Exhibit 10.1
 
EXECUTION FORM
 
 

CREDIT AGREEMENT

dated as of

November 18, 2009

among

PENN VIRGINIA HOLDING CORP.,
as Borrower

PENN VIRGINIA CORPORATION,
as Parent

The Lenders Party Hereto

and

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
as Administrative Agent and Issuing Bank

and

WELLS FARGO BANK, N.A., and BANK OF AMERICA, N.A.,
as Co-Syndication Agents

And

ROYAL BANK OF CANADA and BNP PARIBAS,
as Co-Documentation Agents,
 

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J.P. MORGAN SECURITIES INC.,
as Sole Bookrunner and Sole Arranger
 
 

 
 

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CONTENTS
 

Clause
Subject Matter
 
Page
            ARTICLE I
Definitions
    1                  
Section 1.01.
Defined Terms
    1                  
Section 1.02.
Classification of Loans and Borrowings
    24                  
Section 1.03.
Terms Generally
    25                  
Section 1.04.
Accounting Terms; GAAP
    25                 ARTICLE II
The Credits
    25                  
Section 2.01.
Commitments
    25                  
Section 2.02.
Loans and Borrowings
    25                  
Section 2.03.
Requests for Borrowings
    26                  
Section 2.04.
Borrowing Base
    27                  
Section 2.05.
Increase in Aggregate Commitment Amount
    28                  
Section 2.06.
Letters of Credit
    30                  
Section 2.07.
Funding of Borrowings
    34                  
Section 2.08.
Interest Elections
    35                  
Section 2.09.
Termination and Reduction of Commitments
    36                  
Section 2.10.
Repayment of Loans; Evidence of Debt
    36                  
Section 2.11.
Prepayment of Loans
    37                  
Section 2.12.
Fees
    38                  
Section 2.13.
Interest
    39                  
Section 2.14.
Alternate Rate of Interest
    40                  
Section 2.15.
Increased Costs
    41                  
Section 2.16.
Break Funding Payments
    42                  
Section 2.17.
Taxes
    42                  
Section 2.18.
Payments Generally; Pro Rata Treatment; Sharing of Set-offs
    43                  
Section 2.19.
Mitigation Obligations; Replacement of Lenders
    45  

 
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CONTENTS
 

Clause
Subject Matter
 
Page
             
Section 2.20.
Defaulting Lenders
    46                 ARTICLE III
Representations and Warranties
    47                  
Section 3.01.
Existence; Organization; Powers
    47                  
Section 3.02.
Authorization; Enforceability
    47                  
Section 3.03.
Governmental Approvals; No Conflicts
    48                  
Section 3.04.
Financial Condition; No Material Adverse Change
    48                  
Section 3.05.
Properties.
    49                  
Section 3.06.
Litigation and Environmental Matters
    49                  
Section 3.07.
Compliance with Laws and Agreements
    51                  
Section 3.08.
Investment Company Status
    51                  
Section 3.09.
Taxes
    51                  
Section 3.10.
ERISA
    51                  
Section 3.11.
Disclosure
    52                  
Section 3.12.
Use of Loans and Letters of Credit
    52                  
Section 3.13.
Subsidiaries
    52                  
Section 3.14.
Jurisdiction of Incorporation or Organization
    52                  
Section 3.15.
Maintenance of Properties
    53                  
Section 3.16.
Insurance
    53                  
Section 3.17.
Gas Imbalances, Prepayments
    53                  
Section 3.18.
Marketing of Production
    53                  
Section 3.19.
Hedging Transactions
    54                  
Section 3.20.
Restriction on Liens
    54                  
Section 3.21.
Intellectual Property
    54                  
Section 3.22.
Material Personal Property
    54                  
Section 3.23.
Business
    54  

