Exhibit 4.1


 


Execution
Version


 


CONSENT AND AGREEMENT


 


This Consent and Agreement (“Agreement”)
dated as of February 9, 2009 (“Effective Date”) is among Edge
Petroleum Corporation, a Delaware corporation (“Borrower”), the Lenders
(as defined below), and Union Bank of California, N.A., as administrative agent
for such Lenders (in such capacity, the “Administrative Agent”) and as
issuing lender (in such capacity, the “Issuing Lender”).


 


RECITALS


 


A.                                   The Borrower,
the financial institutions party thereto from time to time (the “Lenders”),
the Issuing Lender and the Administrative Agent, are parties to that certain
Fourth Amended and Restated Credit Agreement dated as of January 31, 2007,
as amended by the Amendment No.1 dated July 11, 2007, the Amendment No. 2
dated December 10, 2007, and the Amendment No.3 and Agreement dated May 8,
2008 (as so amended and as the same may be further amended, modified or
supplemented from time to time, the “Credit Agreement”).


 


B.                                     In addition,
the Borrower, the Lenders, the Issuing Lender and the Administrative Agent have
executed (1) the Consent dated as of July 1, 2008, and (2) the
Letter Agreement dated as of November 5, 2008, which agreements provided
for the temporary deferral by the Lenders of their right to establish a new
Borrowing Base.


 


C.                                     After the
deferral period expired, the Lenders established a new Borrowing Base on January 8,
2009 and, pursuant to Section 2.05(b) of the Credit Agreement, the
Administrative Agent sent the Borrower written notice indicating the existence
of a Borrowing Base deficiency (the “Deficiency”).


 


D.                                    The Borrower
has elected to reduce the Borrowing Base deficiency in six equal installments,
with the first such installment being due and payable on February 9,
2009.  Subject to the terms and conditions
of this Agreement, the Borrower, the Administrative Agent, the Issuing Lender
and the Lenders wish to defer payment of the first installment until March 10,
2009 and to correspondingly extend the due date for each subsequent installment
by one month.


 


THEREFORE, the Borrower, the
Administrative Agent, the Issuing Lender and the Lenders hereby agree as
follows:


 


Section 1.                                          Defined Terms.  As used in
this Agreement, each of the terms defined in the opening paragraph and the
Recitals above shall have the meanings assigned to such terms therein.  Each term defined in the Credit Agreement and
used herein without definition shall have the meaning assigned to such term in
the Credit Agreement, unless expressly provided to the contrary herein.


 


Section 2.                                          Other Definitional
Provisions. Article,
Section, Schedule, and Exhibit references are to Articles and Sections of
and Schedules and Exhibits to this Agreement, unless otherwise specified.  All references to instruments, documents,
contracts, and agreements are references to such instruments, documents,
contracts, and agreements as the same may be amended, supplemented, and
otherwise modified from time to time, unless otherwise specified.  The words “hereof”, “herein”, and “hereunder”
and words of similar import when used in this 


 

















 


Agreement shall refer to
this Agreement as a whole and not to any particular provision of this
Agreement.  The term “including” means “including,
without limitation”.  Paragraph headings
have been inserted in this Agreement as a matter of convenience for reference
only and it is agreed that such paragraph headings are not a part of this
Agreement and shall not be used in the interpretation of any provision of this
Agreement.


 


Section 3.                                          Consent to Payment
Extension. Subject
to the terms and conditions of this Agreement, the Administrative Agent, the
Issuing Lender and the Lenders hereby consent to the extension of the due date
for the first installment to repay the Deficiency, due pursuant to Section 2.05(b) of
the Credit Agreement, until March 10, 2009.  Additionally, each such Person agrees that
each of the other five equal installment payments required to eliminate the
Deficiency shall be due and payable on the subsequent monthly anniversaries of
such date, with the last such installment being due and payable on August 10,
2009.  Each such payment shall be in
immediately available funds and shall otherwise be made in accordance with the
terms of the Credit Agreement. The express consent
set forth in this Section 3 is limited
to the extent described herein and shall not be construed to be a consent to or
a permanent waiver of any other terms, provisions, covenants, warranties or
agreements contained in the Credit Agreement or in any of the other Loan
Documents, unless expressly provided so herein. 
The Administrative Agent, the Issuing Lender and the Lenders reserve the
right to exercise any rights and remedies available to them in connection with
any present or future defaults with respect to the Credit Agreement or any
other provision of any Loan Document.


