Exhibit 10.2

 

STOCK VOTING AGREEMENT

 

STOCK VOTING AGREEMENT, dated as of                     , 20     (this
“Agreement”), is by and among the undersigned stockholder (the “Stockholder”),
and Cano Petroleum, Inc., a Delaware corporation (the “Company”).

 

WHEREAS, concurrently herewith, Resaca Exploitation, Inc., a Texas corporation
(“Resaca”), Resaca Acquisition Sub, Inc., a Delaware corporation and a
wholly-owned subsidiary of Resaca (“Merger Sub”), and the Company are entering
into an Agreement and Plan of Merger of even date herewith (the “Merger
Agreement”), pursuant to which Merger Sub will merge with and into Company (the
“Merger”).  Each capitalized term used herein and not otherwise defined shall
have the meaning set forth in the Merger Agreement;

 

WHEREAS, the Stockholder, as of the date hereof, has Beneficial Ownership, as
defined in Section 6 hereof, of the number of shares of Series D Convertible
Preferred Stock, no par value per share, of the Company (“Company Preferred
Stock”) set forth on Exhibit A hereto (together with any shares of Company
Preferred Stock or common stock, par value $0.0001 per share, of the Company
(“Company Common Stock”) acquired by the Stockholder after the date hereof and
prior to the termination of this Agreement whether upon the exercise of options,
warrants or rights, the conversion or exchange of convertible or exchangeable
shares, or by means of purchase, dividend, distribution or otherwise,
hereinafter collectively referred to as the “Shares”); and

 

WHEREAS, the Company has required, as condition to it entering into the Merger
Agreement, that the Stockholder enter into this Agreement.

 

NOW, THEREFORE, in consideration of the Company’s execution of the Merger
Agreement and the mutual covenants and agreements herein contained and other
good and valuable consideration, and intending to be legally bound hereby, it is
agreed as follows:

 

1.             Vote.

 

1.1           Agreement to Vote.  The Stockholder hereby revokes any and all
previous proxies with respect to the Stockholder’s Shares and irrevocably agrees
to vote and otherwise act (including pursuant to written consent) with respect
to all of such Shares in favor of the amendment to the Certificate of
Designations, Preferences and Rights of Series D Convertible Preferred Stock of
the Company, filed with the Secretary of State of Delaware on August 31, 2006
(the “Original Certificate”), attached hereto as Exhibit B (the “Amendment”),
and take all actions required in furtherance thereof, at any meeting or meetings
of the stockholders of the Company, and at any adjournment, postponement or
continuation thereof, at which the such matter is submitted for the
consideration and vote of the stockholders of the Company.  The Stockholder
shall not enter into any agreement or understanding with any person or entity
the effect of which would be inconsistent or violative of the provisions and
agreements contained in this Section 1.  The obligations of the Stockholder
under this Section 1 shall remain in effect with respect to the Shares until,
and shall terminate upon, the earlier to occur of the Effective Time or the
termination of the Merger Agreement in accordance with its terms.  The
Stockholder hereby agrees to execute such additional documents as the Company
may reasonably request to effectuate the foregoing.

 

1.2           Irrevocable Proxy.  Concurrently with the execution of this
Agreement, the Stockholder agrees to deliver to the Company a proxy in the form
attached hereto as Exhibit C (the “Proxy”), which shall be irrevocable to the
fullest extent permissible by applicable law, with respect to the Shares.

 

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2.             Representations and Warranties of the Stockholder.  The
Stockholder represents and warrants to the Company as follows:

 

2.1           Ownership of Shares.  On the date hereof, the Shares are all of
the Shares currently Beneficially Owned by the Stockholder.  The Stockholder has
sole voting power and sole power to issue instructions with respect to the
matters set forth in Section 1 hereof, sole power of disposition, sole power of
conversion and sole power to agree to all of the matters set forth in this
Agreement, in each case with respect to all of the Shares set forth on Exhibit A
hereto, with no limitations, qualifications or restrictions on such rights,
subject to applicable securities laws and the terms of this Agreement.  The
Stockholder currently has, and at all times during the term hereof will have,
good, valid and marketable title to the Shares, free and clear of all liens,
encumbrances and security interests (other than the encumbrances created by this
Agreement and other than restrictions on transfer under applicable federal and
state securities laws) and free of other restrictions, options, rights to
purchase or other claims that would adversely affect the ability of the
Stockholder to perform its obligations hereunder or pursuant to which the
Stockholder could be required to sell, assign or otherwise transfer the Shares.

