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EXHIBIT 4.1
[FORM OF WARRANT]
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND ARE SUBJECT TO CERTAIN RESTRICTIONS,
CONTAINED IN SECTION 5 HEREOF, WITH
RESPECT TO THEIR TRANSFER.
THE SECURITIES ISSUABLE UPON EXERCISE HEREOF ARE LISTED ON THE
TORONTO STOCK EXCHANGE; HOWEVER, THE SAID SECURITIES CAN
NOT BE TRADED THROUGH THE FACILITIES OF SUCH EXCHANGE
SINCE THEY ARE NOT FREELY TRANSFERABLE, AND
CONSEQUENTLY ANY CERTIFICATE REPRESENTING
SUCH SECURITIES IS NOT GOOD DELIVERY IN
SETTLEMENT OF TRANSACTIONS ON THE
TORONTO STOCK EXCHANGE.
WARRANT TO PURCHASE SHARES OF COMMON STOCK OF
PETROQUEST ENERGY, INC.
WARRANT NO. SHARES
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___________, 1999
This Warrant certifies that, for value received, ____________________
(or any subsequent permitted transferee of this Warrant, as applicable the
"Holder") is entitled initially to subscribe for and purchase from PetroQuest
Energy, Inc., a Delaware corporation (the "Company"), _________ shares of the
Company's common stock, par value $.001 per share (the common stock, including
any stock into which it may be changed, reclassified or converted, is herein
referred to as the "Common Stock"), at the purchase price (the "Exercise Price")
of $1.25 per share (subject to adjustment as provided herein).
This Warrant is subject to the following provisions, terms and
conditions:
1. EXERCISE OF WARRANTS
A. EXERCISE OF WARRANTS. This Warrant may be exercised by the Holder,
in whole or in part, subject to the provisions hereof (but not as to a
fractional share of Common Stock),
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by (a) surrender of this Warrant at the principal office of the Company located
at ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or such
other office or agency of the Company as may be designated by notice in writing
to the Holder at the address of such Holder appearing on the books of the
Company) with the appropriate form attached hereto duly executed, at any time
within the period beginning August 3, 1999 and expiring at 5:00 p.m. Lafayette,
Louisiana time on August 2, 2003 [four years from date hereof] (the "Exercise
Period") and (b) payment to the Company by certified check or bank draft of the
Exercise Price for such shares.
The Company agrees that the shares of Common Stock so purchased shall
be and are deemed to be issued to the Holder and/or the Holder's designee as the
record owner of such shares of Common Stock as of the close of business on the
date on which the Warrant shall have been surrendered and payment made for such
shares of Common Stock. Certificates representing the shares of Common Stock so
purchased, together with any cash for fractional shares of Common Stock paid
pursuant to Section 2G, shall be delivered to the Holder promptly and in no
event later than 10 days after the Warrants shall have been so exercised, and,
unless the Warrants have expired, a new Warrant representing the number of
shares of Common Stock, if any, in respect of which this Warrant shall not have
been exercised also shall be delivered to the Holder within such time.
2. ADJUSTMENTS
A. ADJUSTMENT OF EXERCISE PRICE. In case (i) the outstanding shares of
the Common Stock shall be subdivided into a greater number of shares, (ii) a
dividend or other distribution in Common Stock shall be paid in respect of
Common Stock, (iii) the outstanding shares of Common Stock shall be combined
into a smaller number of shares thereof, or (iv) any shares of the Company's
capital stock are issued by reclassification of the Common Stock (including any
reclassification upon a consolidation or merger in which Company is the
continuing corporation), the Exercise Price per share in effect immediately
prior to such subdivision, combination or reclassification or at the record date
of such dividend or distribution shall simultaneously with the effectiveness of
such subdivision, combination or reclassification or immediately after the
record date of such dividend or distribution be proportionately adjusted to
equal the product obtained by multiplying the Exercise Price by a fraction, the
numerator of which is the number of outstanding shares of Common Stock (on a
fully diluted basis) prior to such combination, subdivision, reclassification or
dividend, and the denominator of which is that number of outstanding shares of
Common Stock (on a fully diluted basis) after giving effect to such combination,
subdivision, reclassification or dividend. Any dividend paid or distributed on
the Common Stock in stock or any other securities convertible into shares of
Common Stock shall be treated as a dividend paid in Common Stock to the extent
that shares of Common Stock are issuable upon the conversion thereof.
