VOTING AND SUPPORT AGREEMENT
Exhibit 2
THIS VOTING AND SUPPORT AGREEMENT (this “Agreement”) is made and entered into as of September 17, 2019, by and Contango Oil & Gas Company, a Texas corporation (“Contango”), and Xxxx X. Xxxx (“Xxxx”).
WITNESSETH:
WHEREAS, Contango and Xxxx MCF Partners, LP and Xxxx X. Xxxx SEP XXX, entities affiliated with Xxxx (the “Affiliated Entities”), entered into a Purchase Agreement, dated as of September 12, 2019 (the “Purchase Agreement”), which provides for the purchase and sale by Contango of an aggregate $7.5 million in gross proceeds of shares of Series A Contingent Convertible Preferred Stock, par value $0.04 per share (the “Preferred Stock”), to the Affiliated Entities;
WHEREAS, the Preferred Stock to be issued to the Affiliated Entities pursuant to the Purchase Agreement will automatically convert into shares of common stock, par value $0.04 per share (“Common Stock”), of Contango upon (i) effectiveness of an amendment to the Certificate of Formation of Contango (the “Charter Amendment”) to increase the number of authorized shares of Common Stock by at least 50,000,000 shares following approval by the shareholders of Contango of such amendment (the “Amendment Proposal”) and (ii) if necessary, approval by the shareholders of Contango, in accordance with applicable law and stock exchange rules and regulations, of the issuance of the shares of Common Stock to be issued upon conversion of the Preferred Stock and the issuance of such shares of Common Stock at a discount to an insider of the Company (the “Conversion Proposal” and, together with the Amendment Proposal, the “Proposals”);
WHEREAS, as of the date hereof, Xxxx is the beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of 25,304,325 shares of Common Stock; and
WHEREAS, as a condition and inducement to the willingness of Contango to enter into the Purchase Agreement, Xxxx has agreed to enter into this Agreement.
NOW, THEREFORE, intending to be legally bound, the parties hereto agree as follows:
1. Certain Definitions. All capitalized terms that are used but not defined herein shall have the respective meanings ascribed to them in the Purchase Agreement. For all purposes of and under this Agreement, the following terms shall have the following respective meanings:
(a) “Expiration Date” shall mean the earlier of (i) the first date upon which both shareholder approval of the Proposals has been obtained and the Charter Amendment has become effective and (ii) the date that is six months after the date hereof.
(b) “Subject Shares” shall mean, without duplication, (i) all shares of Common Stock of which Xxxx is the record or beneficial owner as of the date hereof, which total 25,304,325 shares of Common Stock, (ii) all shares of Common Stock issuable upon conversion, exercise or exchange of options, warrants and/or other rights to acquire shares of Common Stock of which Xxxx is the record or beneficial owner as of the date hereof, (iii) all additional shares of
Common Stock, and all additional shares of Common Stock issuable upon conversion, exercise or exchange of options, warrants and/or other rights to acquire shares of Common Stock, in each case of which Xxxx acquires record or beneficial ownership during the period from the date of this Agreement through the Expiration Date (including by way of share dividend or distribution, split-up, recapitalization, combination, exchange of shares and the like and including the shares of Common Stock acquired by Xxxx in an underwritten public offering concurrent with the issuance of shares of Preferred Stock pursuant to the Purchase Agreement (the “Public Offering”)), and (iv) all shares of Preferred Stock acquired by the Affiliated Entities pursuant to the Purchase Agreement to the extent such shares of Preferred Stock are entitled to vote on any of the Proposals or any of the other matters set forth in Section 3(a).
(c) “Transfer.” A Person shall be deemed to have effected a “Transfer” of Subject Shares if such Person directly or indirectly (i) sells, pledges, assigns, grants an option with respect to, transfers, tenders or disposes (by merger, by testamentary disposition, by operation of Law or otherwise) of such Subject Shares or any interest in such Subject Shares, (ii) creates or permits to exist any Liens, other than restrictions imposed by applicable Law or pursuant to this Agreement, (iii) deposits any Subject Shares into a voting trust or enters into a voting agreement or arrangement or grants any proxy, power of attorney or other authorization with respect thereto that is inconsistent with this Agreement, or (iv) agrees or commits (whether or not in writing) to take any of the actions referred to in the foregoing clauses (i) through (iii).
