exv4w1



 






Exhibit 4.1




EXECUTION VERSION




REGISTRATION RIGHTS AGREEMENT




     THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is dated April 12, 2005, between
PetroQuest Energy, Inc., a Delaware corporation (“PetroQuest”), and Macquarie Bank Limited,
a bank incorporated in accordance with the laws of Australia (“MBL”). Capitalized terms
used but not defined in this Agreement have the meanings given to them in the Agreement and Plan of
Merger dated as of April 12, 2005 (the “PQUE-TDC Merger Agreement”), among PetroQuest, TDC
Acquisition Sub LLC, a Louisiana limited liability company and a wholly-owned subsidiary of
PetroQuest, TDC Energy LLC, a Louisiana limited liability company (“TDC”), and all of the
members of TDC.



Background




     A. PetroQuest and Macquarie Americas Corp. (“MAC”), an affiliate of MBL, are parties
to an Assignment of Overriding Royalty Interest dated April 12, 2005 (the “ORRI
Assignment”), and a related Purchase and Sale Agreement dated April 12, 2005 (the “ORRI
PSA”)



     B. In consideration of the overriding royalty interest to be assigned to PetroQuest Energy,
L.L.C., an affiliate of PetroQuest, by MAC, PetroQuest has issued to MBL 500,000 shares (the
“Shares”) of the common stock (par value $0.001 per share) of PetroQuest (the “Common
Stock”).



     C. The parties desire to enter into this Agreement to memorialize the rights of MBL and the
obligations of PetroQuest with respect to the registration of the Common Stock.



Agreements




     In consideration of the respective representations, warranties and covenants of PetroQuest and
MBL set forth in this Agreement and other good and valuable consideration, the receipt and
sufficiency of which are acknowledged by each of the parties, PetroQuest and MBL agree as follows:



     1. DEFINITIONS. As used in this Agreement, the following terms shall have the following
respective meanings:




     (a) “Closing” shall mean the closing under the ORRI Assignment.




     (b) “Closing Date” shall mean April 12, 2005.




     (c) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended,
and all of the rules and regulations promulgated thereunder.




     (d) “Commission” shall mean the Securities and Exchange Commission.



 









 






     (e) “Securities Act” shall mean the Securities Act of 1933, as amended, and all
of the rules and regulations promulgated thereunder.



2. MANDATORY REGISTRATION.




     (a) PetroQuest covenants and agrees that on or before 30 days after the Closing Date,
PetroQuest will cause to be filed pursuant to Rule 415 of the Securities Act a Shelf
Registration Statement on Form S-3 (the “Shelf Registration Statement”) as to the
Shares, naming MBL as a selling stockholder. PetroQuest shall use its commercially
reasonable best efforts to have such Shelf Registration Statement declared effective as soon
as reasonably practicable after such filing, and to keep such Shelf Registration Statement
continuously effective until two years following the Closing Date; provided, however, that
PetroQuest may voluntarily suspend the effectiveness of such Shelf Registration Statement
for a limited time, which in no event shall be longer than 90 days, if PetroQuest has been
advised by counsel or underwriters to PetroQuest that the offering of the Shares pursuant to
the Shelf Registration Statement would adversely affect, or would be improper in view of (or
improper without disclosure in a prospectus), a proposed financing, a reorganization,
recapitalization, merger, consolidation, or similar transaction involving PetroQuest, in
which case PetroQuest shall be required to keep such Shelf Registration Statement effective
for an additional period of time beyond two years following the Closing Date equal to the
number of days the effectiveness thereof is suspended pursuant to this proviso. If any
event occurs that would cause the Shelf Registration Statement to contain a material
misstatement or omission or not to be effective and usable during the period that such Shelf
Registration Statement is required to be effective and usable, PetroQuest shall promptly
file an amendment to the Shelf Registration Statement and use its best efforts to cause such
amendment to be declared effective as soon as practicable thereafter. MBL shall furnish
PetroQuest such information regarding its holdings and the proposed manner of distribution
thereof as PetroQuest may reasonably request and as shall be required in connection with the
Shelf Registration Statement. Notwithstanding any provision contained herein to the
contrary, PetroQuest’s obligation to include, or continue to include, the Shares in the
Shelf Registration Statement pursuant to this Agreement shall terminate to the extent the
Shares are eligible for resale under Rule 144(k) promulgated under the Securities Act.