 


Section 4.                                          Certain Covenants. 
In consideration of the Consent given in Section 3 above, the
Borrower and its Subsidiaries agree that:


 


(a)                                  Retention of Advisor. 
The Administrative Agent has, through its counsel, retained and employed
a financial advisor, Opportune LLP (such financial advisor, or any successor or
replacement thereof, the “Financial Advisor”), and retained and employed a
technical advisor, H.J Gruy & Co. (such technical advisor, or any
successor or replacement thereof, the “Technical Advisor,” and together with
the Financial Advisor, collectively referred to herein as the Advisors).  The Borrower shall cooperate (and cause its
Subsidiaries to cooperate) in all reasonable respects with the Advisors and shall
promptly provide to the Advisors such information regarding the operations,
business affairs, assets and financial condition of the Borrower and its
Subsidiaries as reasonably requested by the Advisors.  In addition, the Borrower shall permit the
Advisors to discuss such operations, business affairs, assets and financial
condition with the officers and directors of the Borrower and its Subsidiaries
and shall make such officers and directors available to the Advisors for such
purpose as may be reasonably requested and during normal business hours.  The Borrower is required to pay all costs and
expenses of the Advisors in accordance with Section 9.03 of the Credit
Agreement.


 


(b)                                 Mandatory Prepayment. 
The Borrower shall prepay $5,000,000 of the aggregate outstanding principal
balance of the Advances in two equal installments, with the first such payment
of $2,500,000 being due and payable on the date of this Agreement, and the
second $2,500,000 installment being due and payable on February 23,
2009.  Such prepayments shall be made to
the Administrative Agent for the benefit of the Lenders in immediately
available funds, and shall include all accrued and unpaid interest owing
thereon.  Such prepayments shall be
applied on a pro rata basis to the six deficiency payments required to be paid
by the Borrower to 


 


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eliminate the existing
Borrowing Base deficiency. Failure to pay either installment (or the interest
owing thereon) shall constitute an Event of Default under the Credit Agreement.


 


Section 5.                                          Borrower Representations
and Warranties.  The Borrower represents and warrants that: (a) after
giving effect to this Agreement, the representations and warranties contained
in the Credit Agreement, and the representations and warranties contained in
the other Loan Documents, are true and correct in all material respects on and
as of the date of this Agreement as if made on as and as of such date, except
to the extent that any such representation or warranty expressly relates solely
to an earlier date, in which case such representation or warranty is true and
correct in all material respects as of such earlier date; (b) after giving
effect to this Agreement, no Default or Event of Default has occurred and is
continuing; (c) the execution, delivery and performance of this Agreement
are within the corporate power and authority of the Borrower and have been duly
authorized by appropriate corporate and governing action and proceedings; (d) this
Agreement constitutes the legal, valid, and binding obligation of the Borrower
enforceable in accordance with its terms, except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting
the rights of creditors generally and general principles of equity; (e) there
are no governmental or other third party consents, licenses and approvals
required in connection with the execution, delivery, performance, validity and
enforceability of this Agreement; and (f) the Liens under the Security
Documents are valid and subsisting and secure the Borrower’s obligations under
the Loan Documents.


 


Section 6.                                          Reaffirmation of Guaranty.  Each Guarantor
hereby ratifies, confirms, and acknowledges that its obligations under the
Guaranty Agreement are in full force and effect and that each Guarantor
continues to unconditionally and irrevocably, jointly and severally, guarantee
the full and punctual payment, when due, whether at stated maturity or earlier
by acceleration or otherwise, all of the Obligations (subject to the terms of
the Guaranty Agreement), as such Obligations may have been amended by this
Agreement.  Each Guarantor hereby
acknowledges that its execution and delivery of this Agreement does not
indicate or establish an approval or consent requirement by the Guarantors
under the Guaranty Agreement in connection with the execution and delivery of
amendments, modifications or waivers  to
the Credit Agreement, the Notes or any of the other Loan Documents.


 


Section 7.                                          Conditions to
Effectiveness.  This Agreement shall become effective as
of the date of this Agreement and shall be enforceable against the parties
hereto upon the occurrence of the following conditions precedent:


 


(a)                                  The Administrative Agent shall have
received multiple original counterparts, as requested by the Administrative
Agent, of this Agreement duly and validly executed and delivered by duly
authorized officers of the Borrower, the Administrative Agent and the Lenders.


