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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
III EXPLORATION COMPANY
AND
PETROGLYPH ENERGY, INC.
Dated as of June 20, 2000
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TABLE OF CONTENTS
PAGE
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ARTICLE I. THE MERGER..........................................................................1
Section 1.1. Formation of Acquisition......................................................1
Section 1.2. The Merger....................................................................1
Section 1.3. Effective Time................................................................1
Section 1.4. Closing.......................................................................2
Section 1.5. Certificate of Incorporation; By-laws; Officers and Directors.................2
Section 1.6. Effect on Common Stock........................................................2
Section 1.7. Dissenting Shares.............................................................3
Section 1.8. Treatment of Stock Options and Stock Appreciation Rights.....................3
Section 1.9. Exchange of Certificates......................................................4
Section 1.10. Proxy Statement and Schedule 13E-3............................................6
Section 1.11. Additional Agreements and Provisions..........................................6
ARTICLE II. REPRESENTATIONS AND WARRANTIES OF PETROGLYPH.......................................7
Section 2.1. Organization of Petroglyph and its Subsidiaries...............................7
Section 2.2. Capitalization of Petroglyph; Ownership.......................................7
Section 2.3. Subsidiaries of Petroglyph....................................................7
Section 2.4. Authorization.................................................................8
Section 2.5. Fairness Opinion and Approval by the Special Committee........................8
Section 2.6. Brokers and Finders...........................................................8
Section 2.7. SEC Documents; Undisclosed Liabilities........................................8
Section 2.8. Absence of Certain Changes or Events..........................................9
Section 2.9. Taxes.........................................................................9
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF IIIX...........................................10
Section 3.1. Organization and Authority of Acquisition....................................10
Section 3.2. Authorization................................................................10
Section 3.3. Brokers and Intermediaries...................................................11
Section 3.4. Proxy Statement..............................................................11
Section 3.5. Financing....................................................................11
ARTICLE IV. CERTAIN COVENANTS AND AGREEMENTS..................................................11
Section 4.1. Announcement.................................................................11
Section 4.2. Notification of Certain Matters..............................................11
Section 4.3. Directors' And Officers' Indemnification.....................................12
Section 4.4. Stockholders Meeting.........................................................12
Section 4.5. Obligations of Acquisition...................................................12
Section 4.6. Petroglyph Interim Operations................................................12
ARTICLE V. CONDITIONS PRECEDENT...............................................................13
Section 5.1. Conditions to Each Party's Obligation to Effect the Merger...................13
Section 5.2. Conditions to the Obligation of Petroglyph to Effect the Merger..............14
(i)
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Section 5.3. Conditions to the Obligation of Acquisition to Effect the Merger.............14
ARTICLE VI. TERMINATION, AMENDMENT AND WAIVER.................................................15
Section 6.1. Termination..................................................................15
Section 6.2. Effect of Termination........................................................16
Section 6.3. Amendment....................................................................16
Section 6.4. Waiver.......................................................................16
Section 6.5. Approval of Special Committee Required.......................................16
ARTICLE VII. MISCELLANEOUS....................................................................16
Section 7.1. Non-Survival of Representations and Warranties...............................16
Section 7.2. Expenses.....................................................................16
Section 7.3. Applicable Law...............................................................17
Section 7.4. Notices......................................................................17
Section 7.5. Entire Agreement.............................................................18
Section 7.6. Assignment...................................................................18
Section 7.7. Headings; References.........................................................18
Section 7.8. Counterparts.................................................................18
Section 7.9. No Third-Party Beneficiaries.................................................18
Section 7.10. Severability; Enforcement....................................................18
Schedules:
Schedule 2.2 -- Capitalization
Schedule 2.9 -- Taxes
(ii)
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AGREEMENT AND PLAN OF MERGER, dated as of June 20, 2000, by and between III
Exploration Company, an Idaho corporation ("IIIX"), and Petroglyph Energy, Inc.,
a Delaware corporation ("Petroglyph").
WHEREAS, IIIX desires to acquire the entire equity interest in Petroglyph
and to provide for the payment of $2.85 per share in cash for all shares of the
common stock, par value $.01 per share, of Petroglyph (the "Petroglyph Common
Stock") not held by IIIX; and
WHEREAS, IIIX intends to contribute shares of Petroglyph Common Stock held
by it to a Delaware corporation to be formed for the purpose of effecting such
transaction ("Acquisition") and to acquire in exchange therefor the common stock
of Acquisition; and
WHEREAS, the Board of Directors of Petroglyph, upon the recommendation of
the special committee established to consider the fairness of the transaction
contemplated by this Agreement (the "Special Committee"), has unanimously
approved, and deems advisable and in the best interests of its stockholders, the
merger of Acquisition with and into Petroglyph in accordance with Section 251 of
the Delaware General Corporation Law (the "DGCL") and upon the terms, and
subject to the conditions, of this Agreement (the "Merger");
NOW, THEREFORE, in consideration of the premises and the representations,
warranties and agreements herein contained, the parties hereto, intending to be
legally bound, agree as follows:
ARTICLE I.
THE MERGER
Section 1.1. Formation of Acquisition. Before consummation of the Merger,
IIIX shall incorporate and organize Acquisition and contribute to Acquisition,
in exchange for the common stock of Acquisition, shares of Petroglyph Common
Stock owned by it and constituting at least a majority of the shares of
Petroglyph Common Stock outstanding.
Section 1.2. The Merger. At the Effective Time (as hereinafter defined),
upon the terms and subject to the conditions set forth in this Agreement and in
accordance with the DGCL, Acquisition shall be merged with and into Petroglyph,
the separate existence of Acquisition shall cease, and Petroglyph shall continue
as the surviving corporation (the "Surviving Corporation"). The Merger shall
have the effects as provided by the DGCL and other applicable law.
Section 1.3. Effective Time. As soon as practicable after the satisfaction
or waiver of the conditions set forth in Article V, Acquisition and Petroglyph
shall file with the Secretary of State of the State of Delaware a certificate of
merger (the "Certificate of Merger") executed in such form as required by and in
accordance with the relevant provisions of the DGCL. The Merger shall become
effective at such time as the Certificate of Merger shall have been duly filed
with the Secretary of State of the State of Delaware, or at such other time as
shall be permissible in accordance with the DGCL and as Acquisition and
Petroglyph shall agree and as specified in the Certificate of Merger (the time
the Merger shall have become effective being the "Effective Time").