     (b) All costs and expenses of any registration and qualification pursuant to this
Agreement shall be borne by PetroQuest. Such costs and expense shall include, without
limitation, the fees and expenses of counsel for PetroQuest and of its accountants, all
other costs, fees and expenses of PetroQuest incident to the preparation, printing and
filing under the Securities Act of the registration statement and all amendments on
supplements thereto, the cost of furnishing copies of each preliminary prospectus, each
final prospectus and each amendment or supplement thereto to underwriters, dealers and other
purchasers of the Shares and the costs and expenses (including fees and disbursements of
counsel) incurred in connection with the qualification of the Shares under the securities
laws of various jurisdictions. Notwithstanding the foregoing, PetroQuest shall not be
obligated to bear any fees, or expenses for counsel or other advisors to MBL or any
underwriting fees, discounts or commissions or brokerage fees allocable to the registration
or qualification of the Shares.



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     (c) In the case of any registration or qualification pursuant to this Agreement,
PetroQuest will keep MBL advised in writing as to the initiation of proceedings for such
registration and qualification and as to the completion thereof, and will advise MBL, upon
request, of the progress of such proceeding.



     (d) At PetroQuest’s expense, PetroQuest will keep each registration and qualification
under this Agreement effective (and in compliance with the Securities Act) by such action as
may be necessary or appropriate for a period of two years after the Closing Date, including,
without limitation, the filing of post-effective amendments and supplements to any
registration statement or prospectus necessary to keep the registration statement current
and the further qualification under any applicable state securities laws to permit such sale
or distribution, all as reasonably requested by MBL. PetroQuest will immediately notify
MBL, at any time when a prospectus relating thereto is required to be delivered under the
Securities Act, of 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 the statements therein not misleading in light of the circumstances then existing.



     (e) In connection with any registration of the Shares, PetroQuest will provide a
transfer agent and registrar for the Shares not later than the effective date of such
registration statement.



     (f) In connection with any registration of the Shares, PetroQuest will, if requested by
the underwriters for any Shares included in such registration, enter into an underwriting
agreement with such underwriters for such offering, such agreement to contain such
representations and warranties by PetroQuest and such other terms and provisions as are
customarily contained in underwriting agreements with respect to secondary distributions,
including, without limitation, provisions relating to indemnification and contribution. MBL
shall be party to any such underwriting agreement, and the representations and warranties
by, and the other agreements on the part of, PetroQuest to and for the benefit of such
underwriters shall also be made to and for the benefit of MBL.



     (g) In connection with the preparation and filing of the registration statement
registering the Shares, PetroQuest will give MBL and its underwriter, if any, and their
respective counsel and accountants (at their sole expense), 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
PetroQuest with its officers, its counsel and the independent public accountants who have
certified its financial statements, as shall be necessary, in the opinion of MBL or such
underwriters or their respective counsel, in order to conduct a reasonable and diligent
investigation within the meaning of the Securities Act. Without limiting the foregoing,
each registration statement, prospectus, amendment, supplement or any other document filed
with respect to a registration under this Agreement shall be



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subject to a reasonable review and comment period by MBL registering Shares in such
registration and by its counsel.



     (h) PetroQuest will, at the expense of PetroQuest, furnish to MBL such number of
registration statements, prospectuses, offering circulars and other documents incident to
any registration or qualification referred to in this Agreement as MBL from time to time may
reasonably request.



     (i) (A) PetroQuest agrees to indemnify, to the extent permitted by law, MBL and its
officers, directors, stockholders, employees, agents and representatives, and any other
person deemed to control MBL within the meaning of the Securities Act against all losses,
claims, damages, liabilities and expenses caused by (i) any violation or alleged violation
by PetroQuest of the Securities Act, the Exchange Act or any other federal or state
securities law, rule or regulation applicable to PetroQuest or (ii) any untrue statement of
material fact contained in any registration statement, prospectus or preliminary prospectus
or any amendment thereof or supplement thereto or any omission of a material fact required
to be stated therein or necessary to make the statements therein not misleading, except
insofar as the same are caused by or contained in any information furnished in writing to
PetroQuest by MBL expressly for use therein or by MBL’s failure to deliver a copy of the
registration statement or prospectus or any amendments or supplements thereto.