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For purposes of this Warrant, "on a fully diluted basis" means that all
outstanding options, rights or warrants to subscribe for shares of Common Stock
and all securities convertible into or exchangeable for shares of Common Stock
(such options, rights, warrants and securities are collectively referred to
herein as "Convertible Securities") and all options or rights to acquire
Convertible Securities have been exercised, converted or exchanged.
Whenever the Exercise Price per share is adjusted as provided in the
immediately preceding paragraph, the number of shares of the Common Stock
purchasable upon exercise of the Warrant immediately prior to such Exercise
Price adjustment shall be adjusted, effective simultaneously with such Exercise
Price adjustment, to equal the product obtained (calculated to the nearest full
share) by multiplying such number of shares of the Common Stock by a fraction,
the numerator of which is the Exercise Price per share in effect immediately
prior to such Exercise Price adjustment and the denominator of which is the
Exercise Price per share in effect upon such Exercise Price adjustment, which
adjusted number of shares of the Common Stock shall thereupon be the number of
shares of the Common Stock purchasable upon exercise of the Warrant until
further adjusted as provided herein.
B. NOTICE OF ADJUSTMENTS OF EXERCISE PRICE. Whenever the Exercise Price
is adjusted as herein provided, the Company shall deliver to each Holder, within
20 days after such adjustment, a written notice setting forth (1) the adjusted
Exercise Price and the adjusted number of shares of Common Stock that may be
acquired on the exercise of this Warrant, (2) the calculation of such adjustment
and (3) the facts upon which such calculation is based.
C. PARTIAL LIQUIDATING DIVIDEND. In the event that the Company shall
make any distribution of its assets upon or with respect to its Common Stock as
a partial liquidating dividend, other than as a dividend payable out of earnings
or any surplus legally available for dividends under the laws of the state of
incorporation of the Company, the Holder shall, upon the exercise of this
Warrant after the record date for such distribution or, in the absence of a
record date, after the date of such distribution, receive, in addition to the
shares subscribed for, the amount of such assets which would have been
distributed to the Holder if it had exercised this Warrant immediately prior to
the record date for such distribution or, in the absence of a record date,
immediately prior to the date of such distribution.
D. RECLASSIFICATION, CONSOLIDATION, MERGER, SALE, ETC. If any capital
reorganization or reclassification of the capital stock of the Company or any
other corporation Controlled (as defined below) by or under common Control with
the Company, or a consolidation or merger of the Company or such other
corporation with another corporation, or the sale of all or substantially all of
the Company's or such other corporation's assets to another corporation, shall
be effected in such a way that holders of Common Stock shall be entitled to
receive stock, securities, cash or assets with respect to or in exchange for
Common Stock, then, as a condition for such reorganization, reclassification,
consolidation, merger or sale, the Company or such successor purchasing
corporation shall agree that the Holder of this Warrant
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shall have the right thereafter and until the expiration of the Exercise Period
to exercise this Warrant into the kind and amount of stock, securities, cash or
assets receivable upon such reorganization, reclassification, consolidation,
merger or sale that the Holder hereof would have been entitled to receive had
such Holder exercised this Warrant immediately prior to such reorganization,
reclassification, consolidation, merger or sale, subject to adjustments which
shall be as nearly equivalent as may be practicable to the adjustments provided
for herein. In such case, the Company shall take such steps in connection with
such reorganization, consolidation, merger or sale as may be necessary to assure
the Holder that the provisions of this Warrant shall be applicable to the shares
of stock or other securities or property thereafter deliverable upon the
exercise of this Warrant. In the case of partial exercise of this Warrant under
such circumstances, the number of shares of Common Stock underlying this Warrant
or other securities or property which have been receivable upon the full
exercise of this Warrant, and the sum payable therefor, shall be proportionately
reduced.
For purposes of this Warrant, "Control" (and with its correlative
meanings "Controlled by" and "under common Control with") means, in the case of
a corporation, the ownership of more than 50% of the outstanding voting
securities thereof or the right to acquire such securities within 60 days and,
in the case of any other type of entity, an interest that results in the ability
to direct or cause the direction of the management and policies of such entity
or the power to appoint 50% or more of the members of the governing body of the
entity.
