Document:

Exhibit 10.3

 

EMPLOYMENT AGREEMENT

 

This
Employment AGREEMENT (“Agreement”) is made by and between EDGE PETROLEUM
CORPORATION, a Delaware corporation (“Company”), and JOHN W. ELIAS (“Executive”).

 

WITNESSETH:

 

WHEREAS,
Company is desirous of employing Executive in an executive capacity on the
terms and conditions, and for the consideration hereinafter set forth and
Executive is desirous of being employed by Company on such terms and conditions
and for such consideration;

 

WHEREAS,
Company and Executive desire to amend and restate the Agreement to establish
documentary compliance with Section 409A of the Internal Revenue Code of
1986, as amended;

 

NOW,
THEREFORE, for and in consideration of the mutual promises, covenants and
obligations contained herein, Company and Executives agree as follows:

 

ARTICLE 1

EMPLOYMENT AND DUTIES

 

1.1           EMPLOYMENT:  EFFECTIVE DATE.  Company agrees to employ Executive and Executive
agrees to be employed by Company, beginning as of the Beginning Date (as
hereinafter defined) and continuing for the period of  time set forth in Article 2, Paragraph
2.1 of this Agreement, subject to the terms and conditions of this
Agreement.  For purposes of this Agreement,
the “Effective Date” shall be the first date that Executive reports for work at
the offices of Company, but no later than November 16, 1998.  This Agreement is amended and restated
effective April 3, 2008.

 

1.2           POSITIONS.  Effective as of the Effective Date, Company
shall cause Executive to be appointed Chairman, President and Chief Executive
officer of Company and to be elected a member of the Board of Directors of
Company (the “Board of Directors”). 
Company shall maintain Executive in such position, or in such other
positions as the parties mutually may agree, for the full term of Executive’s
employment hereunder.

 

1.3           DUTIES AND ADVICE.  Executive agrees to serve in the positions
referred to in paragraph 1.2 and to perform diligently and to the best of his
abilities the duties and services appertaining to such office, as well as such
additional duties and services appropriate to such office which the parties
mutually may agree upon from time to time. 
Executive’s employment shall also be subject to the policies maintained
and established by Company, as the same may be amended from time to time.

 

1.4           OTHER INTERESTS.  Executive agrees during the period of his
employment by Company to devote his primary business time, energy and best
efforts to the business and affairs of Company and its affiliates and not to engage,
directly or indirectly, in any other business or

 

1

 

businesses
whether or not similar to that of Company, except with the consent of the Board
of Directors.  The foregoing
notwithstanding, the parties recognize and agree that Executive may engage in
passive personal investments and other civic, charitable and business
activities that do not conflict with the business and affairs of Company or
interfere with Executive’s performance of his duties hereunder without the
necessity of obtaining the consent of the Board of Directors.

 

1.5           DUTY OF LOYALTY.  Executive acknowledges and agrees that
Executive owes a fiduciary duty of loyalty, fidelity and allegiance to act at
all times in the best interest of Company. 
In keeping with these duties, Executive shall make full disclosure to
Company of all business opportunities pertaining to Company’s business and
shall not appropriate for Executive’s own benefit business opportunities
concerning the subject matter of the fiduciary relationship.

 

ARTICLE 2

TERM AND TERMINATION OF EMPLOYMENT

 

2.1           TERM. 
Unless sooner termination pursuant to other provisions hereof, Company
agrees to employ Executive beginning on Monday, November 16, 1998 and
extending for a three-year period beginning January 1, 1999 (the “Term of
Employment”).  Beginning with the first
anniversary of the Effective Date, said term of employment shall be extended
automatically for an additional successive one-year period as of each
anniversary of the Effective Date that occurs while this Agreement is in
effect; provided, however, that if, at any time prior to any such anniversary date
of the Effective Date, either party shall give written notice to the other that
no such automatic extensions shall occur, Executive’s employment shall
terminate on the last day of the two-year period beginning on the anniversary
date of the Effective Date that next occurs after such notice is given.

 

2.2           COMPANY’S RIGHT TO TERMINATE.  Notwithstanding the provisions of paragraph
2.1, Company shall have the right to terminate Executive’s employment under the
Agreement at any time for the following reasons:

                

	
  (i)

  	
   

  	
  upon
  Executive’s death;

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  upon
  Executive’s becoming incapacitated by accident, sickness or other
  circumstances which renders him mentally or physically incapable of
  performing the duties and services required of him hereunder on a full-time
  basis with reasonable accommodations for a period of at least 120 consecutive
  days or for a period of 180 business days during any twelve-month period;

  
	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  for
  cause, which for purposes of this Agreement shall mean Executive’s gross
  negligence, gross neglect or willful misconduct in the performance of the
  duties required of him hereunder or Executive’s final conviction of a felony
  or if a misdemeanor involving moral turpitude, excluding misdemeanor
  convictions relating to the operation of a motor vehicle;

  
	
   

  	
   

  	
   

  
	
  (iv)

  	
   

  	
  for
  Executive’s material breach of any material provisions of this Agreement
  which, if correctable, remains uncorrected for 30 days following written
  notice to Executive by Company of such breach; or

  

 

2

 

	
  (v)

  	
   

  	
  for
  any reason whatsoever, in the sole discretion of the Board of Directors.

  

 

2.3           EXECUTIVE’S RIGHT TO TERMINATE.  Notwithstanding the provisions of paragraph
2.1, Executive shall have the right to terminate his employment under this
Agreement at any time for any of the following reasons:

 

	
  (i)

  	
   

  	
  for
  (A) Company’s material breach of any material provision of this
  agreement, (B) Company’s assignment to Executive of duties and
  responsibilities that are materially inconsistent with the positions referred
  to in Article 1, paragraph 1.2, (C) Company’s failure to appoint or
  elect or reappoint or re-elect Executive to the positions referred to in Article 1,
  paragraph 1.2, (D) a change in the location of Executive’s principal
  place of employment by Company by more than 50 miles from the location  where he was principally employed immediately prior to
  such change; provided, however, that prior to Executive’s termination of
  employment under this paragraph 2.3(i), Executive must give written notice to
  Company of any such breach, assignment or failure within 90 days of its
  initial existence and such breach, assignment or failure must remain uncorrected
  for 30 days following such written notice (the “Correction Period”), and
  Executive must terminate his employment within 30 days of the expiration of
  the Correction Period; or

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  for
  any other reason, in the sole discretion of Executive;

  

 

2.4           NOTICE OF TERMINATION.  If Company or Executive desires to terminate Executive’s
employment hereunder at any time prior to expiration of the term of employment
as provided in paragraph 2.1, it or he shall do so by giving written notice to
the other party that it or he has elected to terminate Executive’s employment
hereunder and stating the effective date and reason for such termination,
provided that no such action shall alter or amend any provisions hereof or
rights arising hereunder, including, without limitation, the provisions of Article 4
hereof.  Such notice shall also, to the
extent material to any right or obligation hereunder constitute notice under
paragraph 2.1 of the discontinuance of any  further automatic extensions of the term of
paragraph 2.1.

 

ARTICLE 3

COMPENSATION AND BENEFITS

 

3.1           BASE SALARY.  During the period of this Agreement,
Executive shall receive a minimum base salary of $350,000.  The Compensation Committee of the Board of
Directors (the “Compensation Committee”) shall review Executive’s base salary
at the end of the initial three-year term and on an annual basis thereafter,
and shall make a recommendation to the Board of Directors regarding possible
increases in Executive’s annual base salary, and the Board of Director’s, in
its sole discretion, may increase but not decrease Executive’s annual base
salary.  Executive’s annual base salary
shall be paid in equal installments in accordance with Company’s standard
policy regarding payment of compensation to executives but no less frequently
than monthly.