2. Transfer Restrictions. From the date hereof until the Expiration Date, Xxxx shall not Transfer (or cause or permit the Transfer of) any of his Subject Shares, or enter into any agreement relating thereto, except with Contango’s prior written consent and in Contango’s sole discretion.
3. Agreement to Vote Subject Shares.
(a) At every meeting of the shareholders of Contango, however called, and at every adjournment or postponement thereof (each, a “Meeting”), and on every action or approval by written consent of the shareholders of Contango, Xxxx agrees, unconditionally and irrevocably, to the extent not voted by the Person(s) named (or otherwise appointed in the manner set forth in) in any proxy statement or information statement, as applicable, or to cause the holder of record on any applicable record date to, vote (or cause to be voted) all Subject Shares that are then beneficially owned by Xxxx and entitled to vote or act by written consent:
(i) in favor of the approval of the Amendment Proposal, and in favor of any other matters presented or proposed as to approval of the Amendment Proposal;
(ii) in favor of the approval of the Conversion Proposal, and in favor of any other matters presented or proposed as to approval of the Conversion Proposal;
(iii) in favor of the approval of any proposal to adjourn or postpone the Meeting to a later date, if there are not sufficient votes for the approval of the Proposals on the date on which such Meeting is held;
(iii) against approval of any proposal made in opposition to, in competition with, or inconsistent with, the Proposals; and
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(iv) in favor of any other matter necessary or appropriate to the consummation of the transactions contemplated by the Purchase Agreement.
Xxxx agrees, unconditionally and irrevocably, to deliver or cause to be delivered such written consent immediately following consummation of the Public Offering. Xxxx acknowledges that, pursuant to the applicable rules and regulations of the NYSE American, the shares of Preferred Stock acquired by the Affiliated Entities pursuant to the Purchase Agreement shall not be entitled to vote with respect to the Conversion Proposal.
(b) Any vote required to be cast pursuant to this Section 3 shall be cast by Xxxx or at the direction of Xxxx, as applicable, in accordance with such procedures relating thereto so as to ensure that it is duly counted, including for purposes of determining whether a quorum is present.
(c) Except as provided herein, Xxxx shall not (i) enter into any agreement or understanding with any Person to vote or give instructions in any manner inconsistent with the terms of this Section 3, (ii) grant at any time while this Agreement remains in effect, a proxy, consent or power of attorney with respect to the Subject Shares inconsistent with the terms of this Section 3 or (iii) take any action that would make any representation or warranty of Xxxx contained herein untrue or incorrect or have the effect of preventing or disabling Xxxx from performing any of his obligations under this Agreement.
(d) The obligations of Xxxx specified in Section 3(a) shall apply whether or not any action described above is recommended by the Contango board of directors (or any committee thereof) (the “Board”), for so long as this Agreement is in effect.
4. Irrevocable Proxy.
(a) Solely in the event of a failure by Xxxx to act in accordance with Xxxx’x obligations as to voting pursuant to Section 3(a) prior to the termination of this Agreement and without in any way limiting any of Xxxx’x right to vote the Subject Shares in his sole discretion on any other matters that may be submitted to a shareholder vote, consent or other approval, Xxxx hereby grants an irrevocable proxy (the “Proxy”) appointing Contango as Xxxx’x attorney-in-fact and proxy, with full power of substitution, for and in Xxxx’x name, to vote, express consent or dissent, or otherwise to utilize such voting power in the manner contemplated by Section 3 above as Contango or its proxy or substitute shall, in Contango’s sole discretion, deem proper with respect to the Subject Shares.
(b) Xxxx hereby represents that any proxies heretofore given in respect of the Subject Shares, if any, are revocable, and hereby revokes such proxies.
(c) Xxxx hereby affirms that his Proxy set forth in this Section 4 is given in connection with the execution of the Purchase Agreement, and that such Proxy is given to secure the performance of the duties of Xxxx under this Agreement. Xxxx hereby further affirms that his Proxy is coupled with an interest in consideration of Contango entering into this Agreement and the Purchase Agreement and incurring certain related fees and expenses and, except as set forth in Section 4(d) or in Section 12 hereof, is intended to be irrevocable. All authority conferred hereby shall survive the death, incapacity of or the appointment of any liquidator, receiver,
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trustee, special manager or any other court appointed officer for Xxxx and shall be binding upon the heirs, estate, administrators, receivers, liquidators, trustees, special managers, personal representatives, successors and assigns of Xxxx.