E. ADJUSTMENT FOR ISSUANCE OR SALE OF COMMON STOCK AT LESS THAN THE
EXERCISE PRICE. In case at any time or from time to time the Company prior to
expiration of the Exercise Period issues Common Stock for a consideration with a
value per share less than the Exercise Price, or Convertible Securities which
are exercisable or convertible into Common Stock at an effective conversion or
exercise price per share less than the Exercise Price, then the Exercise Price
shall be computed by dividing (i) the sum of (X) the product obtained by
multiplying the number of shares of Common Stock of the Company outstanding
immediately prior to such issue or sale (on a fully diluted basis) by the
Exercise Price per share in effect immediately prior to such issue or sale, plus
(Y) the aggregate consideration, if any, received by the Company upon such issue
or sale, plus (Z) the minimum aggregate amount of additional consideration, if
any, payable to the Company upon the conversion or exercise thereof, by (ii) the
number of shares of Common Stock of the Company outstanding immediately after
such issue or sale (on a fully diluted basis).
Whenever the Exercise Price per share is adjusted based on the
computation set forth in the immediately preceding paragraph, the number of
shares of Common Stock purchasable upon exercise of the Warrant immediately
prior to such Exercise Price adjustment shall be computed, effective
simultaneous with the Exercise Price adjustment, to equal the product obtained
(calculated to the nearest full share) by multiplying such number of shares of
Common Stock by a fraction, the numerator of which is the Exercise Price per
share in effect immediately prior to such Exercise Price adjustment and the
denominator of which is the adjusted Exercise Price per
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share computed under the immediately preceding paragraph, which adjusted number
of shares of Common Stock shall thereupon be the number of shares of Common
Stock purchasable upon exercise of the Warrant until further adjusted as
provided herein.
F. STATEMENT ON WARRANT CERTIFICATES. This Warrant need not be amended
or modified because of any change in the Exercise Price or in the number or kind
of shares purchasable upon the exercise of this Warrant. Any Warrant thereafter
issued, whether in exchange or substitution for any outstanding Warrant or
otherwise, may be in the form so amended or modified.
G. FRACTIONAL INTEREST. The Company shall not be required to issue
fractional shares of Common Stock on the exercise of this Warrant. The number of
full shares of Common Stock which shall be issuable upon such exercise shall be
computed on the basis of the aggregate number of whole shares of Common Stock
purchasable on exercise of the Warrant so presented. If any fraction of a share
of Common Stock would, except for the provisions of this Section 2G, be issuable
on the exercise of this Warrant, the Company shall, in lieu of issuing such
fractional share of Common Stock, pay an amount in cash equal to the Current
Fair Market Value per share of Common Stock (as defined below), multiplied by
the fraction of a share of Common Stock otherwise issuable.
For purposes of this Warrant, the "CURRENT FAIR MARKET VALUE" of a
share of Common Stock on any day shall mean (i) the closing sales price on the
immediately preceding business day of a share of Common Stock as reported on the
principal securities exchange on which shares of Common Stock are then listed or
admitted to trading or (ii) if not so reported, the average of the closing bid
and asked prices for a share of Common Stock on the immediately preceding
business day as quoted on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") or (iii) if not quoted on NASDAQ, the
average of closing bid and asked prices for a share of Common Stock as quoted by
the National Quotation Bureau's "Pink Sheets" or the National Association of
Securities Dealers' OTC Bulletin Board System. If the price of a share of Common
Stock shall not be so reported, the Current Fair Market Value of a share of
Common Stock shall be determined by the Board in good faith.
3. RESERVATION AND AUTHORIZATION OF COMMON STOCK
The Company represents and warrants (a) that all shares of Common Stock
which may be issued upon the exercise of this Warrant will, upon issuance, be
validly issued, fully paid and nonassessable and free of all transfer taxes,
liens and charges with respect to the issue thereof, (b) that during the
Exercise Period, the Company will at all times have authorized, and reserved for
the purpose of issue or transfer upon exercise of this Warrant, sufficient
shares of Common Stock to provide for the exercise of this Warrant and (c) that
the shares of Common Stock issuable upon the exercise of this Warrant may be so
issued without violation of any applicable
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law or regulation, or any requirement of any securities exchange upon which any
capital stock of the Company may be listed.
