Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

dated as of March 22, 2012

between

CONTANGO ORE, INC.

and

THE PURCHASERS NAMED IN THIS AGREEMENT

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TABLE OF CONTENTS

 

               Page   1.    Agreement to Purchase Securities      1    2.   
Closing      1    3.    Purchasers’ Representations and Warranties      1      
3.1    Investment Intent      1       3.2    Access to Information      2      
3.3    Accredited Investor      2       3.4    Knowledge and Experience      2
      3.5    Suitability      2       3.6    Ability to Bear Risk of Loss      2
      3.7    Non-Registered Securities      3       3.8    Truth and Accuracy   
  3       3.9    Authority      3       3.10    No Violation      3       3.11
   Enforceability      3       3.12    Reliance on Own Advisers      3      
3.13    High Degree of Risk      3       3.14    Brokers or Finders      4      
3.15    Short Sales      4    4.    Issuer’s Representations and Warranties     
4       4.1    Corporate Existence; Authority      4       4.2    Enforceability
     4       4.3    Authorization of the Purchased Securities      4       4.4
   Capitalization and Other Capital Stock Matters      4       4.5    No
Conflicts      5       4.6    Financial Statements and SEC Documents      5   
   4.7    Litigation      5       4.8    No Material Adverse Change      5      
4.9    Environmental Matters      6       4.10    Truth and Accuracy      6   
   4.11    Compliance with Laws, Other Instruments      6       4.12   
Observance of Agreements, Statutes and Orders      7       4.13    Brokers or
Finders      7    5.    Conditions of Purchasers’ Obligations at Closing      7
      5.1    Representations and Warranties      7       5.2    Performance     
7       5.3    Proceedings and Documents      7       5.4    Opinion of Issuer
Counsel      7       5.5    Registration Rights Agreement      7       5.6   
Consents, Permits, and Waivers      8       5.7    Secretary’s Certificate     
8   

 

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TABLE OF CONTENTS (continued)

 

 

               Page   6.    Conditions of the Issuer’s Obligations at Closing   
  8       6.1    Representations and Warranties      8       6.2    Payment of
Purchase Price      8       6.3    Registration Rights Agreement      8      
6.4    Accredited Investor Questionnaire      8       6.5    Qualifications     
8    7.    Restrictions on Transfer      8       7.1    Resale Restrictions     
8       7.2    Restrictive Legend      9       7.3    Illiquid Investment      9
   8.    Indemnification      9       8.1    Indemnification by Issuer      9   
   8.2    Indemnification by Purchaser      10       8.3    Claims for
Indemnification      10    9.    Notices      12    10.    Reliance      12   
11.    Miscellaneous      13       11.1    Survival      13       11.2   
Assignment      13       11.3    Execution and Delivery of Agreement      13   
   11.4    Titles      13       11.5    Severability      13       11.6   
Entire Agreement      13       11.7    Waiver and Amendment      13       11.8
   Counterparts      13       11.9    Governing Law      13       11.10   
Attorney’s Fees      13   

 

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TABLE OF CONTENTS (continued)

 

 

Schedules

     1    Name of Purchaser

Exhibits

     A    Accredited Investor Certificate B    Opinion of Morgan, Lewis &
Bockius LLP C    Form of Registration Rights Agreement

 

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SECURITIES PURCHASE AGREEMENT

This SECURITIES PURCHASE AGREEMENT (“Agreement”) is made and entered into as of
March 22, 2012, by and between Contango ORE, Inc., a Delaware corporation (the
“Issuer”), and the person listed on Schedule 1 attached to this Agreement (each
a “Purchaser” and, together with each other Purchaser who executes this
Agreement, collectively the “Purchasers”).

WHEREAS, the Issuer desires to issue and to sell to the Purchasers, and the
Purchasers desire to purchase from the Issuer, the Common Stock (as hereinafter
defined), all in accordance with the terms and provisions of this Agreement; and

NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties and covenants herein contained, the parties hereto
hereby agree as follows:

1. Agreement to Purchase Securities. Subject to the terms and conditions
hereinafter set forth in this Agreement, each Purchaser hereby agrees severally
and not jointly to purchase at the Closing, and the issuer agrees to sell and
issue to each Purchaser at the Closing at a price of $10.00 per share, the
number of shares of the Issuer’s Common Stock, par value $0.01 per share (the
“Common Stock”), shown opposite such Purchaser’s name on Schedule 1, for an
aggregate purchase price (the “Purchase Price”) to be paid by such Purchaser in
the amount shown opposite such Purchaser’s name on Schedule 1. The shares of the
Issuer’s Common Stock, par value $0.01 per share, purchased pursuant to this
Agreement are collectively referred to herein as the “Purchased Securities”).

2. Closing. Subject to the satisfaction or waiver of the conditions in this
Agreement, the purchase and sale of the Purchased Securities shall take place at
the offices of the Issuer at 3700 Buffalo Speedway, Suite 960, Houston, Texas
77098, at 10:00 a.m. (local time), on March 22, 2012, or at such other time and
place as the Issuer and the Purchasers acquiring, in the aggregate, at least
Five Million Dollars ($5,000,000) of Purchased Securities to be sold pursuant to
this Agreement agree upon orally or in writing (which time and date are
designated as the “Closing”). At the Closing, the Issuer shall deliver to each
Purchaser a certificate or certificates representing the shares of Common Stock
that such Purchaser is purchasing in the name and to the address specified by
each Purchaser on Schedule 1 against payment of the Purchase Price therefor by
wire transfer of immediately available funds.