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Section 1.4. Closing. The closing of the Merger (the "Closing") shall take
place telephonically or at the offices of Morris, Laing, ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇,
Chtd., Fourth Floor, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ at 10:00 a.m.
(central time) on the date that is no later than the business day after the
satisfaction of the conditions provided in Article V, or at such other time and
place as Acquisition and Petroglyph shall agree (the "Closing Date").
Section 1.5. Certificate of Incorporation; By-laws; Officers and Directors.
Pursuant to the Merger: (a) the Certificate of Incorporation and By-laws of
Petroglyph as in effect immediately before the Effective Time shall be the
Certificate of Incorporation and By-laws of the Surviving Corporation after the
Merger, until thereafter changed or amended as provided therein and in
accordance with applicable law; (b) the directors of Petroglyph shall be the
directors of the Surviving Corporation after the Merger and until the earlier of
their death, resignation or removal or until their respective successors shall
have been duly elected or appointed and qualified; and (c) the officers of
Petroglyph immediately before the Effective Time shall be the officers of the
Surviving Corporation until the earlier of their death, resignation or removal
or until their respective successors shall have been duly elected or appointed
and qualified.
Section 1.6. Effect on Capital Stock. As of the Effective Time, by virtue
of the Merger and without any action on the part of Acquisition, Petroglyph or
the holders of any shares of Petroglyph Common Stock or any other capital stock
of Petroglyph:
(a) Common Stock of Acquisition. Each share of Common Stock, par value
$.01 per share, of Acquisition (the "Acquisition Common Stock") that shall be
issued and outstanding immediately before the Effective Time shall be converted
into and become one share of the Common Stock, par value $.01 per share, of the
Surviving Corporation (the "Surviving Corporation Common Stock").
(b) Common Stock of Petroglyph. Subject to Sections 1.6(c), 1.6(d),
1.6(e), 1.7 and 1.8, each share of Petroglyph Common Stock that is issued and
outstanding immediately before the Effective Time shall be converted into and
become the right to receive the sum (the "Merger Consideration") of $2.85 in
cash and, when so converted, shall automatically be canceled and retired and
shall cease to exist, and each holder of a certificate representing any such
shares of Petroglyph Common Stock shall, to the extent such certificate
represents such shares, cease to have any rights with respect thereto, except
the right to receive the Merger Consideration allocable to the shares formerly
represented by such certificate upon surrender of such certificate in accordance
with Section 1.9.
(c) Cancellation of Treasury Stock. Each share of Petroglyph Common
Stock that shall be owned immediately before the Effective Time by Petroglyph or
any Subsidiary (as hereinafter defined) of Petroglyph that constitutes treasury
stock in the hands of the holder thereof, shall be canceled and retired and
shall cease to exist, and no consideration shall be delivered in exchange
therefor, and each holder of a certificate representing any such shares shall
cease to have any rights with respect thereto. The term "Subsidiary" means any
corporation, joint venture, partnership, limited liability company or other
entity of which Petroglyph, directly or indirectly, owns or controls capital
stock (or other equity interests)
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representing more than fifty percent of the general voting power of such entity
under ordinary circumstances.
(d) Petroglyph Common Stock Held by Acquisition. Each share of
Petroglyph Common Stock that shall be owned immediately before the Effective
Time by Acquisition shall be canceled and retired and shall cease to exist, and
no consideration shall be delivered in exchange therefor, and Acquisition shall
cease to have any rights with respect to any certificates representing any such
shares.
(e) Petroglyph Common Stock Subject to Incentive Plan. Each share of
Petroglyph Common Stock issued pursuant to Petroglyph's 1997 Incentive Plan (as
amended, the "Petroglyph Incentive Plan") that is outstanding immediately before
the Effective Time (whether or not vested), and each share of Petroglyph Common
Stock that has been issued prior to the Effective Time upon exercise of
Petroglyph Options (as defined below) granted under the Petroglyph Incentive
Plan shall be converted into and become the right to receive the Merger
Consideration in accordance with Section 1.6(b).
Section 1.7. Dissenting Shares
(a) Notwithstanding anything in this Agreement to the contrary, shares
of Petroglyph Common Stock outstanding immediately before the Effective Time and
held by a holder who shall have demanded and perfected such holder's right to
appraisal of such shares in accordance with Section 262 of the DGCL ("Dissenting
Shares") shall not be converted into or represent the right to receive the
Merger Consideration, but the holder thereof shall instead be entitled to such
rights as are afforded under the DGCL with respect to such holder's Dissenting
Shares, unless such holder shall fail to perfect or shall withdraw or otherwise
lose such holder's right to appraisal.
(b) If any holder of shares of Petroglyph Common Stock who shall
demand appraisal of such holder's shares pursuant to the DGCL shall fail to
perfect or shall withdraw or otherwise lose such holder's right to appraisal, at
the later of the Effective Time or upon the occurrence of such event, the
Dissenting Shares of such holder shall be converted into and represent the right
to receive the Merger Consideration, without interest thereon, in accordance
with Section 1.6(b).
(c) Petroglyph shall give IIIX and, after its formation, Acquisition
(i) prompt notice of any written demand for appraisal or payment of the fair
value of any shares of Petroglyph Common Stock, withdrawals of such demands, and
any other instruments served pursuant to the DGCL received by Petroglyph and
(ii) the opportunity to direct all negotiations and proceedings with respect to
demands for appraisal under the DGCL. Petroglyph shall not voluntarily make any
payment with respect to any demand for appraisal and shall not, except with the
prior written consent of IIIX or Acquisition, settle or offer to settle any such
demands.
Section 1.8. Treatment of Stock Options and Stock Appreciation Rights.
Petroglyph shall take all actions necessary to provide that each outstanding and
unexercised stock option or stock appreciation right (collectively, the
"Petroglyph Options") granted under
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the Petroglyph Incentive Plan, whether or not exercisable or vested, shall be
terminated in accordance with the Petroglyph Incentive Plan prior to the
Effective Time.
Section 1.9. Exchange of Certificates.
