EXHIBIT 10.21
REGISTRATION RIGHTS AGREEMENT
BETWEEN
THE CHASE MANHATTAN BANK
AND
PETROGLYPH ENERGY, INC.
September 15, 1997
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is entered into as of the
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15th day of September, 1997, between The Chase Manhattan Bank, a New York
banking corporation ("Chase"), and Petroglyph Energy, Inc., a Delaware
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corporation (the "Company").
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W I T N E S S E T H:
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WHEREAS, Chase and the Company are parties to a Warrant Agreement of even
date herewith (the "Warrant Agreement") pursuant to which the Company will issue
and sell to Chase 9,280 warrants (the "Warrants") each of which entitles Chase
to purchase one (1) share of the Company's common stock par value $.01 per share
(the "Common Stock"); and
WHEREAS, in connection with the Warrant Agreement, Chase has required that
the Company enter into this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I
TERMS DEFINED
SECTION 1.1. Definitions. All terms used herein which are defined in the
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preamble or recitals hereto shall have the meanings given to such terms therein,
and each of the following terms, as used herein, shall have the following
meanings:
"Authorized Officer" means, as to any Person, its Chairman, its Chief
Executive Officer, its President, its Chief Operating Officer, its Financial
Officer, any Vice President or its Secretary.
"Business Day" means any day excluding Saturday and Sunday and excluding
any other day on which Chase is required or authorized to close.
"Commission" means the Securities and Exchange Commission or any entity
succeeding to any or all of its functions under the Securities Act or the
Exchange Act.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any successor federal statute.
"Fair Market Value" means, as of any date of determination, with respect to
Common Stock of the Company (including any Common Stock issuable upon exercise
of any warrant (including the Warrant Shares)), or option to acquire such Common
Stock, the value per share determined pursuant to clause (i) or (ii) below of
this definition.
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(i) if such Common Stock is listed on a national securities exchange or
admitted to unlisted trading privileges on such an exchange, the average last
reported sale price (as report in The Wall Street Journal) of a share of such
equity security over the 21 trading day period immediately prior to the date of
determination or if no such sale is made on any such day, the mean of the
closing bid and asked prices for such day on such exchange; or
(ii) if such Common Stock is not so listed or admitted to unlisted trading
privileges, the average mean of the last bid and asked prices reported for a
share of Common Stock over the 21 trading day period immediately prior to the
date of determination (A) by the National Association of Securities Dealers
Automatic Quotation System or (B) if reports are unavailable under clause (A)
above by the National Quotation Bureau Incorporated.
"Governmental Authority" means any government, any state or other political
subdivision thereof, or any Person exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.
"Holder" with respect to any security of a Person, shall mean the record or
beneficial owner of such security.
"Other Securities" means Registrable Securities which are not Restricted
Securities.
"Person" means an individual, a corporation, a partnership, an association,
a trust or any other entity, organization or division, including a government or
political subdivision or an agency or instrumentality thereof and shall also
mean the Company.
"Qualified Public Market" shall mean with respect to Common Stock in the
Company, a trading market on a national securities exchange or over-the-counter
market which consists of publicly held Common Stock, with a total company market
capitalization of at least $15,000,000 calculated based on the Fair Market Value
of the Common Stock. A "Qualified Public Market" shall be deemed to exist if
the financial parameters set forth in the immediately preceding sentence have
been met for the Common Stock for any period of 21 consecutive days.
"Registrable Securities" means (a) all Common Stock now or at any time
hereafter owned by Chase, (b) the Warrant Shares, and (c) any Common Stock
issued with respect to the Warrant Shares by way of a stock dividend or stock
split or in connection with a merger, recapitalization, combination of shares,
consolidation or other reorganization.
"Restricted Securities" means (a) the Warrant Shares, and (b) any
securities issued with respect to the Warrant Shares by way of a stock dividend,
a stock split or in connection with a merger, recapitalization, combination of
shares, consolidation or other reorganization.
"Section" refers to a "section" or "subsection" of this Agreement unless
specifically indicated otherwise.
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"Securities Act" means the Securities Act of 1933, as amended, or any
successor federal statute.
"Taxes" means all taxes, assessments, filing or other fees, levies,
imposts, duties, deductions, withholdings, stamp taxes, interest equalization
taxes, capital transaction taxes, foreign exchange taxes or other charges of any
nature whatsoever, from time to time or at any time imposed by law or any
federal, state or local governmental agency. "Tax" means any one of the
foregoing.
"Warrant Holder" means any Person (i) in whose name any Warrant is
registered on the register referenced in Section 4.2 of the Warrant Agreement,
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or (ii) in whose name any Warrant Shares are registered on the books and records
of the Company.
"Warrant Shares" means the shares of Common Stock issuable upon exercise of
the Warrants.
SECTION 1.2. Forms. All references in this Agreement to particular forms
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of registration statements are intended to include, and shall be deemed to
include, references to all successor forms which are intended to replace, or to
apply to similar transactions as, the forms herein referenced.
SECTION 1.3. Gender and Number. Words of any gender used in this
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Agreement shall be held and construed to include any other gender and words in
the singular number shall be held to include the plural, and vice versa, unless
the context requires otherwise.
