25,000,000 Shares CHESAPEAKE ENERGY CORPORATION Common Stock UNDERWRITING AGREEMENT
Exhibit 99.1
25,000,000
Shares
CHESAPEAKE
ENERGY CORPORATION
Common
Stock
July 9,
2008
▇▇▇▇▇▇
BROTHERS INC.
UBS
SECURITIES LLC
ABN AMRO
INCORPORATED
BANC OF
AMERICA SECURITIES LLC
▇▇▇▇▇
FARGO SECURITIES, LLC
As
Representatives (the “Representatives”) of the
Several Underwriters
c/▇
▇▇▇▇▇▇ Brothers Inc.
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear
Sirs:
1. Introductory. Chesapeake
Energy Corporation, an Oklahoma corporation (the “Company”), proposes to issue
and sell to the several underwriters named in Schedule A hereto (the “Underwriters”)
25,000,000 shares (“Firm
Securities”) of its Common Stock (“Securities”) and also proposes
to issue and sell to the Underwriters, at the option of the Underwriters, an
aggregate of not more than 3,750,000 additional shares (“Optional Securities”) of its
Securities as set forth below. The Firm Securities and the Optional
Securities are herein collectively called the “Offered
Securities”. The Company hereby agrees with the Underwriters
as follows:
2. Representations and Warranties of
the Company. The Company represents and warrants to, and
agrees with, the several Underwriters that:
(a) A
registration statement (No. 333-130196), including all materials
incorporated by reference therein and a base prospectus, relating to the Offered
Securities, has been filed with the Securities and Exchange Commission (the
“Commission”) and has
become effective. Such registration statement, including all
materials incorporated by reference therein and any prospectus or prospectus
supplement deemed or retroactively deemed to be part thereof that has not been
superseded or modified, is hereinafter referred to as the “Registration
Statement”. “Registration Statement”
without reference to a time means the Registration Statement as of the date and
time of its filing and effectiveness which time shall be considered the
“effective date” of the Registration Statement. For purposes of the
previous sentence, information contained in a form of prospectus or prospectus
supplement that is deemed retroactively to be a part of the Registration
Statement pursuant to Rule 430B (“Rule 430B”) under the
Securities Act of 1933 (the “Act”) shall be considered to
be included in the Registration Statement as of the time specified in
Rule 430B. “Statutory Prospectus” as of
any time means the prospectus included in the Registration Statement immediately
prior to that time, including any document incorporated by reference therein and
any base prospectus or prospectus supplement deemed to be a part thereof that
has not been superseded or modified. For purposes of the preceding
sentence, information contained in a form of prospectus (including a prospectus
supplement) that is deemed retroactively to be a part of the Registration
Statement pursuant to Rule 430B shall be considered to be included in the
Statutory Prospectus as of the actual time that form of prospectus (including a
prospectus supplement) is filed with the Commission pursuant to Rule 424(b)
(“Rule 424(b)”)
under the Act. “Prospectus” means the
Statutory Prospectus that discloses the public offering price and other final
terms of the Offered Securities and otherwise satisfies Section 10(a) of
the Act. “Issuer
Free Writing Prospectus” means any “issuer free writing prospectus,” as
defined in Rule 433, relating to the Offered Securities in the form filed
or required to be filed with the Commission or, if not required to be filed, in
the form retained in the Company’s records pursuant to
Rule 433(g). “General Use Issuer Free Writing
Prospectus” means any Issuer Free Writing Prospectus that is intended for
general distribution to prospective investors, as evidenced by its being
specified in Schedule C to this Agreement. “Limited Use Issuer Free Writing
Prospectus” means any Issuer Free Writing Prospectus that is not a
General Use Issuer Free Writing Prospectus. “Applicable Time” means
4:30 p.m. (Eastern time) on the date of this Agreement. Any
reference herein to the terms “amend,” “amendment,” or “supplement” with respect to
the Registration Statement, the Prospectus or any Issuer Free Writing Prospectus
shall be deemed to refer to and include the filing of any document under the
Securities Exchange Act of 1934 (the “Exchange Act”) and the rules
and regulations of the Commission (the “Rules and Regulations”) on or
after the initial effective date of the Registration Statement, or the date of
such Prospectus or Issuer Free Writing Prospectus, as the case may be, and
deemed to be incorporated by reference therein.
(b) On its
effective date, the Registration Statement conformed in all respects to the
requirements of the Act and the Rules and Regulations and did not include any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading,
and on the date of this Agreement and on the Closing Date (as defined herein),
the Registration Statement and the Prospectus conform or will conform in all
respects to the requirements of the Act and the Rules and Regulations, and
neither of such documents will include any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, except that the foregoing does not
apply to statements in or omissions from any of such documents based upon
written information furnished to the Company by any Underwriter through the
Representatives, if any, specifically for use therein, it being understood and
agreed that the only such information furnished by an Underwriter consists of
the information described as such in Section 8(b) hereof. The
documents incorporated by reference in the Prospectus (the “Company Filed Documents”),
when they became effective or were filed with the Commission, as the case may
be, conformed in all material respects with the requirements of the Act
or the Exchange Act, as applicable, and the Rules and Regulations and
did not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statement
therein not misleading.
(c) The
Registration Statement is an “automatic shelf registration statement”, as
defined in Rule 405 under the Act, that initially became effective within
three years of the date of this Agreement, and as of the determination date
applicable to the Registration Statement (and any amendment thereof) and the
offering contemplated hereby, the Company is a “well-known seasoned issuer” (as
defined in Rule 405 under the Act). If immediately prior to the
third anniversary (the “Renewal
Deadline”) of the initial effective date of the Registration Statement,
any of the Offered Securities remain unsold by the Underwriters, the Company
will, prior to the Renewal Deadline, if it has not already done so and is
eligible to do so, file a new automatic shelf registration statement relating to
the Offered Securities, in a form satisfactory to the
Representatives. If the Company is no longer eligible to file an
automatic shelf registration statement, the Company will, prior to the Renewal
Deadline, file, if it has not already done so, a new shelf registration
statement relating to the Offered Securities, in a form satisfactory to the
Representatives, and will use its best efforts to cause such registration
statement to be declared effective within 180 days after the Renewal
Deadline. The Company will take all other action necessary or
appropriate to permit the public offering and sale of the Offered Securities to
continue as contemplated in the expired registration statement relating to the
Offered Securities. References herein to the Registration Statement
shall include such new automatic shelf registration statement or such new shelf
registration statement, as the case may be.
(d) The
Company has not received from the Commission any notice pursuant to
Rule 401(g)(2) objecting to use of the automatic shelf registration
statement form. If at any time when Offered Securities remain unsold
by the Underwriters the Company receives from the Commission a notice pursuant
to Rule 401(g)(2) or otherwise ceases to be eligible to use the automatic
shelf registration statement form, the Company will (i) promptly notify the
Representatives, (ii) promptly file a new registration statement or
post-effective amendment on the proper form relating to the Offered Securities
in a form satisfactory to the Representatives, (iii) use its best efforts
to cause such registration statement or post-effective amendment to be declared
effective as soon as practicable, and (iv) promptly notify the Representatives
of such effectiveness. The Company will take all other action
necessary or appropriate to permit the public offering and sale of the Offered
Securities to continue as contemplated in the registration statement that was
the subject of the Rule 401(g)(2) notice or for which the Company has
otherwise become ineligible. References herein to the registration
statement relating to the Offered Securities shall include such new registration
statement or post-effective amendment, as the case may be.