(a) Exchange Agent. Before the Effective Time, Petroglyph shall
appoint a bank or trust company to act as exchange agent (the "Exchange Agent")
for the payment of the Merger Consideration. As of the Effective Time,
Acquisition shall deposit with the Exchange Agent, for the benefit of the
holders of shares of Petroglyph Common Stock, for exchange in accordance with
this Section 1.9, the aggregate amount of cash payable pursuant to Section
1.6(b) hereof in exchange for outstanding shares of Petroglyph Common Stock (the
"Exchange Fund").
(b) Exchange Procedures. Promptly after the Effective Time, the
Exchange Agent shall mail to each holder of record of a certificate or
certificates, which immediately before the Effective Time shall have represented
outstanding shares of Petroglyph Common Stock, whose shares shall have been
converted into the right to receive cash pursuant to Section 1.6(b), a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the certificates representing such shares of Petroglyph Common
Stock shall pass, only upon delivery of the certificates representing such
shares of Petroglyph Common Stock to the Exchange Agent and shall be in such
form and have such other provisions not inconsistent with this Agreement as the
Exchange Agent may reasonably specify), and instructions for use in effecting
the surrender of the certificates representing such shares of Petroglyph Common
Stock, together with a duly executed (if required) letter of transmittal, in
exchange for the Merger Consideration. Upon surrender to the Exchange Agent of a
certificate or certificates formerly representing shares of Petroglyph Common
Stock and acceptance thereof by the Exchange Agent, the holder thereof shall be
entitled to the amount of cash into which the number of shares of Petroglyph
Common Stock formerly represented by such certificate or certificates
surrendered shall have been converted pursuant to this Agreement. The Exchange
Agent shall accept such certificates upon compliance with such reasonable terms
and conditions as the Exchange Agent may impose to effect an orderly exchange
thereof in accordance with normal exchange practices. After the Effective Time,
there shall be no further transfer on the records of Petroglyph or its transfer
agent of certificates representing shares of Petroglyph Common Stock and, if
such certificates shall be presented to Petroglyph for transfer, they shall be
canceled against delivery of the Merger Consideration allocable to the shares of
Petroglyph Common Stock represented by such certificate or certificates. If any
Merger Consideration is to be remitted to a name other than that in which the
certificate for the Petroglyph Common Stock surrendered for exchange is
registered, it shall be a condition of such exchange that the certificate so
surrendered shall be properly endorsed, with signature guaranteed, or otherwise
in proper form for transfer and that the person requesting such exchange shall
pay to Petroglyph, or its transfer agent, any transfer or other taxes required
by reason of the payment of the Merger Consideration to a name other than that
of the registered holder of the certificate surrendered, or establish to the
satisfaction of Petroglyph or its transfer agent that such tax shall have been
paid or shall not be applicable. Until surrendered as contemplated by this
Section 1.9, each certificate for shares of Petroglyph Common Stock shall be
deemed at any time after the Effective Time to represent only the right to
receive upon such surrender the Merger
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Consideration allocable to the shares represented by such certificate as
contemplated by Section 1.6(b). No interest will be paid or will accrue on any
amount payable as Merger Consideration.
(c) No Further Ownership Rights in Petroglyph Stock. The Merger
Consideration paid upon the surrender for exchange of certificates formerly
representing shares of Petroglyph Common Stock in accordance with the terms of
this Section 1.9 shall be deemed to have been paid in full satisfaction of all
rights pertaining to the shares of Petroglyph Common Stock formerly represented
by such certificates.
(d) Termination of Exchange Fund. Any portion of the Exchange Fund
(including any interest and other income received by the Exchange Agent in
respect of all such funds) that shall remain undistributed to the holders of the
certificates formerly representing shares of Petroglyph Common Stock for six
months after the Effective Time shall be delivered to the Surviving Corporation,
upon demand, and any holders of shares of Petroglyph Common Stock before the
Merger who have not theretofore complied with this Section 1.9 shall thereafter
look only to the Surviving Corporation, and only as general creditors thereof,
for payment of their claim for Merger Consideration to which such holders may be
entitled.
(e) No Liability. No party to this Agreement shall be liable to any
Person (as hereinafter defined) in respect of any amount from the Exchange Fund
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law. The term "Person" means any individual, entity,
corporation, partnership, trust or unincorporated organization or any government
or any agency or political subdivision thereof.
(f) Lost Certificates. If any certificate or certificates formerly
representing shares of Petroglyph Common Stock shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such certificate or certificates to be lost, stolen or destroyed, and if
required by the Surviving Corporation, the posting by such Person of a bond in
such amount as the Surviving Corporation may reasonably require as indemnity
against any claim that may be made against it with respect to such certificate,
the Exchange Agent shall issue in exchange for such lost, stolen or destroyed
certificate the Merger Consideration deliverable in respect thereof as
determined in accordance with this Section 1.9.
(g) Withholding Rights. The Surviving Corporation and the Exchange
Agent shall be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any holder of shares of Petroglyph Common
Stock such amounts as the Surviving Corporation or the Exchange Agent shall be
required to deduct and withhold under the United States Internal Revenue Code of
1986, as amended, or any provision of state, local or foreign tax law with
respect to the making of such payment. To the extent that amounts are so
withheld by the Surviving Corporation or the Exchange Agent, such withheld
amounts shall be treated for all purposes of this Agreement as having been paid
to the holder of the shares of Petroglyph Common Stock in respect of which such
deduction and withholding was made by the Surviving Corporation or the Exchange
Agent.
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Section 1.10. Proxy Statement and Schedule 13E-3.
(a) Petroglyph shall prepare, in consultation with IIIX, the Proxy
Statement on Schedule 14A under the Securities Exchange Act of 1934 (the
"Exchange Act") (the "Proxy Statement") to be distributed to holders of the
Petroglyph Common Stock for the purpose of soliciting proxies for use at the
annual or special meeting of stockholders of Petroglyph (the "Stockholders
Meeting") at which the adoption of this Agreement and the approval of the
transactions contemplated thereby shall be sought. In the Proxy Statement,
subject to the fiduciary duties of its Board of Directors or of the directors
constituting the Special Committee (as determined by such directors in good
faith after consultation with counsel), Petroglyph shall recommend to its
stockholders the approval of the Merger, this Agreement and the transactions
contemplated hereby. Petroglyph shall file the Proxy Statement with the SEC as
soon as is reasonably practicable after the date hereof and shall use all
reasonable efforts to respond to comments from the SEC and to cause the Proxy
Statement to be mailed to Petroglyph's stockholders at the earliest practicable
time.