 

3.2           ANNUAL BONUSES.  For the 1999 performance year, no bonus will
be considered for Executive.  In
subsequent years ending during the period of this Agreement,

 

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Executive
shall be eligible to receive an annual bonus under the Edge Petroleum
Corporation Executive Incentive Plan (or any successor thereto) as established
from time to time by the Compensation Committee based on an Incentive Target of
50% of Executive’s annual base salary, with a Maximum Incentive of 100% of Executive’s
annual base salary.  A combination of
specific objective and subjective performance criteria shall be established
mutually between the Compensation Committee and Executive on an annual basis.

 

3.3           INITIAL STOCK OPTION.  On January 4, 1999, Company shall grant
to Executive an option (the “Initial Option”) to purchase 200,000 shares of Company’s
common stock (“Common Stock”).  Such
Initial Options will be issued outside of Company’s 1997 Incentive Plan.  The purchase price for each share of stock
subject to the Initial Option shall be equal to the Fair Market Value (the mean
of the highest and lowest sales price per share of the Common Stock on the
applicable date) of a share of Common Stock as of January 4, 1999.  The Initial Stock Option shall (i) be a
nonqualified stock option, (ii) have a ten-year term, (iii) become
exercisable cumulatively in 33 1/3% increments beginning January 1, 1999
and at each of January 1, 2000 and January 1, 2001.

 

3.4           SUBSEQUENT STOCK OPTIONS. Subject to
the discretion of the Board of Directors, Company shall grant to Executive the
option to purchase a number of shares of stock pursuant to Company’s 1997
Incentive Plan or, at the election of the Compensation Committee, out of other appropriate
Company stock outside of the 1997 Incentive Plan, in accordance with the
following schedule:

 

	
  January 1,
  2000

  	
   

  	
  50,000
  shares

  
	
  January 1,
  2001

  	
   

  	
  50,000
  shares

  
	
  January 1,
  2002

  	
   

  	
  50,000
  shares

  
	
  January 1,
  2003

  	
   

  	
  50,000
  shares

  
	
  January 1,
  2004

  	
   

  	
  50,000
  shares

  

 

The
purchase price for each share of Common Stock subject to each subsequent option
shall be equal to the Fair Market Value of a share of stock as of the date of
grant of such subsequent option.  Subject
to the terms of the 1997 Incentive Plan and the agreement to be executed by Company
and Executive evidencing each subsequent option, each subsequent option shall (i) be
a nonqualified stock option (ii) have a ten-year term, and (iii) become
exercisable 100% on the second anniversary of the date of grant of such
subsequent option.

 

3.5           LIFE INSURANCE.  Company will provide, or cause to be
provided, to Executive, at no cost to Executive, $1,000,000 of term life
insurance coverage payable to a beneficiary to be designated in writing by Executive,
together with a tax gross-up payment in the amount necessary to offset any
applicable taxes imposed on Executive by reason of such coverage and such tax
gross-up payment.  In no event will any
gross-up payment be made later than 30 days after the end of the calendar year
in which the applicable life insurance coverage is provided.  Notwithstanding the foregoing, however, if
Executive fails to qualify medically for such insurance coverage at standard
rates for his age group, Company shall not be required to provide such coverage
unless Executive pays the cost of such coverage that is in excess of the
standard rate cost.  Such insurance, including
replacement or substitute policies therefor, shall be

 

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maintained
for the same period as Executive’s compensation hereunder is continued pursuant
to Article 7 hereof.

 

3.6           OTHER PERQUISITES. 
During his Term of Employment, Executive shall be afforded the following
benefits as incidences of his employment:

 

	
  (i)

  	
   

  	
  BUSINESS
  AND ENTERTAINMENT EXPENSES. Subject to Company’s standard policies and
  procedures with respect to expense reimbursement as applied to its executive
  employees generally, Company shall reimburse Executive for, or pay on behalf
  of Executive, reasonable and appropriate expenses incurred by Executive for
  business-related purposes, including dues and fees to industry and
  professional organizations and cost of entertainment and business
  development.

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  CLUB
  EXPENSES. In addition to other business and entertainment expenses
  reimbursable pursuant to subparagraph 3.6(i) above, Company shall pay
  all membership fees, dues and assessment for a club if Executive is requested
  to join a club. The foregoing notwithstanding, Company shall not be obligated
  to buy from Executive, or to reimburse Executive for the price of, his
  membership in any club of which Executive is a member prior to the Effective
  Date.

  
	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  ANNUAL
  PHYSICAL EXAMINATION. Company shall pay for the cost of an annual physical
  examination to be conducted by a doctor or clinic of Executive’s choosing in
  Houston, Texas.

  
	
   

  	
   

  	
   

  
	
  (iv)

  	
   

  	
  PARKING.
  Company shall provide at no expense to Executive a parking place convenient
  to Executive’s office.

  
	
   

  	
   

  	
   

  
	
  (v)

  	
   

  	
  VACATION.
  During each year of his employment, Executive shall be entitled to five weeks
  of paid vacation in accordance with Company vacation policy.

  
	
   

  	
   

  	
   

  
	
  (vi)

  	
   

  	
  SUPPORT
  STAFF. Executive shall be entitled to secretarial and/or other assistance to
  the extent needed to fulfill his corporate responsibilities.

  
	
   

  	
   

  	
   

  
	
  (vii)

  	
   

  	
  BENEFIT
  PLAN. Executive shall be allowed to participate in all employee benefit
  plans.

  
	
   

  	
   

  	
   

  
	
  (viii)

  	
   

  	
  OTHER
  COMPANY BENEFITS. Executive and, to the extent applicable, Executive’s
  spouse, dependents and beneficiaries, shall be allowed to participate in all benefits,
  plans and programs, including improvements or modifications of the same,
  which are now, or may hereafter be, available to other executive employees of
  Company. Such benefits, plans and programs shall include, without limitation,
  any profit sharing plan, thrift plan, employee stock ownership plan, health
  insurance or health care plan, life insurance, disability insurance, pension
  plan, supplemental retirement plan, vacation and sick leave plan, and the
  like which may be maintained by Company. Company shall not, however, by
  reason of this subparagraph be obligated to institute, maintain, or refrain
  from changing, amending, or discontinuing, any such benefit plan or program,
  so long as such changes are similarly applicable to executive employees generally.

  

 

5

 

ARTICLE 4

PROTECTION OF INFORMATION

 

4.1           DISCLOSURE TO EXECUTIVE. 
Company shall disclose to Executive, or place Executive in a position to
have access to or develop, trade secrets or confidential information of Company
or its affiliates; and/or shall entrust Executive with business opportunities
of Company or its affiliates; and/or shall place Executive in a position to
develop business goodwill on behalf of Company or its affiliates.

