Exhibit 10.1

 

Execution Copy

 

MERGER TERMINATION AGREEMENT

 

This MERGER TERMINATION AGREEMENT (“Agreement”) is entered into as of the 16th
day of December, 2008, by and among Chaparral Energy, Inc., a Delaware
corporation (“Parent”), Chaparral Exploration, L.L.C., a Delaware limited
liability company and a wholly owned subsidiary of Parent (“Sub,” and together
with Parent, the “Parent Parties”), and Edge Petroleum Corporation, a Delaware
corporation (“Edge”).

 

I.

 

RECITALS

 

1.1           On July 14, 2008, Parent, Sub and Edge executed that certain
Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which Edge
would be merged with and into Sub pursuant to the terms and conditions set forth
in the Merger Agreement.

 

1.2           After due consideration, the Parent Parties and Edge believe that
the closing conditions set forth in the Merger Agreement will not be met on or
before the Outside Date (as defined in the Merger Agreement), and desire to
terminate the Merger Agreement, effective upon execution of this Agreement, by
mutual written agreement pursuant to Section 7.1(a) of the Merger Agreement.

 

1.3           Parent and Edge having determined to enter into this Agreement, on
December 16, 2008, Parent, Edge, Magnetar Financial LLC (on behalf of itself and
its Affiliates (as defined therein), “Magnetar”), Investment Partners II (B),
LLC (“Investment Partners”), QRA SR, LLC (“QRA”), Triangle Peak Partners Private
Equity, LP (“Triangle Peak”), and, together with Magnetar, Investment Partners
and QRA, the “Series B Investors”) and Post Oak Energy Capital, LP (“Post Oak”)
executed a Termination and Settlement Agreement, pursuant to which, among other
things, (i) Parent and the Series B Investors terminated the Stock Purchase
Agreement dated July 14, 2008 by and between Parent and Magnetar and related
assignment and assumption agreements with the Series B Investors, (ii) Parent
and Post Oak terminated that certain Letter of Intent dated June 16, 2008,
(iii) the parties agreed to specified release and indemnification provisions,
(iv) Parent granted Magnetar Financial LLP an option to invest in Parent’s
common stock and (v) Magnetar, on behalf of the Series B Investors and Post Oak,
agreed to make a $5.0 million payment to Chaparral in respect of the
termination, $1.5 million of which Parent has directed Magnetar to pay to Edge
on Parent’s behalf to reimburse Edge for certain expenses.

 

NOW, THEREFORE, in consideration of the premises and mutual promises and
covenants herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

 

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II.

 

TERMS OF TERMINATION

 

2.1                   Termination of the Merger Agreement.   Upon execution of
this Agreement, the Merger Agreement, including, without limitation, provisions
of the Merger Agreement that by their terms would otherwise have survived
termination of the Merger Agreement, is terminated and shall be of no further
force and effect.

 

2.2                   Confidentiality.   Parent and Edge shall each file this
Agreement as an exhibit to a current report on Form 8-K to be filed by each of
Parent and Edge announcing the execution of this Agreement. The Parent Parties
and Edge hereby agree that the Confidentiality Agreements dated March 17, 2008
and April 17, 2008 by and between Edge and Parent shall survive according to
their respective terms.

 

2.3                   Release by the Parent Parties.  Upon full compliance with
and performance of the terms stated herein, the Parent Parties, on their own
behalf and, to the fullest extent allowed by law, on behalf of those claiming
through them, hereby agree to and shall release and discharge Edge and its
subsidiaries and affiliates, and their respective directors, officers,
employees, shareholders, predecessors, heirs, successors, assigns, agents and
representatives (collectively, the “Edge Released Parties”), from any and all
claims, liabilities, demands and causes of action known or unknown, fixed or
contingent, except for any obligations created by this Agreement, that they now
have against the Edge Released Parties or that might subsequently accrue to them
against any of the Edge Released Parties by reason of any matter or thing
arising out of or in any way related with the Merger Agreement.  Notwithstanding
anything to the contrary herein, the Parent Parties are not releasing or
discharging Edge from any obligation (i) created by this Agreement, (ii) arising
under the Confidentiality Agreements dated March 17, 2008 and April 17, 2008 by
and between Edge and Parent or (iii) relating to the El Fortunado prospect
agreement between Chaparral Energy, L.L.C. and Edge Petroleum Exploration
Company dated August 19, 2008, as amended on November 25, 2008.