          (B) In connection with any registration statement in which MBL is participating, MBL
will furnish to PetroQuest in writing such information as PetroQuest reasonably requests for
use in connection with any such registration statement or prospectus and, to the extent
permitted by law, will indemnify PetroQuest, its directors, officers, stockholders,
employees, agents and representatives, and any other person deemed to control PetroQuest
against any losses, claims, damages, liabilities and expenses resulting from any untrue
statement or material fact contained in the registration statement, prospectus or
preliminary prospectus or any amendment thereof or supplement thereto or any omission of a
material fact required to be stated therein or necessary to make the statements therein not
misleading, but only to the extent that such untrue statement or omission is contained in
any information so furnished in writing by MBL. In connection with an underwritten
offering, MBL will indemnify the underwriters, the officers and directors and each person
who controls such underwriters to the same extent as provided above with respect to the
indemnification of the PetroQuest.



          (C) Any party entitled to indemnification under this Agreement will (i) give prompt
written notice to the indemnifying party of any claim with respect to which it seeks
indemnification and (ii) unless in such indemnified party’s reasonable judgment a conflict
of interest between such indemnified and indemnifying parties may exist with respect to such
claim, permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party will not be subject to any liability for any settlement made by the
indemnified party without its consent (but such consent will not be unreasonably withheld).
An indemnifying party who is not entitled to, or elects not to, assume the defense of a
claim will not be obligated to pay the fees and expenses of more



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than one counsel for all parties indemnified by such indemnifying party with respect to such
claim, unless in the reasonable judgment of any indemnified party a conflict of interest may
exist between such indemnified party and any other of such indemnified parties with respect
to such claim.



          (D) The indemnification provided for under this Agreement will remain in full force and
effect regardless of any investigation made by or on behalf of the indemnified party or any
officer, director or controlling person of such indemnified party and will survive the
transfer of securities. If for any reason the foregoing indemnification is unavailable to
any party or insufficient to hold it harmless as and to the extent contemplated by the
preceding paragraphs, then PetroQuest or MBL, as the case may be, shall contribute to the
amount paid or payable by the indemnified party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect the relative benefits received by
PetroQuest, on the other hand, and PetroQuest or any other applicable indemnified party, as
the case may be, on the other hand, and also the relative fault of PetroQuest and MBL or
other applicable indemnified party, as the case may be, as well as any other relevant
equitable considerations.



     (j) With a view to making available to MBL the benefits of Rule 144 promulgated under
the Securities Act, PetroQuest agrees to maintain registration of Common Stock under Section
12(g) or 15(d) of the Exchange Act and to file with the Commission in a timely manner all
reports and other documents required to be filed by an issuer of securities registered under
the Exchange Act so as to maintain the availability of Rule 144. When Rule 144(k) is being
complied with, PetroQuest shall deliver securities not bearing any legend restricting
transfer for such securities, as may be requested from time to time by the Members upon
delivery to PetroQuest of a customary stockholder representation letter in a form reasonably
acceptable to PetroQuest.



     (k) The registration rights provided to MBL under this Agreement may not be transferred
to any other person or entity, except pursuant to the laws of descent and distribution;
provided, however, that such transferees are bound by and subject to the terms and
conditions contained herein. Nothing herein shall limit the ability of PetroQuest to grant
to any person or entity any registration or similar rights in the future with respect to the
Common Stock or other securities of PetroQuest (whether pursuant to the foregoing provision
or otherwise).