SECTION 1.4. References to Agreement. Use of the words "herein",
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"hereof", "hereinabove", and the like are and shall be construed as references
to this Agreement.
ARTICLE II
REGISTRATION RIGHTS
SECTION 2.1. Demand Registration. (a) Subject to the limitations
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provided herein, at any time three (3) years after the effective date of the
Company's first issuance of securities to the public pursuant to a registration
statement under the Securities Act, upon the written request (specifying that it
is being made pursuant to this Section 2.1) of one or more Holders of Restricted
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Securities representing 51% or more of the Restricted Securities at the time
outstanding, requesting that the Company effect the registration under the
Securities Act of all or part of such Holders' Registrable Securities, and
specifying (x) the intended method of disposition thereof, (y) whether or not
such requested registration is to be an underwritten offering, and (z) the price
range (net of underwriting discount and commissions) acceptable to such Holder
or Holders to be received for such Registrable Securities, the Company will
within ten (10) business days after the Company receives such written request
give written notice of such requested registration to all other Holders of
Registrable Securities and thereupon the Company will use reasonable efforts to
effect an effective registration under the Securities Act of:
(i) the Registrable Securities which the Company has been so
requested to register by such Holders; and
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(ii) all other Registrable Securities which the Company has
been requested to register by the other Holders thereof by written request given
to the Company within 30 days after the giving of such written notice by the
Company (which request shall specify the same information called for by the
original request to effect registration described above), all to the extent
requisite to permit the disposition (in accordance with Section 2.1(b) hereof)
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of the Registrable Securities so to be registered.
If the Company is required to effect a registration pursuant to this Section 2.1
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and the Company furnishes to the Holders of Registrable Securities requesting
such registration a certificate signed by the President of the Company stating
that in the good faith judgment of the Board of Directors of the Company it
would be seriously detrimental to the Company and its stockholders for such
registration statement to be filed on or before the date such filing would
otherwise be required hereunder and it is therefore necessary to defer the
filing of such registration statement, the Company shall have the right to defer
such filing for a period of not more than one hundred twenty (120) days after
receipt of the request for such registration from the Holder or Holders of
Registrable Securities requesting such registration; provided that during such
time the Company may not file a registration statement for securities to be
issued and sold for its own account or that of anyone other than the Holder or
Holders of Registrable Securities requesting such registration.
(b) The Holders of a majority of the Registrable Securities to be
included in such registration statement shall determine the method of
distribution of the Registrable Securities so included; provided, however, that
if no agreement of Holders of a majority of the Registrable Securities to be
included in such registration statement is obtained, then if Holders of thirty
percent (30%) of the Registrable Securities to be included in such registration
statement request an underwritten public offering, an underwritten public
offering shall be the method of distribution with other methods permitted to the
extent the managing underwriter for such offering, in its sole discretion,
agrees to other methods of distribution being covered by such registration
statement.
(c) Whenever the Company shall effect a registration pursuant to this
Section 2.1 in connection with an underwritten offering, no securities other
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than Registrable Securities shall be included among the securities covered by
such registration unless (i) the managing underwriter of such offering shall
have advised each Holder of Registrable Securities to be covered by such
registration in writing that the inclusion of such other securities would not
adversely affect such offering or (ii) the Holders of a majority or more of all
Registrable Securities to be covered by such registration shall have consented
in writing to the inclusion of such other securities.
(d) Registrations under this Section 2.1 shall be on such appropriate
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registration form of the Commission (i) as shall be selected by the Company and
as shall be reasonably acceptable to the Holders of a majority or more of the
Registrable Securities to be registered, and (ii) as shall permit the
disposition of such Registrable Securities in accordance with the method or
methods of disposition selected pursuant to Section 2.1(b).
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(e) Except as otherwise provided in this Section 2.1 or in Section
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2.2, all expenses incurred in connection with each registration requested
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pursuant to Section 2.1 and each registration requested pursuant to Section 2.2
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(excluding in each case underwriter's discounts and
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commissions applicable to Registrable Securities), including, without
limitation, in each case, all registration, filing and National Association of
Securities Dealer, Inc. fees; all fees and expenses of complying with securities
or blue sky laws; all word processing, duplicating and printing expenses,
messenger, delivery and shipping expenses; fees and disbursements of the
accountants and counsel for the Company including the expenses of any special
audits or "cold comfort" letters or opinions required by or incident to such
registrations; and the reasonable fees and disbursements of one firm of counsel
retained by Holders of such Registrable Securities, premiums and other costs of
policies of insurance against liabilities arising out of the public offering of
the Registrable Securities, any fees and disbursements of underwriters
customarily paid by issuers or sellers of securities, but excluding underwriting
discounts and commissions, if any, shall be borne by the Company. In all cases,
each Holder of Registrable Securities shall pay the underwriter's discounts and
commissions applicable to the securities sold by such Holder.