3. Purchasers’ Representations and Warranties. Each Purchaser hereby represents
and warrants to the Issuer that:

3.1 Investment Intent. Such Purchaser is acquiring the Purchased Securities
solely for the Purchaser’s own account for investment purposes, and not with a
view to, or for offer or sale in connection with, any distribution of the
Purchased Securities in violation of the Securities Act of 1933, as amended (the
“Securities Act”). By such representation, such Purchaser means that no other
person has a beneficial interest in the Purchased Securities, and that no other
person has furnished or will furnish directly or indirectly, any part of or
guarantee the payment of any part of the consideration to be paid by such
Purchaser to the Issuer in connection therewith. Such Purchaser does not intend
to dispose of all or any part of the Purchased Securities except in compliance
with the provisions of the Securities Act and

 

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applicable state securities laws, and understands that the Purchased Securities
are being offered pursuant to a specific exemption under the provisions of the
Securities Act, which exemption(s) depends, among other things, upon compliance
with the provisions of the Securities Act.

3.2 Access to Information. Such Purchaser has received a copy of the Issuer’s
annual report on Form 10-K for the year ended June 30, 2011 (the “Annual
Report”) and quarterly report on Form 10-Q for the quarter ended December 31,
2011 (the “Quarterly Report”) and has reviewed them carefully, including the
risk factors set forth therein. In addition, the Purchaser has received and
reviewed a copy of the Issuer’s proxy statement for its annual meeting of
stockholders held on December 8, 2011 (the “Proxy Statement”) and Confidential
Private Placement Memorandum dated February 6, 2012 provided to each Purchaser
and the Issuer’s Exchange Act filings filed on or prior to the date of this
Agreement (collectively, the “Confidential Private Placement Memorandum”). If
desired, the Purchaser has also sought and obtained from management of the
Issuer such additional information concerning the business, management and
financial affairs of the Issuer as the Purchaser has deemed necessary or
appropriate in evaluating an investment in the Issuer and determining whether or
not to purchase the Purchased Securities.

3.3 Accredited Investor. By completing the Accredited Investor Certification
attached as Exhibit A, such Purchaser represents and warrants to the Issuer that
it is a “qualified institutional buyer” within the meaning of Rule 144A under
the Securities Act and an institutional “accredited investor” within the meaning
of subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the Securities Act, or
an “accredited investor,” as defined in Section 501 (a) of Regulation D, or, if
the Purchased Securities are to be purchased for one of more accounts (“investor
accounts”) for which it is acting as fiduciary or agent, each such investor
account is such an investor on a like basis; in the normal course of its
business, it invests in or purchases securities similar to the Purchased
Securities and it has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of purchasing the
Purchased Securities; and it is aware that it (or any investor account) may be
required to bear the economic risk of an investment in the Purchased Securities
for an indefinite period of time and it (or such account) is able to bear such
risk for an indefinite period.

3.4 Knowledge and Experience. Such Purchaser is experienced in evaluating and
investing in the securities of businesses in the development stage, and has such
knowledge and experience in financial and business matters that it is capable of
evaluating the merits and risks of an investment in the Purchased Securities and
of protecting its interests in connection with an acquisition of the Purchased
Securities.

3.5 Suitability. Such Purchaser has carefully considered, and has, to the extent
the Purchaser deems it necessary, discussed with the Purchaser’s own
professional legal, tax and financial advisers the suitability of an investment
in the Purchased Securities for the Purchaser’s particular tax and financial
situation, and the Purchaser has determined that the Purchased Securities are a
suitable investment for the Purchaser.

3.6 Ability to Bear Risk of Loss. Such Purchaser is financially able to hold the
Purchased Securities subject to restrictions on transfer for an indefinite
period of time, and is capable of bearing the economic risk of losing up to the
entire amount of its investment in the Purchased Securities.

 

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3.7 Non-Registered Securities. Such Purchaser understands that (i) the Purchased
Securities (A) have not been registered under the Securities Act or any state
securities laws, (B) will be issued in reliance upon exemptions from the
registration and prospectus delivery requirements of the Securities Act, and
(C) will be issued in reliance upon exemptions from the registration and
prospectus delivery requirements of state securities laws which relate to
private offerings, and (ii) the Purchaser must therefore bear the economic risk
of such investment indefinitely unless a subsequent disposition thereof is
registered or exempted under the Securities Act and applicable state securities
laws or is exempt therefrom.

3.8 Truth and Accuracy. All representations and warranties made by such
Purchaser in this Agreement are true and accurate as of the date hereof and
shall be true and accurate as of the date the Issuer issues the Purchased
Securities. If at any time prior to the issuance of the Purchased Securities any
representation or warranty shall not be true and accurate in any respect, such
Purchaser shall so notify the Issuer.

3.9 Authority. The individual(s) executing and delivering this Agreement on
behalf of such Purchaser have been duly authorized to execute and deliver this
Agreement on behalf of such Purchaser, the signature of such individual(s) is
binding upon such Purchaser, such Purchaser is duly organized and subsisting
under the laws of the jurisdiction in which it was organized, and such Purchaser
was not formed for the specific purpose of acquiring the Purchased Securities.

3.10 No Violation. The execution and delivery of this Agreement and the
consummation of the transactions or performance of the obligations contemplated
by this Agreement do not and will not violate any term of such Purchaser’s
organizational documents.