 

4.2           DISCLOSURE TO AND PROPERTY OF COMPANY.  All information, ideas, concepts,
improvements, discoveries, and inventions, whether patentable or not, which are
conceived, made, developed, or acquired by Executive, individually or in
conjunction with others, during Executive’s employment by Company (whether
during business hours or otherwise and whether on Company’s premises or
otherwise) which relate to Company’s business, products, or services
(including, without limitation, all such information relating to corporate opportunities,
research, financial and sales data, pricing terms, evaluations, opinions,
interpretations, acquisitions and prospects, the identity of customers or their
requirements, the identity of key contacts within the customer organizations or
within the organization of acquisition prospects, or marketing and
merchandising techniques, prospective names, and markets) shall be disclosed to
Company and are and shall be the sole and exclusive property of Company.  Moreover, all documents, drawings, memoranda,
notes, records, files, correspondence, manuals, models, specification computer
programs, E-mail, voice mail, electronic databases, maps, and all other
writings or materials of any type embodying any such information, ideas,
concepts, improvements, discoveries, and innovations are and shall be the sole
and exclusive property of Company.  Upon
termination of Executive’s employment by Company, for any reason, Executive
promptly shall deliver the same, and all copies thereof, to Company.

 

4.3           NO UNAUTHORIZED USE OR
DISCLOSURE.  Executive will not, at any
time during or after Executive’s employment by Company, make any unauthorized disclosure
of any confidential business information or trade secrets of Company or its
affiliates, or make any use thereof except in the carrying out of its Executive
employment responsibilities hereunder.  Affiliates
of Company shall be third party beneficiaries of Executive’s obligations under
this paragraph.  As a result of Executive’s
employment by Company, Executive may also from time to time have access to, or
knowledge of, confidential business information or trade secrets of third
parties, such as customers, suppliers, partners, joint venturers, and the like,
of Company and its affiliates.  Executive
also agrees to preserve and protect the confidential information and trade
secrets to the same extent, and on the same basis, as Company’s confidential
business information and trade secrets.

 

4.4           OWNERSHIP
BY COMPANY.  If during Executive’s
employment by Company, Executive creates any work of authorship fixed in any
tangible media of expression which is the subject matter of copyright (such as
videotapes, written presentations, or acquisitions, computer programs, E-mail,
voice mail, electronic databases, drawing maps, architectural renditions, models,
manuals, brochures, or the like) relating to Company’s business, products, or
services, whether such work is created solely by Executive or jointly with
others (whether during business

 

6

 

hours or otherwise and whether on Company’s premises or otherwise),
Company shall be deemed the author of such work.  If the work is prepared by Executive in the
scope of Executive’s employment but is specially ordered by Company as a contribution
to a collective work, as a part of a motion picture or other audiovisual work,
as a translation, as a supplementary work, as a compilation, or as an
instructional text, then the work shall be considered to be work made for hire
and Company shall be the author of the work. 
If such work related in any way to the business of Company but is
neither prepared by Executive within the scope of Executive’s employment nor is
work especially ordered that is deemed to be a work for hire, then Executive
hereto agrees to assign, and by these presents does assign, to Company all of
Executive’s worldwide right, title, and interest in and to such work and all
rights of copyright therein.

 

4.5           ASSISTANCE OF EXECUTIVE.  Both during the period of Executive’s employment
by Company and thereafter, Executive shall assist Company and its nominee, at
any time, in the protection of Company’s worldwide right, title, and interest
in and to information, ideas, concepts, improvements, discoveries, and
inventions and its copyrighted works, including without limitation, the
execution of all formal assignment documents requested by Company or its
nominee and the execution of all lawful oaths and applications for patents and
registration of copyright in the United States and foreign countries.

 

4.6           REMEDIES.  Executive acknowledges that money damages
would not be sufficient remedy for any breach of this Article by
Executive, and company shall be entitled to enforce the provisions of this Article by
termination of payments then owing to Executive under this Agreement and/or to
specific performance and injunctive relief as remedies for such breach or any
threatened breach; provided, however, that payments then owing to Executive may
not be terminated unless the Board of Directors determines that such breach by
Executive has directly resulted or could reasonably be expected to result in a
material adverse economic impact on Company’s business.  Such remedies shall not be deemed the exclusive
remedies for a breach of this Article, but shall be in addition to all remedies
available at law or in equity to Company, including the recovery of damages
from Executive and his agents involved in such breach and remedies available to
Company pursuant to this and other agreements with Executive.

 

ARTICLE 5

NONCOMPETITION OBLIGATIONS

 

5.1           IN GENERAL.  As part of the consideration for the
compensation and benefits to be paid to Executive hereunder, to protect the
trade secrets and confidential information of Company and its affiliates that
have been and will be disclosed or entrusted to Executive, the business goodwill
of Company and its affiliates that has been and will in the future be developed
by Executive, or the business opportunities that have been and will in the
future be disclosed or entrusted to Executive by Company and its affiliates and
as an additional incentive for Company to enter into this Agreement, Company
and Executive agree to the non-competition obligations hereunder. Executive
shall not, directly or indirectly, for Executive or for others, in any geographic
area or market (other than Company’s home office) where Company or any of its
affiliates are conducting any business (or is active in pursuing a geologic
trend) or have during the previous twelve months conducted such business or
actively pursued a geologic trend:

 

7

 

	
  (i)

  	
   

  	
  engage
  in any business that is directly competitive with the business conducted by
  Company;

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  render
  advice or services to, or otherwise assist, any other person, association, or
  entity who is engaged, directly or indirectly, in any business competition
  with the business conducted by Company with respect to such competitive
  business; or

  
	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  induce
  any employee of Company or any of its affiliates to terminate his or her
  employment with Company or such affiliates, or hire or assist in the hiring
  of any such employee by any person, association, or entity not affiliated
  with Company.

  

 

These
non-competition obligations shall apply during the period that Executive is
employed by Company and during any period after Executive’s termination of
Employment when Company is providing Executive with Termination Benefits
pursuant to Article 7. 
Notwithstanding the preceding sentence, these non-competition
obligations shall not apply after Executive’s termination of employment by
Company by reason of paragraph 2.2(v).

 

5.2           ENFORCEMENT AND REMEDIES.  Executive acknowledges that money damages would
not be sufficient remedy for any breach of this Article by Executive, and
Company shall be entitled to enforce the provisions of this Article by
terminating any payments then owing to Executive under this Agreement and/or to
specific performance and injunctive relief as remedies for such breach or any
threatened breach, provided, however, that payments then owing to Executive may
not be terminated unless the Board of Directors determines that such breach by
Executive has directly resulted or could reasonably be expected to result in a
material adverse economic impact on Company business.  Such  remedies
shall not be deemed the exclusive remedies for a breach of  this Article, but shall be in addition to all
remedies available at  law or in equity
to Company, including without limitation, the  recovery of damages from Executive and
Executive’s agents involved in such breach and remedies available to
Company  pursuant to this and  other agreements with Executive.

 

5.3           REFORMATION.  It is expressly understood and agreed that
Company and Executive consider the restrictions contained in this Article to
be reasonable and necessary to protect the proprietary information of Company.  Nevertheless, if any of the aforesaid
restrictions are found by a court having jurisdiction to be unreasonable, or
overly broad as to geographic area or time, or otherwise unenforceable, the
parties intend for the restrictions therein set forth to be modified by such
court so as to be reasonable and enforceable and, as so modified by the court,
to be fully enforced.