 

2.2           Authority; Binding Agreement.  The Stockholder has the full legal
right, power and authority to enter into and perform all of its obligations
under this Agreement. This Agreement has been duly executed and delivered by the
Stockholder and constitutes a legal, valid and binding agreement of the
Stockholder, enforceable in accordance with its terms, subject, as to
enforceability, to bankruptcy, insolvency, reorganization, moratorium and other
laws of general applicability relating to or affecting creditors’ rights and to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).  Neither the execution and
delivery of this Agreement nor the consummation by the Stockholder of the
transactions contemplated hereby will (i) violate, or require any consent,
approval or notice under, any provision of any judgment, order, decree, statute,
law, rule or regulation applicable to the Stockholder or the Shares or
(ii) constitute a violation of, conflict with or constitute a default under, any
contract, commitment, agreement, understanding, arrangement or other restriction
of any kind to which the Stockholder is a party or by which the Stockholder is
bound, in each case the effect of which would adversely affect the ability of
the Stockholder to perform his obligations hereunder.

 

3.             Certain Covenants of the Stockholder.  Except in accordance with
the provisions of this Agreement, the Stockholder agrees with and covenants to
the Company as follows:

 

3.1           Transfer.  Prior to the termination of this Agreement, except as
otherwise provided herein, the Stockholder shall not:  (i) transfer (which term
shall include, without limitation, for the purposes of this Agreement, any sale,
gift, pledge, assignment, encumbrance or other disposition), whether directly or
indirectly (including by operation of law), or consent to any transfer of, any
or all of the Shares or any interest therein, except pursuant to the Merger;
(ii) grant any proxies, powers-of-attorney or other authorizations or consents
with respect to the Shares, deposit the Shares into a voting trust or enter into
a voting agreement or similar arrangement with respect to the Shares; or
(iii) enter into any contract, option or other agreement or understanding with
respect to any transfer of any or all such Shares or any interest therein.

 

3.2           Stop Transfer.  The Stockholder hereby agrees with and covenants
to each other party hereto that the Stockholder shall not request that the
Company register the transfer (book entry or otherwise) of any certificate or
uncertified interest representing any of its Shares, unless such transfer is
made in compliance with this Agreement.

 

3.3           Notifications.  The Stockholder shall, while this Agreement is in
effect, notify the Company promptly, but in no event later than two business
days, of the number of any shares of

 

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Company Common Stock acquired by the Stockholder after the date hereof.

 

3.4           Waiver of Claims.  The Stockholder agrees that it will not bring,
commence, institute, maintain, prosecute, participate in or voluntarily aid any
action, claim, suit or cause of action, in law or in equity, in any court or
before any governmental entity, which challenges the validity of or seeks to
enjoin the operation of any provision of this Agreement; provided, that the
Stockholder may defend against, contest or settle any such action, claim, suit
or cause of action brought against the Stockholder that relates to the
Stockholder’s capacity as a director or officer of the Company.

 

3.5           Appraisal Rights.  To the extent permitted by applicable law, the
Stockholder shall not exercise any rights (including, without limitation, under
Section 262 of the DGCL) to demand appraisal of any Shares that may arise with
respect to the Merger.

 

3.6           Additional Voting Agreements.  If requested by the Company, the
Stockholder agrees to use its commercially reasonable efforts to cause the other
beneficial owners of any shares of capital stock of the Company over which the
Stockholder has shared voting or dispositive power (such shares, the “Shared
Securities”) to execute stock voting agreements and Irrevocable Proxies, in
substantially similar form to this Agreement and the Irrevocable Proxy attached
hereto, prior to the Effective Time.  If not so requested by the Company, the
Stockholder nonetheless agrees to use its commercially reasonable efforts to
cause the Shared Securities to be voted in a manner consistent with this
Agreement.

 

4.             Effect of Purported Transfer.  The Company agrees with, and
covenants with, the Stockholder that the Company shall not register the transfer
(book entry or otherwise) of any certificate or uncertified interest
representing any of the Shares, unless such transfer is made in compliance with
this Agreement.  The parties hereto agree that any transfer of the Shares made
other than in compliance with this Agreement shall be null and void.  Any such
transfer shall convey no interest in any of the Shares purported to be
transferred, and the transferee shall not be deemed to be a stockholder of the
Company nor entitled to receive a new share certificate or any rights, dividends
or other distributions on or with respect to such Shares.

