VOTING AGREEMENT
Exhibit
2
THIS VOTING AGREEMENT (this “Agreement”) is made and
entered into as of December 31, 2007, by and among Knight Energy Group I Holding
Co., LLC, a Delaware limited liability company (“Knight I Parent”), Knight
Energy Group II Holding Company, LLC, a Delaware limited liability company
(“Knight II Parent”),
Hawk Energy Fund I Holding Company, LLC, an Oklahoma limited liability company
(“Hawk Parent”), Xxxxx
X. Xx Xxxxxx (“Xx
Xxxxxx”), Xxxxxx X. Xxxxxxx (“Xxxxxxx”) and Xxxxxxxxx
Capital Partners II, L.P., Xxxxxxxxx Capital Partners (Cayman) II, L.P.,
Xxxxxxxxx Capital Partners (Executives) II, L.P., and Xxxxxxxxx Capital Partners
(Employees) II, L.P. (“GCP” and together with Knight
I Parent, Knight II Parent and Hawk Parent, Xx Xxxxxx and Xxxxxxx, the “Parties”).
RECITALS
A. Concurrently
with the execution of this Agreement, the Crusader Parent Entities (as defined
in the Contribution Agreement), Westside Energy Corporation, a Nevada
corporation (the “Company”), and the Crusader
Operating Entities (as defined in the Contribution Agreement) have entered into
a Contribution Agreement (as may be amended from time to time, the “Contribution Agreement”),
which provides for the acquisition by the Company of all of the outstanding
equity interest of each of the Crusader Operating Entities (the “Acquisition”) in exchange for
common stock, par value $0.01 per share, of the Company (the “Company Common Stock”) or
cash, as set forth in the Contribution Agreement.
B. In
connection with the Acquisition, the Crusader Parent Entities have agreed to
vote their shares of Company Common Stock in the manner set forth in this
Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the
foregoing and the mutual promises contained herein, the Parties agree as
follows:
1. Voting
Agreement.
1.1 Board
Composition. Each Party shall vote all shares of Company
Common Stock owned or controlled by such Party, whether now owned or hereafter
acquired or which such Party may be empowered to vote (together the “Shares”), from time to time
and at all times, at each annual or special meeting of stockholders at which an
election of directors is held or pursuant to any written consent of the
stockholders, in favor of the election of the following persons to the Board of
Directors (the “Board”)
of the Company:
(i)
one individual designated by GCP so long as GCP holds not fewer than 33.3333% of
the outstanding Investor Units (as defined in the Limited Liability Company
Agreement of Knight I Parent dated as of even date herewith, as hereafter
amended) in Knight I Parent and Knight I Parent holds not fewer than 30% of the
outstanding
Company Common Stock or Greenhill holds directly not fewer than 10% of the
outstanding shares of Company Common Stock, which individual shall initially be
Xxxxxx Xxxxxxx;
(ii)
three individuals designated by Xx Xxxxxx, provided (A) Xx Xxxxxx remains chief
executive officer of the Company or holds or controls directly or indirectly not
fewer than 10% of the outstanding shares of Company Common Stock, (B) one of the
initial designees shall be Xx Xxxxxx, and (C) two of the designees shall in all
instances qualify as an "independent director" within the meaning of the
applicable rules and regulations of the American Stock Exchange or other
national stock exchange on which the Company common stock is listed or admitted;
and
(iii)
three individuals designated by Xxxxxxx, provided (A) Xxxxxxx remains chairman
of the board of the Company or holds or controls directly or indirectly not
fewer than 10% of the outstanding shares of Company Common Stock, (B) one of the
initial designees is Xxxxxxx, and (C) two of the designees shall in all
instances qualify as an "independent director" within the meaning of the
applicable rules and regulations of the American Stock Exchange or other
national stock exchange on which the Company common stock is listed or
admitted.
1.2 Size of the
Board. Each Party shall vote all of his, her or its Shares
from time to time and at all times, in whatever manner shall be necessary to
cause the size of the Board to be set and to remain at seven (7)
directors.
1.3 Removal of Board
Members. Each Party shall vote all Shares owned or controlled
by such Party from time to time and at all times in whatever manner as shall be
necessary to ensure that (i) no director elected pursuant to Section 1.1 of this
Agreement may be removed from office unless (A) such removal is directed or
approved by the Party having the right under Section 1.1 to
designate that director or (B) the Party originally entitled to designate or
approve such director pursuant to Section 1.1 is no
longer so entitled to designate or approve such director; and (ii) any vacancies
created by the resignation, removal or death of a director elected pursuant to
Section 1.1
shall be filled pursuant to the provisions of Section 1.1;
provided, that, any such replacement nominee is reasonably acceptable to a
majority of the Board members. All Parties agree to execute any
written consents required to effectuate the obligations of this
Agreement.