     3. REPRESENTATIONS AND WARRANTIES BY PETROQUEST. PetroQuest represents and warrants to MBL as
of the Closing Date as follows:



          a. Corporate Existence and Power. PetroQuest is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware. PetroQuest has all power
required to carry on its business as now conducted. PetroQuest is duly qualified to conduct
business and in good standing in each jurisdiction where such qualification is necessary.



          b. Corporate Authorization; Enforceability. The execution, delivery and performance by PetroQuest of this Agreement and the ORRI PSA
are, and will be at the Closing,



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within PetroQuest’s powers and have been duly authorized by the
board of directors of PetroQuest and no other action on the part of PetroQuest is necessary to
authorize this Agreement or the ORRI PSA. This Agreement has been duly executed and delivered by
PetroQuest. Assuming the due execution and delivery by MBL of this Agreement and the ORRI PSA,
this Agreement constitutes the valid and binding agreement of PetroQuest, enforceable against it in
accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting enforcement of creditors’ rights
generally and by general principles of equity (whether applied in a proceeding at law or in
equity).



          c. Non-Contravention. The execution, delivery and performance by PetroQuest of this
Agreement and the ORRI PSA do not and will not at the Closing (a) violate the certificate of
incorporation or bylaws or other similar constituent documents of PetroQuest, (b) violate any
applicable Law or Order, (c) require any filing with or Permit, consent or approval of, or the
giving of any notice to, any Person (including filings, consents or approvals required under any
Permits of PetroQuest or any licenses to which PetroQuest is a party), or (d) result in a violation
of or breach of, conflict with, constitute (with or without due notice or lapse of time or both) a
default under, or give rise to any right of termination, cancellation or acceleration of any right
or obligation of PetroQuest or to a loss of any benefit to which PetroQuest is entitled under, any
contract, agreement or other instrument binding upon PetroQuest or any license, franchise, Permit
or other similar authorization held by PetroQuest.



          d. Capitalization. The authorized capital of PetroQuest consists of 75,000,000 shares
of PetroQuest Common Stock, $.001 par value per share, of which 44,685,363 shares of PetroQuest
Common Stock are issued and outstanding as of December 31, 2004, and 5,000,000 shares of preferred
stock, $.001 par value per share, of which no shares are issued and outstanding. As of December
31, 2004, an aggregate of 6,535,239 shares of PetroQuest Common Stock were reserved for issuance
under outstanding options, warrants and all other convertible securities of PetroQuest. The shares
of PetroQuest Common Stock to be issued as consideration for the ORRI Assignment shall, when issued
pursuant to the terms of this Agreement, be validly issued, fully paid and non assessable shares of
PetroQuest Common Stock, free of preemptive rights of any kind. The PetroQuest Common Stock is
listed for trading on the Nasdaq Stock Market, subject to the listing of the shares issued as the
consideration for the ORRI Assignment.



          e. Commission Filings; Financial Statements.



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(i) PetroQuest has filed all forms, reports, statements and documents required to be filed with the
Commission since January 1, 2002 (collectively, the “PetroQuest Commission Reports”), each
of which has complied in all material respects with the applicable requirements of the Securities
Act or the Exchange Act, each as in effect on the date so filed. None of the PetroQuest Commission
Reports contained when filed any untrue statement of a material fact or omitted or omits to state a
material fact required to be stated or incorporated by reference therein or necessary in order to
make the statements therein, in the light of the circumstances under which they were made, not
misleading.



(ii) All of the financial statements included in the PetroQuest Commission Reports, in each case
including any related notes thereto, as filed with the Commission (collectively, the
“PetroQuest Financial Statements”), have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved (except as may be indicated in the notes thereto
and subject, in the case of the unaudited statements, to normal, recurring audit adjustments) and
fairly present in all material respects the consolidated financial position of PetroQuest and its
Subsidiaries at the respective date thereof and the consolidated results of its operations and
changes in cash flows for the periods indicated.



(iii) There are no liabilities of PetroQuest of any kind whatsoever, whether or not accrued and
whether or not contingent or absolute, that are material to PetroQuest and its Subsidiaries, taken
as a whole, other than (A) liabilities disclosed or provided for in the PetroQuest Commission
Reports, including the notes thereto, and (B) liabilities incurred in the Ordinary Course of
Business (including the use of current credit facilities) since December 31, 2004.




          f. Absence of Certain Changes or Events. Except as contemplated in the PetroQuest
Commission Reports, since December 31, 2004, PetroQuest has conducted in all material respects its
business only in the ordinary course and consistent with prior practice and there has not been (i)
any event or occurrence of any condition that has had or could reasonably be expected to have a
PetroQuest Material Adverse Effect, (ii) any declaration, setting aside or payment of any dividend
or any other distribution to stockholders generally with respect to any of the capital stock of
PetroQuest, or (iii) any material change in accounting methods, principles or practices employed by
PetroQuest.