(e) The
Company has paid or shall pay the required Commission filing fees relating to
the Offered Securities within the time required by Rule 456(b)(1) without
regard to the proviso therein and otherwise in accordance with Rules 456(b)
and 457(r).
(f) (i) At
the time of filing the Registration Statement and (ii) at the date of this
Agreement, the Company was not and is not an “ineligible issuer,” as defined in
Rule 405, including (x) the Company or any other subsidiary in the
preceding three years not having been convicted of a felony or misdemeanor or
having been made the subject of a judicial or administrative decree or order as
described in Rule 405 and (y) the Company in the preceding three years
not having been the subject of a bankruptcy petition or insolvency or similar
proceeding, not having had a registration statement be the subject of a
proceeding under Section 8 of the Act and not being the subject of a
proceeding under Section 8A of the Act in connection with the offering of
the Offered Securities, all as described in Rule 405.
(g) As of the
Applicable Time and at all subsequent times through the completion of the public
offer and sale of the Offered Securities, neither (i) the General Use
Issuer Free Writing Prospectus(es) issued at or prior to the Applicable Time,
the Statutory Prospectus and the information set out in Schedule B hereto all
considered together (collectively, the “General Disclosure Package”),
nor (ii) any individual Limited Use Issuer Free Writing Prospectus, when
considered together with the General Disclosure Package, included any untrue
statement of a material fact or omitted to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The preceding sentence does not
apply to statements in or omissions from any prospectus included in the
Registration Statement or any Issuer Free Writing Prospectus in reliance upon
and in conformity with written information furnished to the Company by any
Underwriter through the Representatives specifically for use therein, it being
understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in Section 8(b)
hereof.
(h) Each
Issuer Free Writing Prospectus, as of its issue date and at all subsequent times
through the completion of the public offer and sale of the Offered Securities or
until any earlier date that the Company notified or notifies the Representatives
as described in the next sentence, did not, does not and will not include any
information that conflicted, conflicts or will conflict with the information
then contained in the Registration Statement. If at any time
following issuance of an Issuer Free Writing Prospectus there occurred or occurs
an event or development as a result of which such Issuer Free Writing Prospectus
conflicted or would conflict with the information then contained in the
Registration Statement or included or would include an untrue statement of a
material fact or omitted or would omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
prevailing at that subsequent time, not misleading, (i) the Company has
promptly notified or will promptly notify the Representatives and (ii) the
Company has promptly amended or will promptly amend or supplement such Issuer
Free Writing Prospectus to eliminate or correct such conflict, untrue statement
or omission. The foregoing two sentences do not apply to statements
in or omissions from any Issuer Free Writing Prospectus in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through the Representatives specifically for use therein, it being understood
and agreed that the only such information furnished by any Underwriter consists
of the information described as such in Section 8(b) hereof.
(i) The
Company has been duly incorporated and is an existing corporation in good
standing under the laws of the State of Oklahoma, with power and authority
(corporate and other) to own its properties and conduct its business as
described in the General Disclosure Package; and the Company is duly qualified
to do business as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the conduct of its
business requires such qualification, except where the failure to be so
qualified would not reasonably be expected to individually or in the aggregate
have a material adverse effect on the condition (financial or other), business,
prospects, properties or results of operations of the Company and its
subsidiaries taken as a whole (“Material Adverse
Effect”).
(j) Each
subsidiary of the Company has been duly organized and is in good standing under
the laws of the jurisdiction of its organization, with power and authority
(corporate and other) to own its properties and conduct its business as
described in the General Disclosure Package; and each subsidiary of the Company
is duly qualified to do business and is in good standing in all other
jurisdictions in which its ownership or lease of property or the conduct of its
business requires such qualification; except where the failure to be so
qualified would not reasonably be expected to individually or in the aggregate
have a Material Adverse Effect; all of the issued and outstanding capital stock
or similar equity interests of each subsidiary of the Company has been duly
authorized and validly issued and is fully paid and nonassessable; and the
capital stock or similar equity interests of each subsidiary owned by the
Company, directly or through subsidiaries, is owned free from liens,
encumbrances and defects.
(k) When the
Offered Securities are delivered and paid for pursuant to this Agreement on each
Closing Date, such Offered Securities will have been duly authorized, validly
issued, fully paid and nonassessable; the Offered Securities are consistent with
the information in the General Disclosure Package and conform to the description
thereof contained in the Prospectus; and the stockholders of the Company have no
preemptive rights with respect to the Offered Securities.
(l) Except as
disclosed in the General Disclosure Package, there are no contracts, agreements
or understandings between the Company and any person that would give rise to a
valid claim against the Company or any Underwriter for a brokerage commission,
finder’s fee or other like payment in connection with this
offering.
(m) The
Offered Securities have been approved for listing on the NYSE, subject to notice
of issuance.
(n) No
consent, approval, authorization, filing with or order of any court or
governmental agency or body is required for the consummation of the transactions
contemplated by this Agreement in connection with the issuance and sale of the
Offered Securities by the Company, except such as have been obtained and made
under the Act and such as may be required under state securities laws in
connection with the resale of the Offered Securities by the
Underwriters.
(o) None of
the execution, delivery and performance of this Agreement, the issuance and sale
of the Offered Securities and compliance with the terms and provisions hereof,
will result in a breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, rule, regulation or order of any
governmental agency or body or any court, domestic or foreign, having
jurisdiction over the Company or any subsidiary of the Company or any of their
properties, or any agreement or instrument to which the Company or any such
subsidiary is a party or by which the Company or any such subsidiary is bound or
to which any of the properties of the Company or any such subsidiary is subject,
or the charter or by-laws (or similar organizational documents) of the Company
or any such subsidiary, and the Company has full power and authority to
authorize, issue and sell the Offered Securities as contemplated by this
Agreement.
(p) This
Agreement has been duly authorized, executed and delivered by the
Company.
(q) Except as
disclosed in the General Disclosure Package, the Company and its subsidiaries
have good and marketable title to all real properties and all other properties
and assets owned by them, including, without limitation, all oil and gas
producing properties of the Company and its subsidiaries, in each case free from
liens, encumbrances and defects that would materially affect the value thereof
or materially interfere with the use made or to be made thereof by them; and,
except as disclosed in the General Disclosure Package, the Company and its
subsidiaries hold any leased real or personal property, including, without
limitation, all oil and gas producing properties of the Company and its
subsidiaries, under valid and enforceable leases with no exceptions that would
materially interfere with the use made or to be made thereof by
them.
(r) The
Company and its subsidiaries possess adequate certificates, authorities or
permits issued by appropriate governmental agencies or bodies necessary to
conduct the business now operated by them and have not received any notice of
proceedings relating to the revocation or modification of any such certificate,
authority or permit that, if determined adversely to the Company or any of its
subsidiaries, would reasonably be expected to individually or in the aggregate
have a Material Adverse Effect.
(s) No labor
dispute with the employees of the Company or any subsidiary exists or, to the
knowledge of the Company, is imminent that would reasonably be expected to have
a Material Adverse Effect.
