EXHIBIT E
February 16, 1989
Xx. Xxxxxxx Xxxx
Dear Xxxxxxx:
The proposed agreement of limited partnership for the Edge Holding
Company Partnership is likely to contain a clause (paragraph 8.3) granting to
the general partner a 30% interest in profits, losses, distributions, and
deductions after payout has been reached under the limited partnership agreement
(the "Reversionary Interest"). As I have advised you, the General Partner will
probably not take the full 30% reversionary interest on certain investors-
particularly Xxxxx Xxxxxx and certain investors associated with him. There may
be additional concessions and negotiations which I make with other investors,
although I do not plan any at this time.
I have made the following commitment to you with respect to the General
Partner's Reversionary Interest which commitment is conditioned upon your
agreeing to remain and remaining in the employ of Edge Petroleum Corporation and
Edge Petroleum Partnership through July 31, 1992. Subject to your continuing in
the employ of Edge Petroleum Corporation and Edge Petroleum Partnership through
July 31, 1992, at such time as the Reversionary Interest becomes effective, I
will sub-allocate to you, subject to losses and liabilities, 8% of the
distributions that I receive pursuant to the General Partners' 30% Reversionary
Interest. There shall, however, be excluded any amounts which I receive under
such Reversionary Interest resulting from my own purchase of units in the Edge
Holding Company Limited Partnership and any sums which I receive pursuant to all
or any portion of the Reversionary Interest attributable to the investment by
Xxxxx Xxxxxx or other persons with whom I make special contractual arrangements
relating to their purchase of limited partnership units.
Xx. Xxxxxxx Xxxx
February 16, 1989
Page 2
For example, assuming that I receive in a calendar year distributions of
$30,000 as a result of the General Partners Reversionary Interest in the Edge
Holding Company Partnership. Of that $15,000, assume further that $10,000 was
attributable to units purchased by Xxxxx Xxxxxx or other persons with whom I
made contractual arrangement and an additional $5,000 was attributable to units
that I invested, either personally or pursuant to an entity affiliated with me,
in the Edge Holding Company Partnership. Under those circumstances, you would be
entitled to 8% of $30,000 less the $15,000 or $1,650.
The will also confirm that there will not be more than 87 units with
respect to which I make special contractual arrangements and/or which I purchase
myself.
This letter relates only to the Reversionary Interest under 8.3 of the
proposed Limited Partnership Agreement and not to any other compensation, fees,
or rights under the Limited Partnership Agreement.
Under this letter, you will be entitled to receive a percentage of funds
that I receive attributable only to my reversionary interest in the partnership
under 8.3 and you will not have any right to claim that I am entitled to receive
funds from the partnership but have not received them. In other words, you will
not be able to assert any claim that I have failed to exercise my rights under
the Partnership Agreement or that I have failed to accept funds from the
Partnership which I was entitled to receive, but only to receive a percentage
based on my actual receipt of funds. If I elect not to make distributions for
any reason, you will not be able to assert a claim, based on the fact of such
non-distribution.
Please confirm that the foregoing confirms the agreement reached by
signing and returning to me the enclosed copy of this letter.
Sincerely,
/s/ XXXX XXXXXXXXX
Xxxx Xxxxxxxxx
/s/ XXXXXXX XXXX
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