(b) None of the information to be supplied by Petroglyph for inclusion
in the Proxy Statement shall, at the time of the mailing of the Proxy Statement
and any amendments or supplements thereto, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Proxy Statement
shall, as of its date, comply as to form in all material respects with all
applicable laws, including the Exchange Act, and the rules and regulations
thereunder. Petroglyph shall not mail, amend or supplement the Proxy Statement
unless the Proxy Statement or any amendment or supplement thereof shall be
satisfactory in content to IIIX in the exercise of its reasonable judgment.
(c) As soon as practicable after the date of this Agreement, IIIX and
Petroglyph shall file with the SEC, and shall use their reasonable best efforts
to cause any of their respective affiliates engaging in this transaction to file
with the SEC, a Rule 13e-3 Transaction Statement on Schedule 13E-3 under the
Exchange Act (the "Schedule 13E-3 Transaction Statement") with respect to the
Merger. Each of the parties hereto shall agree to use its reasonable best
efforts to cooperate and to provide each other with such information as any of
such parties may reasonably request in connection with the preparation of the
Proxy Statement and the Schedule 13E-3 Transaction Statement. Each party hereto
shall promptly supplement, update and correct any information provided by it for
use in the Proxy Statement and the Schedule 13E-3 Transaction Statement if and
to the extent that such information shall be or shall have become incomplete,
false or misleading.
Section 1.11. Additional Agreements and Provisions. Upon the terms and
subject to the conditions of this Agreement and subject to the fiduciary duties
of the directors of Petroglyph or of the directors constituting the Special
Committee (as determined by such directors in good faith after consultation with
counsel), each of the parties hereto shall use its commercially reasonable best
efforts to take, or cause to be taken, all additional action and to do, or cause
to be done, all additional things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement. If, at any time after the Effective
Time, any further action is necessary or desirable
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to carry out the purposes of this Agreement or to vest the Surviving Corporation
with full title to all properties, assets, rights, approvals, immunities and
franchises of either Petroglyph or Acquisition, the proper officers and
directors of each corporation that is a party to this Agreement shall take all
such necessary action. The parties hereto shall use their respective best
efforts to challenge any action brought against any of the parties hereto
seeking a temporary restraining order or preliminary or permanent injunctive
relief which would prohibit, or materially interfere with, the consummation of
the transactions contemplated by this Agreement.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF PETROGLYPH
Petroglyph hereby represents and warrants to IIIX and Acquisition as
follows:
Section 2.1. Organization of Petroglyph and its Subsidiaries. Each of
Petroglyph and its Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of organization
and has all the requisite corporate power and authority to carry on its business
as now being conducted and to own, lease, use and operate the properties owned
and used by it. Each of Petroglyph and its Subsidiaries is qualified and in good
standing to do business in each jurisdiction in which the nature of its business
requires it to be so qualified, except to the extent the failure to be so
qualified has not had, and would not reasonably be expected to have, a Material
Adverse Effect. The term "Material Adverse Effect" means a material adverse
effect on the business, assets, liabilities, results of operations or financial
condition of Petroglyph and its Subsidiaries, taken as a whole.
Section 2.2. Capitalization of Petroglyph; Ownership. The authorized
capital stock of Petroglyph consists of 25,000,000 shares of Petroglyph Common
Stock, of which 6,458,333 shares are issued and outstanding as of the date
hereof, and 5,000,000 shares of preferred stock, of which 292,915 shares have
been designated as Series A Convertible Preferred Stock 262,588 shares of which
are issued and outstanding as of the date hereof. All the issued and outstanding
shares of capital stock of Petroglyph are duly authorized, validly issued, fully
paid and non-assessable and free of preemptive rights. Except for outstanding
Petroglyph Options to purchase an aggregate of no more than 420,000 shares of
Petroglyph Common Stock and as disclosed on Schedule 2.2 hereto, there are no
outstanding options, warrants or other rights of any kind to acquire (including
preemptive rights) any additional shares of capital stock of Petroglyph or
securities convertible into or exchangeable for, or which otherwise confer on
the holder thereof any right to acquire, any such additional shares, nor is
Petroglyph committed to issue any such option, warrant, right or security. After
the Merger, Petroglyph will not have any obligation to issue, transfer or sell
any shares of its capital stock or other securities of Petroglyph pursuant to
any employee benefit plan or otherwise.
Section 2.3. Subsidiaries of Petroglyph. All shares of capital stock of
each Subsidiary have been validly issued and are fully paid and non-assessable.
There are no outstanding options, warrants or other rights of any kind to
acquire (including preemptive rights) any additional equity interests of any
Subsidiary or securities convertible into or exchangeable for, or which
otherwise confer on the holder thereof any right to acquire, any additional
equity interests of any Subsidiary, nor is any Subsidiary committed to issue any
such option, warrant,
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right or security. Other than the Subsidiaries referred to in this Section 2.3,
Petroglyph does not own, directly or indirectly, any equity interest in any
other corporation, joint venture, partnership, limited liability company or
other entity.
Section 2.4. Authorization. Petroglyph has all requisite corporate power
and authority to enter into this Agreement and, subject to any necessary
approval of the Merger by the stockholders of Petroglyph, to carry out its
obligations hereunder and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all requisite
corporate action on the part of Petroglyph (other than the approval of this
Agreement and the transactions contemplated hereby by the stockholders of
Petroglyph). The Board of Directors of Petroglyph has unanimously adopted
resolutions approving this Agreement and the Merger, and has determined that the
terms of the Merger are fair to, and in the best interests of, Petroglyph and
its stockholders. Petroglyph has taken all action necessary to exempt the Merger
and the other transactions contemplated hereby with IIIX, Acquisition and their
affiliates from the operation of the "Business Combination Statute" at Section
203 of the DGCL. This Agreement has been duly executed and delivered by
Petroglyph and, assuming the due authorization, execution and delivery hereof by
IIIX, constitutes the valid and binding obligation of Petroglyph, enforceable
against Petroglyph in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization or similar
laws affecting creditors' rights generally or by general equitable principles.