 

ARTICLE 6

STATEMENTS CONCERNING COMPANY

 

6.1           IN GENERAL.  Executive shall refrain, both during the
employment relationship and after the employment relationship terminates, from publishing
any oral or written statements about Company, any of its affiliates, or any of
such entities, officers, employees, agents or representatives that are
slanderous, libelous, or defamatory; or that disclose private or confidential
information about Company, any of its affiliates, or on such entities’ business
affairs, officers, employees, agents or representatives; or that constitute an
intrusion into the seclusion or private lives of any of such entities’
officers, employees, agents or representatives; or that give rise to
unreasonable adverse publicity about the private lives of any of such entities’
officers, employees, agents, or representatives

 

8

 

or
that place Company, any of its affiliates, or any of such entities’ officers,
employees, agents, or representatives in a false light before the public; or
that constitute a misappropriation of the name or likeness of Company, any of
its affiliates, or any such entities’ officers, employees, agents, or representatives,
except where any of such actions are disclosures required by operation of law
or judicial process.  A violation or threatened
violation of this prohibition may be enjoined by the courts. The rights
afforded Company and its affiliates under this provision are in addition to any
and all rights and remedies otherwise afforded by law.

 

ARTICLE 7

EFFECT OF TERMINATION ON COMPENSATION

 

7.1           BY EXPIRATION.  If Executive’s employment hereunder shall
terminate upon expiration of the Term of Employment provided in paragraph 2.1
hereof, then all compensation and all benefits to Executive hereunder shall terminate
contemporaneously with termination of his employment.

 

7.2           BY COMPANY.  If Executive’s employment hereunder shall be
terminated by Company prior to expiration of the Term of Employment provided in
paragraph 2.1, then, upon such termination, regardless of the reason therefor,
all compensation and benefits to Executive hereunder shall terminate
contemporaneously with the termination of such employment; provided, however,
that if such termination shall be for any reason other than those encompassed
by paragraphs 2.2(iii) or (iv), then Company shall provide Executive with
the Termination Benefits.  For the purpose
of this Agreement, the term “Termination Benefits” shall mean the following: (i) Company
shall continue to pay to Executive his base salary then in effect pursuant to
paragraph 3.1 for the unexpired portion of the term set forth in paragraph 2.1
(the “Salary Severance Amount”) as determined pursuant to Section 7.7(i) below;
(ii) all outstanding stock options granted by Company to Executive shall
become immediately exercisable in full upon Executive’s termination of
employment and for a period of twelve months thereafter (but in no event shall
any such stock option be exercisable after the expiration of the original term
of such stock option); (iii) Company shall pay to Executive a lump sum
cash payment equal to Executive’s Incentive Target (the “Target Bonus”) amount
prorated for the number of months in the performance year of Executive’s
termination of employment that have elapsed prior to termination at the time
determined pursuant to Section 7.7(ii) below, (iv) pursuant to Section 7.7(iii) below,
the life insurance coverage and annual tax gross-up pursuant to paragraph 3.5
shall continue to be provided to Executive for the unexpired portion of the
Term of Employment set forth in paragraph 2.1, (v) within 10 business days
after the date of Executive’s termination of employment, Company shall pay
Executive a lump sum cash payment equal to the amount credited to his accounts
under the Edge Petroleum Corporation Employees’ Profit Sharing Plan and the Employee
Stock Ownership Plan, or any similar plans or programs that are forfeitable in
accordance with the terms of such plans and (vi) during the period, if any
(but in no event for more than 18 months after the date of Executive’s termination
of employment), that Executive elects to continue coverage for himself and any
of his eligible dependents under Company’s group health plan pursuant to the
continuation of coverage provisions contained in Sections 601 et req. of the
Employee Retirement Income Security Act of 1974, as amended, Executive’s
premiums for such coverage shall be no greater than that charged by Company
generally to its

 

9

 

active
executive employees for coverage under such plans.  In the event Company does not fulfill its
obligations under paragraph 1.1 to employ Executive and appoint him to the
positions set forth in paragraph 1.2, Executive shall be entitled to the
Initial Option and to Termination Benefits as if Executive’s employment terminated
on the Effective Date.

 

7.3           BY EXECUTIVE.  If Executive’s employment hereunder shall be
terminated by Executive prior to expiration of the term provided in paragraph
2.1, then, upon such termination, regardless of the reason thereof, all compensation
and benefits to Executive hereunder shall terminate contemporaneously with the
termination of such employment; provided, however, that if such termination
shall occur for the reason encompassed by paragraph 2.3(i), then Company shall
provide Executive with the Termination Benefits.

 

7.4           NO DUTY TO MITIGATE.  Executive shall have no duty to find new employment
following the termination of his employment under circumstances which require
Company to pay any amount to Executive pursuant to this Article 7.  Any salary or remuneration received by Executive
from a third party for the providing of personal services (whether by
employment or by functioning as an independent contractor) following the
termination of his employment under circumstances pursuant to which this Article 7
apply shall not reduce company obligations to make a payment to Executive (or
the amount of such payment) pursuant to this Article 7.  Notwithstanding the preceding sentence, if,
and to the extent that, following the termination of his employment under circumstances
pursuant to which this Article 7 applies, Executive becomes entitled to
receive benefits from a third party that are comparable to the Termination
Benefits set forth in paragraph 7.2(iv) and (vi), Company’s obligation to
provide such Termination Benefits to Executive shall cease.

 

7.5           LIQUIDATED DAMAGES.  In light of the difficulties in estimating
the damages for an early termination of this Agreement, company and Executive
hereby agree that the payments, if any, to be received by Executive pursuant to
this Article 7 shall be received by Executive as liquidated damages.

 

7.6           INCENTIVE AND DEFERRED
COMPENSATION.  This Agreement governs the
rights and obligations of Executive and Company with respect to Executive’s base
salary and certain perquisites of employment. 
Except as expressly provided herein, Executive’s rights and obligations
both during the term of his employment and thereafter with respect to stock
options, incentive and deferred compensation, life insurance policies insuring the
life of Executive, and other benefits under the plans and programs maintained
by Company shall be governed by the separate agreements, plans and other
documents and instruments governing such matters.  Without limiting the scope of the preceding
sentence, Executive acknowledges that he has no right to grants of stock
options either under the stock plans maintained by Company or otherwise other
than (i) as provided in paragraphs 3.3 or 3.4 hereof or (ii) in the discretion
of the Compensation Committee or the Board of Directors.

 

7.7           TIME AND FORM OF TERMINATION
PAYMENTS

 

(i)            Salary Severance Amount.  The Salary Severance Amount described in Section 7.2(i) above
shall be paid as follows in the event of a termination during 2008:

 

10

 

(a) First
Payment Level.  A portion of the
Salary Severance Amount equal to two times the limit on compensation set forth
in Section 401(a)(17) of the Internal Revenue Code of 1986, as amended
(the “Code”) ($460,000 for 2008) shall be paid in an immediate lump sum on the
date five days following his Termination Date.

 

(b) Second
Payment Level.  A portion of the
Salary Severance Amount shall be paid according to paragraphs (1) or (2) to
be determined as follows:

 

(1)           Termination On or Before June 30,
2008.  If the date of Executive’s termination
of employment (“Termination Date”) occurs on or before June 30, 2008, the
Second Payment Level shall be comprised of the following payments:

 

(A)  On the date that is six months following the Termination
Date, Executive shall receive a lump sum payment of a portion of the Salary
Severance Amount equal to the total amount of base salary Executive would have
received during such six-month period had he remained employed.

 

(B)  Following the six-month period described in the immediately
preceding paragraph, Executive shall receive a portion of the Salary Severance
Amount in monthly payments equal to the monthly base salary payments he would
have received had he remained employed through December 31, 2008; provided
that the sum of the First Payment Level and the monthly payments under this
section shall not exceed the Salary Severance Amount.