3.11 Enforceability. Such Purchaser has duly executed and delivered this
Agreement and (subject to its execution by the Issuer) it constitutes a valid
and binding agreement of such Purchaser enforceable in accordance with its terms
against such Purchaser, except as such enforceability may be limited by
principles of public policy, and subject to laws of general application relating
to bankruptcy, insolvency and the relief of debtors and rules of law governing
specific performance, injunctive relief or other equitable remedies.

3.12 Reliance on Own Advisers. In connection with such Purchaser’s investment in
the Purchased Securities, such Purchaser has not relied upon the Issuer or its
advisers for legal or tax advice, and has, if desired, in all cases sought the
advice of such Purchaser’s own legal counsel and tax advisers.

3.13 High Degree of Risk. Such Purchaser has been advised and understands that
the purchase of the Purchased Securities involves a high degree of risk and such
Purchaser has read and understands the risk factors under the heading “Risk
Factors” set forth in the Annual Report on Form 10-K for the fiscal year ended
June 30, 2011 and the Quarterly Report on Form 10-Q for the quarter ended
December 31, 2011.

 

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3.14 Brokers or Finders. Such Purchaser has not dealt with any broker or finder
other than Strategas Securities LLC (“Strategas”) and Strata Capital, Inc.
(“Strata”), acting as placement agents, and certain registered representatives
employed by Strategas, in connection with the transactions contemplated by the
Agreement, and has not incurred, and shall not incur, directly or indirectly,
any liability for any brokerage or finders’ fees or agents’ commissions or any
similar charges in connection with the transactions contemplated by the
Agreement.

3.15 Short Sales. As of the date of this Agreement, such Purchaser and its
affiliates do not have, to Purchaser’s knowledge, and during the 30 day period
prior to the date of this Agreement such Purchaser and its affiliates, to
Purchaser’s knowledge, have not entered into, any “put equivalent position” as
such term is defined in Rule 16a-1 under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) or short sale positions with respect to the Common
Stock of the Issuer.

4. Issuer’s Representations and Warranties. The Issuer hereby represents and
warrants to the Purchasers that:

4.1 Corporate Existence; Authority. The Issuer is a corporation duly organized,
validly existing and in good standing under the laws of Delaware, and it has all
requisite power and authority to carry on its business as it is being conducted.
The individual executing and delivering this Agreement on behalf of the Issuer
has been duly authorized to execute and deliver this Agreement on behalf of the
Issuer, and the signature of such individual is binding upon the Issuer.

4.2 Enforceability. The Issuer has duly executed and delivered this Agreement
and (subject to its execution by the Purchasers) it constitutes a valid and
binding agreement of the Issuer enforceable in accordance with its terms against
the Issuer, except as such enforceability may be limited by principles of public
policy, and subject to laws of general application relating to bankruptcy,
insolvency and the relief of debtors and rules of law governing specific
performance, injunctive relief or other equitable remedies.

4.3 Authorization of the Purchased Securities. All of the outstanding shares of
Common Stock of the Issuer have been duly and validly issued and are fully paid,
non-assessable and not subject to any preemptive or similar rights. When issued,
the Purchased Securities will have been duly authorized, reserved for issuance
and, when issued and delivered to the Purchasers against payment therefor as
provided by herein, will be validly issued, fully paid and non-assessable, and
the issuance of such Purchased Securities will not be subject to any preemptive
or similar rights.

4.4 Capitalization and Other Capital Stock Matters. The authorized, issued and
outstanding capital of the Issuer as of the date hereof, is as set forth under
the caption “Description of Other Capital Stock of the Company” in the
Confidential Private Placement Memorandum. Except as disclosed in the Issuer’s
Reports on Form 10-K and Form 10-Q for the fiscal year ended June 30, 2011 and
December 31, 2011, respectively, and in the Confidential Private Placement
Memorandum, the Issuer has not issued any other options, warrants, script rights
to subscribe to, calls or commitments of any character whatsoever relating to,
or securities, rights or obligations convertible into or exercisable or
exchangeable for, or entered into any

 

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agreement giving any Person any right to subscribe for or acquire, any shares of
its capital stock. Except for customary adjustments as a result of stock
dividends, stock splits, combinations of shares, reorganizations,
recapitalizations, reclassifications or other similar events, there are no
anti-dilution or price adjustment provisions contained in any security issued by
the Issuer (or in any agreement providing rights to security holders), and the
issuance and sale of the Purchased Securities hereunder will not obligate the
Issuer to issue shares of Common Stock or other securities to any Person or
result in a right of any holder of securities to adjust the exercise,
conversion, exchange or reset price under such securities. The Purchased
Securities conform in all material respects to the description thereof contained
in the Confidential Private Placement Memorandum.

4.5 No Conflicts. The issuance and sale of the Purchased Securities to the
Purchasers as contemplated hereby and the performance of this Agreement will not
violate or conflict with the Issuer’s Certificate of Incorporation or Bylaws or
any agreements to which the Issuer is a party or by which it is otherwise bound
or, to the Issuer’s knowledge, any statute, rule or regulation (federal, state,
local or foreign) to which it is subject.

