Item 1.01. Entry into a Material Definitive Agreement.
Purchase Agreement
On May 5, 2021, EQT Corporation, a Pennsylvania
corporation (“Buyer Parent”), and its wholly owned subsidiary, EQT Acquisition HoldCo LLC, a Delaware limited liability company
(the “Buyer” and, together with Buyer Parent, the “EQT Parties”) entered into a Membership Interest Purchase Agreement
(the “Purchase Agreement”) with Alta Resources Development, LLC, a Delaware limited liability company (the “Seller”),
Alta Marcellus Development, LLC, a Delaware limited liability company (“ARD Marcellus”) and ARD Operating, LLC, a Delaware
limited liability company (“ARD Operating” and, together with the Seller and ARD Marcellus, the “Alta Parties”),
pursuant to which the Seller agreed to sell all of the outstanding equity interests of ARD Marcellus and ARD Operating to the Buyer (the
“Transaction”).
The board of directors of Buyer Parent has unanimously
approved the Purchase Agreement and the Transaction.
Under the terms and conditions of the
Purchase Agreement, the aggregate consideration to be paid to the Seller in the Transaction will consist of $1.0 billion in cash and
105,306,346 shares of Buyer Parent common stock (the “Stock Consideration”), which shares have an aggregate dollar value
equal to $1.925 billion based on the volume weighted average sales price as traded on the New York Stock Exchange of such shares
calculated for the thirty trading day period ending on May 5, 2021.
The Purchase Agreement provides that the closing
of the Transaction is subject to the satisfaction or waiver of customary closing conditions, including, among others, (a) the accuracy
of the representations and warranties of each party (subject to specified materiality standards), (b) compliance by each party in
all material respects with their respective covenants, (c) approval by the holders of a majority of the outstanding shares of Buyer
Parent’s common stock present or represented by proxy at a special meeting of Buyer Parent’s shareholders (the “Buyer
Parent Shareholder Approval”) of the issuance of the Stock Consideration, and (d) the expiration or termination of the waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”). The Buyer Parent Shareholder
Approval is necessary to issue the Stock Consideration to the Seller.
The Alta Parties and the EQT Parties have made
customary representations and warranties in the Purchase Agreement. The Purchase Agreement also contains customary covenants and agreements,
including covenants and agreements relating to (a) the conduct of the Alta Parties’ and the EQT Parties’ businesses during
the period between the execution of the Purchase Agreement and closing of the Transaction and (b) the efforts of the parties to cause
the Transaction to be completed, including not taking any action to intentionally and materially delay the obtaining of any required governmental
approval, including the expiration or termination of the waiting period under the HSR Act.
The Purchase Agreement provides that the Buyer
Parent will be subject to certain restrictions on its ability to provide non-public information to third parties and to engage in discussions
with third parties regarding alternate transactions, subject to customary exceptions. The Buyer Parent is required to call a meeting of
its shareholders to approve the issuance of the Stock Consideration in the Transaction in accordance with the rules and regulations
of the New York Stock Exchange and, subject to certain exceptions, to recommend that its shareholders approve such issuance.
The Purchase Agreement also provides for
certain termination rights for both the Buyer and Seller, including if the Transaction is not consummated on or before
November 1, 2021. Upon termination of the Purchase Agreement under certain circumstances, including, but not limited to, the
(a) termination by the Seller in the event of a change of recommendation by the board of directors of Buyer Parent,
(b) termination by the Seller because Buyer Parent or its affiliates materially breached its obligations under the Purchase
Agreement (including its non-solicitation obligations) or (c) termination by the Buyer or the Seller if an alternative
transaction is announced and not withdrawn prior to the Buyer Parent shareholder meeting and Buyer Parent enters into such
alternative transaction within six months of termination, Buyer Parent will be obligated to pay the Seller a fee of $146,250,000. In
addition, if the Purchase Agreement is terminated by the Buyer or Seller because of a failure of the Buyer Parent shareholders to
approve the issuance of the Stock Consideration (other than as a result of a change of recommendation by the board of directors of Buyer Parent),
Buyer Parent will be obligated to pay the Seller a fee of $21,937,500.