 

(C)  On January 2, 2009, Executive shall receive a cash lump
sum equal to the amount of Salary Severance Amount, if any, that remains unpaid
following the payment of the amounts described in the First Payment Level and Second
Payment Level.

 

(2)           Termination After June 30,
2008.  If Executive’s Termination
Date occurs after June 30, 2008, Executive shall receive the remaining
balance of his Salary Severance Amount as reduced by the First Payment Level on
the later of January 2, 2009 or five days after his Termination Date.

 

(ii)           Target Bonus.  Executive’s Target Bonus described in Section 7.2(iii) above
shall be paid as follows:

 

(a)           If Executive’s
Termination Date occurs in 2008, the Target Bonus shall be paid on the later of
(1) January 2, 2009 or (2) five days following his Termination
Date.

 

(b)          If Executive’s
Termination Date occurs in 2009, the Target Bonus shall be paid five days following
his Termination Date.

 

11

 

(iii)          Life Insurance Gross-Up.  Executive’s life insurance gross-up payment
shall be made on the later of January 2, 2009 or five days following
Executive’s Termination Date.

 

7.8           SECTION 409A.  This Agreement is intended to comply with
Code Section 409A and any ambiguous provision will be construed in a
manner that is compliant with or exempt from the application of Code Section 409A.  If any provision of this Agreement would
cause Executive to incur any additional tax or interest under Code Section 409A
and accompanying Treasury regulations and guidance, Employer shall, after
consulting with Executive, reform such provision to comply with Code Section 409A,
to the extent permitted under Code Section 409A; provided, however, that
Employer agrees to maintain, to the maximum extent practicable, the original
intent and economic benefit to Executive of the applicable provision without
violating the provisions of Code Section 409A.  Notwithstanding any provision to the contrary
in this Agreement, if Executive is deemed on his termination date to be a “specified
employee” within the meaning of that term under Section 409A(a)(2)(B) of
the Code, then the payments and benefits under this Agreement that are subject
to Code Section 409A shall be made or provided (subject to the last
sentence hereof) on the later of (A) the payment date set forth in this
Agreement or (B) the date that is the earliest of (i) the expiration
of the six-month period measured from the date of Executive’s Termination of
employment or (ii) the date of Executive’s death (the “Delay Period”).  Payments subject to the Delay Period shall be
paid to Executive without interest for such delay in payment.  Notwithstanding any provision of this
Agreement to the contrary, Executive acknowledges and agrees that the Company
and its employees, officers, directors, Affiliates and Subsidiaries shall not
be liable for, and nothing provided or contained in this Agreement will be
construed to obligate or cause the Company and/or its employees, officers,
directors, Affiliates and Subsidiaries to be liable for, any tax, interest or
penalties imposed on Executive related to or arising with respect to any
violation of Section 409A.

 

ARTICLE 8

MISCELLANEOUS

 

8.1           NOTICES.  For purposes of this Agreement, notices and
all other communications provided for herein shall be in writing and shall be deemed
to have been duly given when personally delivered or when mailed by United
States registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:

 

	
  If
  to Company to:

  	
   

  	
  Edge
  Petroleum Corporation

  
	
   

  	
   

  	
  Texaco
  Heritage Plaza

  
	
   

  	
   

  	
  1111
  Bagby, Suite 2100

  
	
   

  	
   

  	
  Houston,
  Texas 77002

  
	
   

  	
   

  	
  Telecommunications
  Number: (713) 654-8960

  
	
   

  	
   

  	
  Attention:
  Corporate Secretary

  
	
   

  	
   

  	
   

  
	
  If
  to Executive:

  	
   

  	
  John
  W. Elias

  
	
   

  	
   

  	
  1923
  Olympia Drive

  
	
   

  	
   

  	
  Houston,
  Texas 77019

  

 

12

 

or
to such other address as either party may furnish to the other in writing in
accordance herewith, except that notices or changes of address shall be
effective only upon receipt.

 

8.2           APPLICABLE LAW.  This Agreement is entered into under, and
shall be governed for all purposes by, the laws of the State of Texas.

 

8.3           NO WAIVER.  No failure by either party hereto at any time
to give notice of any breach by the other party of, or to require compliance
with, any condition or provisions of this Agreement shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.

 

8.4           SEVERABILITY.  If a court of competent jurisdiction
determines that any provision of this Agreement is invalid or unenforceable,
then the invalidity or enforceability of the provision shall not affect the validity
or enforceability of any other provision of this Agreement, and all other
provisions shall remain in full force and effect.

 

8.5           COUNTERPARTS.  This Agreement may be executed in one or more
counterparts each of which shall be deemed to be an original, but all of which
together will constitute one and the same Agreement.

 

8.6           WITHHOLDING OF TAXES AND OTHER
EMPLOYEE DEDUCTIONS.  Company may withhold
from any benefits and payments made pursuant to this agreement all federal,
state, city and other taxes as may be required pursuant to any law or
government regulation or ruling and all other normal employee deductions made
with respect to Company’s employees generally.

 

8.7           HEADINGS.  The paragraph headings have been inserted for
purposes of convenience and shall not be used for interpretive purposes.

 

8.8           GENDER AND PLURALS.  Wherever the context so requires, the
masculine gender includes the feminine or neuter, and the singular number
includes the plural and converse.

 

8.9           AFFILIATE.  As used in this Agreement, the term “affiliate”
shall mean any entity which owns or controls, is owned or controlled by, or is under
common ownership or control with, Company.

 

8.10         ASSIGNMENT.  This agreement shall be binding upon and
inure to the benefit of Company and any successor of Company, by merger or
otherwise. Except as provided in the preceding sentence, this Agreement, and
the rights and obligations of the parties hereunder, are personal and neither
this Agreement, nor any right, benefit, or obligation of either party hereto,
shall be subject to voluntary or involuntary assignment, alienation or
transfer, whether by operation of law or otherwise without the prior written
consent of the other party.

 

8.11         TERM. 
This Agreement has a term co-extensive with the term of employment
provided in paragraph 2.1.  Termination
shall not affect any right or obligation of any party which is accrued or
vested prior to such terminations. 
Without limiting the scope of the 

 

13

 

preceding
sentences, the provisions of Articles 4, 5 and 6 shall survive any termination
of the employment relationship and/or of this Agreement.

 

8.12         ENTIRE AGREEMENT.  Except as provided in (i) the written
benefit plans and programs and agreements referenced in Article 3 and (ii) any
signed written agreement contemporaneously or hereafter executed by Company and
Executive, including, without limitation, the Severance Agreement, this Agreement
constitutes the entire agreement of the parties with regard to the subject
matter hereof, and contains all the covenants, promises, representations,
warranties and agreements between the parties with respect to employment of
Executive by Company.  Without limiting
the scope of the preceding sentence, all prior understandings and agreements among
the parties hereto relating to the subject matter hereof are hereby null and
void and of no further force and effect. 
Any modification of this Agreement will be effective only if it is in writing
and signed by the party to be charged.

 

IN
WITNESS WHEREOF, THE PARTIES HERETO EXECUTE THIS AMENDED AND RESTATED AGREEMENT
ON THE 3rd DAY OF APRIL, 2008 TO BE EFFECTIVE IMMEDIATELY.