4.6 Financial Statements and SEC Documents. The Issuer has made available the
Annual Report, the Quarterly Report and the Proxy Statement to the Purchasers.
As of the date hereof, the Annual Report, the Quarterly Report and the Proxy
Statement do not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. The Issuer has included in the Annual Report a list of all
material agreements, contracts and other documents that it reasonably believes
are required to be filed as exhibits to the Annual Report. The financial
statements of the Issuer incorporated by reference in the Confidential Private
Placement Memorandum present fairly the consolidated financial position of the
Issuer in accordance with generally accepted accounting principles as of and at
the dates indicated and present fairly the results of operations and cash flow
of the Issuer of and at the dates indicated. Such financial statements of the
Issuer have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods involved, except
as may be expressly stated in the related notes thereto.

4.7 Litigation. Except as otherwise disclosed in the Confidential Private
Placement Memorandum, there is no litigation or other legal, administrative or
governmental proceeding pending or, to the knowledge of the Issuer, threatened
against or relating to the Issuer or its properties or business, that if
determined adversely to the Issuer may reasonably be expected to have a material
adverse effect on the present or future operations or financial condition of the
Issuer.

4.8 No Material Adverse Change. Since the date of the Quarterly Report, there
has not been any material adverse change in the business, operations,
properties, prospects, assets, or condition of the Issuer, and, to the Issuer’s
knowledge, no event has occurred or circumstance exists that may result in such
a material adverse change.

 

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4.9 Environmental Matters.

(a) Except as otherwise disclosed in the Confidential Private Placement
Memorandum or as would not be reasonably likely to have a material adverse
effect change in the business, operations, properties, prospects, assets, or
condition of the Issuer: (i) to Issuer’s knowledge, Issuer has complied with all
applicable Environmental Laws (as defined in Section 4.9(b)); (ii) to Issuer’s
knowledge, Issuer is not subject to liability for any Hazardous Substance
disposal or contamination on any third party property; (iii) to Issuer’s
knowledge, Issuer has not been associated with any release or threat of release
of any Hazardous Substance; (v) Issuer has not received any notice, demand,
letter, claim or request for information alleging that Issuer may be in
violation of or liable under any Environmental Law; (vi) Issuer is not subject
to any orders, decrees, injunctions or other arrangements with any governmental
entity or is subject to any indemnity or other agreement with any third party
relating to liability under any Environmental Law or relating to Hazardous
Substances; and (vii) there are no circumstances or conditions involving Issuer
that could reasonably be expected to result in any claims, liability,
investigations, costs or restrictions on the ownership, use or transfer of any
property of Issuer pursuant to any Environmental Law.

(b) For purposes of this Agreement, the term “Environmental Law” means any
federal, state, local or foreign law, regulation, order, decree, permit,
authorization, opinion, common law or agency requirement relating to: (A) the
protection, investigation or restoration of the environment, health and safety,
or natural resources, (B) the handling, use, presence, disposal, release or
threatened release of any Hazardous Substance or (C) noise, odor, wetlands,
pollution, contamination or any injury or threat of injury to persons or
property.

(c) For purposes of this Agreement, the term “Hazardous Substance” means any
substance that is: (A) listed, classified or regulated pursuant to any
Environmental Law; (B) any petroleum product or by-product, asbestos-containing
material, lead-containing paint or plumbing, polychlorinated biphenyls,
radioactive materials or radon; or (C) any other substance which is the subject
of regulatory action by any governmental entity pursuant to any Environmental
Law.

4.10 Truth and Accuracy. All representations and warranties made by the Issuer
in this Agreement are true and accurate as of the date hereof and shall be true
and accurate as of the date the Issuer issues the Purchased Securities. If at
any time prior to the issuance of any of the Purchased Securities any
representation or warranty shall not be true and accurate in any respect, the
Issuer shall so notify the Purchasers.

4.11 Compliance with Laws, Other Instruments. The execution, delivery and
performance by the Issuer of this Agreement will not (a) contravene, result in
any breach of, or constitute a default under or result in the creation of any
lien in respect of any property of the Issuer under, any indenture, mortgage,
deed of trust, loan, purchase or credit agreement, lease, corporate charter or
bylaws, or any other material agreement or instrument to which the Issuer is
bound or by which the Issuer or any of its respective properties may be bound or
affected, (b) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or governmental authority applicable to the Issuer or (c) violate any
provision of any statute or other rule or regulation of any governmental
authority applicable to the Issuer.

 

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4.12 Observance of Agreements, Statutes and Orders. The Issuer is not in default
under any term of any agreement or instrument to which it is a party or by which
it is bound, or any order, judgment, decree or ruling of any court, arbitrator
or governmental authority or is in violation of any applicable law, ordinance,
rule or regulation (including without limitation environmental laws) of any
governmental authority which default or violation could have a material adverse
effect upon the business or operations of the Issuer.

4.13 Brokers or Finders. Except for Strategas and certain registered
representatives employed by Strategas and Strata, the Issuer has not dealt with
any broker or finder in connection with the transactions contemplated by the
Agreement, and except for certain fees and expenses payable by the Issuer to
Strategas, the Issuer has not incurred, and shall not incur, directly or
indirectly, any liability for any brokerage of finders’ fees or agents’
commissions or any similar charges in connection with the transactions
contemplated by the Agreement.

5. Conditions of Purchasers’ Obligations at Closing. The obligations of each
Purchaser under Section 1 and Section 2 are subject to the fulfillment on or
before the Closing of each of the following conditions, the waiver of which
shall not be effective against any Purchaser who does not consent in writing to
such waiver:

5.1 Representations and Warranties. The representations and warranties of the
Issuer contained in Section 4 shall be true and correct on and as of the Closing
with the same effect as though such representations and warranties had been made
on and as of the date of such Closing (other than representations and warranties
that relate only to a certain date, which shall be true as of such date).