4. NO VOTING RIGHTS
This Warrant shall not entitle the Holder hereof to any voting rights
or other rights as a stockholder of the Company.
5. RESTRICTIONS ON TRANSFER
This Warrant is transferable by the Holder only to its "affiliates;"
provided, however, if such Affiliate is a resident of Ontario Canada, no
transfer of this Warrant shall be permitted until after February 3, 2000.
"Affiliate" means a person or entity that directly or indirectly controls, is
controlled by or is under common control with, the Holder.
Subject to the provisions of this Section 5, this Warrant is
transferable in the same manner and with the same effect as in the case of a
negotiable instrument payable to a specified person. The Company, however, may
treat the registered Holder hereof as the owner hereof for all purposes until
this Warrant shall have been surrendered for transfer as hereinafter provided.
Upon surrender of this Warrant duly executed by the Holder hereof or his agent
or attorney, the Company shall execute and deliver a new Warrant or Warrants in
the name of the assignee or assignees and in the denominations specified in such
instrument of assignment, and this Warrant shall promptly be canceled.
This Warrant and the shares of Common Stock issuable upon the exercise
of this Warrant are not transferable directly or indirectly, in whole or in
part, except in the case of any such transfer (a) which is in compliance with
applicable federal and state securities laws, including but not limited to, the
Securities Act and (b) for which the Company is provided with an opinion of
counsel to the Holder, reasonably satisfactory to the Company, to the effect
that such transfer is not in violation of any of said securities laws. The
certificates representing the shares of Common Stock issuable upon the exercise
of this Warrant will bear restrictive legends evidencing such restrictions.
6. CLOSING OF BOOKS
The Company will at no time close its transfer books against the
transfer of any Warrant or of any shares of Common Stock or other securities
issuable upon the exercise of any Warrant in any manner which interferes with
the timely exercise of the Warrants.
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7. WARRANTS EXCHANGEABLE; LOSS, THEFT
This Warrant is exchangeable, upon the surrender hereof by any Holder
at the office or agency of the Company referred to in Section 1 hereof, for a
new Warrant or Warrants of like tenor representing in the aggregate the right to
subscribe for and purchase the number of shares of Common Stock which may be
subscribed for and purchased hereunder, each such new Warrant to represent the
right to subscribe and purchase such number of shares of Common Stock as shall
be designated by said Holder hereof at the time of such surrender. Upon receipt
of evidence satisfactory to the Company of the loss, theft, destruction or
mutilation, or upon surrender or cancellation of this Warrant, the Company will
issue to the Holder hereof a new Warrant of like tenor, in lieu of this Warrant,
representing the right to subscribe for and purchase the number of shares of
Common Stock which may be subscribed for and purchased hereunder.
8. INCORPORATION OF SUBSCRIPTION AGREEMENT
The terms and conditions of the subscription agreement between the
Company and the Holder dated the date hereof (including the representations,
warranties and covenants made therein) are incorporated herein by reference and
shall be deemed to be made herein.
9. OTHER COVENANTS
A. NO IMPAIRMENT. The Company shall not by any action, including,
without limitation, amending its certificate of incorporation, any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate to protect the
rights of the Holder hereof against impairment. Without limiting the generality
of the foregoing, the Company will (a) not increase the par value of any shares
of Common Stock issuable upon the exercise of this Warrant above the amount
payable therefor upon such exercise, (b) take all such action as may be
necessary or appropriate in order that the Company may validly issue full paid
and nonassessable shares of Common Stock upon the exercise of this Warrant, and
(c) obtain all such authorizations, exemptions or consents from any public
regulatory body having jurisdiction thereof as may be necessary to enable the
Company to perform its obligations under this Warrant.
B. INDEMNIFICATION. The Company shall indemnify, save and hold harmless
the Holder from and against any and all liability, loss, cost, damage,
reasonable attorneys' and accountants, fees and expenses, court costs and all
other out-of-pocket expenses incurred in connection with or arising from any
default by the Company under this Warrant.