1.4 Compensation
Committee. Each Party shall vote all Shares owned or
controlled by such Party from time to time and at all times in whatever manner
as is necessary and shall take all other necessary or desirable actions within
its reasonable control, so that (i) the Board establishes and maintains a
compensation committee, and (ii) so long as GCP has the right hereunder to
designate an individual to serve on the Board and such individual qualifies as
an “independent director” within the meaning of the applicable rules and
regulations of the American Stock Exchange or other national stock exchange on
which the Company’s common stock is listed or admitted, such GCP designee will
be a member of the compensation committee.
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2. Term. This
Agreement shall take effect on the date of the closing of the transaction
contemplated by the Contribution Agreement (the “Effective Date”) and shall
continue in effect until and shall terminate upon the earlier to occur of (a) a
Change in Control of the Company, and (b) December 31, 2011. As used
herein, a “Change in
Control” shall mean the occurrence of any of the following
events:
(i) The
acquisition by any person or group of beneficial ownership of forty percent
(40%) or more of either (x) the then outstanding shares of Company Common Stock
(the “Outstanding Company
Stock”) or (y) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the “Outstanding
Company Voting Securities”); provided, however, that for purposes of this
Section 2(i),
the following acquisitions (whether the acquiring person or group acquires
beneficial ownership of forty percent (40%) or more of the Outstanding Company
Stock or any such acquisition results in any other person or group (other than
the acquiring person or group) owning forty percent (40%) or more of the
Outstanding Company Stock) shall not constitute a Change in
Control: (1) any acquisition directly from the Company, (2) any
acquisition by the Company, (3) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any entity controlled
by the Company or (4) any acquisition by any entity pursuant to a transaction
which complies with clauses (A), (B) or (C) of paragraph (iii) below;
or
(ii) Members of
the then incumbent Board cease to constitute at least a majority of the members
of the Board; or
(iii) Consummation
of a reorganization, merger or consolidation or sale or other disposition of all
or substantially all of the assets of the Company or an acquisition of assets of
another company (a “Business
Combination”), in each case, unless, following such Business Combination,
(A) all or substantially all of the persons who were the beneficial owners,
respectively, of the Outstanding Company Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination beneficially own,
directly or indirectly, more than fifty percent (50%) of, respectively, the then
outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the entity resulting from such Business
Combination (including without limitation an entity which as a result of such
transaction owns the Company or all or substantially all of the Company’s assets
either directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business Combination
of the Outstanding Company Stock and Outstanding Company Voting Securities, as
the case may be, (B) no person or group (excluding any employee benefit plan (or
related trust) of the Company or the entity resulting from such Business
Combination) beneficially owns, directly or indirectly, forty percent (40%) or
more of, respectively, the then outstanding shares of common stock of the entity
resulting from such Business Combination or the combined voting power of the
then outstanding voting securities of such entity except to the extent that such
ownership results solely from ownership of the Company that existed prior to the
Business Combination, and (C)
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at least a
majority of the members of the board of directors or similar governing body of
the entity resulting from such Business Combination were members of the then
incumbent Board at the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business Combination; or
(iv) Approval
by the stockholders of the Company of a complete liquidation or dissolution of
the Company.