5.2 Performance. The Issuer shall have performed and complied with the covenants
and agreements in this Agreement that are required to be performed or complied
with by it on or before the Closing.

5.3 Proceedings and Documents. All corporate and other proceedings in connection
with the Agreement contemplated to be effected at the Closing and all documents
incident thereto shall be reasonably satisfactory in form and substance to
Purchasers’ counsel, and they shall have received all such counterpart original
and certified or other copies of such documents as they may reasonably request.

5.4 Opinion of Issuer Counsel. Each Purchaser shall have received from Morgan,
Lewis & Bockius LLP, counsel for the Issuer, an opinion, dated as of the
Closing, substantially in the form of Exhibit B.

5.5 Registration Rights Agreement. Issuer shall have delivered a copy of the
Registration Rights Agreement, substantially in the form of Exhibit C dated as
of the Closing Date and executed by the Issuer.

 

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5.6 Consents, Permits, and Waivers. The Issuer shall have obtained any and all
consents, permits and waivers necessary or appropriate for consummation of the
transactions contemplated by the Agreement.

5.7 Secretary’s Certificate. Purchasers shall have received from the Issuer’s
Secretary or Assistant Secretary, a certificate having attached thereto (i) the
Certificate of Incorporation as in effect at the time of the Closing, (ii) the
Issuer’s Bylaws as in effect at the time of the Closing, (iii) resolutions
approved by the Board of Directors authorizing the transactions contemplated
hereby, and (iv) good standing certificates (including tax good standing) with
respect to the Issuer from the applicable authorities in Delaware and Texas.

6. Conditions of the Issuer’s Obligations at Closing. The obligations of the
Issuer to each Purchaser under this Agreement are subject to the fulfillment on
or before the Closing of each of the following conditions:

6.1 Representations and Warranties. The representations and warranties of the
Purchaser contained in Section 3 shall be true on and as of the Closing with the
same effect as though such representations and warranties had been made on and
as of the Closing.

6.2 Payment of Purchase Price. Such Purchaser shall have delivered the Purchase
Price specified in Section 1, and the Purchasers shall have delivered Purchase
Prices equal to at least $5,000,000 in aggregate principal amount.

6.3 Registration Rights Agreement. Such Purchaser shall have delivered a copy of
the Registration Rights Agreement substantially in the form of Exhibit C, dated
as of the Closing Date and executed by such Purchaser.

6.4 Accredited Investor Questionnaire. Such Purchaser shall have delivered an
Accredited Investor Questionnaire substantially in the form of Exhibit A
completed and executed by such Purchaser.

6.5 Qualifications. All authorizations, approvals or permits, if any, of any
governmental authority or regulatory body of the United States or of any state
that are required in connection with the lawful issuance and sale of the
Purchased Securities pursuant to this Agreement shall be duly obtained and
effective as of the Closing.

7. Restrictions on Transfer.

7.1 Resale Restrictions. The Purchasers understand that the offer and sale of
the Purchased Securities to the Purchasers have not been registered under the
Securities Act or under any state laws. Each Purchaser agrees not to offer, sell
or otherwise transfer the Purchased Securities, or any interest in the Purchased
Securities, unless (i) the offer and sale is registered under the Securities
Act, (ii) the Purchased Securities may be sold in accordance with the applicable
requirements and limitations of Rule 144 under the Securities Act and any
applicable state laws and, if the Issuer reasonably requests, such Purchaser
delivers to the Issuer an opinion of counsel to such effect, or (iii) such
Purchaser delivers to the Issuer an opinion of counsel reasonably satisfactory
to the Issuer that the offer and sale is otherwise exempt from Securities Act
registration. Notwithstanding the foregoing subsections (ii) and (iii), no
opinion shall be required for transfers by a Purchaser to its affiliates.

 

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7.2 Restrictive Legend. Each Purchaser understands and agrees that a legend in
substantially the following form will be placed on the certificates or other
documents representing the Purchased Securities:

“THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY STATE
SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS
(i) THE OFFER AND SALE IS REGISTERED UNDER THE SECURITIES ACT, OR (ii) THE OFFER
AND SALE IS EXEMPT FROM SECURITIES ACT REGISTRATION AND THE TERMS OF SECTION 7.1
OF THE SECURITIES PURCHASE AGREEMENT PURSUANT TO WHICH THE SECURITIES WERE
ORIGINALLY PURCHASED HAVE BEEN COMPLIED WITH. (A COPY OF THE SECURITIES PURCHASE
AGREEMENT IS ON FILE AT THE CORPORATE OFFICE OF THE CORPORATION.)

Certificates evidencing the Purchased Securities shall not be required to
contain such legend or any other legend (A) after such securities are registered
for resale under the Securities Act, (B) following any sale of such securities
pursuant to Rule 144 under the Securities Act, (C) if such securities are
eligible for sale under Rule 144(k) under the Securities Act, or (D) if such
legend is not required under applicable requirements of the Securities Act
(including controlling judicial interpretations and pronouncements issued by the
Staff of the SEC).

7.3 Illiquid Investment. Each Purchaser acknowledges that it must bear the
economic risk of its investment in the Purchased Securities for an indefinite
period of time, until such time as the Purchased Securities are registered or an
exemption from registration is available. Each Purchaser acknowledges that the
soonest that the Rule 144 exemption from registration could become available
would be after such Purchaser has paid for and held the Purchased Securities for
one year.