(d) Contango hereby acknowledges and agrees that the Proxy set forth in this Section 4 shall not be exercised to vote, consent or act on any matter except as specifically contemplated by Section 3 above and Contango agrees not to exercise the Proxy granted herein for any purpose other than the purposes described in Section 3. The Proxy set forth in this Section 4 shall be revoked, terminated and of no further force or effect automatically without further action upon the termination of this Agreement.
5. Update of Beneficial Ownership Information. Xxxx shall promptly (and in any event within two Business Days after such acquisition) notify Contango of the number of Subject Shares acquired by Xxxx following the date hereof and prior to the Expiration Date and the updated number of Subject Shares beneficially owned by Xxxx as of immediately following such acquisition.
6. Representations and Warranties of Xxxx. Xxxx hereby represents and warrants to Contango as follows:
(a) Power; Organization; Binding Agreement. Xxxx has full power and authority to execute and deliver this Agreement and his Proxy, to perform Xxxx’x obligations hereunder and to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by Xxxx, and, assuming this Agreement constitutes a valid and binding obligation of Contango, constitutes a valid and binding obligation of Xxxx, enforceable against Xxxx in accordance with its terms, except that such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar Laws affecting the enforcement of creditors’ rights generally or by general principles of equity.
(b) No Conflicts. None of the execution and delivery by Xxxx of this Agreement, the performance by Xxxx of his obligations hereunder or the consummation by Xxxx of the transactions contemplated hereby will (i) result in a violation or breach of any agreement to which Xxxx is a party or by which Xxxx may be bound, including any voting agreement or voting trust or (ii) violate any applicable Law.
(c) Ownership of Subject Shares. Xxxx (i) is the beneficial owner of the Subject Shares, all of which are free and clear of any Liens (except any Liens arising under securities Laws or Liens that are not material to Xxxx’x performance of his obligations under this Agreement) and (ii) no Person (other than Xxxx) has a right to acquire any of the Subject Shares held by Xxxx.
(d) Voting Power. Xxxx has sole voting power, power of disposition, power to issue instructions with respect to the matters set forth herein, and power to agree to all of the matters set forth in this Agreement, in each case with respect to all of the Subject Shares, with no limitations, qualifications or restrictions on such rights, subject to applicable federal securities laws and those arising under the terms of this Agreement.
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(e) Reliance by Contango. Xxxx understands and acknowledges that the Contango is entering into the Purchase Agreement in reliance upon Xxxx’x execution and delivery of this Agreement.
(f) Consents and Approvals. The execution and delivery of this Agreement by Xxxx does not, and the performance by Xxxx of his obligations under this Agreement and the consummation by him of the transactions contemplated hereby will not, require Xxxx to obtain any consent, approval, authorization or permit of, or to make any filing with or notification to, any Governmental Entity, except in each case for filings with the Securities and Exchange Commission (“SEC”) by Xxxx or where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings and notifications, would not, either individually or in the aggregate, prevent or delay the performance by Xxxx of any of his obligations hereunder.
(g) Absence of Litigation. As of the date hereof, there is no Action pending or, to the knowledge of Xxxx, threatened against or affecting Xxxx or any of his Affiliates before or by any Governmental Entity that would reasonably be expected to impair the ability of Xxxx to perform his obligations hereunder or to consummate the transactions contemplated hereby on a timely basis.
7. Certain Restrictions. Xxxx agrees that Xxxx will not (in Xxxx’x capacity as a shareholder of Contango) bring, commence, institute, maintain, prosecute or voluntarily aid any legal action or proceeding, which (i) challenges the validity of or seeks to enjoin the operation of any provision of this Agreement, (ii) alleges that the execution and delivery of this Agreement by Xxxx or the approval of the Purchase Agreement and the transactions contemplated thereby, including the Charter Amendment, by the Board, breaches any fiduciary duty of the Board or any member thereof or (iii) would reasonably be expected to restrict or otherwise affect Xxxx’x legal power, authority and ability to comply with and perform the covenants and obligations of Xxxx under this Agreement.
8. Shareholder Capacity. The parties hereto acknowledge that this Agreement is being entered into by Xxxx solely in his capacity as a beneficial owner of the Subject Shares, and nothing in this Agreement shall restrict or limit the ability of Xxxx, who is a director of Contango, to exercise his duties attendant to such position by taking any action whatsoever in such capacity, including with respect to the Purchase Agreement or this Agreement.