Section 2.5. Fairness Opinion and Approval by the Special Committee. On or
before the date hereof, the Special Committee (i) determined that the Merger is
fair to and in the best interest of the stockholders of Petroglyph other than
IIIX (the "Public Stockholders") and (ii) recommended that the Board of
Directors of Petroglyph approve this Agreement and such transactions. The
Special Committee has received an opinion of Prudential Securities Incorporated
to the effect that the consideration to be received by the Public Stockholders
in the Merger is fair to such stockholders from a financial point of view.
Section 2.6. Brokers and Finders. Neither Petroglyph nor any Subsidiary has
employed any broker, finder, advisor or intermediary in connection with the
transactions contemplated by this Agreement which would be entitled to a
broker's, finder's or similar fee or commission in connection therewith or upon
the consummation thereof.
Section 2.7. SEC Documents; Undisclosed Liabilities. Petroglyph has filed
all required reports, schedules, forms, statements and other documents with the
Securities and Exchange Commission (the "SEC") since January 1, 1998 (the "SEC
Documents"). As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the Securities Act of 1933, as
amended (the "Securities Act"), or the Exchange Act, as the case may be, and the
rules and regulations of the SEC thereunder applicable to such SEC Documents.
Except to the extent that information contained in any SEC Document has been
revised or superseded by a later filed SEC Document, as of their respective
dates none of the SEC Documents contained any untrue statement of a material
fact or omitted to state any 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 financial statements of
Petroglyph included in the SEC Documents comply as to form in all material
respects with
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applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto, have been prepared in accordance with GAAP
(except, in the case of unaudited statements, as permitted by applicable
instructions or regulations of the SEC relating to the preparation of quarterly
reports on Form 10-Q) applied on a consistent basis during the period involved
(except as may be indicated in the notes thereto) and fairly present the
financial position of Petroglyph as of the dates thereof and the results of
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments).
Section 2.8. Absence of Certain Changes or Events. Except as disclosed in
the SEC Documents filed and publicly available before the date of this Agreement
or as discussed at any duly called meeting of the Board of Directors of
Petroglyph at which a quorum was present, since the date of the most recent
audited financial statements included in the filed SEC Documents, Petroglyph has
conducted its business only in the ordinary course, and there has not been any
material adverse change in the business or financial condition of Petroglyph and
its subsidiaries taken as a whole.
Section 2.9. Taxes.
(a) Except as set forth in Schedule 2.9, (i) each of Petroglyph and
its Subsidiaries has timely filed with the appropriate governmental authorities
all Tax Returns (as hereinafter defined) required to be filed by or with respect
to it or its operations or assets, and such Tax Returns are true, correct and
complete, (ii) all Taxes (as hereinafter defined) due with respect to taxable
years for which each of Petroglyph's and its Subsidiaries' Tax Returns were
filed, all Taxes required to be paid on an estimated or installment basis, and
all Taxes required to be withheld with respect to each of Petroglyph and its
Subsidiaries or its employees, operations or assets have been timely paid or, if
applicable, withheld and paid to the appropriate taxing authority in the manner
provided by law, (iii) the reserve for Taxes set forth on the balance sheet of
each of Petroglyph and its Subsidiaries as of December 31, 1999 is adequate in
all material respects for the payment of all Taxes through the date thereof and
no Taxes have been incurred after December 31, 1999 which were not incurred in
the ordinary course of business, (iv) there are no liens for Taxes upon the
assets of any of Petroglyph or its Subsidiaries, (v) no federal, state, local or
foreign audits, administrative proceedings or court proceedings are pending with
regard to any Taxes or Tax Returns of any of Petroglyph or its Subsidiaries, and
there are no outstanding deficiencies or assessments asserted or proposed, and
any such proceedings, deficiencies or assessments shown in Schedule 2.9 are
being contested in good faith through appropriate proceedings, and each of
Petroglyph and its Subsidiaries has made available to Acquisition copies of all
revenue agent reports (or similar reports) and related schedules relating to
pending income tax audits of each of Petroglyph and its Subsidiaries, (vi) there
are no outstanding agreements, consents or waivers extending the statutory
period of limitations applicable to the assessment of any Taxes or deficiencies
against any of Petroglyph or its Subsidiaries, or with respect to its operations
or assets, no power of attorney granted by any of Petroglyph or its Subsidiaries
with respect to any matter relating to Taxes is currently in force, and each of
Petroglyph and its Subsidiaries is not a party to any agreement providing for
the allocation or sharing of Taxes and (vii) the federal income Tax Returns of
each of Petroglyph and its Subsidiaries have been examined by the IRS (or the
applicable statutes of limitations for the
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assessment of federal income Taxes for such periods have expired) for all
periods through and including December 31, 1996.
(b) Each of Petroglyph and its Subsidiaries has not filed a consent to
the application of Section 341(f) of the Internal Revenue Code of 1986, as
amended (the "Code").
(c) Each of Petroglyph and its Subsidiaries is not and has not been a
United States real property holding company (as defined in Section 897(c)(2) of
the Code) during the applicable period specified in Section 897(c)(1)(ii) of the
Code.
(d) Except as set forth in Schedule 2.9, each of Petroglyph and its
Subsidiaries is not a party to any agreement, contract or arrangement that could
result, separately or in the aggregate, in the payment of any "excess parachute
payments" within the meaning of section 280G of the Code.
(e) For purposes of this Agreement, "Taxes" means all taxes, charges,
fees, levies or other assessments imposed by any United States federal, state,
or local taxing authority or by any non-U.S. taxing authority, including but not
limited to, income, gross receipts, excise, property, sales, use, transfer,
payroll, license, ad valorem, value added, withholding, social security,
national insurance (or other similar contributions or payments), franchise,
estimated, severance, stamp, and other taxes (including any interest, fines,
penalties or additions attributable to or imposed on or with respect to any such
taxes, charges, fees, levies or other assessments).
(f) For purposes of this Agreement, "Tax Return" means any return,
report, information return or other document (including any related or
supporting information and, where applicable, profit and loss accounts and
balance sheets) with respect to Taxes.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF IIIX
IIIX hereby represents and warrants to Petroglyph as follows:
Section 3.1. Organization and Authority of Acquisition. At the Effective
Time, Acquisition will be a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware. Acquisition will be
incorporated solely for the purpose of merging with and into Petroglyph and
taking action incident thereto. Except for obligations or liabilities incurred
in connection with the transactions contemplated by this Agreement or in
connection with its organization, at the Effective Time Acquisition will not
have incurred any obligations or liabilities or engaged in any business
activities of any kind.