(f) A registration requested pursuant to this Section 2.1 shall not be
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deemed to have been effected (i) unless a registration statement with respect
thereto has become effective (unless a substantial cause of the failure of such
registration statement to become effective shall be attributable to one or more
Holders of Registrable Securities whose Restricted Securities were to have been
included in such registration statement), (ii) if after it has become effective,
such registration is interfered with by any stop order, injunction or other
order or requirement of the Commission or other governmental agency or court for
any reason, resulting in a failure to consummate the offering of Registrable
Securities offered thereby, (iii) if after a registration statement with respect
thereto has become effective, the offering of Registrable Securities offered
thereby is not consummated due to factors beyond the control of the Holders of
such Registrable Securities, including without limitation in the context of a
proposed firm commitment underwriting, the fact that the underwriters have
advised the Holders of such Registrable Securities that such Registrable
Securities cannot be sold at a net price equal to or above the net price
anticipated at the time of filing of the preliminary prospectus or (iv) if the
conditions to closing specified in the purchase agreement or underwriting
agreement entered into in connection with such registration are not satisfied
(unless a substantial cause of such conditions to closing not being satisfied
shall be attributable to one or more Holders of Registrable Securities whose
Registrable Securities were included in such registration statement).
(g) If a requested registration pursuant to this Section 2.1 involves
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an underwritten offering, the underwriter or underwriters thereof shall be
selected by the Company with the approval of the Holders of a majority or more
of the Registrable Securities to be so registered.
(h) If a requested registration pursuant to this Section 2.1 involves
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an underwritten offering, and the managing underwriter shall advise the Company
in writing (with a copy to each Person requesting registration) that, in its
opinion, the number of securities requested to be included in such registration
exceeds the number which can be sold in such offering within a price range
acceptable to the Holders of a majority or more of the Registrable Securities
requested to be included in such registration, then the Registrable Securities
requested to be registered pursuant to this Section 2.1 shall be reduced to the
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number of Registrable Securities which the Company is so advised can be sold in
(or during the time of) such offering by (i) first decreasing the Other
Securities requested to be registered (pro rata among the Persons requesting
such registration on the
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basis of the percentage of Other Securities held by such Person immediately
prior to the filing of the registration statement with respect to such
registration), then (ii) by decreasing the Restricted Securities requested to be
registered (such decrease to be made ratably among the Persons requesting such
registration on the basis of the percentage of Restricted Securities held by
such Person immediately prior to the filing of the registration statement with
respect to such registration). In connection with any registration as to which
the provisions of this clause (h) apply, no securities other than Registrable
Securities shall be covered by such registration.
(i) Notwithstanding the other provisions of this Section 2.1, the
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Company shall not be required by this Section 2.1 to effect (A) more than one
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effective registration at the Company's expense under this Section 2.1 requested
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by Holders of Restricted Securities. The Company shall also be required by this
Section 2.1, to effect, at the sole expense of the holders of Registrable
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Securities requesting registration (unless such registration is a demand
registration exercised pursuant to the other provisions of this Section 2.1 in
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which case the Company will bear the expenses of such registration in accordance
with Section 2.1(e)), an unlimited number of registrations on Form S-3 (or any
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successor similar form).
SECTION 2.2. Piggyback Registration. (a) If the Company at any time
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proposes to register any of its securities under the Securities Act (other than
by a registration on Form X-0, X-0 or any successor similar forms or any other
form not available for registering the Registrable Securities) for sale to the
public and other than pursuant to Section 2.1, whether or not for sale for its
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own account, it will at such time, at least 30 days prior to filing the
registration statement, give written notice to all Holders of Registrable
Securities of its intention to do so. Upon the written request of any such
Holder made within 15 days after the receipt of any such notice (which request
shall specify the Registrable Securities intended to be disposed of by such
Holder and the intended method of disposition thereof), the Company will use
reasonable efforts to effect the registration under the Securities Act of all
Registrable Securities which the Company has been so requested to register by
the Holders of such Registrable Securities, to the extent requisite to permit
the disposition (determined pursuant to the provisions of Section 2.1(b)) of the
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Registrable Securities so to be registered, provided that if, at any time after
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giving written notice of its intention to register any securities and prior to
the effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register or to
delay registration of such securities, the Company may, at its election, give
written notice of such determination to each Holder of Registrable Securities
and, thereupon, (i) in the case of a determination not to register, shall be
relieved of its obligation to register any Registrable Securities in connection
with such registration (but not from its obligation to pay expenses in
accordance with Section 2.1(e)), without prejudice, however, subject to the
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rights of any Holder or Holders of Registrable Securities entitled to do so, to
request that such registration be effected as a registration under Section 2.1,
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and (ii) in the case of a determination to delay registering, shall be permitted
to delay registering any Registrable Securities being registered pursuant to
this Section 2.2, for the same period as the delay in registering such other
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securities. No registration effected under this Section 2.2 shall relieve the
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Company of its obligation to effect any registration upon request under Section
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2.1.