 

	
   

  	
   

  	
   

  
	
   

  	
  Edge
  Petroleum Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  David F. Work

  
	
   

  	
  Name:

  	
  David
  F. Work

  
	
   

  	
  Title:

  	
  Chairman, Compensation Committee of

  
	
   

  	
   

  	
  Board
  of Directors

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Edge
  Petroleum Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ John W. Elias

  
	
   

  	
  John
  W. Elias

  	
   

  
	
   

  	
  “Executive”

  	
   

  
				

 

14Exhibit 4.1

 

SEVENTH
AMENDMENT TO THE

REVOLVING
CREDIT AGREEMENT

 

THIS SEVENTH AMENDMENT to
the REVOLVING CREDIT AGREEMENT, dated as of this 31st day of March,
2008 (this “Seventh Amendment”), is entered into in connection with and as an
amendment to that certain Revolving Credit Agreement, dated as of March 10,
2003 (the “Credit Agreement”), as amended by that First Amendment, dated as of August 31,
2003, as further amended by that Second Amendment, dated as of February 27,
2004, as further amended by that Third Amendment, dated as of August 30,
2004, as further amended by that Fourth Amendment dated as of August 29,
2005, as further amended by that Fifth Amendment dated as of August 29,
2006, as further amended by that Sixth Amendment dated as of August 29,
2007, and as further amended, restated or modified from time to time, by and
between First National Bank of Omaha (“FNBO”) and Ballantyne of Omaha, Inc.
(the “Borrower”).

 

RECITALS:

 

WHEREAS, the Borrower
desires to obtain an interim extension of credit from FNBO in the amount of Ten
Million Four Hundred Thousand Dollars ($10,400,000);

 

WHEREAS, FNBO has agreed
to make said extension of credit, and to amend the Credit Agreement as set
forth herein to reflect said extension of credit.

 

NOW, THEREFORE, in consideration
of the mutual covenants and agreements contained in this Amendment, the parties
agree as follows:

 

ARTICLE I

Amendments

 

1.1                                 Definitions.  Article I
of the Credit Agreement is hereby amended as follows:

 

(a)                                  A definition for the term “Adjustment
Date” is added to Article I, reading as follows:

 

“As
defined in Section 2.3(b).”

 

(b)                                 The definition of “Advance” is amended
and restated in its entirety to read as follows:

 

“Any
advance of funds to the Borrower by FNBO under the Base Revolving Credit
Facility or the Interim Revolving Credit Facility.”

 

(c)                                  A definition for the term “Base Revolving
Credit Note” is added to Article I, reading as follows:

 

 

“The
revolving credit note, substantially in the form of Exhibit A attached to
this Agreement, and all extensions, renewals, and substitutions of or for the
foregoing.”

 

(d)                                 The definition of “Collateral” is amended
by inserting “the Control Agreement” immediately prior to “the Security
Agreement” in the first and second lines thereof.

 

(e)                                  The definition of “Commitment” is amended
by inserting “Base Revolving Credit” immediately prior to “Note” in the second
line thereof.

 

(f)                                    A definition for the term “Control
Agreement” is added to Article I, reading as follows:

 

“The
Control Agreement Regarding Security Interest in Investment Property, dated as
of March 31, 2008, by and among FNBO, First National Capital Markets, Inc.
and the Borrower, relating to the Pledged Account, as amended, modified,
supplemented or restated from time to time.”

 

(g)                                 The definition of “Default Rate” is
amended and restated in its entirety to read as follows:

 

“3.0%
plus the Revolving Credit Rate or the Interim Revolving Credit Rate, as
applicable.”

 

(h)                                 The definition of “Guarantor Documents”
is amended and restated in its entirety to read as follows:

 

“(a)                            The Guaranty Agreement, dated as of March 10,
2003, among the Guarantors party thereto from time to time and FBNO, as the
same may be amended, modified, supplemented and restated from time to time;

 

(b)                                 The Pledge Agreement; and

 

(c)                                  The Security Agreement.”

 

(i)                                     The definition of “Guarantor” is hereby
amended and restated to read as follows:

 

“(a) All
of the Borrower’s existing and future direct and indirect Subsidiaries; (b) any
existing and future direct and indirect Subsidiaries of any of the Guarantors;
and (c) any Affiliate of Borrower that agrees to act as a Guarantor
pursuant to this Agreement and the Guarantor Documents.”

 

(j)                                     A definition for the term “Interim
Facility Availability” is added to Article I, reading as follows:

 

2

 

“The
Interim Facility Commitment at such time, minus the principal amount of
all then-outstanding Advances under the Interim Revolving Credit Facility.”

 

(k)                                  A definition for the term “Interim Facility
Commitment” is added to Article I, reading as follows:

 

“The
lesser of (i) $10,400,000 or (ii) 80% of the par value of investments
held in the Pledged Account.”

 

(l)                                     A definition for the term “Interim
Facility Termination Date” is added to Article I, reading as follows:

 

“March 30,
2009, or such later date as is approved in writing by FNBO.”

 

(m)                               A definition for the term “Interim
Revolving Credit Facility” is added to Article I, reading as follows:

 

“As
defined in Section 2.1.”

 

(n)                                 A definition for the term “Interim
Revolving Credit Note” is added to Article I, reading as follows:

 

“A
revolving credit note, in form and substance satisfactory to FNBO, evidencing
the Interim Revolving Credit Facility, including all extensions, renewals, and
substitutions of or for the foregoing.”

 

(o)                                 A definition for the term “Interim
Revolving Credit Rate” is added to Article I, reading as follows:

 

“As
defined in Section 2.3(b).”

 

(p)                                 The definition of “Note” is amended and
restated in its entirety to read as follows:

 

“The
Base Revolving Credit Note or the Interim Revolving Credit Note.”

 

(q)                                 A new definition for the term “Notes” is
added to Article I, reading as follows:

 

“The
Base Revolving Credit Note and the Interim Revolving Credit Note.”

 

(r)                                    The definition of “Operative Documents”
is amended and restated in its entirety to read as follows:

 

3

 

“This
Agreement, the Notes, the Control Agreement, the Pledge Agreement, the Security
Agreement, the Guarantor Documents, any reaffirmations of the foregoing, the
financing statements regarding the Collateral and all other documents,
certificates and instruments required to be delivered pursuant to this
Agreement from time to time.”

 

(s)                                  The definition of “Permitted Participant”
is amended by deleting “the Note” in the first line thereof and substituting
“any Note” in lieu thereof.

 

(t)                                    The definition of “Pledge Agreement” is
amended and restated in its entirety to read as follows:

 

“The
Stock Pledge Agreement, dated as of March 10, 2003, among the Borrower,
the Guarantors from time to time party thereto, and FNBO, as the same may be
amended, modified, supplemented and restated from time to time.”

 

(u)                                 A new definition for the term “Pledged
Account” is added to Article I, reading as follows:

 

“Securities
account number 20800013 maintained by the Borrower at First National Capital
Markets, Inc.”

 

(v)                                 A new definition for the term “Portfolio
Concentration Factor” is added to Article I, reading as follows:

 

“For
any investment in the Pledged Account, as of any date, the quotient of (i) the
principal amount of said investment divided by (ii) the aggregate
principal amount of all investments in the Pledged Account.”

 

(w)                               The definition of Security Agreement is
amended and restated in its entirety to read as follows:

 

“The
Security Agreement, dated as of March 10, 2003, among the Borrower, the
Subsidiary Guarantors from time to time party thereto, and FNBO, as the same
may be amended, modified, supplemented and restated from time to time.”