(t) The
Company and its subsidiaries own, possess or can acquire on reasonable terms,
adequate trademarks, trade names and other rights to inventions, know-how,
patents, copyrights, confidential information and other intellectual property
(collectively, “intellectual
property rights”) necessary to conduct the business now operated by them,
or presently employed by them, and have not received any notice of infringement
of, or conflict with, asserted rights of others with respect to any intellectual
property rights that, if determined adversely to the Company or any of its
subsidiaries, would reasonably be expected to individually or in the aggregate
have a Material Adverse Effect.
(u) Except as
disclosed in the General Disclosure Package, neither the Company nor any of its
subsidiaries is in violation of any statute, rule, regulation, decision or order
of any governmental agency or body or any court, domestic or foreign, relating
to the use, disposal or release of hazardous or toxic substances or relating to
the protection or restoration of the environment or human exposure to hazardous
or toxic substances (collectively, “environmental laws”), owns or
operates any real property contaminated with any substance that is subject to
any environmental laws, is liable for any off-site disposal or contamination
pursuant to any environmental laws, or is subject to any claim relating to any
environmental laws which violation, contamination, liability or claim would
reasonably be expected to individually or in the aggregate have a Material
Adverse Effect; and the Company is not aware of any pending investigation which
might lead to such a claim.
(v) Except as
disclosed in the General Disclosure Package, there are no pending actions, suits
or proceedings against or affecting the Company, any of its subsidiaries or any
of their respective properties that, if determined adversely to the Company or
any of its subsidiaries, would reasonably be expected to individually or in the
aggregate have a Material Adverse Effect, or would materially and adversely
affect the ability of the Company to perform its obligations under this
Agreement, or which are otherwise material in the context of the sale of the
Offered Securities; and no such actions, suits or proceedings are threatened or,
to the Company’s knowledge, contemplated.
(w) The
financial statements included or incorporated by reference in the Registration
Statement and the General Disclosure Package present fairly the financial
position of the Company and its consolidated subsidiaries as of the dates shown
and their results of operations and cash flows for the periods shown, and such
financial statements have been prepared in conformity with the generally
accepted accounting principles in the United States applied on a consistent
basis.
(x) Except as
disclosed in the General Disclosure Package, since the date of the latest
audited financial statements incorporated by reference in the General Disclosure
Package, there has been no material adverse change, nor any development or event
involving a prospective material adverse change, in the condition (financial or
other), business, properties or results of operations of the Company and its
subsidiaries taken as a whole, and, except as disclosed in the General
Disclosure Package, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital
stock.
(y) The
Company is not, and at no time during which a prospectus is required by the Act
to be delivered (whether physically or through compliance with Rule 172
under the Act or any similar rule) in connection with the sales will it be, and,
after giving effect to the offering and sale of the Offered Securities and the
application of proceeds thereof as described in the General Disclosure Package,
will not be an “investment company” as defined in the Investment Company Act of
1940.
(z) The
Company is subject to the reporting requirements of either Section 13 or
15(d) of the Exchange Act and files reports with the Commission on the
Electronic Data Gathering, Analysis, and Retrieval (▇▇▇▇▇) system.
(aa) The
statistical and market related data and forward looking statements included in
the General Disclosure Package and any Limited Use Issuer Free Writing
Prospectus, are based on or derived from sources that the Company believes to be
reliable and accurate in all material respects and represents its good faith
estimates that are made on the basis of data derived from such
sources.
(bb) Neither
the Company nor any of its subsidiaries has any liability for any prohibited
transaction or accumulated funding deficiency (within the meaning of
Section 412 of the Internal Revenue Code) or any complete or partial
withdrawal liability (within the meaning of Sections 4203 and 4205 of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”), respectively), with
respect to any pension, profit sharing or other plan which is subject to ERISA,
to which the Company or any of its subsidiaries makes or ever has made a
contribution and in which any employee of the Company or any subsidiary is or
has ever been a participant. With respect to such plans, the Company
and each of its subsidiaries is in compliance in all material respects with all
applicable provisions of ERISA.
(cc) The
Company has established and maintains disclosure controls and procedures (as
such term is defined in Rule 13a-15 under the Exchange Act); such
disclosure controls and procedures are designed to ensure that material
information relating to the Company and its subsidiaries is made known to the
chief executive officer and chief financial officer of the Company by others
within the Company or any subsidiary, and such disclosure controls and
procedures are reasonably effective to perform the functions for which they were
established subject to the limitations of any such control system; the Company’s
auditors and the audit committee of the board of directors of the Company have
been advised of: (A) any significant deficiencies in the design or
operation of internal controls which could adversely affect the Company’s
ability to record, process, summarize, and report financial data; and
(B) any fraud, whether or not material, that involves management or other
employees who have a role in the Company’s internal controls; any material
weaknesses in internal controls have been identified for the Company’s auditors;
and since the date of the most recent evaluation of such disclosure controls and
procedures, there have been no significant changes in internal controls or in
other factors that could significantly affect internal controls, including any
corrective actions with regard to significant deficiencies and material
weaknesses. The Company made available to the Underwriters or their
counsel for review true and complete copies of all minutes or draft minutes of
meetings, or resolutions adopted by written consent, of the board of directors
of the Company and each subsidiary and each committee of each such board in the
past three years, and all agendas for each such meeting for which minutes or
draft minutes do not exist.
(dd) Except as
disclosed in the General Disclosure Package and the Registration Statement,
(i) all stock options granted under any stock option plan of the Company
(the “Stock Plans”) have been granted in compliance with the terms of applicable
law and the applicable Stock Plans and (ii) the Company has properly
accounted for all stock options granted under the Stock Plans in conformity with
generally accepted accounting principles in the United States applied on a
consistent basis.
(ee) All
information on (or hyperlinked from) the Company’s website at ▇▇▇.▇▇▇.▇▇▇ either
(i) qualifies for the exemption for regularly released factual business
information or forward-looking information in Rule 168 of the Act or
(ii) qualifies for the safe-harbor related to historical information in
Rule 433(e)(2) under the Act, and the Company does not maintain or support
any website other than ▇▇▇.▇▇▇.▇▇▇.
(ff) The
Company has not received any written comments from the Commission staff in
connection with the Company’s reports under the Exchange Act that remain
unresolved.
In
addition, any certificate signed by any officer of the Company or any of the
Subsidiaries and delivered to the Underwriters or counsel for the Underwriters
in connection with the offering of the Offered Securities shall be deemed to be
a representation and warranty by the Company, as to matters covered thereby, to
each Underwriter.
3. Purchase, Sale and Delivery of
Offered Securities. On the basis of the representations,
warranties and agreements herein contained, but subject to the terms and
conditions herein set forth, the Company agrees to sell to the Underwriters, and
the Underwriters agree, severally and not jointly, to purchase from the Company,
at a purchase price of $55.103125 per share (other than the 1,000,000 shares, to
be purchased by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and a trust established for the benefit of
▇▇. ▇▇▇▇▇▇▇▇▇’▇ children, which shall be purchased for a price of $57.25 per
share), the respective numbers of shares of Firm Securities set forth opposite
the names of the Underwriters in Schedule A hereto.