Notwithstanding
the foregoing clause (i) of this definition: (x) the following acquisitions
(whether the acquiring Person or Group acquires Beneficial Ownership of forty
percent (40%) or more of the Outstanding Company Stock or Outstanding Company
Voting Securities or any such acquisition results in any other Person or Group
(other than the acquiring Person or Group) Beneficially Owning forty percent
(40%) or more of the Outstanding Company Stock or Outstanding Company Voting
Securities) shall not constitute a Change in Control unless, following such
acquisition, any Person or Group (other than the acquiring Person or Group
effecting the acquisition pursuant to the following clauses (A) through (D)) who
becomes the Beneficial Owner of forty percent (40%) or more of the Outstanding
Company Stock or Outstanding Company Voting Securities as a result of one or
more of such acquisitions shall thereafter acquire any additional shares of
Company Securities and, following such acquisition, Beneficially Owns forty
percent (40%) or more of either the Outstanding Company Stock or Outstanding
Company Voting Securities, in which case such acquisition shall constitute a
Change in Control: (A) any acquisition directly from the Company, (B) any
acquisition by the Company, (C) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any entity controlled
by the Company or (D) any acquisition by any entity pursuant to a transaction
which complies with clauses (A), (B) and (C) of the foregoing clause (iii) of
this definition; and (y) the acquisition of Beneficial Ownership of shares of
Common Stock by the Crusader Parent Entities pursuant to the Contribution
Agreement, the corresponding acquisition of Beneficial Ownership of shares of
Common Stock by any other Person or Group deemed to Beneficially Own the Common
Stock so acquired by the Crusader Parent Entities (any such Person and/or Group,
collectively with the Crusader Parent Entities and the Crusader Distributees,
the "Crusader
Group") and the acquisition of Beneficial Ownership of shares of Common
Stock as a result of the distribution by a Crusader Parent Entity to Crusader
Distributees of shares of Common Stock acquired pursuant to the Contribution
Agreement or directly from the Company prior to the date of the Contribution
Agreement shall not constitute a Change of Control, provided that if, (1) for so
long as the shares of Common Stock Beneficially Owned by any member of the
Crusader Group equals or exceeds forty percent (40%) of the Outstanding Company
Stock or the Outstanding Company Voting Securities, such member of the Crusader
Group shall obtain Beneficial Ownership of shares of Common Stock (other than as
a result of any acquisition described in the foregoing clauses (A) through (D)
of this paragraph or pursuant to an award issued under any equity based
compensation plan of the Company, including without limitation the 2008 LTIP)
representing one percent (1%) or more of the Outstanding Company Stock or
Outstanding Company Voting Securities or (2) at any time after such member of
the Crusader Group shall cease to Beneficially Own forty percent (40%) or more
of the Outstanding Company Stock and Outstanding Company Voting Securities, such
member of the Crusader Group shall obtain Beneficial Ownership of shares of
Stock (other than as a result of any acquisition described in the foregoing
clauses (A) through (D) of this paragraph
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or
pursuant to an award issued under any equity based compensation plan of the
Company, including without limitation the 2008 LTIP) representing forty percent
(40%) or more of either the Outstanding Company Stock or Outstanding Company
Voting Securities, then in the case of either (1) or (2) a Change of Control
shall be deemed to occur.
3. Specific
Enforcement. Each Party acknowledges and agrees that each
Party hereto will be irreparably damaged in the event any of the provisions of
this Agreement are not performed by the Parties in accordance with their
specific terms or are otherwise breached. Accordingly, it is agreed
that each Party shall be entitled to an injunction to prevent breaches of this
Agreement and to specific enforcement of this Agreement and its terms and
provisions in any action instituted in any court of the United States or any
state having subject matter jurisdiction, in addition to any other remedy to
which the Parties may be entitled at law or in equity.
4. Miscellaneous.
4.1 Transfers, Successors and
Assigns. The terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective successors and
assigns of the Parties. Nothing in this Agreement, express or
implied, is intended to confer upon any Party other than the Parties hereto or
their respective successors and assigns any rights, remedies, obligations,
or liabilities under or by reason of this Agreement, except as expressly
provided in this Agreement. Notwithstanding the foregoing, each
transferee or assignee of the Shares subject to this Agreement shall take such
Shares free and clear of the terms of this Agreement, unless such transferee or
assignee is a Party hereto or an Affiliate thereof. As used in this
Section 4.1, the term “Affiliate” shall have the meaning set forth in the
Contribution Agreement except that this Section 4.1 shall not apply to D.E. Shaw
Synoptic Portfolios, L.L.C.; Crusader Energy Group Holding Company, L.L.C. or
Knight Energy Parent as a result of a distribution of Shares to any of these
listed entities from a Party in which they hold an interest, nor shall this
Section 4.1 apply to any member of one or more of these entities who receives a
distribution of Shares from one or more of the listed entities in the
employee-member’s capacity as a member of one or more of the
entities.
4.2 Governing
Law. This Agreement shall be governed by and construed in
accordance with the General Corporation Law of the State of Nevada as to matters
within the scope thereof, and as to all other matters shall be governed by and
construed in accordance with the internal laws of the State of Nevada, without
regard to its principles of conflicts of laws.
4.3 Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument. This Agreement may also be executed and delivered by
facsimile signature and in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
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4.4 Titles and
Subtitles. The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.