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(b) If (i) a registration pursuant to this Section 2.2 involves an
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underwritten offering of the securities so being registered, whether or not for
sale for the account of the Company,
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to be distributed (on a firm commitment basis) by or through one or more
underwriters of recognized standing, whether or not the Registrable Securities
so requested to be registered for sale for the account of Holders of Registrable
Securities are also to be included in such underwritten offering, and (ii) the
managing underwriter of such underwritten offering shall inform the Company and
the Holders of the Registrable Securities requesting such registration by letter
of its belief that the number of securities requested to be included in such
registration exceeds the number which can be sold in (or during the time of)
such offering, then the Company may include in such offering all securities
proposed by the Company to be sold for its own account and may decrease the
number of Registrable Securities and other securities of the Company requested
to be included in such registration by (i) first decreasing the number of other
securities requested to be included in such registration to zero, and (ii) then
decreasing the number of Registrable Securities requested to be included in such
registration (pro rata on the basis of the number of shares of such securities
held by such Person immediately prior to the filing of the registration
statement with respect to such registration) to the extent necessary to reduce
the number of securities to be included in the registration to the level
recommended by the managing underwriter.
SECTION 2.3. Registration Procedures. If and whenever the Company is
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required to use reasonable efforts to effect the registration of any Registrable
Securities under the Securities Act as provided in Sections 2.1 and 2.2, the
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Company will, subject to the limitations provided herein, as expeditiously as
possible:
(a) prepare and (as soon thereafter as possible or in any event no
later than 60 days after the end of the period within which requests for
registration may be given to the Company or such longer period as the Company
shall in good faith require to produce the financial statements required in
connection with such registration) file with the Commission the requisite
registration statement to effect such registration and thereafter use reasonable
efforts to cause such registration statement to become effective, provided that
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the Company may discontinue any registration of its securities which are not
Registrable Securities (and, under the circumstances specified in Section
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2.1(f)(iii) its securities which are Registrable Securities) at any time prior
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to the effective date of the registration statement relating thereto;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
to comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement until such
time as all of such securities have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof set forth in
such registration statement; provided, however, that the Company shall not in
any event be required to keep the registration statement effective for a period
of more than nine months after such registration statement becomes effective;
(c) furnish to each seller of Registrable Securities covered by such
registration statement such number of conformed copies of such registration
statement and of each such amendment and supplement thereto (in each case
including all exhibits), such number of copies of the prospectus contained in
such registration statement (including each preliminary prospectus and
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any summary prospectus) and any other prospectus filed under Rule 424 under the
Securities Act, and such other documents, as such seller may reasonably request;
(d) use its reasonable best efforts to register or qualify all
Registrable Securities and other securities covered by such registration
statement under such other securities or blue sky laws of such jurisdictions as
each seller thereof shall reasonably request, to keep such registration or
qualification in effect for so long as such registration statement remains in
effect (provided, however, that the Company shall not in any event be required
to keep such registration or qualification in effect for a period of more than
nine months after such registration or qualification becomes effective), and
take any other action which may be reasonably necessary or advisable to enable
such seller to consummate the disposition in such jurisdictions of the
securities owned by such seller, except that the Company shall not for any such
purpose be required to qualify generally to do business as a foreign corporation
in any jurisdiction wherein it would not but for the requirements of this
subsection (d) be obligated to be so qualified or to consent to general service
of process in any such jurisdiction;
(e) use its reasonable best efforts to cause all Registrable
Securities covered by such registration statement to be registered with or
approved by such other United States Federal or state governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof to
consummate the disposition of such Registrable Securities;
(f) furnish to each seller of Registrable Securities a copy, or, upon
request, a signed counterpart, addressed to such seller (and the underwriters,
if any) of:
(i) an opinion of counsel for the Company, dated the effective
date of such registration statement (and, if such registration includes an
underwritten public offering, dated the date of the closing under the
underwriting agreement), and
(ii) a "comfort" letter, dated the effective date of such
registration statement (and, if such registration includes an underwritten
public offering, dated the date of the closing under the underwriting
agreement), signed by the independent public accountants who have audited the
Company's financial statements included in such registration statement, covering
substantially the same matters with respect to such registration statement (and
the prospectus included therein) and, in the case of the accountants' letter,
with respect to events subsequent to the date of such financial statements, as
are customarily covered in opinions of issuer's counsel and in accountants'
letters delivered to the underwriters in underwritten public offerings of
securities and, in the case of the accountants' letter, such other financial
matters, and, in the case of the legal opinion such other legal matters, as such
seller or such Holder (or the underwriters, if any) may reasonably request;
(g) notify each seller of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, upon discovery that, or upon
the happening of any event as a result of which, the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make
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the statements therein not misleading in the light of the circumstances under
which they were made, and at the request of any such seller, prepare and furnish
to such seller a reasonable number of copies of a supplement to or an amendment
of such prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances under which they were made;
(h) otherwise use reasonable efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
Holders, as soon as reasonably practicable, an earnings statement covering the
period of at least twelve months beginning with the first full calendar month
after the effective date of such registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act,
and will furnish to each such seller, upon request of such seller, at least five
days prior to the filing thereof a copy of any amendment or supplement to such
registration statement or prospectus and shall not file any thereof to which any
such seller shall have delivered to the Company an opinion of counsel that such
amendment or supplement does not comply in all material respects with the
requirements of the Securities Act or of the rules or regulations thereunder;
(i) provide and cause to be maintained a transfer agent for all
Registrable Securities covered by such registration statement from and after a
date not later than the effective date of such registration statement;
(j) use its reasonable best efforts to list all Registrable Securities
covered by such registration statement on any securities exchange on which any
of the Registrable Securities is then listed; and
(k) except with respect to registrations made pursuant to Section
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2.1(i), refrain from making any sale or distribution of any equity securities of
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the Company, except pursuant to any employee stock option plan and any
preexisting agreement for the sale of such securities, for at least one hundred
(180) days after the closing of the public offering pursuant to such
registration.