The
Company will deliver the Firm Securities to the Representatives for the accounts
of the several Underwriters, against payment of the purchase price in Federal
(same day) funds by official bank check or checks or wire transfer to an account
at a bank acceptable to the Representatives drawn to the order of the Company at
the office of Cravath, Swaine & ▇▇▇▇▇ LLP, at 10:00 A.M.,
New York time, on July 15, 2008, or at such other time not later than seven
full business days thereafter as the Representatives and the Company determine,
such time being herein referred to as the “First Closing
Date”. For purposes of Rule 15c6-1 under the Exchange
Act, the First Closing Date (if later than the otherwise applicable settlement
date) shall be the settlement date for payment of funds and delivery of
securities for all the Offered Securities sold pursuant to the
offering. The certificates for the Firm Securities so to be delivered
will be in definitive form, in such denominations and registered in such names
as the Representatives request and will be made available for checking and
packaging at the above office of Cravath, Swaine & ▇▇▇▇▇ LLP at least
24 hours prior to the First Closing Date.
In
addition, upon written notice from the Representatives given to the Company from
time to time not more than 30 days subsequent to the date of the
Prospectus, the Underwriters may purchase all or less than all of the Optional
Securities at the purchase price per Security to be paid for the Firm
Securities. The Company agrees to sell to the Underwriters the number
of shares of Optional Securities specified in such notice and the Underwriters
agree, severally and not jointly, to purchase such Optional
Securities. Such Optional Securities shall be purchased from the
Company for the account of each Underwriter in the same proportion as the number
of shares of Firm Securities set forth opposite such Underwriter’s name in
Schedule A hereto bears to the total number of shares of Firm Securities
(subject to adjustment by the Representatives to eliminate fractions) and may be
purchased by the Underwriters only for the purpose of covering over-allotments
made in connection with the sale of the Firm Securities. No Optional
Securities shall be sold or delivered unless the Firm Securities previously have
been, or simultaneously are, sold and delivered. The right to
purchase the Optional Securities or any portion thereof may be exercised from
time to time and to the extent not previously exercised may be surrendered and
terminated at any time upon notice by the Representatives to the
Company.
Each time
for the delivery of and payment for the Optional Securities, being herein
referred to as an “Optional
Closing Date”, which may be the First Closing Date (the First Closing
Date and each Optional Closing Date, if any, being sometimes referred to as a
“Closing Date”), shall
be determined by the Representatives but shall be not later than five full
business days after written notice of election to purchase Optional Securities
is given. The Company will deliver the Optional Securities being
purchased on each Optional Closing Date to the Representatives for the accounts
of the several Underwriters against payment of the purchase price therefor in
Federal (same day) funds by official bank check or checks or wire transfer to an
account at a bank acceptable to the Representatives drawn to the order of the
Company, at the above office of Cravath, Swaine & ▇▇▇▇▇
LLP. The certificates for the Optional Securities being purchased on
each Optional Closing Date will be in definitive form, in such denominations and
registered in such names as the Representatives request upon reasonable notice
prior to such Optional Closing Date and will be made available for checking and
packaging at the above office of Cravath, Swaine & ▇▇▇▇▇ LLP at a
reasonable time in advance of such Optional Closing Date.
4. Offering by
Underwriters. It is understood that the several Underwriters
propose to offer the Offered Securities for sale to the public as set forth in
the Prospectus.
5. Certain Agreements of the
Company. The Company agrees with the several Underwriters
that:
(a) The
Company will file each Statutory Prospectus with the Commission pursuant to and
in accordance with Rule 424(b)(2) (or, if applicable and if consented to by
the Representatives, subparagraph (5), such consent not to be unreasonably
withheld or delayed) not later than the second business day following the
execution and delivery of this Agreement.
(b) The
Company will advise the Representatives promptly of any proposal to amend or
supplement the Registration Statement or any Statutory Prospectus and will not
undertake any such amendment or supplement if the Representatives reasonably
object in writing thereto; and the Company will also advise the Representatives
promptly of the filing of any such amendment or supplement and of the
institution by the Commission of any stop order proceedings in respect of the
Registration Statement or of any part thereof and will use its best efforts to
prevent the issuance of any such stop order and to obtain as soon as possible
its lifting, if issued.
(c) If, at
any time when a prospectus relating to the Offered Securities is required to be
delivered (whether physically or through compliance with Rule 172 under the
Act) in connection with sales by the Underwriters or any dealer, any event
occurs as a result of which the Prospectus, as then amended or supplemented
would include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is necessary
at any time to amend the Registration Statement or the Prospectus to comply with
the Act, the Company promptly will notify the Representatives of such event and
will promptly prepare and file with the Commission, at its own expense, an
amendment or supplement which will correct such statement or omission or an
amendment which will effect such compliance. Neither the
Representatives’ consent to, nor the Underwriters’ delivery of, any such
amendment or supplement shall constitute a waiver of any of the conditions set
forth in Section 6 hereof.
(d) As soon
as practicable, but not later than 16 months, after the date of this
Agreement, the Company will make generally available to its security holders an
earnings statement covering a period of at least 12 months beginning after
the later of (i) the effective date of the registration statement relating
to the Offered Securities, (ii) the effective date of the most recent
post-effective amendment to the Registration Statement to become effective prior
to the date of this Agreement and (iii) the date of the Company’s most
recent Annual Report on Form 10-K filed with the Commission prior to the
date of this Agreement, which will satisfy the provisions of Section 11(a)
of the Act.
(e) The
Company will furnish to the Representatives copies of the Registration Statement
in the form it became effective (including all exhibits) and of all amendments
thereto, any related preliminary prospectus, any related preliminary prospectus
supplement, and, so long as a prospectus relating to the Offered Securities is
(or but for the exemption in Rule 172 would be required to be) delivered under
the Act in connection with sales by the Underwriters or any dealer, the
Prospectus and all amendments and supplements to such documents, in each case in
such quantities as the Representatives request. The Prospectus shall
be so furnished on or prior to 3:00 p.m., New York time, on the
business day following the execution and delivery of this
Agreement. All other documents shall be so furnished as soon as
available. The Company will pay the expenses of printing and
distributing to the Underwriters all such documents.
(f) The
Company will arrange for the qualification of the Offered Securities for sale
under the laws of such jurisdictions as the Representatives designate and will
continue such qualifications in effect so long as required for the
distribution.
(g) The
Company will pay all expenses incidental to the performance of its obligations
under this Agreement, for any filing fees and other expenses (including fees and
disbursements of counsel) incurred in connection with qualification of the
Offered Securities for sale under the laws of such jurisdictions as the
Representatives designate and the printing of memoranda relating thereto, and
for expenses incurred in distributing preliminary prospectuses, preliminary
prospectus supplements and the Prospectus (including any amendments and
supplements thereto) to the Underwriters and for expenses incurred for
preparing, printing and distributing any Issuer Free Writing Prospectuses to
investors or prospective investors; provided that on the
First Closing Date, the Underwriters (acting collectively) will reimburse the
Company for up to $150,000 of expenses incurred by the Company in the
performance of its obligations under this Agreement.
(h) For a
period of 60 days after the date of this Agreement, the Company will not
offer, sell, contract to sell, pledge or otherwise dispose of, directly or
indirectly, or file with the Commission a registration statement under the Act
(other than a customary universal shelf registration statement) relating to, any
additional shares of its common stock or securities convertible into or
exchangeable or exercisable for any shares of its common stock, or
publicly disclose the intention to make any such offer, sale, pledge,
disposition or filing, without the prior written consent of ▇▇▇▇▇▇ Brothers Inc.
and UBS Securities LLC, except (i) grants of employee and director stock
options or restricted stock pursuant to the terms of a plan in effect on the
date hereof, (ii) issuances of common stock pursuant to the exercise of
options, preferred stock, contingent convertible senior notes or warrants
outstanding on the date of the initial offering of the Offered Securities,
(iii) issuances of common stock in exchange for preferred stock or
contingent convertible senior notes of the Company outstanding on the date of
the initial offering of the Offered Securities and (iv) the filing of a
registration statement in accordance with a registration rights agreement
relating to any preferred stock or contingent convertible senior notes of the
Company outstanding on the date of the initial offering of the Offered
Securities.