In connection with, and concurrently with the entry
into, the Purchase Agreement, Buyer Parent entered into a debt commitment letter dated May 5, 2021 pursuant to which Bank of America,
N.A. an JPMorgan Chase Bank, N.A. have committed, subject to satisfaction of standard conditions, to provide Buyer Parent with an unsecured
bridge loan facility in aggregate principal amount of $1.0 billion. Buyer Parent currently intends to finance the Transaction and related
fees and expenses with cash on hand, borrowings under its revolving credit facility, through one or more debt capital markets transactions,
subject to market conditions and other factors, and, only to the extent necessary, borrowings under the bridge loan facility.
In connection with the closing of the
Transaction, Buyer Parent will enter into a registration rights agreement (the “Registration Rights Agreement”) with
certain affiliates of the Seller (the “Holders”) that will receive a portion of the Stock Consideration to be issued at
the closing of the Transaction (the “Issuance”). Pursuant to the Registration Rights Agreement, among other things,
Buyer Parent (a) is required to file with the Securities and Exchange Commission (the “SEC”) a registration
statement on Form S-3 registering for resale the shares of Buyer Parent’s common stock received by the Holders as part of
the Issuance and (b) will grant the Holders certain demand and piggyback registration rights. In connection with entering into
the Registration Rights Agreement, the Buyer Parent will also enter into a lockup agreement with each Holder (the “Lockup
Agreements”), pursuant to which, among other things, each Holder will agree not to sell its portion of the Stock Consideration
received in the Issuance for six months following the closing of the Transaction; provided, however, the Holders may sell
(i) up to an aggregate of 50% of the Registrable Securities (as defined in the Registration Rights Agreement) pursuant to up
two shelf underwritten offerings in the first six months following closing, (ii) no more than 25% of the Registrable Securities
in a shelf underwritten offering before the 31st day following closing and before the 90th day following
closing and (iii) up to 2,500,000 additional shares of common stock. Buyer Parent will also agree with each Holder not to sell
shares of Buyer Parent’s common stock for the first 30 days following the closing of the Transaction. The foregoing
descriptions of the Registration Rights Agreement and Lockup Agreements do not purport to be complete and are subject to, and
qualified in their entirety by, the full text of the form of Registration Rights Agreement and Lockup Agreement, which are exhibits
to the Purchase Agreement and incorporated herein by reference.
The representations, warranties and covenants
contained in the Purchase Agreement have been made solely for the benefit of the parties thereto. In addition, such representations,
warranties and covenants (a) have been made only for purposes of the Purchase Agreement, (b) are subject to materiality
qualifications contained in the Purchase Agreement which may differ from what may be viewed as material by investors, (c) were
made only as of the date of the Purchase Agreement or such other date as is specified in the Purchase Agreement and (d) have
been included in the Purchase Agreement for the purpose of allocating risk between the contracting parties rather than establishing
matters as fact. Accordingly, the Purchase Agreement is included with this filing only to provide investors with information
regarding the terms of the Purchase Agreement, and not to provide investors with any other factual information regarding the parties
thereto or their respective businesses. Investors should not rely on the representations, warranties and covenants or any
descriptions thereof as characterizations of the actual state of facts or condition of the parties to the Purchase Agreement or any
of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations and
warranties may change after the date of the Purchase Agreement, which subsequent information may or may not be fully reflected in
Buyer Parent’s public disclosures. The Purchase Agreement should not be read alone, but should instead be read in conjunction
with the other information regarding Buyer Parent that is or will be contained in, or incorporated by reference into, the Buyer
Parent’s Proxy Statement, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and other documents that Buyer
Parent files with the SEC.
The foregoing description of the Purchase Agreement
and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full
text of the Purchase Agreement attached hereto as Exhibit 2.1.