It shall be a condition precedent to the obligations of the Company to
take any action with respect to registering a Holder's Registrable Securities
pursuant to this Section 2.3 that such seller of Registrable Securities as to
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which any registration is being effected furnish the Company in writing such
information regarding such seller, the Registrable Securities and other
securities of the Company held by such seller, and the distribution of such
securities as the Company may from time to time reasonably request in writing.
If a Holder refuses to provide the Company with any of such information on the
grounds that it is not necessary to include such information in the registration
statement, the Company may exclude such Holder's Registrable Securities from the
registration statement if the Company provides such Holder with an opinion of
counsel to the effect that such information must be included in the registration
statement and such Holder thereafter continues to withhold such information.
The deletion of such Holder's Registrable Securities from a registration
statement shall not affect the registration of the other Registrable Securities
to be included in such registration statement.
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Each Holder of Registrable Securities agrees by acquisition of such
Registrable Securities that upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 2.3(g), such Holder will
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forthwith discontinue such Holder's disposition of Registrable Securities
pursuant to the registration statement relating to such Registrable Securities
until such Holder's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 2.3(g) and, if so directed by the Company,
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will deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the prospectus
relating to such Registrable Securities current at the time of receipt of such
notice.
SECTION 2.4. Underwritten Offerings. (a) If requested by the
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underwriters for any underwritten offering of Registrable Securities pursuant to
a registration requested under Section 2.1 except the second sentence of Section
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2.1(i), the Company will enter into an underwriting agreement with such
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underwriters for such offering, such agreement to be reasonably satisfactory in
substance and form to each Holder of Registrable Securities being registered and
the underwriters and to contain such representations and warranties by the
Company and such other terms as are generally prevailing in agreements of this
type, including, without limitation, indemnities to the effect and to the extent
provided in Section 2.6. Each such Holder of Registrable Securities will
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cooperate with the Company in the negotiation of the underwriting agreement and
will give consideration to the reasonable requests of the Company regarding the
form thereof, provided, that nothing herein contained shall diminish the
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foregoing obligations of the Company. The Holders of Registrable Securities to
be distributed by such underwriters shall be parties to such underwriting
agreement and may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of such Holders and that any or all of the conditions precedent
to the obligations of such underwriters under such underwriting agreement be
conditions precedent to the obligations of such Holders. Any such Holder shall
not be required to make any representations or warranties to or agreements with
the Company or the underwriters other than representations, warranties or
agreements regarding such Holder, such Holder's Registrable Securities and other
securities of the Company, such Holder's intended method of distribution, and
any representations, warranties or agreements required by law.
(b) If the Company at any time proposes to register any of its
securities under the Securities Act as contemplated by Section 2.2 and such
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securities are to be distributed by or through one or more underwriters, the
Company will, if requested by any Holder of Registrable Securities as provided
in Section 2.2 and subject to the provisions of Section 2.2(b), arrange for such
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underwriters to include all the Registrable Securities to be offered and sold by
such Holder owning the securities to be distributed by such underwriters. In
such event, the Holders of Registrable Securities to be distributed by such
underwriters shall be parties to the underwriting agreement between the Company
and such underwriters and may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of such Holders and that any or all of the conditions precedent
to the obligations of such underwriters under such underwriting agreement be
conditions precedent to the obligations of such Holders. Any such Holder shall
not be required to make any representations or warranties to or agreements with
the Company or the underwriters other than representations, warranties or
agreements regarding such Holder, such
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Holder's Registrable Securities or other securities of the Company, such
Holder's intended method of distribution and any representations, warranties or
agreements required by law.
SECTION 2.5. Preparation; Reasonable Investigation. In connection with
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the preparation and filing of each registration statement under the Securities
Act pursuant to this Agreement, the Company will give the Holders of Registrable
Securities registered under such registration statement, their underwriters, if
any, and one counsel or firm of counsel and one accountant or firm of
accountants representing all the Holders of Registrable Securities to be
registered under such registration statement, the opportunity to participate in
the preparation of such registration statement, each prospectus included therein
or filed with the Commission, and each amendment thereof or supplement thereto,
and will give each of them such access to its books and records and such
opportunities to discuss the business of the Company with its officers and the
independent public accountants who have certified its financial statements as
shall be necessary, in the opinion of such Holders' and such underwriters'
respective counsel, to conduct a reasonable investigation within the meaning of
the Securities Act.