6. Free Writing Prospectuses. The
Company represents and agrees that, unless it obtains the prior consent of the
Representatives, and each Underwriter represents and agrees that, unless it
obtains the prior consent of the Company and the Representatives, it has not
made and will not make any offer relating to the Offered Securities that would
constitute an Issuer Free Writing Prospectus, or that would otherwise constitute
a “free writing prospectus,” as defined in Rule 405, required to be filed
with the Commission. Any such free writing prospectus consented to by
the Company and the Representatives is hereinafter referred to as a “Permitted Free Writing
Prospectus.” The Company represents that it has treated and
agrees that it will treat each Permitted Free Writing Prospectus as an “issuer
free writing prospectus,” as defined in Rule 433, and has complied and will
comply with the requirements of Rule 433 applicable to any Permitted Free
Writing Prospectus, including timely Commission filing where required, legending
and record keeping.
7. Conditions of the Obligations of the
Underwriters. The obligations of the several Underwriters to
purchase and pay for the Firm Securities on the First Closing Date and the
Optional Securities to be purchased on each Optional Closing Date will be
subject to the accuracy of the representations and warranties on the part of the
Company herein, to the accuracy of the statements of officers of the Company
made pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder and to the following additional conditions
precedent:
(a) The
Representatives shall have received a letter (the “Initial Comfort Letter”),
dated on or prior to the date of this Agreement, of PricewaterhouseCoopers LLP
in form and substance satisfactory to the Representatives and
PricewaterhouseCoopers LLP, which comfort letter shall address, without
limitation, the various financial disclosures, if any, set forth in the
Registration Statement and the General Disclosure Package.
(b) The
Prospectus shall have been filed with the Commission in accordance with the Act
and Section 5(a) of this Agreement. No stop order suspending the
effectiveness of the Registration Statement or of any part thereof shall have
been issued and no proceedings for that purpose shall have been instituted or,
to the knowledge of the Company or any Underwriter, shall be contemplated by the
Commission.
(c) Subsequent
to the execution and delivery of this Agreement, there shall not have occurred
(i) any change, or any development or event involving a prospective change,
in the condition (financial or other), business, properties or results of
operations of the Company and its subsidiaries taken as one enterprise which, in
the judgment of the Representatives, is material and adverse and makes it
impractical or inadvisable to proceed with completion of the public offering or
the sale of and payment for the Offered Securities; (ii) any downgrading in
the rating of any debt securities of the Company by any “nationally recognized
statistical rating organization” (as defined for purposes of Rule 436(g)
under the Act), or any public announcement that any such organization has under
surveillance or review its rating of any debt securities of the Company (other
than an announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating) or any announcement that
the Company has been placed on negative outlook; (iii) any change in U.S.
or international financial, political or economic conditions or currency
exchange rates or exchange controls as would, in the judgment of the
Representatives, be likely to prejudice materially the success of the proposed
issue, sale or distribution of the Offered Securities, whether in the primary
market or in respect of dealings in the secondary market; (iv) any material
suspension or material limitation of trading in securities generally on the
New York Stock Exchange, or any setting of minimum prices for trading on
such exchange, or any suspension of trading of any securities of the Company on
any exchange or in the over-the-counter market; (v) any banking moratorium
declared by U.S. Federal or New York authorities; (vi) any major
disruption of settlements of securities or clearance services in the United
States; or (vii) any attack on, outbreak or escalation of hostilities or
acts of terrorism involving the United States, any declaration of war by
Congress or any other national or international calamity or emergency if, in the
judgment of the Representatives, the effect of any such attack, outbreak,
escalation, act, declaration, calamity or emergency makes it impractical or
inadvisable to proceed with completion of the public offering or the sale of and
payment for the Offered Securities.
(d) The
Representatives shall have received an opinion, dated such Closing Date, of
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Company, that:
(i) The
Company has been duly incorporated and is an existing corporation in good
standing under the laws of the State of Oklahoma, with corporate power and
authority to own its properties and conduct its business as described in the
General Disclosure Package.
(ii) Each
subsidiary of the Company has been duly organized and is in good standing under
the laws of the jurisdiction of its organization, with power and authority
(corporate and other) to own its property and conduct its business as described
in the General Disclosure Package; except where the failure to be so qualified
would not reasonably be expected to individually or in the aggregate have a
Material Adverse Effect; and, to the best of such counsel’s knowledge after
reasonable investigation, the capital stock or similar equity interests of each
subsidiary owned by the Company, directly or through subsidiaries, is owned free
from liens, encumbrances and defects.
(iii) The
Offered Securities have been duly authorized and, when issued and delivered
against payment of the consideration therefore pursuant to the terms of this
Agreement, will be validly issued, fully paid and nonassessable; the Offered
Securities conform as to legal matters in all material respects to the
description thereof contained in the Prospectus; and the stockholders of the
Company have no preemptive rights with respect to the Offered
Securities;
(iv) No
consent, approval, authorization or order of, or filing with, any governmental
agency or body or any court is required for the consummation of the transactions
contemplated by this Agreement in connection with the issuance or sale of the
Offered Securities by the Company, except such as may be required
under applicable securities laws in connection with the purchase and resale of
the Offered Securities by the Underwriters.
(v) None of
the execution, delivery and performance of this Agreement, the issuance and sale
of the Offered Securities and compliance with the terms and provisions hereof
will result in a breach or violation of any of the terms and provisions of, or
constitute a default under, (1) any statute, rule, regulation or order of
any governmental agency or body or any court having jurisdiction over the
Company or any subsidiary of the Company or any of their properties which is, in
the experience of such counsel, customarily applicable to securities offerings
or (2) any agreement or instrument filed or referenced as an exhibit to the
Company’s Annual Report on Form 10-K for the year ended December 31, 2007,
or to any report on Form 8-K or Form 10-Q filed since December 31, 2007, to
which the Company or any such subsidiary is party or by which the Company or any
such subsidiary is bound or to which any of the properties of the Company or any
such subsidiary is subject, or (3) the charter or by-laws (or similar
organizational documents) of the Company or any such subsidiary, and the Company
has full power and authority to authorize, issue and sell the Offered Securities
as contemplated by this Agreement except in the
case of clause (2) for such breaches or violations that would not have
a Material Adverse Effect.
(vi) Except as
disclosed in the General Disclosure Package, there are no pending actions, suits
or proceedings against or affecting the Company, any of its subsidiaries or any
of their respective properties that, if determined adversely to the Company or
any of its subsidiaries, would individually or in the aggregate have a Material
Adverse Effect, or would materially and adversely affect the ability of the
Company to perform its obligations under this Agreement, or which are otherwise
material in the context of the sale of the Offered Securities; and no such
actions, suits or proceedings are threatened or, to such counsel’s knowledge,
contemplated.
(vii) This
Agreement has been duly authorized, executed and delivered by the
Company.