8. Indemnification.

8.1 Indemnification by Issuer. The Issuer agrees to indemnify and hold harmless
each Purchaser and its officers, directors, members and their respective
successors and assigns (collectively, the “Purchaser Indemnified Parties”) from
and against any third party losses, claims, damages or liabilities to which such
Purchaser Indemnified Parties may become subject (under the Securities Act or
otherwise) insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon any breach of
the representations or warranties of the Issuer contained herein, or failure to
comply with the covenants and agreements of the Issuer contained herein, and the
Issuer will reimburse such Purchaser Indemnified Parties for any reasonable
legal or other expenses reasonably incurred in investigating, defending or
preparing to defend any such action, proceeding or claim, provided, however,
that the Issuer shall not be liable in any such case to the extent that such
loss, claim,

 

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damage or liability arises out of, or is based upon, a breach of any
representations or warranties made by such Purchaser herein, or the failure of
such Purchaser Indemnified Parties to comply with its covenants and agreements
contained in this Agreement hereof . The Issuer shall reimburse each Purchaser
Indemnified Party for the amounts provided for herein on demand as such expenses
are incurred; provided, however, that Issuer’s obligation to indemnify the
Purchaser Indemnified Parties shall in no event exceed the aggregate amount
received by such Purchaser from the sale of the Purchased Securities.

8.2 Indemnification by Purchaser. Each Purchaser agrees to indemnify and hold
harmless the Issuer and its officers, directors, members and their respective
successors and assigns (collectively, the “Issuer Indemnified Parties”) from and
against any third party losses, claims, damages or liabilities to which such
Issuer Indemnified Parties may become subject (under the Securities Act or
otherwise) insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon any breach of
the representations or warranties of such Purchaser contained herein, or failure
to comply with the covenants and agreements of such Purchaser contained herein,
and such Purchaser will reimburse such Issuer Indemnified Parties for any
reasonable legal or other expenses reasonably incurred in investigating,
defending or preparing to defend any such action, proceeding or claim, provided,
however, that such Purchaser shall not be liable in any such case to the extent
that such loss, claim, damage or liability arises out of, or is based upon, a
breach of any representations or warranties made by the Issuer herein, or the
failure of the Issuer to comply with its covenants and agreements contained in
this Agreement hereof . Such Purchaser shall reimburse each Issuer Indemnified
Party for the amounts provided for herein on demand as such expenses are
incurred; provided, however, that such Purchaser’s obligation to indemnify the
Issuer Indemnified Parties shall in no event exceed the aggregate amount
received by such Purchaser from the sale of the Purchased Securities.

8.3 Claims for Indemnification. Promptly after receipt by any indemnified person
of a notice of a claim or the beginning of any action in respect of which
indemnity is to be sought against an indemnifying person pursuant to this
Section 8, such indemnified person shall notify the indemnifying person in
writing of such claim or of the commencement of such action, but the omission to
so notify the indemnifying person will not relieve it from any liability which
it may have to any indemnified person under this Section 8 (except to the extent
that such omission materially and adversely affects the indemnifying person’s
ability to defend such action) or from any liability otherwise than under this
Section 8. Subject to the provisions hereinafter stated, in case any such action
shall be brought against an indemnified person, the indemnifying person shall be
entitled to participate therein, and, to the extent that it shall elect by
written notice delivered to the indemnified person promptly after receiving the
aforesaid notice from such indemnified person, shall be entitled to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified
person. After notice from the indemnifying person to such indemnified person of
its election to assume the defense thereof, such indemnifying person shall not
be liable to such indemnified person for any legal expenses subsequently
incurred by such indemnified person in connection with the defense thereof,
provided, however, that if there exists or shall exist a conflict of interest
that would make it inappropriate, in the opinion of counsel to the indemnified
person, for the same counsel to represent both the indemnified person and such
indemnifying person or any affiliate or associate thereof, the indemnified
person shall be entitled to retain its own counsel at the expense of such

 

10

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indemnifying person; provided, however, that no indemnifying person shall be
responsible for the fees and expenses of more than one separate counsel
(together with appropriate local counsel) for all indemnified parties. In no
event shall any indemnifying person be liable in respect of any amounts paid in
settlement of any action unless the indemnifying person shall have approved the
terms of such settlement; provided that such consent shall not be unreasonably
withheld. No indemnifying person shall, without the prior written consent of the
indemnified person, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified person is or could have been a
party and indemnification could have been sought hereunder by such indemnified
person, unless such settlement includes an unconditional release of such
indemnified person from all liability on claims that are the subject matter of
such proceeding.

(a) If the indemnification provided for in this Section 8 is unavailable to or
insufficient to hold harmless an indemnified person under subsection 8.1 or 8.2
above in respect of any losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) referred to therein, then each indemnifying
person shall contribute to the amount paid or payable by such indemnified person
as a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect the relative
fault of the Issuer on the one hand and the Purchaser(s) on the other in
connection with the statements or omissions or other matters which resulted in
such losses, claims, damages or liabilities (or actions in respect thereof), as
well as any other relevant equitable considerations. The relative fault shall be
determined by reference to, among other things, in the case of an untrue
statement, whether the untrue statement relates to information supplied by the
Issuer on the one hand or the Purchaser(s) on the other and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement. The Issuer and the Purchasers agree that it would
not be just and equitable if contribution pursuant to this subsection 8.3(a)
were determined by pro rata allocation (even if the Purchasers were treated as
one entity for such purpose) or by any other method of allocation which does not
take into account the equitable considerations referred to above in this
subsection 8.3(a). The amount paid or payable by an indemnified person as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection 8.3(a) shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection 8.3(a), a Purchaser shall not
be required to contribute any amount in excess of the amount by which the net
amount received by such Purchaser from the sale of the Purchased Securities to
which such loss relates exceeds the amount of any damages which such Purchaser
has otherwise been required to pay by reason of such untrue statement. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. Each Purchaser’s obligations in
this subsection to contribute shall be in proportion to its sale of Purchased
Securities to which such loss relates and shall not be joint with any other
Selling Stockholders.