 

5.             Termination. This Agreement shall terminate, and neither the
Company nor the Stockholder shall have any rights or obligations hereunder, and
this Agreement shall become null and void and have no effect on the earlier of
(i) the Effective Time, (ii) upon the termination of the Merger Agreement in
accordance with its terms, (iii) upon any amendment, modification or supplement
to the Merger Agreement or any waiver by any party thereto that is individually
or in the aggregate adverse to the interests of the Stockholder without the
prior written consent of the Stockholder, or (iv) the failure of Resaca to
assume the Company’s obligations under the Transaction Documents (as defined in
the Original Certificate) to the extent not otherwise eliminated pursuant to
proposed Section (23) of the Amendment with respect to the Merger.

 

6.             Definitions.  For the purposes of this Agreement:

 

6.1           “Beneficial Ownership” or “Beneficial Owner” with respect to any
securities shall mean having “beneficial ownership” of such securities (as
determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934 (the
“Exchange Act”), including pursuant to any agreement, arrangement or
understanding, whether or not in writing; provided, however, that
notwithstanding Rule 13d-3 under the Exchange Act, “Beneficial Ownership” or
“Beneficial Owner” for purposes of this Agreement shall include only those
securities over which the Stockholder has sole voting and dispositive power. 
Without duplicative counting of the same security by the same holder, securities
Beneficially Owned by a Person shall include securities Beneficially Owned by
all other Persons with whom such Person would constitute a “group” as within the
meaning of Section 13(d)(3) of the Exchange Act.

 

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6.2           “Person” shall mean an individual, corporation, partnership, joint
venture, association, trust, unincorporated organization or other entity.

 

7.     Miscellaneous.

 

7.1           Notices.  Any notice or communication required or permitted
hereunder shall be in writing and either delivered personally, telegraphed or
telecopied or sent by certified or registered mail, postage prepaid, and shall
be deemed to be given, dated and received (i) when so delivered personally,
(ii) upon receipt of an appropriate electronic answerback or confirmation when
so delivered by telegraph or telecopy (to such number specified below or another
number or numbers as such person may subsequently designate by notice given
hereunder), or (iii) five business days after the date of mailing to the
following address or to such other address or addresses as such person may
subsequently designate by notice given hereunder, if so delivered by mail:

 

If to the Company:

 

Cano Petroleum, Inc.

 

 

Burnett Plaza

 

 

801 Cherry St., Suite 3200

 

 

Fort Worth, Texas 76102

 

 

Telephone: (817) 698-0900

 

 

Facsimile:  (817) 334-0222

 

 

Attention:  Phillip B. Feiner, Esq., General Counsel

 

 

 

with a copy to:

 

Thompson & Knight LLP

 

 

1722 Routh Street

 

 

Suite 1500

 

 

Dallas, Texas 75201-2533

 

 

Telephone: (214) 969-1303

 

 

Facsimile: (214) 999-1695

 

 

Attention: Wesley P. Williams

 

If to the Stockholder: at the address set forth on Exhibit A

 

7.2           Tax Matters.  The parties agree to treat the exchange of Company
Preferred Stock for Parent Series A Shares as qualifying for non-recognition of
gain or loss for federal and any applicable state or local income tax purposes,
except to the extent of payments received for accrued dividends, and further
agree to file all U.S. federal, state and local income tax and information
returns and reports consistent with such treatment unless and until the
occurrence of a “determination” to the contrary under section 1313 of the
Internal Revenue Code of 1986, as amended.

 

7.3           Further Actions.  Each of the parties hereto agrees that it will
use its commercially reasonable efforts to do all things necessary to effectuate
this Agreement.  The Stockholder and the Company hereby covenant and agree to
execute and deliver any additional documents reasonably necessary or desirable
to carry out the purpose and intent of this Agreement.

 

7.4           Entire Agreement.  This Agreement, together with the documents
expressly referred to herein, constitutes the entire agreement, and supersedes
all prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof.

 

7.5           Amendments.  This Agreement may not be modified, amended, altered
or supplemented, except upon the execution and delivery of a written agreement
executed by the parties hereto.  The failure of any party hereto to exercise any
right, power or remedy provided under this Agreement or otherwise

 

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available in respect hereof at law or in equity, or to insist upon compliance by
any other party hereto with its obligations hereunder, and any custom or
practice of the parties at variance with the terms hereof shall not constitute a
waiver by such party of its right to exercise any such or other right, power or
remedy or to demand such compliance.