(viii) The
Registration Statement has become effective under the Act, the Prospectus was
filed with the Commission pursuant to the subparagraph of Rule 424(b)
specified in such opinion on the date specified therein in the manner and within
the time period required by Rule 424 and in compliance with Rule 430B,
and, to the best of the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement or any part thereof has been issued
and no proceedings for that purpose have been instituted or are pending or
contemplated under the Act, and the Registration Statement, as of its effective
date and as of the date of this Agreement, the Statutory Prospectus, as of the
Applicable Time, and the Prospectus, as of its date and the Closing Date, and
any amendment or supplement thereto, as of its date, complied as to form in all
material respects with the requirements of the Act and the Rules and
Regulations; the descriptions in the Registration Statement and the Prospectus
of statutes, legal and governmental proceedings and contracts and other
documents are accurate and fairly present the information required to be shown;
and such counsel do not know of any legal or governmental proceedings required
to be described in the Prospectus which are not described as required or of any
contracts or documents of a character required to be described in the
Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement which are not described and filed as
required.
(ix) The
Company is not, and after giving effect to the offering and sale of the Offered
Securities and the application of the proceeds thereof as described in the
General Disclosure Package will not be, an “investment company” as such term is
defined in the Investment Company Act of 1940.
It is
understood and agreed that certain of the opinions set forth in
paragraphs (i), (ii), (iii), (v) (with respect to conflicts with charters,
by-laws or similar organizational documents and with respect to certain of the
documents filed as exhibits to the filings described in such paragraph) and
(vii) (with respect to due authorization) may be given by the Commercial Law
Group, P.C., and certain opinions in paragraphs (vi) and (viii) may be
given by ▇▇▇▇▇ ▇▇▇▇, Esq.
In
addition, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP shall state that they have
participated in conferences with officers and other representatives of the
Company, representatives of the independent public accountants of the Company,
general counsel of the Company, representatives of the Underwriters and counsel
for the Underwriters, at which conferences the Registration Statement and the
Prospectus were discussed. Such counsel shall further state that,
although they have made certain additional inquiries and investigations in
connection with the preparation of the Registration Statement and the
Prospectus, they have not verified, are not passing on and do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus or any documents
incorporated by reference therein, based on the participation described above in
the course of acting as counsel to the Company in this transaction, no
information has come to their attention that has caused such counsel to believe
that (i) any part of the Registration Statement, at the time such part
became effective (other than the financial statements and schedules and other
financial and accounting data (including the notes thereto and auditor’s report
thereon) and the oil and gas reserve data and related future net revenue data
and exhibits, in each case contained or incorporated by reference therein, as to
which such counsel need not express any comment or belief) contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading,
(ii) the General Disclosure Package (other than the financial statements
and schedules and other financial and accounting data (including the notes
thereto and auditor’s report thereon) and the oil and gas reserve data and
related future net revenue data and exhibits, in each case contained or
incorporated by reference therein, as to which such counsel need not express any
comment or belief), as of the Applicable Time and as of the date of this
Agreement, contained any untrue statement of a material fact or omitted to state
a material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, (iii) the
Prospectus (other than the financial statements and schedules and other
financial and accounting data (including the notes thereto and auditor’s report
thereon) and the oil and gas reserve data and related future net revenue data
and exhibits, in each case contained or incorporated by reference therein, as to
which such counsel need not express any comment or belief), as of its date and
as of the Closing Date, contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or
(iv) any of the documents incorporated by reference in the Registration
Statement (other than the financial statements and schedules and other financial
and accounting data (including the notes thereto and auditor’s report thereon)
and the oil and gas reserve data and related future net revenue data and
exhibits, in each case contained or incorporated by reference therein, as to
which such counsel need not express any comment or belief), at the time such
Registration Statement became effective or was filed with the Commission (or the
time of filing of an amendment, if so amended or deemed amended), as the case
may be, did not comply as to form in all material respects with the requirements
of the Act or Exchange Act, as the case may be, and the Rules and
Regulations.
(e) The
Representatives shall have received from Cravath, Swaine & ▇▇▇▇▇ LLP,
counsel for the Underwriters, such opinion or opinions, dated such Closing Date,
with respect to the incorporation of the Company, the validity of the Offered
Securities delivered on such Closing Date, the Registration Statement, the
Prospectus and other related matters as the Representatives may require, and the
Company shall have furnished to such counsel such documents as they request for
the purpose of enabling them to pass upon such matters. In rendering
such opinion, Cravath, Swaine & ▇▇▇▇▇ LLP may rely as to the
incorporation of the Company and all other matters governed by Oklahoma law upon
the opinion of Commercial Law Group, P.C. referred to above.
(f) The
Representatives shall have received a certificate, dated such Closing Date, of
the President or any Vice President and a principal financial or accounting
officer of the Company in which such officers, on behalf of the Company, shall
state that the representations and warranties of the Company in this Agreement
are true and correct, that the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder at
or prior to such Closing Date, that no stop order suspending the effectiveness
of the Registration Statement or of any part thereof has been issued and no
proceedings for that purpose have been instituted or are contemplated by the
Commission and that, subsequent to the date of the most recent financial
statements included or incorporated by reference into the Registration Statement
and the General Disclosure Package, there has been no material adverse change,
nor any development or event involving a prospective material adverse change, in
the condition (financial or other), business, properties or results of
operations of the Company and its subsidiaries taken as a whole except as set
forth in or contemplated by the Registration Statement and the General
Disclosure Package or as described in such certificate.
(g) The
Representatives shall have received a letter (the “Bring-Down Comfort Letter”),
dated such Closing Date, of PricewaterhouseCoopers LLP (i) confirming that
they are independent public accountants with respect to the Company and its
subsidiaries within the meaning of the Act and the applicable Rules and
Regulations thereunder, (ii) stating, as of the date of the Bring-Down
Comfort Letter (or, with respect to matters involving changes or developments
since the respective dates as of which specified financial information is given
in the Registration Statement and the General Disclosure Package, as of a date
not more than three business days prior to the date of the Bring-Down Comfort
Letter), that the conclusions and findings of such accountants with respect to
the financial information and other matters covered by the Initial Comfort
Letter are accurate, (iii) confirming in all material respects the
conclusions and findings set forth in the Initial Comfort Letter and
(iv) otherwise in form and substance satisfactory in all respects to the
Representatives and PricewaterhouseCoopers LLP.
(h) The
Representatives shall have received (i) a copy of the certificate or
articles of incorporation, including all amendments thereto, of the Company,
certified as of a recent date by the Secretary of State of the State of
Oklahoma, (ii) a certificate of good standing for the Company, dated as of
a recent date, from such Secretary of State and (iii) a certificate, dated
as of a recent date, of the Secretary of State of each state in which the
Company is qualified to do business as a foreign corporation under the laws of
such state.
(i) The
Representatives shall have received (i) a copy of the certificate or
articles of incorporation (or similar organizational document), including all
amendments thereto, of each of the Company’s subsidiaries, certified as of a
recent date by the Secretary of State of the state in which such subsidiary is
organized, (ii) a certificate of good standing for each of the Company’s
subsidiaries, certified as of a recent date by the Secretary of State of the
state in which such subsidiary is organized, and (iii) a certificate, dated
as of a recent date, of the Secretary of State of each state in which each such
subsidiary is qualified to do business as a foreign corporation (or similar
entity) under the laws of each such state.
(j) On or
prior to the date of this Agreement, the Representatives shall have received a
lockup letter from ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇.