SECTION 2.6. Purchase Option. Notwithstanding anything contained herein to
---------------
the contrary, upon any request by Holders of Registrable Securities for
registration of Registrable Securities pursuant to Section 2.1 or 2.2 hereof (a
----------- ---
"Registration Request"), if at the time such request is made, a Qualified Public
Market exists for the Common Stock, the Company shall have the option to
purchase all Registrable Securities with respect to which such Registration
Request is made for a cash purchase price equal to the Fair Market Value of such
Registrable Securities. In the event the Company elects to exercise such
option, it shall deliver written notice of such election to the Holders
requesting registration not less than ten (10) Business Days after receipt of
such Registration Request, and the closing of such purchase and sale of
Registrable Securities shall occur on a date mutually acceptable to the Company
and such Holders, but in no event more than thirty (30) days after the date of
the Registrable Request. At the closing of such sale and purchase, such Holders
shall deliver the certificates evidencing the Registrable Securities to be sold
subject to receipt from the Company of the purchase price therefor payable by
certified check, wire transfer or other immediately available funds.
ARTICLE III
INDEMNIFICATION
SECTION 3.1. Indemnification. In the event any Registrable Securities
---------------
are included in a registration statement under Section 2.1 or 2.2, to the extent
----------- ---
permitted by law, the Company will, and hereby does, indemnify and hold harmless
the seller of any Registrable Securities covered by such registration statement,
its directors and officers, each other Person who participates as an underwriter
in the offering or sale of such securities and each other Person, if any, who
controls such seller or any such underwriter within the meaning of the
Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which such seller or any such director or officer or underwriter or
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue
11
statement of any material fact contained in any registration statement under
which such securities were registered under the Securities Act, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Company will reimburse such seller
and each such director, officer, underwriter and controlling person for any
legal or any other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, liability, action or
proceeding; provided that the Company shall not be liable in any such case to
--------
to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises solely out of or is based
solely upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement, any such preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by such seller expressly for use in the preparation thereof, and
provided further that the Company shall not be liable to any person who
----------------
participates as an underwriter in the offering or sale of Registrable Securities
or any other Person, if any, who controls such underwriter within the meaning of
the Securities Act, in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense arises
out of such Person's failure to send or give a copy of the final prospectus, as
the same may be then supplemented or amended, to the Person asserting an untrue
statement or alleged untrue statement or omission or alleged omission at or
prior to the written confirmation of the sale of Registrable Securities to such
Person if such statement or omission was corrected in such final prospectus.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such seller or any such director, officer,
underwriter or controlling person and shall survive the transfer of such
securities by such seller.
SECTION 3.2. Indemnification by the Sellers. The Company may require, as
------------------------------
a condition to including any Registrable Securities in any registration
statement filed pursuant to Section 2.3, that the Company shall have received an
-----------
undertaking satisfactory to it from the prospective seller of such securities,
to indemnify and hold harmless (in the same manner and to the same extent as set
forth in Section 3.1) each underwriter, each Person who controls such
-----------
underwriter within the meaning of the Securities Act, the Company, each director
of the Company, each officer of the Company and each other Person, if any, who
controls the Company within the meaning of the Securities Act, with respect to
any statement or alleged statement in or omission or alleged omission from such
registration statement, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, if such
statement or alleged statement or omission or alleged omission was made in
reliance upon and in strict conformity with written information furnished to the
Company by such seller expressly for use in the preparation of such registration
statement, preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement; provided that such prospective seller shall not be
--------
liable to any Person who participates as an underwriter in the offering or sale
of Registrable Securities or any other Person, if any, who controls such
underwriter within the meaning of the Securities Act, in any such case to the
extent that any such loss, claim, damage, liability (or action or proceeding in
respect thereof) or expense arises out of such Person's failure to send or give
a copy of the final prospectus, as the same may be then supplemented or amended,
to the Person asserting an untrue statement or alleged untrue statement or
omission or alleged omission at or prior to the written confirmation of
12
the sale of Registrable Securities to such Person if such statement or omission
was corrected in such final prospectus. Such indemnity shall remain in full
force and effect, regardless of any investigation made by or on behalf of any
underwriter, the Company or any such director, officer or controlling Person and
shall survive the transfer of such securities by such seller. In no event shall
the liability of any selling holder of Registrable Securities under this Section
-------
3.2 be greater in amount than the dollar amount of the proceeds received by such
---
holder upon the sale of the Registrable Securities giving rise to such
indemnification obligation.
SECTION 3.3. Notices of Claims, etc. Promptly after receipt by an
----------------------
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in Section 3.1 or 3.2, such indemnified party
----------- ---
will, if a claim in respect thereof is to be made against an indemnifying party,
give written notice to the latter of the commencement of such action, provided
--------
that the failure of any indemnified party to give notice as provided herein
shall not relieve the indemnifying party of its obligations under Section 3.1 or
-----------
3.2, except to the extent that the indemnifying party is actually prejudiced by
---
such failure to give notice. In case any such action is brought against an
indemnified party, unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying parties shall
exist in respect of such claim, the indemnifying parties shall be entitled to
participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release from all liability
in respect to such claim or litigation.
SECTION 3.4. Other Indemnification. Indemnification similar to that
---------------------
specified in Section 3.1 or 3.2 (with appropriate modifications) shall be given
----------- ---
by the Company and each seller of Registrable Securities with respect to any
required registration or other qualification of securities under any Federal or
state law or regulation of any governmental authority other than the Securities
Act.