 
-ii-

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CONTENTS
 

Clause
Subject Matter
 
Page
             
Section 3.24.
Solvency
    54                  
Section 3.25.
Licenses, Permits, Etc
    55                  
Section 3.26.
Fiscal Year
    55                  
Section 3.27.
Seniority Designation
    55                 ARTICLE IV
Conditions
    55                  
Section 4.01.
Effective Date
    55                  
Section 4.02.
Each Credit Event
    58                 ARTICLE V
Affirmative Covenants
    59                  
Section 5.01.
Financial Statements; Other Information
    59                  
Section 5.02.
Notices of Material Events
    61                  
Section 5.03.
Existence; Conduct of Business
    62                  
Section 5.04.
Payment of Obligations, Taxes and Material Claims
    63                  
Section 5.05.
Maintenance of Properties; Insurance.
    63                  
Section 5.06.
Books and Records; Inspection Rights
    64                  
Section 5.07.
Compliance with Laws
    64                  
Section 5.08.
Use of Proceeds and Letters of Credit
    64                  
Section 5.09.
Environmental Matters
    65                  
Section 5.10.
Further Assurances
    65                  
Section 5.11.
Reserve Reports
    66                  
Section 5.12.
Title Information
    66                  
Section 5.13.
Additional Collateral; Additional Guarantors
    67                  
Section 5.14.
ERISA Information and Compliance
    68                  
Section 5.15.
Business of the Borrower
    68                  
Section 5.16.
Permits, Licenses
    69                  
Section 5.17.
Swap Agreement Termination
    69  

 
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CONTENTS
 

Clause
Subject Matter
 
Page
             
Section 5.18.
Restricted Subsidiaries
    69                  
Section 5.19.
Agreements Respecting Unrestricted Subsidiaries
    69                  
Section 5.20.
Additional Covenants Upon Issuance of Unsecured Notes
    69                  
Section 5.21.
Certain Post-Effective Date Matters
    70                 ARTICLE VI
Negative Covenants
    70                  
Section 6.01.
Indebtedness
    71                  
Section 6.02.
Liens
    72                  
Section 6.03.
Fundamental Changes
    73                  
Section 6.04.
Investments, Loans and Advances
    73                  
Section 6.05.
Hedging Transactions
    74                  
Section 6.06.
Restricted Payments
    75                  
Section 6.07.
Transactions with Affiliates
    75                  
Section 6.08.
Restrictive Agreements
    75                  
Section 6.09.
Financial Covenants
    76                  
Section 6.10.
Designation and Conversion of Restricted and Unrestricted Subsidiaries;
Indebtedness of Unrestricted Subsidiaries
    76                  
Section 6.11.
Proceeds of Loans
    77                  
Section 6.12.
ERISA Compliance
    77                  
Section 6.13.
Sale of Properties
    78                  
Section 6.14.
Environmental Matters
    78                  
Section 6.15.
Subsidiaries
    78                  
Section 6.16.
Gas Imbalances, Take-or-Pay or Other Prepayments
    79                  
Section 6.17.
Fiscal Year; Fiscal Quarter
    79                  
Section 6.18.
Repayment of Unsecured Notes; Amendment of Unsecured Notes Documents
    79                  
Section 6.19.
Marketing Activities
    80  

 
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CONTENTS
 

Clause
Subject Matter
 
Page
             
Section 6.20.
Sale or Discount of Receivables
    80                 ARTICLE VII
Events of Default; Remedies; Application of Proceeds
    80                  
Section 7.01.
If any of the following events (“Events of Default”) shall occur:
    80                  
Section 7.02.
Application of Payments
    82                 ARTICLE VIII
The Administrative Agent
    83                  
Section 8.01.
Appointment; Powers
    83                  
Section 8.02.
Agents as Lenders
    83                  
Section 8.03.
Duties and Obligations of Administrative Agent
    84                  
Section 8.04.
Reliance by Administrative Agent
    84                  
Section 8.05.
Subagents
    84                  
Section 8.06.
Resignation or Removal of Administrative Agent
    85                  
Section 8.07.
No Reliance
    85                  
Section 8.08.
Administrative Agent May File Proofs of Claim
    85                  
Section 8.09.
Authority of Administrative Agent to Execute Collateral Documents and Release
Collateral and Liens
    86                  
Section 8.10.
The Arranger, the Co-Syndication Agents and the Co-Documentation Agents
    86                 ARTICLE IX
Miscellaneous
    87                  
Section 9.01.
Notices
    87                  
Section 9.02.
Waivers; Amendments
    88                  
Section 9.03.
Expenses; Indemnity; Damage Waiver
    89                  
Section 9.04.
Successors and Assigns
    90                  
Section 9.05.
Survival
    93                  
Section 9.06.
Counterparts; Integration; Effectiveness
    94                  
Section 9.07.
Severability
    94                  
Section 9.08.
Right of Setoff
    94  