 

7.6           Expenses.  All costs and expenses incurred in connection with this
Agreement shall be paid by the party incurring such cost or expense. 
Notwithstanding the foregoing, the Company will reimburse to Stockholder its
reasonable out-of-pocket expenses (including attorneys fees, etc.).

 

7.7           Specific Performance.  Each of the parties hereto acknowledges and
agrees that in the event of any breach of this Agreement, each non-breaching
party would be irreparably and immediately harmed and could not be made whole by
monetary damages. It is accordingly agreed that the parties hereto (i) will
waive, in any action for specific performance, the defense of adequacy of a
remedy at law and (ii) shall be entitled, in addition to any other remedy to
which they may be entitled at law or in equity, including monetary damages, to
compel specific performance of this Agreement without the necessity of posting
bond or proving actual damages.

 

7.8           Assignment.  This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, assigns and
personal representatives, but neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
without the prior written consent of the other parties.

 

7.9           Governing Law.  This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware, without giving effect to the
principles of conflicts of law thereof.

 

7.10         Counterparts.  This Agreement may be executed manually or by
facsimile in two or more counterparts, all of which shall be considered one and
the same agreement and shall become effective when a counterpart hereof shall
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.

 

7.11         Severability.  Any term or provision of this Agreement that is
invalid or unenforceable in any jurisdiction shall, as to such 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.  If any provision of
this Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.

 

7.12         Effect of Headings. The section headings herein are for convenience
only and shall not affect the construction or interpretation of this Agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

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

 

 

CANO PETROLEUM, INC.

 

 

 

 

 

By:

 

 

Name: Benjamin Daitch

 

Title: Chief Financial Officer

 

 

 

 

 

 

 

(Printed Name of Stockholder)

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

SIGNATURE PAGE TO STOCK VOTING AGREEMENT

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EXHIBIT A

 

Stock Ownership and Address Notice List

 

Beneficial Ownership:

 

                 shares of Company Preferred Stock

 

 

                 shares of Company Common Stock, acquirable upon conversion of
the Company Preferred Stock.

 

 

 

Address for Notices:

 

 

 

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EXHIBIT B

 

CERTIFICATE OF AMENDMENT

TO

CERTIFICATE OF DESIGNATIONS, PREFERENCES

AND RIGHTS OF SERIES D CONVERTIBLE PREFERRED STOCK

OF

CANO PETROLEUM, INC.

 

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Cano Petroleum, Inc., a corporation organized and existing under the laws of the
State of Delaware (the “Company”), DOES HEREBY CERTIFY as follows:

 

FIRST:  That the Board of Directors of the Company, at a duly convened meeting
on September 29, 2009, duly adopted resolutions approving and adopting the
amendments set forth below to the Certificate of Designations of Series D
Convertible Preferred Stock of the Company (the “Certificate of Designations”),
and that such amendments have been approved and adopted by the requisite number
of existing holders of the Common Stock and the Series D Convertible Preferred
Stock of the Company.

 

SECOND:  That the amendments set forth below have been duly adopted in
accordance with the applicable provisions of Section 242 of the General
Corporation Law of the State of Delaware.

 

THIRD: That the Certificate of Designations is hereby amended as follows:

 

A.                                   The following is added as Section (23) of
the Certificate of Designations:

 

Notwithstanding anything to the contrary contained in the Transaction Documents,
the holders of the Preferred Shares shall have none of the preferences, rights,
privileges or powers of, or restrictions provided for the benefit of, the
Preferred Shares contained in the Transaction Documents relating to, arising out
of or caused by the execution and delivery of that certain Agreement and Plan of
Merger dated September 29, 2009, by and among Resaca Exploitation, Inc., a Texas
corporation (“Resaca”), Resaca Acquisition Sub, Inc., a Delaware corporation and
the Company (the “Merger Agreement”) and the consummation of the transactions
contemplated thereby (the “Merger”) (including, without limitation, any rights
to require the Company to redeem any of the Preferred Shares or notice, voting
or consent rights), except to receive the Preferred Conversion Consideration (as
such term is defined in the Merger Agreement) pursuant to the terms of the
Merger Agreement and such other rights (including registration rights and
preemptive rights having terms consistent with those presently contained in the
Transaction Documents) not inconsistent with the foregoing as shall be
reasonably acceptable to the Company, Resaca and the Required Holders.  In the
event that (i) the Merger Agreement is terminated in accordance with its terms,
(ii) the Merger Agreement is amended, modified or