4.5 Notices. All
notices and other communications given or made pursuant to this Agreement shall
be in writing and shall be deemed effectively given: (a) upon
personal delivery to the Party to be notified, (b) when sent by confirmed
electronic mail or facsimile if sent during normal business hours of the
recipient, and if not so confirmed, then on the next business day, (c) three (3)
days after having been sent by registered or certified mail, return receipt
requested, postage prepaid, or (d) one (1) day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt. All communications shall be sent to the
respective Parties at their address as set forth on the signature page, or to
such email address, facsimile number or address as subsequently modified by
written notice given in accordance with this Section
4.5.
4.6 Amendment. This
Agreement may be amended, modified or terminated and the observance of any term
hereof may be waived (either generally or in a particular instance and either
retroactively or prospectively) only by a written instrument executed by the
holders of 90% of the Shares at any such time subject to this Agreement whether
or not such person entered into or approved such amendment or
waiver.
4.7 Severability. The
invalidity of unenforceability of any provision hereof shall in no way affect
the validity or enforceability of any other provision.
4.8 Delays or
Omissions. No delay or omission to exercise any right, power
or remedy accruing to any party under this Agreement, upon any breach or default
of any other party under this Agreement, shall impair any such right, power or
remedy of such non-breaching or non-defaulting party nor shall it be construed
to be a waiver of any such breach or default, or an acquiescence therein, or of
or in any similar breach or default thereafter occurring; nor shall any waiver
of any single breach or default be deemed a waiver of any other breach or
default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any party of any
breach or default under this Agreement, or any waiver on the part of any party
of any provisions or conditions of this Agreement, must be in writing and shall
be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement or by law or
otherwise afforded to any party, shall be cumulative and not
alternative.
4.9 Entire
Agreement. This Agreement (including the exhibits hereto, if
any), constitutes the full and entire understanding and agreement between the
parties with respect to the subject matter hereof, and any other written or oral
agreement relating to the subject matter hereof existing between the parties are
expressly canceled.
4.10 Manner of
Voting. The voting of Shares pursuant to this Agreement may be
effected in person, by proxy, by written consent or in any other manner
permitted by applicable law.
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4.11 Costs of
Enforcement. If any Party to this Agreement seeks to enforce
its rights under this Agreement by legal proceedings, the non-prevailing Party
shall pay all costs and expenses incurred by the prevailing Party, including,
without limitation, all reasonable attorneys’ fees.
[Remainder
of Page Intentionally Left Blank]
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IN WITNESS
WHEREOF, the Parties have executed this Voting Agreement as of the date first
above written.
KNIGHT
ENERGY GROUP I HOLDING CO., LLC
By: Crusader
Energy Group Holding Co., LLC,
its Manager
By:
/s/ Xxxxx X. Xx
Xxxxxx
Xxxxx X. Xx Xxxxxx,
Manager
KNIGHT
ENERGY GROUP II HOLDING COMPANY, LLC
By: Knight
Energy Management Holding
Company, LLC, its
Manager
By: /s/ Xxxxx X. Xx
Xxxxxx
Xxxxx X. Xx Xxxxxx,
Manager
By: /s/ Xxxxxx X.
Xxxxxxx
Xxxxxx X. Xxxxxxx,
Manager
HAWK
ENERGY FUND I HOLDING COMPANY, LLC
By: Hawk
Holdings, LLC, its Manager
By:
/s/ Xxxxx X. Xx
Xxxxxx
Xxxxx X. Xx Xxxxxx,
Manager
/s/ Xxxxx X. Xx
Xxxxxx
Xxxxx X.
Xx Xxxxxx
/s/ Xxxxxx X.
Xxxxxxx
Xxxxxx X.
Xxxxxxx
[Signature
Page to Voting Agreement]
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Xxxxxxxxx
Capital Partners II, X.X.
Xxxxxxxxx
Capital Partners (Cayman, II, X.X.
Xxxxxxxxx
Capital Partners (Executive), II, X.X.
Xxxxxxxxx
Capital Partners (Employees), II, L.P.
By: GCP
Managing Partner II, L.P.,
Managing General Partner of each of
the
foregoing partnerships
By: Greenhill
Capital Partners, LLC,
General Partner of GCP Managing
Partner,
II, L.P.
By: /s/ V. Xxxxx
Xxxxxx
Name:
V. Xxxxx Xxxxxx
Title: Managing
Director
[Signature
Page to Voting Agreement]
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