Section 3.2. Authorization. IIIX has, and Acquisition will have, all
corporate power and authority to enter into this Agreement and to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been (or in the
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case of Acquisition, will be) duly authorized by all requisite partnership or
corporate action on the part of IIIX and Acquisition. This Agreement has been
duly executed and delivered by IIIX and, assuming the due authorization,
execution and delivery hereof by Petroglyph, constitutes the valid and binding
obligation of IIIX, enforceable against IIIX in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, or similar laws affecting creditors' rights
generally or by general equitable principles. Upon consummation of the
Assignment (as hereinafter defined), assuming the due authorization, execution
and delivery hereof by Petroglyph, this Agreement will constitute the valid and
binding obligation of Acquisition, enforceable against Acquisition in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, or similar laws affecting creditors'
rights generally or by general equitable principles.
Section 3.3. Brokers and Intermediaries. IIIX has not, and Acquisition will
not have, employed any broker, finder, advisor or intermediary in connection
with the transactions contemplated by this Agreement which would be entitled to
a broker's, finder's, or similar fee or commission in connection therewith or
upon the consummation thereof. Any such fees shall be the liability of IIIX or
Acquisition.
Section 3.4. Proxy Statement. None of the information to be supplied by
IIIX or Acquisition for inclusion in the Proxy Statement will, at the time of
the mailing of the Proxy Statement and any amendments or supplements thereto,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading.
Section 3.5. Financing. IIIX has on the date hereof, and anticipates that
at the Closing it will have, such funds as are necessary for the consummation by
Acquisition of the Merger as contemplated hereby.
ARTICLE IV.
CERTAIN COVENANTS AND AGREEMENTS
Section 4.1. Announcement. None of Petroglyph, IIIX or Acquisition shall
issue any press release or otherwise make any public statement with respect to
this Agreement and the transactions contemplated hereby without the prior
consent of the others (which consent shall not be unreasonably withheld or
delayed), except as may be required by applicable law or stock exchange
regulation. Notwithstanding anything in this Section 4.1 to the contrary,
Acquisition, IIIX and Petroglyph shall, to the extent practicable, consult with
each other before issuing, and provide each other the opportunity to review and
comment upon, any such press release or other public statement with respect to
this Agreement and the transactions contemplated hereby, whether or not required
by law.
Section 4.2. Notification of Certain Matters. Petroglyph shall give prompt
notice to IIIX and Acquisition, and IIIX and Acquisition shall give prompt
notice to Petroglyph, of (a) the occurrence or non-occurrence of any event the
occurrence or non-occurrence of which
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would be reasonably likely to cause any representation or warranty contained in
this Agreement to be untrue or inaccurate in any material respect at or before
the Effective Time and (b) any material failure of Petroglyph, or of IIIX or
Acquisition, as the case may be, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder;
provided, however, that the delivery of any notice pursuant to this Section 4.3
shall not limit or otherwise affect the remedies available hereunder to the
party or parties receiving such notice.
Section 4.3. Directors' And Officers' Indemnification.
(a) The Certificate of Incorporation and the By-laws of the Surviving
Corporation shall contain the provisions with respect to indemnification and
limitation of liability of directors and officers set forth in Petroglyph's
Certificate of Incorporation and By-laws on the date of this Agreement, which
provisions shall not be amended, repealed or otherwise modified for a period of
six years from the Effective Time in any manner that would adversely affect the
rights thereunder of individuals who on or before the Effective Time were
directors or officers of Petroglyph, unless such modification shall be required
by law.
(b) IIIX or the Surviving Corporation shall maintain in effect for six
years from the Effective Time policies of directors' and officers' liability
insurance containing terms and conditions which shall not be less advantageous
to the insured (as defined under the Petroglyph Insurance Policies (as
hereinafter defined)) than any such policies of Petroglyph currently in effect
on the date of this Agreement (the "Petroglyph Insurance Policies"), with
respect to matters occurring before the Effective Time, to the extent available,
and having the maximum available coverage under any such Petroglyph Insurance
Policies; provided, that in no event shall the Surviving Corporation be required
to pay annual premiums for insurance under this Section 4.3(b) in excess of 200%
of the annual premiums currently paid by Petroglyph and provided further,
however, that if the annual premiums for such insurance coverage exceed 200% of
the annual premiums currently paid by Petroglyph, the Surviving Corporation
shall be obliged to obtain a policy with the greatest coverage that can be
obtained for premiums that are 200% of the annual premiums currently paid by
Petroglyph.
Section 4.4. Stockholders Meeting. Petroglyph shall seek and solicit the
requisite vote of stockholders at the Stockholders Meeting for the adoption and
approval of this Agreement and the transactions contemplated hereby. IIIX shall
vote all shares of Petroglyph Common Stock owned by it, and shall cause
Acquisition to vote any and all shares of Petroglyph Common Stock that
Acquisition may own, at the Stockholders Meeting in favor of the adoption and
approval of this Agreement and the transactions contemplated hereby.
Section 4.5. Obligations of Acquisition. IIIX shall take all actions
necessary to cause Acquisition to perform its obligations in accordance with the
terms, and subject to the conditions, of this Agreement.