SECTION 3.5. Indemnification Payments. The indemnification required by
------------------------
Section 3.1 and 3.2 shall be made by periodic payments of the amount thereof
----------- ---
during the course of the investigation or defense, as and when bills are
received or expense, loss, damage or liability is incurred.
SECTION 3.6. Contribution. If the indemnification provided for in
------------
Section 3.1 and 3.2 from the indemnifying party is unavailable to an indemnified
----------- ---
party hereunder in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such loss, claims, damages,
liabilities or expenses in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and indemnified parties
13
in connection with the actions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative fault of such indemnifying party and indemnified parties shall be
determined by reference to, among other things, whether any action in question,
including any untrue statement of material fact or omission or alleged omission
to state a material fact, has been made by, or relates to information supplied
by, such indemnifying party or indemnified parties, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such action. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 3.3, any legal or other
-----------
fees or expenses reasonably incurred by such party in connection with any
investigation or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 3.6 were determined by pro rata allocation
-----------
or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 3.6, no underwriter shall be
-----------
required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such underwriter has otherwise been required to pay by reason on such untrue or
alleged untrue statement or omission or alleged omission, and no selling holder
shall be required to contribute any amount in excess of the amount by which the
total price at which the Registrable Securities of such selling holder were
offered to the public exceeds the amount of any damages which such selling
holder has otherwise been required to pay by reason of such untrue statement or
omission. 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.
If indemnification is available under this Article III, the
-----------
indemnifying parties shall indemnify each indemnified party to the full extent
provided in this Article III without regard to the relative fault of said
-----------
indemnifying party or indemnified party or any other equitable consideration
provided for in this Section 3.6.
-----------
ARTICLE IV
REPORTING REQUIREMENTS
SECTION 4.1. Reporting Requirements Under Securities Exchange Act of
-------------------------------------------------------
1934. When it is first legally required to do so, the Company shall register
----
its Common Stock under Section 12 of the Exchange Act (as hereinafter defined)
and shall keep effective such registration and shall timely file such
information, documents and reports as the Commission may require or prescribe
under Section 13 of the Exchange Act. From and after the effective date of the
first registration statement filed by the Company under the Securities Act, the
Company shall (whether or not it shall then be required to do so) timely file
such information, documents and reports which a corporation, partnership or
other entity subject to Section 13 or 15(d) (whichever is applicable) of the
Exchange Act is required to file.
14
SECTION 4.2. Delivery of Company Information. Immediately upon becoming
-------------------------------
subject to the reporting requirements of either Section 13 or 15(d) of the
Exchange Act, the Company shall forthwith upon request furnish any Holder of
Registrable Securities (a) a written statement by the Company that it has
complied with such reporting requirements, (b) a copy or the most recent annual
or quarterly report of the Company, and (c) such other reports and documents
filed by the Company with the Commission as such Holder may reasonably request
in availing itself of an exemption for the sale of Registrable Securities
without registration under the Securities Act. The Company acknowledges and
agrees that the purposes of the requirements contained in this Section 4.2 are
-----------
(i) to enable any such Holder to comply with the current public information
requirement contained in Paragraph (c) of Rule 144 under the Securities Act
should such Holder ever wish to dispose of any of the securities of the Company
acquired by it without registration under the Securities Act in reliance upon
Rule 144 (or any other similar exemptive provision) and (ii) to qualify the
Company for the use of registration statements on Form S-3. In addition, the
Company shall take such other measures and file such other information,
documents and reports, as shall hereafter be required by the Commission as a
condition to the availability of Rule 144 under the Securities Act (or any
similar exemptive provision hereafter in effect) and the use of Form S-3. The
Company also covenants to use its best efforts, to the extent that it is
reasonably within its power to do so, to qualify for the use of Form S-3.
SECTION 4.3. Stockholder Information. The Company may require each
-----------------------
Holder of Registrable Securities as to which any registration is to be effected
pursuant to this Article IV to furnish the Company such information in writing
----------
with respect to such Holder and the distribution of such Registrable Securities
as the Company may from time to time reasonably request in writing and as shall
be required by law or by the Commission in connection therewith.
ARTICLE V
MISCELLANEOUS
SECTION 5.1. Notices. All notices, requests and other communications to
-------
any party hereunder shall be in writing (including bank wire, telex, telecopy or
similar writing) and shall be given to such party at its address, telex or
telecopy number set forth on the signature pages hereof or such other address,
telex or telecopy number as such party may hereafter specify for the purpose by
notice to the other party. Each such notice, request or other communication
shall be effective (i) if given by telex or telecopy, when such telex or
telecopy is transmitted to the telex or telecopy number specified in this
Section 5.1 and the appropriate answer back is received or receipt is otherwise
-----------
confirmed, (ii) if given by certified mail, return receipt requested, three (3)
Business Days after deposit in the mails with first class postage prepaid,
addressed as aforesaid, or (iii) if given by any other means, when delivered at
the address specified in this Section 5.1.
-----------
SECTION 5.2. Amendments and Waivers. Any provision of this Agreement and
----------------------
the other Transaction Documents may be amended or waived if, but only if, such
amendment or waiver is in writing and signed by the Company and a majority of
the holders of Restricted Securities.