(b) The parties to this Agreement hereby acknowledge that they are sophisticated
business persons who were represented by counsel during the negotiations
regarding the provisions hereof including, without limitation, the provisions of
this Section 8, and are fully informed regarding said provisions. The parties
are advised that federal or state public policy as interpreted by the courts in
certain jurisdictions may be contrary to certain of the provisions of this
Section 8, and the parties hereto hereby expressly waive and relinquish any
right or ability to assert such public policy as a defense to a claim under this
Section 8 and further agree not to attempt to assert any such defense.

 

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9. Notices. All notices, requests, consents and other communications hereunder
shall be in writing, shall be mailed (A) if within the United States by
first-class registered or certified airmail, or nationally recognized overnight
express courier, postage prepaid, or by facsimile, or (B) if delivered from
outside the United States, by International Federal Express or facsimile, and
shall be deemed given (i) if delivered by first-class registered or certified
mail, three business days after so mailed, (ii) if delivered by nationally
recognized overnight carrier, one business day after so mailed, (iii) if
delivered by International Federal Express, two business days after so mailed,
(iv) if delivered by facsimile, upon electronic confirmation of receipt and
shall be delivered as addressed as follows:

 

  (a) if to the Issuer, to:

Contango ORE, Inc.

3700 Buffalo Speedway, Suite 960

Houston, TX 77098

Attn: Chairman and CEO

Tel:        (713) 960-1901

Fax:        (713) 960-1065

with a copy to:

Morgan, Lewis & Bockius LLP

300 S. Grand Avenue, Suite 2200

Los Angeles, CA 90071

Attn: Richard A. Shortz

Tel:        (213) 612-2526

Fax:        (213) 612-2501

 

  (b) if to a Purchaser, at its address on Schedule 1 attached hereto, or at
such other address or addresses as may have been furnished to the Issuer in
writing.

10. Reliance. Each Purchaser and the Issuer understand and agree that the other
party and its respective officers, directors, employees and agents may, and
will, rely on the accuracy of the other party’s respective representations and
warranties in this Agreement to establish compliance with applicable securities
laws. Each Purchaser and the Issuer agree to indemnify and hold harmless all
such parties against all losses, claims, costs, expenses and damages or
liabilities which they may suffer or incur caused or arising from their reliance
on such representations and warranties; provided, however, that the
indemnification provided by each Purchaser pursuant to this Section 10 shall be
limited to the Purchase Price paid by such Purchaser pursuant to this Agreement.

 

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11. Miscellaneous.

11.1 Survival. The representations and warranties made in this Agreement shall
survive the closing of the transactions contemplated by this Agreement.

11.2 Assignment. This Agreement is not transferable or assignable, except that
this Agreement shall be transferable by a Purchaser to its affiliates.

11.3 Execution and Delivery of Agreement. The Issuer shall be entitled to rely
on delivery by facsimile transmission of an executed copy of this Agreement, and
acceptance by the Issuer of such facsimile copy shall create a valid and binding
agreement between the Purchaser and the Issuer.

11.4 Titles. The titles of the sections and subsections of this Agreement are
for the convenience of reference only and are not to be considered in construing
this Agreement.

11.5 Severability. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect or limit the validity or
enforceability of the remaining provisions of this Agreement.

11.6 Entire Agreement. This Agreement constitutes the entire agreement and
understanding between the parties with respect to the subject matters herein and
supersedes and replaces any prior agreements and understandings, whether oral or
written, between them with respect to such matters.

11.7 Waiver and Amendment. Except as otherwise provided herein, the provisions
of this Agreement may be waived, altered, amended or repealed, in whole or in
part, only upon the mutual written agreement of the Issuer and Purchasers
acquiring in the aggregate a majority of the Purchased Securities.

11.8 Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be an original, but all of which together shall constitute
one and the same instrument.

11.9 Governing Law. This Agreement is governed by and shall be construed in
accordance with the laws of the State of Delaware.

11.10 Attorney’s Fees. In any action or proceeding brought to enforce any
provision of this Agreement, or where any provision hereof is validly asserted
as a defense, the successful party shall be entitled to recover reasonable
attorney’s fees (including any fees incurred in any appeal) in addition to its
costs and expenses and any other available remedy.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the date first above mentioned.

 

ISSUER: CONTANGO ORE, INC.

By:

  /s/ Yaroslava Makalskaya  

 

Name:

  Yaroslava Makalskaya

Title:

  Vice President, Controller, and   Chief Accounting Officer

 

 

[Signature Page to Securities Purchase Agreement]

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PURCHASER:

HENRY H. GORDON

/s/ Henry H. Gordon

 

Name and Address of Purchaser

   Number of Shares of
Common Stock
Purchased      Aggregate Purchase
Price  

Henry H. Gordon

7 Sterling Avenue, Englewood, CO 80113

Tel: (303) 296-8834

email: hgordon@stratacapitalinc.com

     100,000       $ 1,000,000   

 

[Signature Page to Securities Purchase Agreement]

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PURCHASER:

KELCLAY INC.