 

(x)                                   A new definition for the term “Weighted
Average Rate” is added to Article I, reading as follows:

 

“As of
any Adjustment Date, the product of (i) 1.25 multiplied by (ii) the
sum of the Weighted Average Returns for each investment in the Pledged Account.”

 

(y)                                 A new definition for the term “Weighted
Average Return” is added to Article I, reading as follows:

 

4

 

“As of
any Adjustment Date, for any investment in the Pledged Account, the product of (i) the
annualized rate of return for the investment, determined as of the most recent
Business Day immediately preceding the Adjustment Date on which such
information is available to FNBO (for purposes hereof, the “Calculation Date”),
multiplied by (ii) the Portfolio Concentration Factor for said
investment, determined as of said Calculation Date.”

 

1.2                                 Revolving Credit.  Section 2.1
of the Credit Agreement is hereby amended and restated in its entirety to read
as follows:

 

“Until the Termination
Date, FNBO agrees to advance funds for general corporate purposes to the
Borrower on a revolving credit basis up to the amount of the Commitment in
effect from time to time (the “Base Revolving Credit Facility”); provided,
however, that the aggregate amount of funds available for Advance to the
Borrower under the Base Revolving Credit Facility shall not exceed the
Availability.

 

In addition, until the
Interim Facility Termination Date, FNBO agrees to advance funds for general
corporate purposes to the Borrower on a revolving credit basis up to the amount
of the Interim Facility Commitment in effect from time to time (the “Interim
Revolving Credit Facility”); provided, however, that the
aggregate amount of funds available for Advance to the Borrower under the
Interim Revolving Credit Facility shall not exceed the Interim Facility
Availability.

 

The Borrower shall not be entitled to any further
Advances hereunder after the occurrence and during the continuation of any
Event of Default or Potential Event of Default, or if the Borrower’s
representations and warranties hereunder are not true and correct in all
material respects as of the time of the requested Advance.  Advances shall be made, on the terms and
conditions of this Agreement, upon the Borrower’s request.  Requests shall be made by 2:00 p.m.
Omaha time on the Business Day prior to the requested date of the Advance.  The Borrower’s obligation to make payments of
principal and interest on the foregoing revolving credit indebtedness shall be
further evidenced by the Notes.”

 

1.3                                 Revolving Credit Fees.  Section 2.2(a) of
the Credit Agreement is hereby amended by deleting “facility” in the second
line thereof and substituting “Base Revolving Credit Facility” in lieu thereof.

 

1.4                                 Interest on Revolving Credit.  Section 2.3
of the Credit Agreement is hereby amended and restated in its entirety to read
as follows:

 

“(a)                            Interest shall accrue on the Principal
Loan Amount outstanding from time to time under the Base Revolving Credit
Facility at a variable rate per annum (the “Revolving Credit Rate”) equal to
the Prime Rate plus one quarter of one percent (.25%).  Each change in the Prime Rate shall be
effective as of the opening of business on the day such change in the Prime
Rate occurs.  The parties hereto
acknowledge that the rate 

 

5

 

announced publicly by
FNBO as its Prime Rate is an index or base rate and shall not necessarily be
its lowest or best rate charged to its customers or other banks.

 

(b)                                 Interest shall accrue
on the principal amount outstanding from time to time under the Interim
Revolving Credit Facility at a variable rate per annum equal to the Weighted
Average Rate (the “Interim Revolving Credit Rate”).   The
Interim Revolving Credit Rate will be adjusted on Monday of each week (or, if
Monday is not a Business Day, the next Business Day) (the “Adjustment Date”)
and remain fixed until the next Adjustment Date.

 

(c)                                  All interest shall accrue based on a year
of 360 days, and for actual days elapsed. 
Interest for any month shall be due no later than the tenth day of the
following month.  Notwithstanding
anything to the contrary elsewhere herein, after an Event of Default has
occurred and is continuing, interest shall accrue on the entire outstanding
balance of principal and interest on all indebtedness hereunder at a
fluctuating rate per annum equal to the Default Rate.”

 

1.5                                 Payments.  Section 2.4
of the Credit Agreement is hereby amended and restated in its entirety to read
as follows:

 

“The aggregate principal balance
outstanding under the Base Revolving Credit Note together with all accrued but
unpaid interest thereon shall be due on the Termination Date.  The aggregate principal balance outstanding
under the Interim Revolving Credit Note together with all accrued but unpaid
interest thereon shall be due on the Interim Facility Termination Date.  All obligations of the Borrower under the
Notes and under the other Operative Documents shall be payable in immediately
available funds in lawful money of the United States of America at the
principal office of FNBO in Omaha, Nebraska or at such other address as may be
designated by FNBO in writing.  In the
event that a payment day is not a Business Day, the payment shall be due on the
next succeeding Business Day.”

 

1.6                                 Prepayments.  Section 2.5
of the Credit Agreement is hereby amended and restated in its entirety to read
as follows:

 

“The Borrower may at any time prepay, in whole or in part, amounts
outstanding under the Base Revolving Credit Note or the Interim Revolving Credit
Note if the Borrower has given FNBO at least one (1) Business Day (or, in
the case of payments under the Interim Revolving Credit Note, two (2) Business
Days) prior written notice of its intention to make such prepayment.  Any such prepayment may be made without
penalty.  No such prepayment shall reduce
the Base Revolving Credit Facility or the Interim Revolving Credit Facility.”

 

1.7                                 Security.  Section 2.6
of the Credit Agreement is hereby amended and restated in its enitrety to read
as follows:

 

“All obligations of the Borrower hereunder and under the Operative
Documents, including, without limitation, the Borrower’s obligations to make
payments of principal and interest on the Notes, and any and all obligations
outstanding under the Letter(s) of 

 

6

 

Credit, shall be
secured by a first security interest in the Collateral, as more specifically
described in the Security Agreement, the Pledge Agreement and the Control
Agreement, subject to liens permitted thereunder.”

 

1.8                                 Indebtedness.  Section 4.4
of the Credit Agreement is hereby amended by inserting “(excluding, for this
purpose, Indebtedness under the Interim Revolving Credit Facility)” following
the word “Indebtedness” in the third line thereof.

 

1.9                                 Remedies.  Section 6.2
of the Credit Agreement is hereby amended by deleting each reference to “Note”
and substituting in lieu thereof “Notes.”

 

1.10                           Participation; General Indemnity. 
Sections 7.10 and 7.11 of the Credit Agreement are each hereby amended
by deleting each reference therein to “the Note” and substituting in lieu
thereof “any Note.”

 

ARTICLE II

CLOSING CONDITIONS

 

2.1                                 Closing Conditions. 
This Amendment shall become effective upon satisfaction of the following
conditions precedent:

 

(a)                                  Executed Amendment. 
Receipt by FNBO of a copy of this Amendment duly executed by the
Borrower.

 

(b)                                 Interim Revolving Credit Note. 
Receipt by FNBO of an Interim Revolving Credit Note, in substantially
the form of Exhibit A hereto, duly executed by the Borrower.

 

(c)                                  Control Agreement. 
Receipt by FNBO of the Control Agreement, duly executed by the Borrower.

 

(d)                                 Reaffirmation. 
Receipt by FNBO of the Reaffirmation of Guaranty, in substantially the
form of Exhibit B hereto, duly executed by Strong Westrex, Inc.
(the “Reaffirmation”).

