Exhibit 2.2
PLAN SUPPORT AND LOCK-UP
AGREEMENT REGARDING
EDGE PETROLEUM
CORPORATION
This Plan Support and Lock-Up
Agreement (this “ Agreement ”) dated as of
September 30, 2009 (the “ Agreement Effective
Date ”) is among Edge Petroleum Corporation, a Delaware
corporation (“ Borrower ”), each of the
Borrower’s Subsidiaries (as defined below), and the Lenders
(as defined below) executing this Agreement (collectively, the
“Supporting Lenders”).
RECITALS
A.
The Borrower is a party to that certain Fourth Amended and Restated
Credit Agreement dated as of January 31, 2007 among the
Borrower, the financial institutions party thereto from time to
time (the “ Lenders ”), and Union Bank, N.A.
(f/k/a Union Bank of California, N.A.)(“ Union
”) as administrative agent for the Lenders (in such capacity
the “ Administrative Agent ”) and as
issuing lender (in such capacity, the “ Issuing
Lender ”), as amended by the Amendment No. 1
dated as of July 11, 2007, the Amendment No. 2 dated as
of December 10, 2007, the Amendment No. 3 and Agreement
dated as of May 8, 2008, the Consent and Amendment No. 4
dated as of March 16, 2009, the Amendment No. 5 dated as
of May 15, 2009, the Amendment No. 6 dated as of
May 29, 2009, the Amendment No. 7 dated as of
June 30, 2009, the Amendment No. 8 dated as of
July 31, 2009 and the Amendment No. 9 dated as of
August 31, 2009 (as so amended and as the same may be further
amended, modified or supplemented from time to time, the “
Credit Agreement ”). Unless otherwise defined in
this Agreement, each term used in this Agreement that is defined in
the Credit Agreement has the meaning assigned to such term in the
Credit Agreement; provided, however, that unless otherwise defined
in this Agreement, the capitalized words appearing, but not
otherwise defined, in Section 2(b)(ii) shall have the
meaning given to them in the Purchase Agreement (as defined below)
and the capitalized words appearing, but not otherwise defined, in
Section 2(b)(iii) shall have the meaning given to them in
the Conforming Plan (as defined below). The Supporting
Lenders represent holders of at least two-thirds of the outstanding
Obligations under the Credit Agreement and more than one-half in
number of the Lenders.
B.
Borrower and its direct and indirect subsidiaries, including Edge
Petroleum Exploration Company, a Delaware corporation; Miller
Exploration Company, a Delaware corporation; Edge Petroleum
Operating Company, Inc., a Delaware corporation; Edge
Petroleum Production Company, a Delaware corporation; and Miller
Oil Corporation, a Michigan corporation (collectively, the “
Subsidiaries ” and each a “ Subsidiary
”), desire to implement a restructuring and reorganization of
Borrower and its Subsidiaries such that the Lenders and the other
holders of claims against and/or equity interests in Borrower and
its Subsidiaries shall receive the consideration to be paid,
distributed or provided by the Borrower and its Subsidiaries
pursuant to such restructuring and reorganization as set forth in a
plan of reorganization conforming in all material respects to the
plan attached hereto as Exhibit A (the “
Conforming Plan ”).
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C.