 

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supplemented or any waiver is given by any party thereto that is individually or
in the aggregate adverse to the interests of the holders of the Preferred Shares
without the prior written consent of the Required Holders or (iii) Parent fails
to assume the Company’s obligations under the Transaction Documents to the
extent not otherwise eliminated pursuant to this Section (23) with respect to
the Merger, this Section (23) shall be inoperative and of no force or effect.

 

IN WITNESS WHEREOF, the Company has caused this Certificate of Amendment to be
signed by S. Jeffrey Johnson, its Chairman of the Board of Directors and Chief
Executive Officer, as of the       day of                    , 2009.

 

 

CANO PETROLEUM, INC.

 

 

 

 

 

 

By:

 

 

Name:

S. Jeffrey Johnson,

 

Title:

Chairman of the Board of Directors and Chief Executive Officer

 

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EXHIBIT C

 

Irrevocable Proxy

 

The undersigned stockholder of Cano Petroleum, Inc., a Delaware corporation (the
“Company”), hereby irrevocably (to the fullest extent permitted by law) appoints
the directors on the board of directors of the Company, and each of them, as the
sole and exclusive attorneys and proxies of the undersigned, with full power of
substitution and resubstitution, to vote and exercise all voting and related
rights (to the full extent that the undersigned is entitled to do so) with
respect to all of the shares of capital stock of the Company that now or
hereafter may be beneficially owned by the undersigned, and any and all other
shares or securities of the Company issued or issuable in respect thereof on or
after the date hereof (collectively, the “Shares”) in accordance with the terms
of this Proxy.  The Shares beneficially owned by the undersigned stockholder of
the Company as of the date of this Proxy are listed on the final page of this
Proxy.  Upon the execution of this Proxy by the undersigned, any and all prior
proxies given by the undersigned with respect to any Shares shall be revoked and
the undersigned hereby agrees not to grant any subsequent proxies with respect
to the Shares until after the Expiration Date (as defined below).

 

This Proxy is irrevocable (to the fullest extent permitted by law), is coupled
with an interest and is granted pursuant to the Stock Voting Agreement of even
date herewith by and between the Company and the undersigned stockholder (the
“Stock Voting Agreement”), and is granted in consideration of the Company
entering into the Agreement and Plan of Merger (the “Merger Agreement”), by and
among the Resaca, Merger Sub and the Company, which provides for the merger of
Merger Sub with and into the Company, with the Company being the surviving
corporation (the “Merger”).  This Proxy shall terminate and be of no further
force and effect automatically upon the Expiration Date.  As used herein, the
term “Expiration Date” shall mean the date that the Stock Voting Agreement
terminates in accordance with its terms.

 

The attorneys and proxies named above, and each of them, are hereby authorized
and empowered by the undersigned, at any time prior to the Expiration Date, to
act as the undersigned’s attorney and proxy to vote the Shares, and to exercise
all voting, consent and similar rights of the undersigned with respect to the
Shares (including, without limitation, the power to execute and deliver written
consents) in favor of the Amendment (as such term is defined in the Stock Voting
Agreement) and all actions required in furtherance thereof, at any meeting or
meetings of the stockholders of the Company, and at any adjournment,
postponement or continuation thereof, at which the Amendment is submitted for
the consideration and vote of the stockholders of the Company.

 

The attorneys and proxies named above may not exercise this Proxy to vote,
consent or act on any other matter except as provided above.  The undersigned
stockholder may vote the Shares on all other matters.

 

Any obligation of the undersigned hereunder shall be binding upon the successors
and assigns of the undersigned.

 

[Remainder of Page Intentionally Left Blank]

 

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Dated:

 

 

 

 

 

 

 

 

Signature of Stockholder:

 

 

 

 

 

 

1.

 

Print Name of Stockholder:

 

 

 

 

2.

 

Shares beneficially owned:

 

 

 

 

 

shares of Company Preferred Stock

 

 

 

 

 

shares of Company Common Stock

 

 

 

 

 

shares of Company Common Stock issuable upon the exercise of outstanding
options, warrants or other rights (including upon conversion shares of Company
Preferred Stock)

 

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