 


(b)                                 The Administrative Agent shall have
received multiple original counterparts, as requested by the Administrative
Agent, of a deposit account control
agreement among the Borrower, the Subsidiaries of the
Borrower, the Administrative Agent and Compass Bank duly and validly
executed and delivered by duly authorized officers of the Borrower, the
Subsidiaries of the Borrower, the Administrative Agent and Compass Bank,
in form and substance satisfactory to the Administrative Agent.


 


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(c)                                  The Borrower shall have paid to the
Administrative Agent for the ratable benefit of the Lenders the first of the
two principal payments required under Section 4(b).


 


(d)                                 After giving effect to this Agreement, no
Default or Event of Default shall have occurred and be continuing as of the
date of this Agreement.


 


(e)                                  The representations and warranties in
this Agreement shall be true and correct in all material respects.


 


(f)                                    The Borrower shall have paid all costs
and expenses for which the Borrower has received invoices on or prior to the
date hereof and which are payable pursuant to Section 9.03 of the Credit
Agreement.


 


Section 8.                                          Acknowledgments and
Agreements.


 


The Borrower acknowledges
that on the date hereof all Obligations are payable without defense, offset,
counterclaim or recoupment.


 


(a)                                  The Lenders hereby expressly reserve all
of their rights, remedies, and claims under the Loan Documents.


 


(b)                                 Each of the Borrower, the Administrative
Agent, the Issuing Lender and the Lenders does hereby adopt, ratify, and
confirm the Credit Agreement and acknowledges and agrees that the Credit
Agreement is and remains in full force and effect, and the Borrower
acknowledges and agrees that its liabilities and obligations under the Credit
Agreement are not impaired in any respect by this Agreement.


 


(c)                                  From and after the date hereof, all
references to the Credit Agreement and the Loan Documents shall mean such
Credit Agreement and such Loan Documents as modified by this Agreement.


 


(d)                                 This Agreement is a Loan Document for the
purposes of the provisions of the other Loan Documents.  Without limiting the foregoing, any breach of
representations, warranties, and covenants under this Agreement shall be a
Default or Event of Default, as applicable, under the Credit Agreement.


 


(e)                                  EACH OF THE BORROWER AND ITS SUBSIDIARIES
AND THE GUARANTORS (FOR THEMSELVES AND THEIR RESPECTIVE SUCCESSORS, AGENTS,
ASSIGNS, TRANSFEREES, OFFICERS, DIRECTORS, EMPLOYEES, SHAREHOLDERS, ATTORNEYS
AND AGENTS) HEREBY RELEASES ANY AND ALL CLAIMS, CAUSES OF ACTION OR OTHER
DISPUTES IT MAY HAVE AGAINST THE ADMINISTRATIVE AGENT, ANY OF THE LENDERS,
LEGAL COUNSEL TO THE ADMINISTRATIVE AGENT OR ANY OF THE LENDERS, CONSULTANTS
HIRED BY ANY OF THE FOREGOING, OR ANY OF THEIR RESPECTIVE AFFILIATES,
SUBSIDIARIES, SHAREHOLDERS, AGENTS, DIRECTORS, OFFICERS, EMPLOYEES,
REPRESENTATIVES, SUCCESSORS OR ASSIGNS OF ANY KIND OR NATURE ARISING OUT OF,
RELATED TO, OR IN ANY WAY CONNECTED WITH, THE CREDIT AGREEMENT OR THE LOAN
DOCUMENTS, IN EACH CASE WHICH MAY HAVE 


 


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ARISEN ON OR BEFORE THE
DATE OF THIS AGREEMENT.  EACH OF THE
BORROWER AND ITS SUBSIDIARIES HEREBY ACKNOWLEDGES THAT IT HAS READ THIS
AGREEMENT AND HAS CONFERRED WITH ITS COUNSEL AND ADVISORS REGARDING ITS
CONTENT, INCLUDING THIS PARAGRAPH 8(e), AND IS FREELY AND VOLUNTARILY ENTERING
INTO THIS AGREEMENT, AND HEREBY AGREES TO WAIVE ANY CLAIM THAT THE TERMS OF
THIS AGREEMENT (INCLUDING, WITHOUT LIMITATION, THE RELEASES CONTAINED HEREIN)
ARE INVALID OR OTHERWISE UNENFORCEABLE.


 


Section 9.                                          Counterparts.  This Agreement
may be signed in any number of counterparts, each of which shall be an original
and all of which, taken together, constitute a single instrument.  This Agreement may be executed by facsimile
signature and all such signatures shall be effective as originals.


 


Section 10.                                   Successors and Assigns.  This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted pursuant to the Credit Agreement.


 


Section 11.                                   Invalidity.  In the event
that any one or more of the provisions contained in this Agreement shall for
any reason be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement.


 


Section 12.                                   Governing Law.  This Agreement
shall be deemed to be a contract made under and shall be governed by and
construed in accordance with the laws of the State of Texas.


 


Section 13.                                   Entire Agreement. 
This
Agreement, the Credit Agreement, the Notes and the other Loan Documents
constitute the entire understanding among the parties hereto with respect to
the subject matter hereof and supersede any prior agreements, written or oral,
with respect thereto.


 


THERE ARE NO UNWRITTEN
ORAL AGREEMENTS AMONG THE PARTIES.


 


 


[Signatures begin on the next page]


 


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EXECUTED
effective as of the date first above written.


 


 


	
  BORROWER:

  	
  EDGE
  PETROLEUM CORPORATION,

  
	
   

  	
  a
  Delaware Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gary L. Pittman

  
	
   

  	
  Name:
  Gary L. Pittman

  
	
   

  	
  Title:
  Executive V.P. and C.F.O.

  



 

















 


	
  GUARANTORS:

  	
  EDGE
  PETROLEUM EXPLORATION COMPANY

  
	
   

  	
   

  
	
   

  	
  EDGE
  PETROLEUM OPERATING  COMPANY, INC.

  
	
   

  	
   

  
	
   

  	
  EDGE
  PETROLEUM PRODUCTION COMPANY

  
	
   

  	
   

  
	
   

  	
  MILLER
  EXPLORATION COMPANY

  
	
   

  	
   

  
	
   

  	
  MILLER
  OIL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gary L. Pittman

  
	
   

  	
  Name:
  Gary L. Pittman

  
	
   

  	
  Title:
  Executive V.P. and C.F.O.

  



 

















 


	
  ADMINISTRATIVE AGENT/ISSUING LENDER/LENDER:

  	
  UNION
  BANK OF CALIFORNIA, N.A.,

  
	
   

  	
  as
  Administrative Agent, Issuing Lender and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ M. Duncan McDuffie

  
	
   

  	
  Name:
  M. Duncan McDuffie

  
	
   

  	
  Title:
  Vice President

  



 
















 


	
  LENDERS:

  	
  JPMORGAN
  CHASE BANK, N.A., as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Randall B. Durant

  
	
   

  	
  Name: Randall B. Durant

  
	
   

  	
  Title: Senior Vice President

  



 

















 


	
   

  	
  SUNTRUST
  BANK, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Katherine Bass

  
	
   

  	
  Name: Katherine Bass

  
	
   

  	
  Title: Director

  



 

















 


	
   

  	
  MIZUHO
  CORPORATE BANK, LTD., as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Leon Mo

  
	
   

  	
  Name: Leon Mo

  
	
   

  	
  Title: Senior Vice President

  



 

















 


	
   

  	
  BNP
  PARIBAS, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Dodd

  
	
   

  	
  Name:
  David Dodd

  
	
   

  	
  Title: Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Betsy Jocher

  
	
   

  	
  Name:
  Betsy Jocher

  
	
   

  	
  Title: Director

  



 

















 


	
   

  	
  FORTIS
  CAPITAL CORP., as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Montgomery

  
	
   

  	
  Name:
  David Montgomery

  
	
   

  	
  Title:
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ilene Fowler

  
	
   

  	
  Name:
  Ilene Fowler

  
	
   

  	
  Title:
  Director

  



 

















 


	
   

  	
  THE
  FROST NATIONAL BANK, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Larry D. Sprouse

  
	
   

  	
  Name:
  Larry D. Sprouse

  
	
   

  	
  Title:
  Senior EVP

  



 

















 


	
   

  	
  COMPASS
  BANK, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dorothy Marchand

  
	
   

  	
  Name:
  Dorothy Marchand

  
	
   

  	
  Title:
  Senior Vice President

  



 

















 


	
   

  	
  U.S.
  BANK NATIONAL ASSOCIATION, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Heather W. Kiely

  
	
   

  	
  Name:
  Heather W. Kiely

  
	
   

  	
  Title:
  Vice President

  



 

















 


	
   

  	
  BANK
  OF SCOTLAND, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Karen Weich

  
	
   

  	
  Name:
  Karen Weich

  
	
   

  	
  Title: Vice President