 
-v-

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CONTENTS
 

Clause
Subject Matter
 
Page
             
Section 9.09.
Governing Law; Jurisdiction; Consent to Service of Process
    94                  
Section 9.10.
WAIVER OF JURY TRIAL
    95                  
Section 9.11.
Headings
    95                  
Section 9.12.
Confidentiality
    95                  
Section 9.13.
Interest Rate Limitation
    97                  
Section 9.14.
Collateral Matters; Lender Party Swap Agreements and Lender Party Financial
Service Products
    97                  
Section 9.15.
No Third Party Beneficiaries
    98                  
Section 9.16.
USA PATRIOT Act
    98                  
Section 9.17.
NO ORAL AGREEMENTS
    98  

 
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SCHEDULES:
 
Schedule 2.01 – Commitments
Schedule 2.06(k) – Existing Letters of Credit
Schedule 3.06 – Litigation
Schedule 3.13 – Subsidiaries
Schedule 3.17 – Gas Imbalances
Schedule 3.18 –Marketing Contracts
Schedule 3.19 – Swap Agreements
Schedule 4.01(m) – Certain Unrestricted Subsidiaries
Schedule 6.01(b) – Outstanding Unsecured Notes
Schedule 6.01(c) – Existing Indebtedness
Schedule 6.02 – Existing Liens
Schedule 6.04 – Investments
Schedule 6.08 – Existing Restrictions

EXHIBITS:
 
Exhibit A – Form of Assignment and Assumption
Exhibit B – Additional Lender Agreement
Exhibit C – Compliance Certificate
Exhibit D – Form of Subordination Agreement

 

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This CREDIT AGREEMENT dated as of November 18, 2009, among PENN VIRGINIA
HOLDING CORP., as Borrower, PENN VIRGINIA CORPORATION, as Parent, LENDERS party
hereto, and JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as Administrative Agent.
 
The parties hereto agree as follows:
 
ARTICLE I
 
Definitions
 
SECTION 1.01.  Defined Terms.  As used in this Agreement, the following terms
have the meanings specified below:
 
“2007 Convertible Notes” means those certain 4½% convertible senior subordinated
notes due November 15, 2012, issued by the Parent in an aggregate principal
amount of $230,000,000 on the date of issuance thereof.
 
“2007 Convertible Notes Indenture” means collectively, that certain indenture
dated as of December 5, 2007, by and among the Parent, as issuer, and Wells
Fargo Bank, National Association, as trustee, and certain of its affiliates,
that certain first supplemental indenture dated as of December 5, 2007, between
the Parent and Wells Fargo Bank, National Association, as trustee, and related
documentation entered into in connection therewith, pursuant to which the 2007
Convertible Notes have been issued, as the same may be amended, restated,
modified or supplemented from time to time.
 
“ABR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.
 
“Additional Lender Agreement” shall have the meaning assigned to such term in
Section 2.05(b).
 
“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.
 
“Administrative Agent” means JPMorgan Chase Bank, N.A., in its capacity as
administrative agent for the Lenders hereunder, pursuant to Article VIII (and
not in its individual capacity as a Lender), together with any successor agent
appointed pursuant to Article VIII.
 