The
Company will furnish the Representatives with such conformed copies of such
opinions, certificates, letters and documents as the Representatives reasonably
request. The Representatives may in their sole discretion waive on
behalf of the Underwriters compliance with any conditions to the obligations of
the Underwriters hereunder, whether in respect of an Optional Closing Date or
otherwise.
8. Indemnification and
Contribution. (a) The Company will indemnify and
hold harmless each Underwriter, its partners, members, directors and officers
and each person, if any, who controls such Underwriter within the meaning of
Section 15 of the Act, against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter may become subject, under the Act or
the Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, each Statutory Prospectus, the Prospectus, any
Issuer Free Writing Prospectus or any amendment or supplement thereto, any
related preliminary prospectus or preliminary prospectus supplement, any “issuer
information” filed or required to be filed pursuant to Rule 433(d) under
the Act, or any “road show” (as defined in Rule 433 under the Act) not
constituting an Issuer Free Writing Prospectus (a “Non-Prospectus Road Show”),
or arise out of or are based upon the 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 will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in connection
with investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with written information furnished
to the Company by any Underwriter through the Representatives specifically for
use therein, it being understood and agreed that the only such information
furnished by the Underwriters consists of the information described as such in
subsection (b) below.
(b) Each
Underwriter will severally and not jointly indemnify and hold harmless the
Company, its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the Act, against any losses,
claims, damages or liabilities to which the Company may become subject, under
the Act or the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, each Statutory Prospectus, the
Prospectus, any Issuer Free Writing Prospectus or any Non-Prospectus Road Show
or any amendment or supplement thereto, or any related preliminary prospectus or
preliminary prospectus supplement, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by such
Underwriter through the Representatives specifically for use therein, and will
reimburse any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred, it being understood and
agreed that the only such information furnished by the Underwriters consists of
the following information in the Prospectus: the amount of the selling
concession as set forth in paragraph five, paragraph six and paragraph seven
under the caption “Underwriting”. The Company and the Underwriters
acknowledge that no information has been furnished to the Company by any
Underwriter for use in any Non-Prospectus Road Show.
(c) Promptly
after receipt by an indemnified party under this Section of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under subsection (a)
or (b) above, notify the indemnifying party in writing of the commencement
thereof; provided that the failure to notify the indemnifying party will not
relieve it from any liability which it may have under subsection (a) or (b)
above except to the extent that it has been materially prejudiced (through the
forfeiture of substantive rights or defenses) by such failure; and provided
further that the failure to notify the indemnifying party shall not relieve it
from any liability that it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, if such
indemnified party shall have been advised by counsel that there are one or more
defenses available to it that are in conflict with those available to the
indemnifying party (in which case the indemnifying party shall not have the
right to direct the defense of such action on behalf of the indemnified party),
the reasonable fees and expenses of such indemnified party’s counsel shall be
borne by the indemnifying party. In no event shall the indemnifying
party be liable for the fees and expenses of more than one counsel (together
with appropriate local counsel) at any time for any indemnified party in
connection with any one action or separate but substantially similar or related
actions arising in the same jurisdiction out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party unless such settlement includes an unconditional release of such
indemnified party from all liability on any claims that are the subject matter
of such action and does not include a statement as to or an admission of fault,
culpability or failure to act by or on behalf of any indemnified
party.
(d) If the
indemnification provided for in this Section is unavailable or insufficient to
hold harmless an indemnified party under subsection (a) or (b) above, then
each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages or liabilities
referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other from the offering of the Offered
Securities or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and the Underwriters on the other
in connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters from the Company under this
Agreement. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim which is
the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Offered 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 of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters’ obligations in
this subsection (d) to contribute are several in proportion to their
respective underwriting obligations and not joint.
(e) The
obligations of the Company under this Section shall be in addition to any
liability which the Company may otherwise have and shall extend, upon the same
terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act or the Exchange Act; and the obligations of the
Underwriters under this Section shall be in addition to any liability which the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each director of the Company, to each officer of the Company
who has signed the Registration Statement and to each person, if any, who
controls the Company within the meaning of the Act or the Exchange
Act.
9. Default of
Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Offered Securities hereunder on either the First
Closing Date or any Optional Closing Date and the aggregate number of shares of
Offered Securities that such defaulting Underwriter or Underwriters agreed but
failed to purchase does not exceed 10% of the total number of shares of Offered
Securities that the Underwriters are obligated to purchase on such Closing Date,
the Representatives may make arrangements satisfactory to the Company for the
purchase of such Offered Securities by other persons, including any of the
Underwriters, but if no such arrangements are made by such Closing Date, the
non-defaulting Underwriters shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the Offered Securities that such
defaulting Underwriters agreed but failed to purchase on such Closing
Date. If any Underwriter or Underwriters so default and the aggregate
number of shares of Offered Securities with respect to which such default or
defaults occur exceeds 10% of the total number of shares of Offered Securities
that the Underwriters are obligated to purchase on such Closing Date and
arrangements satisfactory to the Representatives and the Company for the
purchase of such Offered Securities by other persons are not made within
36 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter or the Company, except
as provided in Section 10 (provided that if such default occurs with
respect to Optional Securities after the First Closing Date, this Agreement will
not terminate as to the Firm Securities or any Optional Securities purchased
prior to such termination). As used in this Agreement, the term
“Underwriter” includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from
liability for its default.
10. Survival of Certain Representations
and Obligations. The respective indemnities, agreements,
representations, warranties and other statements of the Company or its officers
and of the several Underwriters set forth in or made pursuant to this Agreement
will remain in full force and effect, regardless of any investigation, or
statement as to the results thereof, made by or on behalf of any Underwriter,
the Company or any of their respective representatives, officers or directors or
any controlling person, and will survive delivery of and payment for the Offered
Securities. If this Agreement is terminated pursuant to
Section 9 or for any reason the purchase of the Offered Securities by the
Underwriters is not consummated, the Company shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 5 and the
respective obligations of the Company and the Underwriters pursuant to
Section 8 shall remain in effect, and if any Offered Securities have been
purchased hereunder the representations and warranties in Section 2 and all
obligations under Section 5 shall also remain in effect. If the
purchase of the Offered Securities by the Underwriters is not consummated for
any reason other than solely because of the termination of this Agreement
pursuant to Section 9 or the occurrence of any event specified in
clause (iii), (iv) (other than any suspension of trading of any securities
of the Company on any exchange or in the over-the-counter market), (v), (vi) or
(vii) of Section 7(c), the Company will reimburse the Underwriters for all
out-of-pocket expenses (including fees and disbursements of counsel) reasonably
incurred by them in connection with the offering of the Offered
Securities.
11. Research
Independence. In addition, the Company acknowledges that the
Underwriters’ research analysts and research departments are required to be
independent from their respective investment banking divisions and are subject
to certain regulations and internal policies, and that the Underwriters’
research analysts may hold and make statements or investment recommendations
and/or publish research reports with respect to the Company and/or the offering
that differ from the views of their investment bankers. The Company
hereby waives and releases, to the fullest extent permitted by law, any claims
that the Company may have against the Underwriters with respect to any conflict
of interest that may arise from the fact that the views expressed by the
Underwriters’ independent research analysts and research departments may be
different from or inconsistent with the views or advice communicated to the
Company by the Underwriters’ investment banking divisions. The
Company acknowledges that the Underwriters are full service securities firms and
as such from time to time, subject to applicable securities laws, may effect
transactions for their own accounts or the accounts of their customers and hold
long or short positions in debt or equity securities of the companies that may
be the subject of the transactions contemplated by this Agreement.