In order to expedite the contemplated restructuring and
reorganization of Borrower and its Subsidiaries, each party hereto
desires to pursue and support the Conforming Plan by way of the
Borrower and each of the Subsidiaries each commencing a voluntary
case (collectively, the “ Bankruptcy Cases ”)
pursuant to Chapter 11 of Title 11 of the United States
Code in the United States Bankruptcy Court for the Southern
District of Texas, Corpus Christi Division (the “
Bankruptcy Court ”). Upon commencing such cases,
the Borrower shall cause to be filed a motion (the “ Sale
Motion ”) to establish bidding procedures to effect the
sale of all or substantially all of its assets to the bidder who
submits the highest and best offer. Together the Sale Motion
and the Plan will seek to achieve and implement that certain
Purchase and Sale Agreement (the “ Purchase Agreement
”) dated September 30, 2009 with PGP Gas Supply Pool
No. 3, LLC, a Georgia limited liability company (the “
Buyer ”) attached hereto as Exhibit B ,
subject to a higher and better offer solicited, selected and
approved as the winning bid in accordance with the Bidding
Procedures Order (as defined in the Purchase Agreement) (the
purchase and sale or similar agreement effecting the purchase and
sale of the equity interests or assets of the Borrower and its
Subsidiaries, whether the Purchase Agreement or a higher and better
agreement entered into pursuant to the Bidding Procedures Order,
being referred to herein as the “ Final Agreement
,” and any such restructuring transaction effected thereby a
“ Restructuring Transaction ”).
D.
In order to implement the Restructuring Transaction, the Borrower
and its Subsidiaries have agreed, subject to the terms of this
Agreement, (i) to prepare and file (a) a Conforming Plan,
(b) a disclosure statement that conforms in all material
respects with the disclosure statement attached hereto as
Exhibit C (the “ Conforming Disclosure
Statement ”) and (ii) to use reasonable commercial
efforts to have the Conforming Disclosure Statement approved and
the Conforming Plan confirmed by the Bankruptcy Court.
STATEMENT OF
AGREEMENT
In consideration of the premises and
mutual covenants and agreements set forth herein, and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be
legally bound, agree as follows:
Section 1. Support
of Final Agreement, Filing of Bankruptcy Cases and Related
Transactions.
(a)
Each Supporting Lender agrees that until this Agreement is
terminated (or the obligations of the Supporting Lenders set forth
in Section 1 of this Agreement (the “ Support
Obligations ”) terminate as provided herein), it
(i) shall vote (or cause the voting of ) its claim(s) to
accept the Conforming Plan following receipt of the Conforming
Disclosure Statement and any solicitation of votes for the
Conforming Plan, no later than any voting deadline stated therein,
(ii) shall vote against and shall in no way otherwise,
directly or indirectly, support any restructuring or reorganization
of the Borrower and its Subsidiaries (or any plan or proposal in
respect of the same) that is not consistent with, or does not
implement or achieve the Conforming Plan and the Final Agreement
and (iii) shall not (A) directly or indirectly seek,
solicit, support or encourage any other plan or the termination of
the exclusive period for the filing of any plan, proposal or offer
of dissolution, winding up, liquidation, reorganization, merger or
restructuring
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of the Borrower and/or its Subsidiaries except
as contemplated in the Conforming Plan, (B) object to the
Conforming Disclosure Statement or the solicitation of votes for
the Conforming Plan or support any such objection by any third
party or (C) take any other action that is inconsistent with,
or that would materially delay or obstruct the proposed
solicitation, confirmation or consummation of, the Conforming
Plan. Nothing contained herein shall limit the ability of any
Supporting Lender, the Issuing Lender or the Administrative Agent
to consult with the Borrower, or to appear and be heard, concerning
any matter arising in the Bankruptcy Cases so long as such
consultation or appearance does not violate the Supporting
Lenders’ obligations under the terms of this Agreement.
Notwithstanding the foregoing or any other provision of this
Agreement, the Conforming Plan, the Bidding Procedures Order and
the cash collateral order to be entered by the court in the
Bankruptcy Cases have set forth or will describe a number of rights
of the Administrative Agent, the Issuing Lender, or the Supporting
Lenders, and the exercise of any of such rights, including, without
limitation, an objection or a refusal to consent or approve or
similar action, is hereby expressly permitted by, and will not be
or be deemed to be a violation or breach of, this Agreement.
The Supporting Lenders, Issuing Lender and Administrative Agent may
also exercise their other rights as creditors and parties of
interest in the Bankruptcy Cases as long as the exercise of those
rights do not violate the Support Obligations.