Section 4.6. Petroglyph Interim Operations. During the period from the date
of this Agreement and continuing until the earlier of the termination of this
Agreement and the Effective Time, Petroglyph shall (except to the extent that
IIIX shall otherwise have previously consented in writing) carry on its business
and the business of its Subsidiaries in the usual, regular and ordinary course
in substantially the same manner as heretofore conducted, pay, to the
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extent it is able, its debts and taxes when due (unless debts and taxes are
subject to a dispute that Petroglyph is reasonably and actively seeking to
resolve), pay or perform, to the extent it is able, other obligations when due
(unless such obligations are the subject of a dispute that Petroglyph is
actively seeking to resolve) and, to the extent consistent with such businesses,
use its reasonable efforts consistent with past practice and policies to
preserve intact its present business organizations, keep available the services
of its present officers and key employees, to maintain in effect all material
foreign, federal, state and local licenses, approvals and authorizations,
including, without limitation, all material licenses and permits that are
required for Petroglyph or any of its Subsidiaries to carry on its business and
preserve its relationships with customers, suppliers, distributors, licensors,
licensees, and others having business dealings with it, all with the goal of
preserving Petroglyph's goodwill and ongoing business at the Effective Time, and
shall refrain from taking such action that would cause any of the conditions
contained in Article V hereof not to be satisfied; provided, however, that the
parties hereby acknowledge that Petroglyph currently has a negative net cash
working capital position of approximately $2 million. Without limiting the
generality of the foregoing, except as otherwise contemplated by this Agreement,
from the date hereof until the Effective Time, without the prior written consent
of IIIX, Petroglyph shall not, nor shall it permit any Subsidiary to:
(a) acquire or dispose of (by merger, consolidation, acquisition of
stock or assets or otherwise), directly or indirectly, any assets, other than
(i) pursuant to agreements that are in effect as of the date hereof and that
have been disclosed to IIIX in writing prior to the date hereof, (ii) assets
used in the ordinary course of business, including sales of oil and gas
products, in a manner that is consistent with past practice or (iii) approved by
the Petroglyph Board of Directors; or
(b) incur, assume or guarantee any indebtedness for borrowed money
other than pursuant to Petroglyph's credit facility with Chase Manhattan Bank
(up to amounts available under such credit facility on the date hereof);
provided, however, that the parties hereby acknowledge that Petroglyph, with the
approval of IIIX, intends to seek additional debt financing.
ARTICLE V.
CONDITIONS PRECEDENT
Section 5.1. Conditions to Each Party's Obligation to Effect the Merger.
The respective obligation of each party to effect the Merger shall be subject to
the satisfaction on or before the Closing Date of each of the following
conditions (any of which may be waived by the parties hereto in writing, in
whole or in part, to the extent permitted by applicable law):
(a) No Injunction or Proceeding. No preliminary or permanent
injunction, temporary restraining order or other decree of a court, legislature
or other agency or instrumentality of federal, state or local government (a
"Governmental Entity") shall be in effect, no statute, rule or regulation shall
have been enacted by a Governmental Entity and no action, suit or proceeding by
any Governmental Entity shall have been instituted or threatened, which
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shall prohibit the consummation of the Merger or shall materially challenge the
transactions contemplated hereby.
(b) Consents. Except for the filing of the Certificate of Merger, all
consents, approvals and authorizations of and filings with Governmental Entities
required for the consummation of the transactions contemplated hereby shall have
been obtained or effected or filed.
(c) Approval of Holders of Petroglyph Common Stock. This Agreement and
the Merger shall have been adopted by the affirmative vote or written consent of
a majority of the shares of Petroglyph Common Stock outstanding.
(d) Consent of Chase Manhattan Bank. Chase Manhattan Bank, as lender
under the Credit Agreement, dated as of September 30, 1998, between Chase
Manhattan Bank and Petroglyph, shall have consented to the Merger.
(e) Recommendation of the Special Committee. The Special Committee
shall not have withdrawn its recommendation that (i) the Merger is fair to and
in the best interest of the Public Stockholders and (ii) the Board of Directors
of Petroglyph approve this Agreement and such transactions.
Section 5.2.Conditions to the Obligation of Petroglyph to Effect the
Merger. The obligation of Petroglyph to effect the Merger is further subject to
the satisfaction or waiver of each of the following conditions before or at the
Closing Date:
(a) Representations and Warranties. The representations and warranties
of IIIX contained in this Agreement shall be true and correct in all material
respects at and as of the Effective Time as though made at and as of the
Effective Time, and Petroglyph shall have received a certificate of the
President of IIIX to that effect.
(b) Agreements. IIIX and Acquisition shall have performed and complied
in all material respects with all their undertakings and agreements required by
this Agreement to be performed or complied with by them before or at the Closing
Date.
Section 5.3. Conditions to the Obligation of Acquisition to Effect the
Merger. The obligation of Acquisition to effect the Merger is further subject to
the satisfaction or waiver of each of the following conditions before or at the
Closing Date:
(a) Representations and Warranties. The representations and warranties
of Petroglyph contained in this Agreement shall be true and correct in all
material respects at and as of the Effective Time as though made at and as of
the Effective Time, and Acquisition shall have received a certificate of the
President and Chief Executive Officer of Petroglyph to that effect.
(b) Agreements. Petroglyph shall have performed and complied in all
material respects with all of undertakings and agreements required by this
Agreement to be performed or complied with by it before or at the Closing Date.
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(c) No Material Adverse Change. Except as set forth in the Petroglyph
SEC Reports filed on or before the date of this Agreement or as discussed at any
duly called meeting of the Board of Directors of Petroglyph at which a quorum
was present, since December 31, 1999 there shall not have been any material
adverse change in the business, assets, liabilities, results of operations or
financial condition of Petroglyph and its Subsidiaries, taken as a whole.
(d) Appraisal Rights. The holders of not more than 10% of the issued
and outstanding shares of Petroglyph Common Stock shall have exercised their
rights to dissent from the Merger in accordance with Section 262 of the DGCL and
pursuant to Section 1.7 of this Agreement.
(e) Indebtedness of Petroglyph. Except as otherwise provided in this
Agreement or approved by IIIX, the gross aggregate amount of all indebtedness
(including, without limitation, capitalized leases (but specifically excluding
any obligations under Petroglyph's agreements with Colorado Interstate Gas),
senior subordinated notes issued to IIIX, Petroglyph's credit facility with
Chase Manhattan Bank and the loan agreement between Petroglyph and IIIX, and all
accrued and unpaid interest on such amounts) of Petroglyph and its Subsidiaries
shall not, on the Closing Date, exceed $19 million.
ARTICLE VI.