 

2.4                   Release by Edge.  Upon full compliance with and
performance of the terms stated herein, Edge, on its own behalf and, to the
fullest extent allowed by law, on behalf of those claiming through it, hereby
agrees to and shall release and discharge the Parent Parties and their
subsidiaries and affiliates, and their respective directors, officers,
employees, shareholders, predecessors, heirs, successors, assigns, agents and
representatives (collectively, the “Parent Released Parties”), from any and all
claims, liabilities, demands and causes of action known or unknown, fixed or
contingent, except for any obligations created by this Agreement, that it now
has against the Parent Parties or that might subsequently accrue to it against
the Parent Parties by reason of any matter or thing arising out of or in any way
related with the Merger Agreement.  Notwithstanding anything to the contrary
herein, Edge is not releasing or discharging the Parent Released Parties from
any obligation (i) created by this Agreement, (ii) arising under the
Confidentiality Agreements dated March 17, 2008 and April 17, 2008 by and
between Edge and Parent or (iii) relating to the El Fortunado prospect agreement
between Chaparral Energy, L.L.C. and Edge Petroleum Exploration Company dated
August 19, 2008, as amended on November 25, 2008.

 

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2.5                   General Release.  Each of the parties agrees and warrants
that, subject to the terms and conditions hereof, the releases set forth in this
Agreement are general releases as to any claim that any of the parties to this
Agreement have, or could have in the future based on facts and circumstances
existing on the date of this Agreement, relating to the Merger Agreement, and
that each such party acknowledges and generally waives and assumes the risk of
any claims for injuries and/or damages (arising from or related in any way to
the Merger Agreement) of which such party does not know or suspect to exist
(whether through ignorance, oversight, error, negligence or otherwise), which if
known would materially affect such party’s decision to enter into this
Agreement.  In this regard, each party (only for itself) warrants and represents
that such party assumes the risk that the facts and/or law may be different than
what such party believes.

 

III.

 

ADDITIONAL AGREEMENTS

 

3.1           Disclaimer of Liability.  The parties hereto agree and acknowledge
that this Agreement and all actions taken pursuant to it are done and accepted
as a full and complete compromise of all matters addressed by this Agreement;
that neither this Agreement nor any actions undertaken in connection therewith
by the parties hereto, their attorneys, or representatives, shall be considered
admissions by any of said parties; and that no past or present wrongdoing,
fault, or failure on the part of any party or its or their representatives,
agents, or employees, shall be implied or inferred from such matters or such
actions.  Neither this Agreement nor any of its terms shall be offered or
received in evidence in any proceeding or utilized in any manner whatsoever as
an admission or any evidence of any wrongdoing, default, or failure of any
nature, or any liability therefor, on the part of any party hereto, their
agents, representatives, officers, or employees; provided, however, that nothing
contained in this paragraph shall prevent this Agreement from being used,
offered, or received into evidence in any proceeding to approve, enforce, or
otherwise effectuate this Agreement.

 

3.2           Representations and Warranties.   Each party acknowledges,
represents, warrants, and confirms the following:

 

(a)           Such party has carefully read and understand the effect of this
Agreement  and has had the assistance of separate counsel in carefully
reviewing, discussing, and considering all terms of this Agreement.

 

(b)           Such party is executing this Agreement as its free and voluntary
act, without any duress, coercion, or undue influence exerted by or on behalf of
any party.

 

(c)           Except as otherwise provided herein, this Agreement constitutes
the entire compromise and release agreement between the parties hereto (except
for the express obligations contained herein) and is a final and complete
release of those matters set forth herein and supersedes all prior agreements
and understandings, if any, relating to the subject matter hereof.