(b)
The Borrower and its Subsidiaries agree that they will (i) use
reasonable commercial efforts to (A) file the Bankruptcy Cases
with respect to the Restructuring Transaction in the United States
Bankruptcy Court for the Southern District of Texas, Corpus Christi
Division, on or prior to October 1, 2009 (the “
Filing Date ”), (B) obtain Bankruptcy Court
approval of a cash collateral order and budget that are, in each
case, in form and substance acceptable to the Supporting Lenders,
(C) file the Conforming Plan and Conforming Disclosure
Statement with the Bankruptcy Court within five (5) days of
the Filing Date, (D) obtain Bankruptcy Court approval of the
Conforming Disclosure Statement within forty-five (45) days of the
Filing Date, (E) obtain confirmation of the Conforming Plan by
the Bankruptcy Court within ninety (90) days of the Filing Date,
and (F) consummate the Final Agreement within eleven (11) days
of confirmation of the Conforming Plan, and not to take any action
that is materially inconsistent with, or that would materially
delay consummation of, either the Restructuring Transaction or the
effectiveness of the Conforming Plan; and (ii) not assert or
support any assertion by any third party that, in order to act on
the provisions of Section 2(b), the Supporting Lenders shall
be required to obtain relief from the automatic stay from the
Bankruptcy Court (and hereby waives, to the greatest extent
possible, the applicability of the automatic stay to the giving of
such notice).
Section 2.
Termination of Support Obligations .
(a)
The Support Obligations shall be subject to termination upon the
occurrence of any Support Termination Event.
(b)
A “ Support Termination Event ” shall mean any
of the following:
(i)
the Chapter 11 Cases to implement the Restructuring Transaction
through confirmation of the Conforming Plan shall not have been
commenced by October 5, 2009;
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(ii)
the sum of the following (the “ Proposed Adjustment
Amount ”) exceeds $5,000,000: (A) the aggregate
Defect Values asserted by Buyer in all Title Defect Notices, plus
(B) the aggregate Buyer Remediation Amount asserted by Buyer
in all Adverse Environmental Condition Notices, plus (C) the
sum of the Allocated Values of all Retained Properties plus
(D) the sum of all Casualty Losses (to the extent not covered
by insurance or condemnation awards);
(iii)
the sum of the following (the “ Allowed Administrative and
Priority Claims Amount ”) exceeds the Administrative and
Priority Claims Reserve: (A) the Allowed Administrative
Claims, (B) the Allowed Priority Tax Claims, (C) the
Allowed Priority Non-Tax Claims and (D) the Allowed Other
Secured Claims;
(iv)
the Borrower and its Subsidiaries (A) shall file with the
Bankruptcy Court any plan of reorganization or liquidation other
than the Conforming Plan or (B) shall modify or amend the
Conforming Plan in any material respect without the written consent
of the Required Lenders (as defined in the Credit Agreement) or
(C) shall modify or amend the Purchase Agreement or any of its
Exhibits or Schedules in any material respect or waive any material
right thereunder without the written consent of the Required
Lenders;
(v)
the Bankruptcy Court shall enter a cash collateral order or budget
that is, without the written consent of the Required Lenders,
materially different from those agreed upon by the Supporting
Lenders, the Borrower and its Subsidiaries as described in
Section 3(e);
(vi)
the Conforming Plan shall not have been confirmed by the Bankruptcy
Court in accordance with its terms within one hundred and five
(105) days of the Filing Date;
(vii)
(A) the Borrower shall withdraw or revoke the Conforming Plan
or (B) the Borrower shall publicly announce its intention not
to pursue confirmation of the Conforming Plan;
(viii)
(A) a trustee shall have been appointed in any of the
Chapter 11 Cases, (B) any of the Chapter 11 Cases
shall have been converted to cases under Chapter 7 of the
Bankruptcy Code, or (C) any of the Chapter 11 Cases shall
have been dismissed by order of the Bankruptcy Court; or
(ix)
the Conforming Plan shall not have been substantially consummated
in accordance with its terms within one hundred twenty (120) days
of the Filing Date.
(c) &nb