“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

 

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“Advance Payment Contract” means (a) any production payment (whether volumetric
or dollar denominated) granted or sold by any Credit Party payable from a
specified share of proceeds received from production from specified Oil and Gas
Properties, together with all undertakings and obligations in connection
therewith, or (b) any contract whereby any Credit Party receives or becomes
entitled to receive (either directly or indirectly) any payment (an “Advance
Payment”) as consideration for (i) Hydrocarbons produced or to be produced from
Oil and Gas Properties owned by any Credit Party in advance of the delivery of
such Hydrocarbons (and regardless of whether such Hydrocarbons are actually
produced or actual delivery is required) to or for the account of the purchaser
thereof or (ii) a right or option to receive such Hydrocarbons (or a cash
payment in lieu of such Hydrocarbons); provided that inclusion of customary and
standard “take or pay” provisions in any gas sales or purchase contract or any
other similar contract shall not, in and of itself, cause such gas sales or
purchase contract to constitute an Advance Payment Contract for the purposes of
this definition.
 
“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
 
“Aggregate Commitment Amount” means the aggregate of the Commitment Amounts of
all the Lenders, as increased or reduced from time to time pursuant to the terms
hereof; provided that the Aggregate Commitment Amount shall not at any time
exceed the Maximum Facility Amount.
 
“Agreement” means this Credit Agreement, as it may be amended, restated,
supplemented or otherwise modified and in effect from time to time.
 
“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective
Rate in effect on such day plus ½ of 1% and (c) the Adjusted LIBO Rate for a one
month Interest Period on such day (or if such day is not a Business Day, the
immediately preceding Business Day) plus 1%, provided that, for the avoidance of
doubt, the Adjusted LIBO Rate for any day shall be based on the rate appearing
on the Reuters Screen LIBOR01 Page (or on any successor or substitute page) at
approximately 11:00 a.m. London time on such day (without any rounding).  Any
change in the Alternate Base Rate due to a change in the Prime Rate, the Federal
Funds Effective Rate or the Adjusted LIBO Rate shall be effective from and
including the effective date of such change in the Prime Rate, the Federal Funds
Effective Rate or the Adjusted LIBO Rate, respectively.
 
“Applicable Percentage” means, with respect to any Lender, the percentage of the
Aggregate Commitment Amount represented by such Lender’s Commitment Amount;
provided that for purposes of Section 2.20 when a Defaulting Lender shall exist,
“Applicable Percentage” shall mean the percentage of the Aggregate Commitment
Amount (disregarding any Defaulting Lender’s Commitment Amount) represented by
such Lender’s Commitment Amount.  If the Commitments have terminated or expired,
the Applicable Percentages shall be determined based upon the Commitment Amounts
most recently in effect, giving effect to any assignments and to any Lender’s
status as a Defaulting Lender at the time of determination.
 
“Applicable Rate” means, for any day, with respect to any ABR Loan or Eurodollar
Loan, or with respect to the Unused Commitment Fees payable hereunder, as the
case may be, the applicable rate per annum set forth below under the caption
“ABR Spread”, “Eurodollar Spread” or “Unused Commitment Fee Rate”, as the case
may be, based upon the Borrowing Base Usage applicable on such date:

 
2

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Borrowing Base Usage:
 
ABR
Spread
   
Eurodollar
Spread
   
Unused
Commitment Fee
Rate
 
Equal to or greater than 90%
    2.000 %     3.000 %     0.500 %                          
Equal to or greater than 75%, but less than 90%
    1.750 %     2.750 %     0.500 %                          
Equal to or greater than 50%, but less than 75%
    1.500 %     2.500 %     0.500 %                          
Equal to or greater than 25% but less than 50%
    1.250 %     2.250 %     0.500 %                          
Less than 25%
    1.000 %     2.000 %     0.500 %

Each change in the Applicable Rate shall apply during the period commencing on
the effective date of such change and ending on the date immediately preceding
the effective date of the next such change.
 