TERMINATION, AMENDMENT AND WAIVER
Section 6.1. Termination. This Agreement may be terminated and the Merger
may be abandoned at any time before the Effective Time, whether before or after
stockholder approval thereof:
(a) by the mutual written consent of IIIX (or Acquisition, after its
formation) and Petroglyph (with the approval of the Special Committee);
(b) by either IIIX (or Acquisition, after its formation) or Petroglyph
(with the approval of the Special Committee), in each case by written notice to
the other, if:
(i) the Merger shall have not been consummated on or before
September 15, 2000; provided, however, that the right to terminate this
Agreement under this Section 6.1(b)(i) shall not be available to any party whose
failure to fulfill any obligation under this Agreement has been the cause of, or
resulted in, the failure of the Merger to occur on or before such date; or
(ii) the Special Committee shall have withdrawn, or modified or
changed in any manner adverse to Acquisition its approval of this Agreement or
the Merger after having concluded to do so in good faith after consultation with
independent legal counsel that there is a reasonable probability that the
failure to take such action would result in a violation of its fiduciary
obligations under applicable law.
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Section 6.2. Effect of Termination. If this Agreement shall be terminated
as provided in Section 6.1, this Agreement shall become null and void, and there
shall be no liability on the part of IIIX, Acquisition or Petroglyph (except as
set forth in Section 7.2 hereof, which shall survive any termination of this
Agreement); provided, however, that nothing herein shall relieve any party from
any liability or obligation with respect to any breach of this Agreement.
Section 6.3. Amendment. This Agreement may be amended in writing by the
parties hereto; provided, however, that any amendment of this Agreement after
approval by the stockholders of Petroglyph at the Stockholders Meeting that, in
the judgment of the Special Committee, shall adversely affect in any material
respect the rights of stockholders under this Agreement shall require the prior
approval of the stockholders of Petroglyph.
Section 6.4. Waiver. At any time before the Effective Time, whether before
or after the approval of the holders of Petroglyph Common Stock referred to in
Section 5.1(c) hereof, either party may (i) extend the time for the performance
of any of the obligations or other acts of the other party hereto or (ii) waive
compliance with any of the agreements of the other party or fulfillment of any
conditions to its own obligations hereunder. Any agreement on the part of a
party hereto to any such extension or waiver shall be valid only if set forth in
an instrument in writing signed on behalf of such party by a duly authorized
officer.
Section 6.5. Approval of Special Committee Required. The approval of the
Special Committee shall be required for (i) any amendment or modification of
this Agreement that adversely affects in any material respect the rights of
stockholders under this Agreement, (ii) any waiver of any condition to the
obligations of Petroglyph under Sections 5.1(e), 5.2(a) or 5.2(b) hereof and
(iii) any waiver of Petroglyph's rights under this Agreement.
ARTICLE VII.
MISCELLANEOUS
Section 7.1. Non-Survival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Effective Time, and neither IIIX,
Acquisition or Petroglyph, nor any of their respective officers, directors or
employees or stockholders, shall have any liability whatsoever with respect to
any such representation or warranty after such time. This Section 7.1 shall not
limit any covenant or agreement of the parties which by its terms contemplates
performance after the Effective Time.
Section 7.2. Expenses. Except as contemplated by this Agreement, all costs
and expenses incurred in connection with the Agreement and the consummation of
the transactions contemplated hereby shall be the obligation of the party
incurring such expenses. All costs and expenses incurred by IIIX or Acquisition
in connection with the Agreement and the consummation of the transactions
contemplated hereby shall, after the Effective Time, be obligations of the
Surviving Corporation.
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Section 7.3. Applicable Law. This Agreement shall be governed by the law of
the State of Delaware without regard to the laws that might apply under
otherwise applicable choice-of-law principles.
Section 7.4. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given or made as follows:
(a) if sent by registered or certified mail in the United States return receipt
requested, upon receipt; (b) if sent by reputable overnight air courier, two
business days after being so sent; (c) if sent by telecopy transmission, with a
copy mailed on the same day in the manner provided in clauses (a) or (b) above,
when transmitted and receipt is confirmed by telephone; or (d) if otherwise
actually personally delivered, when delivered, and shall be sent or delivered as
follows:
If to Petroglyph, to:
c/o Petroglyph Energy, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copies (which shall not constitute notice) to:
▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Morris, Laing, ▇▇▇▇▇, ▇▇▇▇▇ &
▇▇▇▇▇▇▇, Chtd.
▇▇▇ ▇.▇. ▇▇▇▇▇▇▇, ▇▇▇. ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to IIIX or Acquisition, to:
c/o Intermountain Industries, Inc.
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copies (which shall not constitute notice) to:
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▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇. ▇▇▇▇▇▇▇, Rock & Fields, Chtd.
US Bank Plaza Building
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Such names and addresses may be changed by such notice.
Section 7.5. Entire Agreement. This Agreement (including the documents and
instruments referred to herein) contains the entire understanding of the parties
hereto with respect to the subject matter contained herein, and supersedes and
cancels all prior agreements, negotiations, correspondence, undertakings and
communications of the parties, oral or written, respecting such subject matter.
Section 7.6. Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any either party hereto
(whether by operation of law or otherwise) without the prior written consent of
the other party; provided, however, that promptly following the formation of
Acquisition, IIIX shall assign to Acquisition (the "Assignment") its rights,
interests and obligations hereunder, and Acquisition shall assume and succeed to
such rights, interests and obligations; provided that such assignment shall not
relieve IIIX of its obligations to cause the Merger to be consummated pursuant
to and in accordance with the terms of this Agreement. This Section 7.6 shall
survive any termination of this Agreement.
Section 7.7. Headings; References. The article, section and paragraph
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
Section 7.8. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
shall be considered one and the same agreement.
Section 7.9. No Third-Party Beneficiaries. Except as provided in Sections
1.9 and 4.3, nothing in this Agreement, express or implied, is intended to
confer upon any Person not a party to this Agreement any rights or remedies
under or by reason of this Agreement.
Section 7.10. Severability; Enforcement. Any term or provision of this
Agreement that is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or
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unenforceable the remaining terms and provisions of this Agreement or affecting
the validity or unenforceability of any of the terms or provisions of this
Agreement in any other jurisdiction and such provision shall be deemed to have
been replaced in such jurisdiction by the provisions enforceable in such
jurisdiction that shall most nearly express the intent and achieve the
commercial effect of the unenforceable provision. If any provision of this
Agreement is so broad as to be unenforceable, the provisions shall be
interpreted to be only so broad as is enforceable.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first above written.
PETROGLYPH ENERGY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
III EXPLORATION COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
[SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER]