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:


 

















 


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.


 


6