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10. NOTICE OF CERTAIN EVENTS
If, at any time prior to the expiration of this Warrant and prior to
its exercise, any of the following events shall occur:
A. The Company shall take a record of the holders of its shares of
Common Stock for the purpose of entitling them to receive a dividend or
distribution payable otherwise than in cash, or a cash dividend or distribution
payable otherwise than out of current or retained earnings, as indicated by the
accounting treatment of such dividend or distribution on the books of the
Company; or
B. The Company shall offer to the holders of its Common Stock any
additional shares of capital stock of the Company or securities convertible into
or exchangeable for shares of capital stock of the Company, or any option, right
or warrant to subscribe therefor; or
C. A dissolution, liquidation or winding up of the Company (other than
in connection with a consolidation or merger) or a sale of all or substantially
all of its property, assets and business as an entirety shall be proposed; or
D. Any consolidation or merger to which the Company is a party and for
which approval of any stockholders of the Company is required, any
reclassification of change of Common Stock issuable upon exercise of this
Warrant, or a tender offer or exchange offer for shares of Common Stock;
then, in any one or more of such events, the Company shall give written notice
of such event at least 15 days prior to the date fixed as a record date or the
date of closing the transfer books for the determination of the shareholders
entitled to such dividend, distribution, convertible or exchangeable securities
or subscription rights, or entitled to vote on such proposed dissolution,
liquidation, winding up or sale. Such notice shall specify such record date or
the date of closing the transfer books, as the case may be. Failure to give such
notice or any defect therein shall not affect the validity of any action taken
in connection with the declaration or payment of any such dividend, or the
issuance of any convertible or exchangeable securities, or subscription rights,
options or warrants, or any proposed dissolution, liquidation, winding up or
sale.
The Company shall give 15 days' prior written notice of any change in
the Company's principal office.
11. NOTICES
All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been duly made when delivered:
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A. If to the registered Holder of this Warrant, to the address of such
Holder as shown on the books of the Company; or
B. If to the Company, to the address set forth on the first page of
this Warrant, or to such other address specified in prior written notice given
and delivered by the Company to the Holder.
12. SUCCESSORS
All the covenants, agreements, representations and warranties contained
in this Warrant shall bind the parties hereto and their respective heirs,
personal representatives, successors and assigns.
13. LAW GOVERNING
This Warrant shall be construed and enforced in accordance with, and
governed by, the laws of the State of New York.
[SIGNATURE PAGE FOLLOWS]
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Dated this ___ day of ____________, 1999.
PETROQUEST ENERGY, INC.
By:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President and Chief Executive Officer
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[FORM OF ELECTION TO PURCHASE]
(To be executed upon exercise of Warrant.)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase _____ shares of Common
Stock and herewith tenders in payment for such shares a certified check or bank
draft payable to the order of PetroQuest Energy, Inc. in the amount of
$__________, all in accordance with the terms hereof. The undersigned requests
that a certificate for such shares be registered in the name of
____________________ whose address is __________________________________________
and that such certificate (or any payment in lieu thereof) be delivered to
________________________ whose address is _____________________________________.
Dated:
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(Signature must conform in all respects
to name of Holder as specified on the
face of the Warrant.)
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[FORM OF ASSIGNMENT]
(To be signed only upon transfer of Warrant)
For value received, the undersigned hereby sells, assigns and transfers
unto __________________________________ the right represented by the enclosed
Warrant to purchase _______________ shares of Common Stock of PetroQuest Energy,
Inc. to which the enclosed Warrant relates, and appoints ______________________
Attorney to transfer such right on the books of PetroQuest Energy, Inc. with
full power of substitution in the premises.
The undersigned represents and warrants that the transfer of the
enclosed Warrant is permitted by the terms of the Warrant Agreement pursuant to
which the enclosed Warrant has been issued, and the transferee hereof, by his
acceptance of this Agreement, represents and warrants that he is familiar with
the terms of said Warrant Agreement and agrees to be bound by the terms thereof
with the same force and effect as if a signatory thereto.
Dated:
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(Signature must conform in all respects
to name of Holder as specified on the
face of the Warrant.)
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(Address)
Signed in the presence of:
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