
courts.

 

(c)                                  EACH OF THE
PARTIES IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

 

Section 5.12                                Amendment;
Waiver.   This Agreement may not be amended except
by an instrument in writing signed by Parent and, to the extent such amendment
relates to a Stockholder, such Stockholder, provided that
any amendment to Section 5.2 shall also require the consent of the
Company. Each party may waive any right of such party hereunder by an
instrument in writing signed by such party and delivered to Parent and the
applicable Stockholder(s).

 

Section 5.13                                Specific
Performance.   Each party agrees that irreparable damage may
occur in the event any provision of this Agreement was not performed in
accordance with the terms hereof and that the parties shall be entitled to
specific performance of the terms hereof, in addition to any other remedy at
law or in equity.

 

Section 5.14                                Severability.   Any
term or provision of this Agreement which is determined by a court of competent
jurisdiction to be invalid or unenforceable in any jurisdiction shall, as to
that jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction, and
if any provision of this Agreement is determined to be so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable, in all cases so long as neither the economic nor legal substance
of the transactions contemplated hereby is affected in any manner materially
adverse to any party or its stockholders. Upon any such determination, the
parties shall negotiate in good faith in an effort to agree upon a suitable and
equitable substitute provision to effect the original intent of the parties.

 

8

 

Section 5.15                                Successors
and Assigns; Third Party Beneficiaries.   Neither
this Agreement nor any of the rights or obligations of any party under this
Agreement shall be assigned, in whole or in part (by operation of law or otherwise),
by any party without the prior written consent of Parent and the Stockholders,
except that, without such prior written consent, Parent may assign this
Agreement (in whole or in part) to any Person to which it assigns any of its
rights or obligations under the Merger Agreement in accordance therewith.
Subject to the foregoing, this Agreement shall bind and inure to the benefit of
and be enforceable by the parties hereto and their respective successors and
permitted assigns. Nothing in this Agreement, express or implied, is intended
to confer on any Person other than the parties hereto or their respective
successors and permitted assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement.

 

[Remainder of this page intentionally
left blank]

 

9

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
(where applicable, by their respective officers or other authorized Person
thereunto duly authorized) as of the date first written above.

 

	
   

  	
   

  	
  POWDER HOLDINGS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Tym Tombar

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Tym Tombar

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  

 

 

	
   

  	
   

  	
  PINNACLE GAS RESOURCES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Peter G. Schoonmaker

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Peter G. Schoonmaker

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President & CEO

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  DLJ
  MERCHANT BANKING PARTNERS III, L.P.

  
	
   

  	
   

  	
  By:

  	
  DLJ Merchant
  Banking III, Inc.,

  
	
   

  	
   

  	
   

  	
  its Managing
  General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Kenneth J.
  Lohsen

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Kenneth J.
  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 J.
  Lohsen

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Kenneth J.
  Lohsen

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
						

 

SIGNATURE PAGE TO

VOTING AGREEMENT

 

 

	
   

  	
   

  	
  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 Domestic
  Associate General Partner of DLJ OFFSHORE PARTNERS
  III-1, C.V.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Kenneth J.
  Lohsen

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Kenneth J.
  Lohsen

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  

 

 

	
   

  	
   

  	
  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 Domestic
  Associate General Partner of DLJ OFFSHORE PARTNERS
  III-2, C.V.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Kenneth J.
  Lohsen

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Kenneth J.
  Lohsen

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  

 

 

	
   

  	
   

  	
  DLJ MB PARTNERSIII GMBH &
  CO. KG

  By: DLJ Merchant Banking III, Inc.,

  the General Partner of DLJ Merchant Banking III, L.P., its Managing Limited
  Partner.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Kenneth J.
  Lohsen

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Kenneth J.
  Lohsen

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  

 

 

	
   

  	
   

  	
  By: DLJ MB GmbH, 

  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Kenneth J.
  Lohsen

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Kenneth J.
  Lohsen

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  

 

SIGNATURE PAGE TO

VOTING AGREEMENT

 

 

	
   

  	
   

  	
  MILLENNIUM PARTNERS II, L.P.

  
	
   

  	
   

  	
  By: DLJ Merchant Banking III, Inc.,

  its Managing General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Kenneth J.
  Lohsen

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Kenneth J.
  Lohsen

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  

 

 

	
   

  	
   

  	
  MBP III PLAN INVESTORS, L.P.