9. Disclosure. Xxxx shall permit Contango to publish and disclose in all documents and schedules filed with the SEC, and any press release or other disclosure document that Contango determines to be necessary or desirable in connection with the Purchase Agreement and any transactions related thereto, Xxxx’x identity and ownership of Subject Shares and the nature of Xxxx’x commitments, arrangements and understandings under this Agreement.
10. No Ownership Interest. Except as provided in this Agreement, nothing contained in this Agreement shall be deemed to vest in Contango any direct or indirect ownership or incidence of ownership of or with respect to any Subject Shares. Except as provided in this Agreement, all rights, ownership and economic benefits relating to the Subject Shares shall remain vested in and belong to Xxxx.
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11. Further Assurances. Subject to the terms and conditions of this Agreement, upon request of Contango, Xxxx shall use commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary to fulfill Xxxx’x obligations under this Agreement.
12. Termination. This Agreement and Xxxx’x Proxy, and all rights and obligations of the parties hereunder and thereunder, shall terminate and shall have no further force or effect as of the Expiration Date. Notwithstanding anything to the contrary in this Agreement, nothing set forth in this Section 12 or elsewhere in this Agreement shall relieve any party hereto from liability, or otherwise limit the liability of any party hereto, for any willful breach of this Agreement prior to such termination.
13. Miscellaneous.
(a) Amendment or Supplement; Waiver. This Agreement may not be amended, modified or supplemented in any manner, whether by course of conduct or otherwise, except by an instrument in writing specifically designated as an amendment hereto, signed on behalf of each of the parties in interest at the time of the amendment. At any time prior to the Expiration Date, any party may, to the extent permitted by and subject to applicable Law, waive compliance with any of the agreements or conditions of the other parties contained herein. Any agreement on the part of a party to any such waiver shall be valid only if set forth in a written instrument executed and delivered by a duly authorized officer on behalf of such party. No failure or delay of any party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the parties hereunder are cumulative and are not exclusive of any rights or remedies which they would otherwise have hereunder. Notwithstanding any of the foregoing, any amendment, waiver, consent or modification of, or supplement to, this Agreement shall require approval of a majority of the members of the board of directors of Contango not affiliated with Xxxx.
(b) Notices. All notices and other communications hereunder shall be in writing and shall be deemed duly given (i) on the date of delivery if delivered personally, or if by e-mail, upon written confirmation of receipt by e-mail or otherwise, (ii) on the first Business Day following the date of dispatch if delivered utilizing a next-day service by a recognized next-day courier or (iii) on the earlier of confirmed receipt or the fifth Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered to the addresses set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:
If to Contango:
Contango Oil & Gas Company
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: E. Xxxxxx Xxxxx
E-mail: xxxxxx@xxxxxxxx.xxx
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with a copy (which shall not constitute notice) to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx Xxxxxx
E-mail: xxxxxxx@xxxxxxxxxx.xxx
If to Xxxx:
000 Xxxxxxxx Xx., Xxxxx 000,
Xxxx Xxxxx, Xxxxx 00000
Attention Xxxxxxxx Xxxxxxx
xxxxxxxx@Xxxxxx.xxx
with a copy (which shall not constitute notice) to:
Pillsbury Xxxxxxxx Xxxx Xxxxxxx LLP
0000 Xxxxxxxxxxx Xxxxxx XX
Xxxxxxxxxx, XX 00000-0000
Attention Xxxxxx Xxxxxxx
xxxxxx.xxxxxxx@xxxxxxxxxxxx.xxx
(c) Interpretation. When a reference is made in this Agreement to a Section, such reference shall be to a Section of this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for convenience of reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. All words used in this Agreement will be construed to be of such gender or number as the circumstances require. The word “including” and words of similar import when used in this Agreement will mean “including, without limitation,” unless otherwise specified. The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to the Agreement as a whole and not to any particular provision in this Agreement. The term “or” is not exclusive. The word “will” shall be construed to have the same meaning and effect as the word “shall.” References to days mean calendar days unless otherwise specified.
(d) Entire Agreement. This Agreement and the Proxy constitute the entire agreement, and supersede all prior written agreements, arrangements, communications and understandings and all prior and contemporaneous oral agreements, arrangements, communications and understandings, among the parties with respect to the subject matter hereof and thereof.