12. No Fiduciary
Duty. The Company acknowledges and agrees that in connection
with this offering, the sale of the Offered Securities or any other services the
Underwriters may be deemed to be providing hereunder, notwithstanding any
preexisting relationship, advisory or otherwise, between the parties or any oral
representations or assurances previously or subsequently made by the
Underwriters: (i) no fiduciary or agency relationship between the Company
and any other person, on the one hand, and the Underwriters, on the other,
exists; (ii) the Underwriters are not acting as advisors, experts or
otherwise, to the Company, including, without limitation, with respect to the
determination of the public offering price of the Offered Securities, and such
relationship between the Company, on the one hand, and the Underwriters, on the
other, is entirely and solely commercial, based on arm’s-length negotiations;
(iii) any duties and obligations that the Underwriters may have to the
Company shall be limited to those duties and obligations specifically stated
herein; and (iv) the Underwriters and their respective affiliates may have
interests that differ from those of the Company. The Company hereby
waives any claims that the Company may have against the Underwriters with
respect to any breach of fiduciary duty in connection with the
offering.
13. Notices. All
communications hereunder will be in writing and, if sent to the Underwriters,
will be mailed, delivered or telegraphed and confirmed to the Underwriters at
▇▇▇▇▇▇ Brothers Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Syndicate Registration, provided, however, that any notice to an
Underwriter pursuant to Section 8 will be mailed, delivered or telegraphed
and confirmed to ▇▇▇▇▇▇ Brothers Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: Director of Litigation, Office of the General Counsel, or, if
sent to the Company, will be mailed, delivered or telegraphed and confirmed to
it at Chesapeake Energy Corporation, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Secretary.
14. Successors. This
Agreement will inure to the benefit of and be binding upon the parties hereto
and their respective successors and the officers and directors and controlling
persons referred to in Section 7, and no other person will have any right
or obligation hereunder.
15. Representation of
Underwriters. The Representatives will act for the several
Underwriters in connection with this financing, and any action under this
Agreement taken by the Representatives will be binding upon all the
Underwriters.
16. Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original, but all such counterparts shall together constitute
one and the same Agreement.
17. Applicable
Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York without regard to
principles of conflicts of laws. The Company hereby submits to the
non-exclusive jurisdiction of the Federal and state courts in the Borough of
Manhattan in The City of New York in any suit or proceeding arising out of
or relating to this Agreement or the transactions contemplated
hereby.
Each of
the Underwriters and the Company (on its behalf and, to the extent permitted by
applicable law, on behalf of its stockholders and affiliates) waives all right
to trial by jury in any action, proceeding or counterclaim (whether based upon
contract, tort or otherwise) in any way arising out of or relating to this
Agreement.
If the
foregoing is in accordance with the Representatives’ understanding of our
agreement, kindly sign and return to us one of the counterparts hereof,
whereupon it will become a binding agreement between the Company and the
Underwriters in accordance with its terms.
| Very truly yours, | |||
|
CHESAPEAKE
ENERGY CORPORATION
|
|||
|
|
By:
|
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |
|
Name:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
|||
The
foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written.
▇▇▇▇▇▇
BROTHERS INC.
UBS
SECURITIES LLC
BANC OF
AMERICA SECURITIES LLC
ABN AMRO
INCORPORATED
▇▇▇▇▇
FARGO SECURITIES, LLC
Acting on
behalf of themselves and as the
Representatives
of the several Underwriters.
| ▇▇▇▇▇▇ BROTHERS INC. | ||
|
By:
|
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇ | |
| Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇ | ||
| Title: Vice President | ||
| UBS SECURITIES LLC | ||
|
By:
|
/s/ ▇▇▇ ▇▇▇▇▇ | |
| Name: ▇▇▇ ▇▇▇▇▇ | ||
| Title: Managing Director | ||
|
By:
|
/s/ Chip Van Os | |
| Name: Chip Van Os | ||
| Title: Managing Director | ||
| BANC OF AMERICA SECURITIES LLC | ||
|
By:
|
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | |
| Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | ||
| Title: Head of Syndicate - Managing Director | ||
| ABN AMRO INCORPORATED | ||
|
By:
|
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | |
| Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | ||
| Title: Managing Director | ||
| ▇▇▇▇▇ FARGO SECURITIES, LLC | ||
|
By:
|
/s/ Lane Genatowski | |
| Name: Lane Genatowski | ||
| Title: Managing Director | ||
SCHEDULE
A
|
Underwriter
|
Number of
Firm Securities
|
|||
|
▇▇▇▇▇▇
Brothers Inc.
|
4,375,000 | |||
|
UBS
Securities LLC
|
4,375,000 | |||
|
ABN
AMRO Incorporated
|
2,125,000 | |||
|
Banc
of America Securities LLC
|
2,125,000 | |||
|
▇▇▇▇▇
Fargo Securities, LLC
|
2,125,000 | |||
|
Barclays
Capital Inc.
|
625,000 | |||
|
Citigroup
Global Markets Inc.
|
625,000 | |||
|
Credit
Suisse Securities (USA) LLC
|
625,000 | |||
|
Deutsche
Bank Securities Inc.
|
625,000 | |||
|
▇▇▇▇▇▇▇,
▇▇▇▇▇ & Co.
|
625,000 | |||
|
▇.▇.
▇▇▇▇▇▇ Securities Inc.
|
625,000 | |||
|
▇▇▇▇▇▇▇▇▇
& Company, Inc.
|
625,000 | |||
|
▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated
|
625,000 | |||
|
▇▇▇▇▇▇▇
▇▇▇▇▇ & Associates, Inc.
|
625,000 | |||
|
SunTrust
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Inc.
|
625,000 | |||
|
Wachovia
Capital Markets, LLC
|
625,000 | |||
|
BBVA
Securities, Inc.
|
200,000 | |||
|
BMO
Capital Markets Corp.
|
200,000 | |||
|
BNP
Paribas Securities Corp.
|
200,000 | |||
|
BOSC,
Inc.
|
200,000 | |||
|
Calyon
Securities (USA) Inc.
|
200,000 | |||
|
Comerica
Securities, Inc.
|
200,000 | |||
|
Fortis
Securities LLC
|
200,000 | |||
|
▇▇▇▇▇▇▇
▇▇▇▇ & Company L.L.C.
|
200,000 | |||
|
Natixis
Bleichroeder Inc.
|
200,000 | |||
|
Scotia
Capital (USA) Inc.
|
200,000 | |||
|
▇▇▇▇▇▇▇
& Company International
|
200,000 | |||
|
TD
Securities (USA) LLC
|
200,000 | |||
|
Tristone
Capital Co.
|
200,000 | |||
|
Tudor,
Pickering, ▇▇▇▇ & Co. Securities, Inc.
|
200,000 | |||
|
Wedbush
▇▇▇▇▇▇ Securities Inc.
|
200,000 | |||
|
Total
|
25,000,000 | |||
SCHEDULE
B
|
Title
of securities:
|
Common
Stock
|
|
Symbol:
|
CHK
|
|
Total
number of shares offered:
|
25,000,000
shares
|
|
Common
stock outstanding after this offering
|
573,715,364
shares
|
|
Public
offering price:
|
$57.25
per share
|
SCHEDULE
C
None