“Approved Counterparty” means, at any time and from time to time, (i) any Person
engaged in the business of entering into Swap Agreements for commodity, interest
rate or currency risk that has (or the credit support provider of such Person
has), at the time the Parent, the Borrower or any Restricted Subsidiary enters
into a Swap Agreement with such Person, a long term senior unsecured debt credit
rating of “A-” or better from S&P, (ii) any Lender or Affiliate of a Lender or
(iii) any other Person designated by the Parent or the Borrower that is
acceptable to the Administrative Agent.
 
“Approved Fund” means any Person (other than a natural person) that is engaged
in making, purchasing, holding or investing in bank loans and similar extensions
of credit in the ordinary course of its business and that is administered or
managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.
 
“Approved Petroleum Engineers” means any of Wright & Company, Inc., Ryder Scott
Company, Netherland Sewell & Associates, Inc., and Miller and Lentz, Ltd., or
such other reputable firm(s) of independent petroleum engineers as shall be
approved by the Majority Lenders.
 
“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 9.04), and accepted by the Administrative Agent, in the form of
Exhibit A or any other form approved by the Administrative Agent.

 
3

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“Authorized Officer” means, as to any Person, the chief executive officer, the
president, the chief financial officer, or any vice president of such
Person.  Unless otherwise specified, all references to an Authorized Officer
herein shall mean an Authorized Officer of the Parent.
 
“Availability Period” means the period from and including the Effective Date to
but excluding the earlier of the Maturity Date and the date of termination of
the Commitments.
 
“Board” means the Board of Governors of the Federal Reserve System of the United
States of America.
 
“Borrower” means Penn Virginia Holding Corp., a Delaware corporation.
 
“Borrowing” means Loans of the same Type, made, converted or continued on the
same date and, in the case of Eurodollar Loans, as to which a single Interest
Period is in effect.
 
“Borrowing Base” means at any time an amount equal to the amount determined in
accordance with Section 2.04.
 
“Borrowing Base Deficiency” means, as of any date, the amount, if any, by which
the Credit Exposure on such date exceeds the Borrowing Base in effect on such
date; provided that, for purposes of determining the existence and amount of any
Borrowing Base Deficiency, obligations under any Letter of Credit will not be
deemed to be outstanding to the extent such obligations are secured by cash in
the manner contemplated by Section 2.06(j).
 
“Borrowing Base Properties” means all proved Oil and Gas Properties of the
Borrower and the Guarantors located in the United States included in the most
recently delivered Reserve Report and evaluated by the Administrative Agent and
the Lenders for purposes of establishing the Borrowing Base.
 
“Borrowing Base Usage” means, as of any date and for all purposes, the quotient,
expressed as a percentage, of (i) the Credit Exposure as of such date, divided
by (ii) the lesser of (A) the Aggregate Commitment Amount as of such date and
(B) the Borrowing Base in effect on such date.
 
“Borrowing Request” means a request by the Borrower for a Borrowing in
accordance with Section 2.03.
 
“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in Chicago, Illinois or New York, New York are authorized
or required by law to remain closed; provided that, when used in connection with
a Eurodollar Loan, the term “Business Day” shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.
 
“Call Spread Transaction” means, collectively, that certain transaction entered
into by the Parent in connection with the issuance of the 2007 Convertible Notes
pursuant to which (i) the Parent purchased for cash one or more call options
from one or more Persons (including one or more Lenders or Affiliates of
Lenders) with respect to a specified number of shares of the Parent’s issued and
outstanding capital stock determined based on the aggregate principal amount of
the 2007 Convertible Notes at a strike price approximately equal to the
conversion price of the 2007 Convertible Notes and (ii) the Parent concurrently
sold one or more warrants to one or more Person (including one or more Lenders
or Affiliates of Lenders) with respect to a specified number of shares of the
Parent’s issued and outstanding capital stock determined based on the aggregate
principal amount of the 2007 Convertible Notes at a strike price in excess of
the conversion price.