 

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(d)           Such party has all requisite power and authority, as applicable,
to execute and deliver this Agreement. No consent, approval, waiver, order,
permit, or authorization is required to be obtained from, and no declaration,
filing or registration is required to be made with, any person by such party in
connection with the execution, delivery, and performance of this Agreement.

 

(e)           That the person executing this Agreement on behalf of a party is
legally competent and able to execute this Agreement.

 

(f)            That the person executing this Agreement on behalf of such party
is authorized to execute and deliver this Agreement in the capacities indicated
hereon and has the power and authority to bind those on whose behalf he signs
this Agreement and to perform their obligations hereunder.

 

(g)           That such party is the sole and exclusive owner of any claims and
that such party has not assigned, pledged and/or otherwise in any manner
whatsoever sold, transferred or otherwise encumbered, either by instrument in
writing or otherwise, all or any portion of such claims.

 

(h)           That before executing this Agreement, such party has fully
informed itself of this Agreement’s terms, contents, conditions and effects and
that such party fully and completely understands this Agreement and all of its
terms, contents, conditions and effects.

 

(i)            That such party has not filed or caused to be filed any lawsuit,
action or proceeding against any other party that arises out of, concerns and/or
in any way relates to the Merger Agreement.

 

3.3           No Recitals.          The parties agree that the terms of this
Agreement are contractual and, other than Article I, are not mere recitals.

 

3.4           Binding Effect and Execution.  This Agreement shall be binding on
and inure to the benefit of the parties hereto and their respective legal
representatives, successors and assigns, and shall be for the benefit of the
Edge Released Parties and the Parent Released Parties.  This Agreement may be
executed in any number of counterparts, each of which shall be considered an
original for all purposes.

 

3.5           Survival. If any term, provision, covenant, or condition of this
Agreement is held by a court of competent jurisdiction to be invalid, void, or
unenforceable, the remainder of the provisions shall remain in full force and
effect and shall in no way be affected, impaired, or invalidated.

 

3.6           Litigation.  In any action to enforce or construe the provisions
of this Agreement, the prevailing party shall be entitled to recover all
reasonable costs and expenses incurred by that party related thereto, including
the reasonable fees and expenses of its attorneys.

 

3.7           GOVERNING LAW, JURISDICTION, AND VENUE.  THIS AGREEMENT SHALL BE
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF

 

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THE STATE OF DELAWARE, WITHOUT REFERENCE TO PRINCIPLES OF CHOICE OR CONFLICT OF
LAW, AND ALL PARTIES HERETO EXPRESSLY AGREE THAT EXCLUSIVE JURISDICTION AND
VENUE OF ANY DISPUTE WITH RESPECT TO THIS AGREEMENT AND ANY ACTION FOR
INDEMNIFICATION HEREUNDER SHALL BE IN A COURT OF APPROPRIATE JURISDICTION IN THE
STATE OF DELAWARE.

 

3.8           ENTIRETIES.  EXCEPT AS OTHERWISE PROVIDED HEREIN, THIS DOCUMENT
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES ABOUT THE SUBJECT MATTER OF
THIS AGREEMENT AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of day and
year first above written.

 

 

“Parent”

Chaparral Energy, Inc.

 

 

 

 

By:

 /s/ Mark A. Fischer

 

 

Mark A. Fischer

 

 

President and Chief Executive Officer

 

 

 

 

 

 

“Sub”

Chaparral Exploration, L.L.C.

 

 

 

 

 

By:

 /s/ Mark A. Fischer

 

 

Mark A. Fischer

 

 

Manager

 

 

 

 

 

 

“Edge”

Edge Petroleum Corporation

 

 

 

 

 

By:

 /s/ John W. Elias

 

 

John W. Elias

 

 

Chairman, President and Chief Executive

Officer

 

 

Signature Page for Chaparral/Edge Merger Termination Agreement.

 

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