(e) No Third Party Beneficiaries. Nothing in this Agreement, express or implied, is intended to or shall confer upon any Person other than the parties and their respective successors and permitted assigns any legal or equitable right, benefit or remedy of any nature under or by reason of this Agreement.
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(f) Governing Law. This Agreement and all disputes or controversies arising out of or relating to this Agreement or the transactions contemplated hereby shall be governed by, and construed in accordance with, the internal laws of the State of Texas, without regard to the laws of any other jurisdiction that might be applied because of the conflicts of laws principles of the State of Texas.
(g) Submission to Jurisdiction. Each of the parties irrevocably agrees that any legal action or proceeding arising out of or relating to this Agreement brought by any party or its Affiliates against any other party or its Affiliates shall be brought and determined in the state courts located in Xxxxxx County, Texas; provided, however, that if jurisdiction is not then available in the state courts located in Xxxxxx County, Texas, then any such legal action or proceeding may be brought in any federal court located in the State of Texas. Each of the parties hereby irrevocably submits to the jurisdiction of the aforesaid courts for itself and with respect to its property, generally and unconditionally, with regard to any such action or proceeding arising out of or relating to this Agreement and the transactions contemplated hereby. Each of the parties agrees not to commence any action, suit or proceeding relating thereto except in the courts described above in Texas, other than actions in any court of competent jurisdiction to enforce any judgment, decree or award rendered by any such court in Texas as described herein. Each of the parties further agrees that notice as provided herein shall constitute sufficient service of process and the parties further waive any argument that such service is insufficient. Each of the parties hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, (i) any claim that it is not personally subject to the jurisdiction of the courts in Texas as described herein for any reason, (ii) 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 (iii) that (A) the suit, action or proceeding in any such court is brought in an inconvenient forum, (B) the venue of such suit, action or proceeding is improper or (C) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.
(h) Assignment; Successors. Neither this Agreement nor any of the rights, interests or obligations under this Agreement may be assigned or delegated, in whole or in part, by operation of law or otherwise, by Xxxx without the prior written consent of Contango, and any such assignment without such prior written consent shall be null and void. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns.
(i) Specific Performance. The parties agree that irreparable damage would occur in the event that the parties hereto do not perform the provisions of this Agreement in accordance with its terms or otherwise breach such provisions. Accordingly, prior to the Expiration Date, the parties acknowledge and agree that each party shall be entitled to an injunction, specific performance and other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in the state courts located in Xxxxxx County, Texas; provided, however, that if jurisdiction is not then available in the state courts of the State of Texas, then in any federal court located in the State of Texas, this being in addition to any other remedy to which such party is entitled at law or in equity. Each of the parties hereby further waives (i) any defense in any action for specific performance that a remedy at law would be adequate and (ii) any requirement under any law to post security as a prerequisite to obtaining equitable relief.
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(j) Severability. Whenever possible, each provision or portion of any provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable Law, but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable Law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or portion of any provision in such jurisdiction, and this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein.
(k) Fees and Expenses. All fees and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such fees or expenses.
(l) Waiver of Jury Trial. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
(m) Counterparts. This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same instrument and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party.
(n) Facsimile or .pdf Signature. This Agreement may be executed by facsimile or .pdf signature and a facsimile or .pdf signature shall constitute an original for all purposes.
(o) No Presumption Against Drafting Party. Each party hereto acknowledges that each party to this Agreement has been represented by counsel in connection with this Agreement and the transactions contemplated by this Agreement. Accordingly, any rule of law or any legal decision that would require interpretation of any claimed ambiguities in this Agreement against the drafting party has no application and is expressly waived.
[Remainder of Page Intentionally Left Blank; Signature Pages Follow]
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IN WITNESS WHEREOF, the undersigned have executed and caused to be effective this Agreement as of the date first above written.
/s/ Xxxx X. Xxxx | ||
Name: | Xxxx X. Xxxx |
[Signatures continued on following page.]
[Signature Page to Voting and Support Agreement]
CONTANGO OIL & GAS COMPANY | ||
By: | /s/ E. Xxxxxx Xxxxx | |
Name: | E. Xxxxxx Xxxxx | |
Title: | Senior Vice President and Chief | |
Financial Officer |
[Signature Page to Voting and Support Agreement]