 

By:

  /s/ Henry Gordon  

 

Name:

  Henry Gordon

Title:

  President

 

Name and Address of Purchaser

   Number of Shares of
Common Stock
Purchased      Aggregate Purchase
Price  

KelClay Inc.

c/o Henry Gordon

7 Sterling Avenue, Englewood, CO 80113

Tel: (303) 296-8834

email: hgordon@stratacapitalinc.com

     50,000       $ 500,000   

 

[Signature Page to Securities Purchase Agreement]

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PURCHASER:

 

THOMAS A. PETRIE

/s/    Thomas A. Petrie         

 

 

Name and Address of Purchaser

   Number of Shares of
Common Stock
Purchased      Aggregate Purchase
Price  

Thomas A. Petrie

285 Madison Street

Denver, CO 80206

Tel: (303) 909-2335

email: thomasapetrie@gmail.com

     50,000       $ 500,000   

 

[Signature Page to Securities Purchase Agreement]

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PURCHASER:

 

GEORGE F. WOOD

/s/    George F. Wood        

 

Name and Address of Purchaser

   Number of Shares of
Common Stock
Purchased      Aggregate Purchase
Price  

George F. Wood

55 Madison Street, Suite 680

Denver, CO 80206

Tel: (303) 321-8188

email: gwood@woodam.com

     50,000       $ 500,000   

 

[Signature Page to Securities Purchase Agreement]

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PURCHASER:

 

GENERAL RESOURCES INC.

By:   /s/    Donald Gillen          Name:   Donald Gillen Title:   President

 

Name and Address of Purchaser

   Number of Shares of
Common Stock
Purchased      Aggregate Purchase
Price  

General Resources Inc.

21 Capilano Drive

Saskatoon, SK S7K 4A4

CANADA

Tel: (306) 244-6721

Attention: Don Gillen

email: don.gillen@hotmail.com

     50,000       $ 500,000   

 

[Signature Page to Securities Purchase Agreement]

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PURCHASER:

 

BRENT SUER

/s/    Brent Suer        

 

Name and Address of Purchaser

   Number of Shares of
Common Stock
Purchased      Aggregate Purchase
Price  

Brent Suer

#73 602 Cartwright Street

Saskatoon, SK S7T 0G4

CANADA

Tel: (306) 975-3779 x: 222

email: bsuer.suerandpollon@shawbiz.ca

     25,000       $ 250,000   

 

[Signature Page to Securities Purchase Agreement]

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PURCHASER:

 

DALE POLLON

/s/    Dale Pollon         

 

Name and Address of Purchaser

   Number of Shares of
Common Stock
Purchased      Aggregate Purchase
Price  

Dale Pollon

1129 1st Street East

Saskatoon, SK S7H 1T6

CANADA

Tel: (306) 241-9544

email: dpollon.suerandpollon@shawbiz.ca

     25,000       $ 250,000   

 

[Signature Page to Securities Purchase Agreement]

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PURCHASER:

 

RAGING CAPITAL FUND, LP

By:   /s/    Frederick C. Wasch Name:   Frederick C. Wasch

Title:

  Chief Financial Officer

 

Name and Address of Purchaser

   Number of Shares of
Common Stock
Purchased      Aggregate Purchase
Price  

Raging Capital Fund, LP

10 Princeton Avenue

Rocky Hill, NJ 08553

Attention: Bill Martin and Frederick Wasch

Tel: (609) 228-6225

email: bill@ragingcapital.com; fred@raging capital.com

     17,857       $ 178,573   

 

[Signature Page to Securities Purchase Agreement]

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PURCHASER:

 

RAGING CAPITAL FUND (QP), LP

By:   /s/    Frederick C. Wasch Name:   Frederick C. Wasch

Title:

  Chief Financial Officer

 

Name and Address of Purchaser

   Number of Shares of
Common Stock
Purchased      Aggregate Purchase
Price  

Raging Capital Fund (QP), LP

10 Princeton Avenue

Rocky Hill, NJ 08553

Attention: Bill Martin and Frederick Wasch

Tel: (609) 228-6225

email: bill@ragingcapital.com; fred@raging capital.com

     64,643       $ 646,427   

 

[Signature Page to Securities Purchase Agreement]

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PURCHASER:

 

FIVE STAR ENERGY, LLC

By:   /s/    Peter A. Dea Name:   Peter A. Dea

Title:

  President

 

Name and Address of Purchaser

   Number of Shares of
Common Stock
Purchased      Aggregate Purchase
Price  

Five Star Energy, LLC

28006 Meadowlark Drive

Golden, CO 80401

Tel: (303) 226-9501

Attention: Peter A. Dea

email: pdea@cirqueresources.com

     50,000       $ 500,000   

 

[Signature Page to Securities Purchase Agreement]

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PURCHASER:

 

KENNETH R. PEAK

  /s/    Kenneth R. Peak

 

Name and Address of Purchaser

   Number of Shares of
Common Stock
Purchased      Aggregate Purchase
Price  

Kenneth R. Peak

c/o Contango Oil & Gas Company

3700 Buffalo Speedway, Suite 960

Houston, TX 77098

Tel: (713) 960-1901

email: kpeak@contango.com

     400,000       $ 4,000,000   

 

[Signature Page to Securities Purchase Agreement]