15
SECTION 5.3. Successors and Assigns. The provisions of this Agreement
----------------------
shall be binding upon and inure to the benefit of the parties hereto, each
holder of Registrable Securities and their respective permitted successors and
assigns, except that the Company may not assign or otherwise transfer any of its
rights under this Agreement.
SECTION 5.4. Governing Law. PURSUANT TO THE NEW YORK GENERAL OBLIGATIONS
-------------
LAW SECTION 5-1401, THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 5.5. Counterparts; Effectiveness. This Agreement may be signed
---------------------------
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when Chase shall have received
counterparts hereof signed by the Company.
SECTION 5.6. FINAL AGREEMENT. THIS AGREEMENT AND THE OTHER TRANSACTION
---------------
DOCUMENTS COLLECTIVELY REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.
SECTION 5.7. WAIVER OF RIGHT TO TRIAL BY JURY. THE COMPANY AND CHASE
--------------------------------
HEREBY (A) KNOWINGLY, VOLUNTARILY, INTENTIONALLY, AND IRREVOCABLY WAIVE, TO THE
MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREIN, OR DIRECTLY OR INDIRECTLY AT ANY TIME
ARISING OUT OR, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREIN OR ASSOCIATED HEREWITH, (B) IRREVOCABLY WAIVE,
TO THE MAXIMUM EXTEND NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR
RECOVER IN ANY SUCH LITIGATION ANY "SPECIAL DAMAGES," AS DEFINED BELOW, (C)
CERTIFY THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY
PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS,
AND (D) ACKNOWLEDGE THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND
THE TRANSACTIONS CONTEMPLATED HEREIN BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS CONTAINED IN THIS SECTION. AS USED IN THIS SECTION, "SPECIAL
DAMAGES" INCLUDES ALL SPECIAL AND CONSEQUENTIAL, EXEMPLARY, OR PUNITIVE DAMAGES
(REGARDLESS OF HOW NAMED), BUT DOES NOT EXPRESSLY INCLUDE ANY PAYMENT OR FUNDS
WHICH ANY PARTY HERETO HAS EXPRESSLY PROMISED TO PAY OR DELIVER TO ANY OTHER
PARTY HERETO.
SECTION 5.8. CONSENT TO JURISDICTION/VENUE. THE COMPANY, FOR ITSELF, ITS
-----------------------------
SUCCESSORS AND ASSIGNS, HEREBY (A) IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF THE STATE AND FEDERAL COURTS OF THE STATE OF TEXAS AND AGREES
AND CONSENTS THAT SERVICE OF PROCESS MAY BE MADE
16
UPON IT IN ANY LEGAL PROCEEDING ARISING OUT OR IN CONNECTION WITH THIS AGREEMENT
AND THE OBLIGATION BY SERVICE OF PROCESS AS PROVIDED BY TEXAS LAW, (B)
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY LITIGATION ARISING
OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND THE OBLIGATIONS BROUGHT IN THE
COURTS OF DALLAS COUNTY, TEXAS, OR IN ANY UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF TEXAS, (C) IRREVOCABLY WAIVES ANY CLAIMS THAT ANY
LITIGATION BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM,
(D) AGREES TO DESIGNATE AND MAINTAIN AN AGENT FOR SERVICE OF PROCESS IN DALLAS,
TEXAS IN CONNECTION WITH ANY SUCH LITIGATION AND TO DELIVER CHASE EVIDENCE
THEREOF, (E) IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH LITIGATION BY THE MAILING OF COPIES THEREOF BY
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID, TO CHASE AT ITS
ADDRESS SET FORTH HEREIN AND (F) IRREVOCABLY AGREES THAT ANY LEGAL PROCEEDING
AGAINST ANY LENDER ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT SHALL BE
BROUGHT IN THE COURTS OF DALLAS COUNTY, TEXAS, OR IN ANY UNITED STATES DISTRICT
COURT FOR THE NORTHERN DISTRICT OF TEXAS. NOTHING HEREIN SHALL AFFECT THE RIGHT
OF CHASE TO COMMENCE ANY LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE
COMPANY IN ANY JURISDICTION OR TO SERVE PROCESS IN ANY MATTER PERMITTED BY
APPLICABLE LAW.
[SIGNATURE PAGE FOLLOWS]
17
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers on the day and year first
above written.
COMPANY:
PETROGLYPH ENERGY, INC.,
a Delaware corporation Address for Notice:
Petroglyph Energy, Inc..
By: /s/ Xxxxxx X. Xxxxxxx 0000 Xxxxx Xxxxxxx 00
--------------------------------- Xxxxxxxxxx, Xxxxxx 00000
Xxxxxx X. Xxxxxxx, President Fax No. (000) 000-0000
Attn: Xxxxxx X. Xxxxxxx
XXXXX:
THE XXXXX MANHATTAN BANK
By: /s/ Xxxx X. Xxxxxx Address for Notice:
---------------------------------
Name: Xxxx X. Xxxxxx The Chase Manhattan Bank
------------------------------- One Chase Manhattan Place
Title: Managing Director Eighth Floor
------------------------------ Xxx Xxxx, Xxx Xxxx 00000
Fax No. (000) 000-0000
Attn: Xxxxxxxx Xxxx
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