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Kenneth J.
  Lohsen

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Kenneth J.
  Lohsen

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  

 

 

	
   

  	
   

  	
  DLJ MERCHANT BANKING III, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Kenneth J.
  Lohsen

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Kenneth J.
  Lohsen

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  

 

 

	
   

  	
   

  	
  CCBM, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ S. P.
  Johnson

  
	
   

  	
   

  	
   

  	
  Name: S. P.
  Johnson

  
	
   

  	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
   

  	
  By:

  	
  /s/ Peter G.
  Schoonmaker

  
	
   

  	
   

  	
   

  	
  Peter G. Schoonmaker

  

 

 

	
   

  	
   

  	
  By:

  	
  /s/ Ronald T.
  Barnes

  
	
   

  	
   

  	
   

  	
  Ronald T. Barnes

  

 

 

	
   

  	
   

  	
  By:

  	
  /s/ Thomas G.
  McGonagle

  
	
   

  	
   

  	
   

  	
  Thomas G. McGonagle

  

 

SIGNATURE
PAGE TO

VOTING
AGREEMENT

 

 

	
   

  	
   

  	
  By:

  	
  /s/ Robert L.
  Cabes, Jr.

  
	
   

  	
   

  	
   

  	
  Robert L. Cabes, Jr.

  

 

 

	
   

  	
   

  	
  By:

  	
  /s/ Jeffrey P.
  Gunst

  
	
   

  	
   

  	
   

  	
  Jeffrey P. Gunst

  

 

 

	
   

  	
   

  	
  By:

  	
  /s/ S. P.
  Johnson, IV

  
	
   

  	
   

  	
   

  	
  S. P. Johnson, IV

  

 

 

	
   

  	
   

  	
  By:

  	
  /s/ F. Gardner
  Parker

  
	
   

  	
   

  	
   

  	
  F. Gardner Parker

  

 

SIGNATURE PAGE TO

VOTING AGREEMENT

 

 

Schedule 1

 

Stockholders

 

	
  DLJ Stockholders

   

  DLJ Merchant Banking Partners III, L.P.

  DLJ Offshore Partners III, C.V.

  DLJ Offshore Partners III-1, C.V.

  DLJ Offshore Partners III-2, C.V.

  DLJ MB PartnersIII GmbH & Co. KG

  Millennium Partners II, L.P.

  MBP III Plan Investors, L.P.

  DLJ Merchant Banking III, Inc.

   

  Address for Notices:

   

  c/o DLJ Merchant Banking Partners III, L.P.

  2121 Avenue of the Stars

  Los Angeles, California 90067

  Attn: Susan Schnabel

  Fax:  (310) 712-2711

   

  With a copy to:

  DLJ Merchant Banking Partners

  Eleven Madison Avenue

  New York, New York  10010

  Attention: Daniel Gewirtz, Director and Counsel

  Fax: (212) 325-2663

   

  With a copy to:

  Davis Polk & Wardwell LLP

  450 Lexington Ave.

  New York, New York 10017

  Attn: Nancy L. Sanborn

  Fax:  (212) 701-5955

   

   

  

 

	
  Non-DLJ Stockholders

   

  CCBM, Inc.

   

  Address for Notices:

   

  c/o Carrizo Oil &
  Gas, Inc.

  Attn: Chip Johnson

  1000 Louisiana, Suite 1500

   

  

 

1

 

	
  Houston, TX 77002

   

  Peter G. Schoonmaker

   

  Address for Notices:

   

  1 East Alger Street

  Sheridan Wyoming, 82801

   

  
	
  Ronald T. Barnes

   

  Address for Notices:

   

  1 East Alger Street

  Sheridan Wyoming, 82801

   

  
	
  Thomas G. McGonagle

   

  Address for Notices:

   

  1 East Alger

  Sheridan, Wyoming, 82801

   

  
	
  Robert L. Cabes, Jr.

   

  Address for Notices:

   

  1000 Louisiana, Ste. 1200

  Houston, TX 77002

   

  
	
  Jeffrey P. Gunst

   

  Address for Notices:

   

  1000 Louisiana, Ste. 1200

  Houston, TX 77002

   

  
	
  S. P. Johnson, IV

   

  Address for Notices:

   

  Carrizo Oil & Gas, Inc.

  Attn: Chip Johnson

  1000 Louisiana, Suite 1500

  Houston, TX 77002

   

  

 

2

 

	
  F. Gardner Parker

   

  Address for Notices:

   

  2901 Drexel

  Houston, TX 77027

  

 

3

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