 

(e)                                  Joinder.  Receipt by
FNBO of a joinder agreement, in form and substance satisfactory to FNBO,
pursuant to which Strong Technical Services, Inc. and Strong Digital
Systems, Inc. (the “Additional Guarantors”) shall become party to the
Guarantor Documents (the “Joinder”).

 

(f)                                    Officer’s Certificates. 
Receipt by FNBO of a certificates of an officer of the Borrower and each
Guarantor (including each Additional Guarantor), certifying incumbency of
officers, authorized signatures, authorizing resolutions, organizational
documents and such other matters as FNBO shall reasonably request.

 

7

 

(g)                                 Good Standing Certificates. 
Receipt by FNBO of certificates of good standing of the Borrower and each
Guarantor (excluding good standing certificates for any Additional Guarantor,
which shall be delivered as set forth in Section 2.2), certified by the
appropriate governmental officer in the jurisdiction of incorporation of such
entity.

 

(h)                                 Other Fees and Expenses. 
The Borrower shall have reimbursed FNBO for all reasonable costs and
out-of-pocket expenses (including attorneys’ fees) paid or incurred by FNBO in
connection with the preparation, negotiation, execution and delivery of this
Amendment.

 

(i)                                     Other.  The Borrower
and the Guarantors shall have delivered such other documents as FNBO may
reasonably request.

 

2.2                                 Post-Closing Items. 
The Borrower shall deliver to FNBO the following within five (5) Business
Days of the date hereof:

 

(a)                                  Original stock certificates, evidencing
the capital stock of the Additional Guarantors, and any Subsidiaries of such
Additional Guarantors (including, without limitation, Marcel Desrochers, Inc.),
together with appropriate stock powers executed in blank, all of which shall be
held by FNBO as Collateral pursuant to the Pledge Agreement; provided, however,
that, at the option of FNBO, no more than sixty-five percent (65%) of the
capital stock of Strong Digital Systems, Inc. or Marcel Desrochers, Inc.
shall be pledged to FNBO pursuant to the foregoing sentence.

 

(b)                                 Good standing certificates (or their
equivalent) for each Additional Guarantor, certified by the appropriate
governmental officer in the jurisdiction of incorporation of such entity.

 

(c)                                  All additional items required to be
delivered pursuant to the terms of the Joinder.

 

The failure to
deliver the documentation required by this Section 2.2 within the
specified time period shall constitute an Event of Default under the Credit
Agreement.

 

ARTICLE III

MISCELLANEOUS

 

3.1                                 Amended Term. 
The term “Credit Agreement” as used in each of the Operative Documents
shall hereafter mean the Credit Agreement as amended by this Amendment.  Except as specifically amended or modified
hereby or otherwise agreed, the Credit Agreement is hereby ratified and
confirmed and shall remain in full force and effect according to its terms.

 

3.2                                 Reassertion of Representations and
Warranties; No Default.  The Borrower
hereby represents that on and as of the date hereof and after giving effect to
this Amendment (a) all of the representations and warranties contained in
the Credit Agreement are true, correct and complete in all respects as of the
date hereof as though  

 

8

 

made on and as of such date, except
for changes permitted by the terms of the Credit Agreement and (b) there
will exist no Event of Default under the Credit Agreement on such date which
has not been waived by FNBO.

 

3.3                                 Reaffirmation of Obligations. 
The Borrower hereby ratifies the Credit Agreement (as amended by this
Amendment) and acknowledges and reaffirms (a) that it is bound by all
terms of the Credit Agreement (as amended by this Amendment) applicable to it,
and (b) that each Operative Document to which it is party remains in full
force and effect.

 

3.4                                 Release of Guarantors. 
FNBO hereby releases Xenotech Rental Corp. and Xenotech Strong, Inc.
(the “Released Guarantors”) from their respective obligations under the
Guarantor Documents.  In connection with
said release, FNBO hereby authorizes the Borrower and the Released Guarantors
to file UCC termination statements with respect to the Collateral of the
Released Guarantors.  In addition, FNBO
agrees to return any original stock certificates issued by the Released
Guarantors that are now in the possession of FNBO, upon receipt of written
instructions from the Borrower.

 

3.5                                 Entirety.  This
Amendment, the Credit Agreement and the other Operative Documents embody the
entire agreement between the parties hereto and supersede all prior agreements
and understandings, oral or written, if any, relating to the subject matter
hereof.

 

3.6                                 Counterparts. 
This Amendment may be executed in counterparts, each of which shall
constitute an original, but all of which when taken together shall constitute
one and the same instrument.

 

3.7                                 Governing Law. 
THIS AMENDMENT SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE LAWS
OF THE STATE OF NEBRASKA APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED
ENTIRELY WITHIN THE STATE OF NEBRASKA. WHENEVER POSSIBLE EACH PROVISION OF THIS
AMENDMENT SHALL BE INTERPRETED IN SUCH MANNER AS TO BE EFFECTIVE AND VALID
UNDER APPLICABLE LAW, BUT IF ANY PROVISION OF THIS AMENDMENT SHALL BE
PROHIBITED BY OR INVALID UNDER APPLICABLE LAW, SUCH PROVISION SHALL BE
INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR INVALIDITY, WITHOUT
INVALIDATING THE REMAINDER OF SUCH PROVISION OR THE REMAINING PROVISIONS OF
THIS AMENDMENT. ALL OBLIGATIONS OF THE BORROWER AND RIGHTS OF FNBO EXPRESSED
HEREIN, IN THE CREDIT AGREEMENT OR IN ANY OTHER OPERATIVE DOCUMENT SHALL BE IN
ADDITION TO AND NOT IN LIMITATION OF THOSE PROVIDED BY APPLICABLE LAW.

 

3.8                                 Statutory Notice.  A CREDIT AGREEMENT MUST BE IN WRITING TO BE
ENFORCEABLE UNDER NEBRASKA LAW.  TO
PROTECT YOU AND US FROM ANY MISUNDERSTANDINGS OR DISAPPOINTMENTS, ANY CONTRACT,
PROMISE, UNDERTAKING, OR OFFER TO FOREBEAR REPAYMENT OF MONEY OR TO MAKE ANY
OTHER FINANCIAL ACCOMMODATION IN CONNECTION WITH THIS LOAN OF MONEY OR GRANT OR
EXTENSION OF CREDIT, OR ANY AMENDMENT OF, CANCELLATION OF, WAIVER OF, OR
SUBSTITUTION FOR ANY OR ALL OF THE 

 

9

 

TERMS OR PROVISIONS OF ANY
INSTRUMENT OR DOCUMENT EXECUTED IN CONNECTION WITH THIS LOAN OF MONEY OR GRANT
OR EXTENSION OF CREDIT, MUST BE IN WRITING TO BE EFFECTIVE.

 

 

[remainder of page intentionally
left blank; signature page follows]

 

 

 

 

 

 

 

10

 

IN WITNESS WHEREOF, the
Borrower and FNBO have caused this Seventh Amendment to be executed as of the
day and year first above written.

 

 

	
   

  	
  FIRST NATIONAL BANK OF
  OMAHA

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Marc T. Wisdom

  
	
   

  	
  Name: Marc T. Wisdom

  
	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BORROWER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BALLANTYNE OF OMAHA,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Christopher
  Stark

  
	
   

  	
  Name: Christopher Stark

  
	
   

  	
  Title: VP Operations

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00140-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00140-of-00352.parquet"}]]