          g. Litigation. There is no litigation pending or, to the knowledge of PetroQuest,
threatened against PetroQuest which could reasonably be expected to have a PetroQuest Material
Adverse Effect. Except for such matters which have not had, and could not reasonably be expected
to have, a PetroQuest Material Adverse Effect, there are no judgments, orders, injunctions,
decrees, stipulations or awards (whether rendered by a court, administrative agency, or by
arbitration, pursuant to a grievance or other procedure) against or relating to PetroQuest.



          h. Finders’ Fees. There is no investment banker, broker, finder or other intermediary which has been retained
by or is authorized to act on behalf of PetroQuest who might be entitled to any fee or other
commission in connection with the transactions contemplated by this Agreement or the ORRI PSA.



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     4. ENTIRE AGREEMENT. This Agreement constitutes and contains the entire agreement and
understanding of the parties with respect to the subject matter hereof, and it also supersedes any
and all prior negotiations, correspondence, agreements or understandings with respect to the
subject matter hereof.



     5. MISCELLANEOUS.




     (a) This Agreement shall be governed by and construed and enforced in accordance with
the laws of the State of Delaware, and shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, personal representatives, successors or assigns,
provided that the terms and conditions of Section 2(k) hereof are satisfied. This Agreement
may not be amended, modified or waived without the written consent of PetroQuest and MBL.



          (b) (A) Any notices, reports or other correspondence (hereinafter collectively referred
to as “correspondence”) required or permitted to be given hereunder shall be sent by courier
(overnight or same day) or telecopy or delivered by hand to the party to whom such
correspondence is required or permitted to be given hereunder. The date of giving any notice
shall be the date of its actual receipt.




	 	(B)  	All correspondence to PetroQuest shall be addressed as follows:
	 
	 	   	PetroQuest Energy, Inc.

400 East Kaliste Saloom Road, Suite 6000

Lafayette, Louisiana 70508

Facsimile No.: (337) 232-0044

Attention: Daniel G. Fournerat
	 
	 	(C)  	All correspondence to MBL shall be addressed as follows:
	 
	 	   	Macquarie Bank Limited

Houston Representative Office

333 Clay Street, Suite 4550

Houston, TX 77002

Facsimile No.: (713) 986-3610

Attention: Michael Sextro





          (D) Any party may change the address to which correspondence to it is to be addressed
by notification as provided for herein.



     (c) The parties acknowledge and agree that in the event of any breach of this
Agreement, remedies at law may be inadequate, and each of the parties hereto shall be
entitled to seek specific performance of the obligations of the other parties hereto
and such appropriate injunctive relief as may be granted by a court of competent
jurisdiction.



     (d) This Agreement may be executed in a number of counterparts, each of which together
shall for all purposes constitute one Agreement, binding on all the parties hereto
notwithstanding that all such parties have not signed the same counterpart.



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[SIGNATURES BEGIN ON THE FOLLOWING PAGE]




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This Agreement is executed by each of the parties on April 12, 2005.



	 	 	 	 	 
	 	PETROQUEST:



PetroQuest Energy, Inc.,

a Delaware corporation

 	 
	 	By:  	/s/ Michael O. Aldridge
 	 
	 	 	Michael O. Aldridge 	 
	 	 	Senior Vice President, Chief Financial Officer and Treasurer 	 
	 




	 	 	 	 	 
	 

	 	MBL:	 	 
	 
	 	 	 	 
	 	 	Macquarie Bank Limited, 
	 	 	a bank incorporated under the laws of Australia
	 
	 	 	 	 
	

	 	By:
	 	          /s/ Nicholas O’Kane
	

	 	 	 	

	

	 	Printed Name:
	 	          Nicholas O’Kane
	

	 	 	 	

	

	 	Title:
	 	          Executive Director
	

	 	 	 	

	 
	 	 	 	 
	

	 	By:
	 	          /s/ Anita Chiu
	

	 	 	 	

	

	 	Printed Name:
	 	          Anita Chiu
	

	 	 	 	

	

	 	Title:
	 	          Lawyer