 
4

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“Capital Lease” of any Person means any lease of Property by such Person, as
lessee, that would be capitalized on a balance sheet of such Person prepared in
accordance with GAAP.
 
“Capital Lease Obligations” of any Person means the amount of the obligations of
such Person under any Capital Lease, which obligations are required to be
classified and accounted for as capital leases on a balance sheet of such Person
under GAAP, and the amount of such obligations shall be the capitalized amount
thereof determined in accordance with GAAP.
 
“Casualty Event” means any loss, casualty or other insured damage to, or any
taking under power of eminent domain or by condemnation or similar proceeding
of, any Property or asset of the Parent, the Borrower or any Restricted
Subsidiary that was included in the most recent Reserve Report having a Fair
Market Value in excess of $10,000,000.
 
“Change in Control” means (a) any Person or two or more Persons acting as a
group (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934)
shall have acquired beneficial ownership (within the meaning of Rule 13d-3 of
the SEC under the Securities Exchange Act of 1934) of 35% or more of the
outstanding shares of voting stock of the Parent; (b) individuals who, as of the
Effective Date, constitute the Board of Directors of the Parent (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board of
Directors of the Parent; provided, however, that any individual becoming a
director of the Parent subsequent to the date hereof whose election, or
nomination for election by the Parent’s shareholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent Board, shall
be considered as though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of either an actual or threatened election contest (as
such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Securities Exchange Act of 1934) or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board of
Directors of the Parent; or (c) less than 100% of the Equity Interests of the
Borrower are owned directly or indirectly by the Parent.
 
“Change in Law” means (a) the adoption of any law, rule or regulation after the
date of this Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement or (c) compliance by any Lender or the Issuing Bank (or,
for purposes of Section 2.15, by any lending office of such Lender or by such
Lender’s or the Issuing Bank’s holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
 
“Charges” has the meaning assigned to such term in Section 9.13.

 
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“Code” means the Internal Revenue Code of 1986, as amended from time to time.
 
“Collateral” means any and all “Mortgaged Property” and “Collateral”, as defined
in any Collateral Document.
 
“Collateral Documents” means the Guaranty, the Pledge Agreement, the Mortgages,
and any and all other agreements, documents or instruments now or hereafter
executed and delivered by the Parent, the Borrower or any other Person
(including participation or similar agreements between any Lender and any other
lender or creditor with respect to any Secured Obligation pursuant to this
Agreement) in connection with, or as security for the payment or performance of
the Secured Obligations, as such agreements, documents or instruments may be
amended, supplemented or restated from time to time.
 
“Commitment” means, with respect to each Lender, the commitment of such Lender
to make Loans and to acquire participations in Letters of Credit hereunder,
expressed as an amount representing the maximum aggregate amount of such
Lender’s Credit Exposure hereunder; provided that such Lender’s Commitment (and
such Lender’s Credit Exposure) shall never exceed the least of (x) such Lender’s
Commitment Amount, (y) such Lender’s Applicable Percentage of the Borrowing Base
then in effect and (z) such Lender’s Applicable Percentage of the Aggregate
Commitment Amount, in each case, as such amounts may be adjusted from time to
time in accordance with this Agreement.
 
“Commitment Amount” means, with respect to each Lender, as applicable, the
amount set forth opposite such Lender’s name on Schedule 2.01 (including any
revision thereof in accordance with Section 2.05) or in the Assignment and
Assumption pursuant to which such Lender shall have assumed its Commitment (or
as set forth opposite such Lender’s name on Schedule 2.01, plus (minus) any
amounts assumed (assigned) pursuant to an Assignment and Assumption).  The
initial amount of each Lender’s Commitment Amount as of the Effective Date is
set forth on Schedule 2.01.
 
“Consolidated Current Assets” means with respect to the Parent and the
Restricted Subsidiaries, for any period, the consolidated current assets of the
Parent and the Restricted Subsidiaries; provided that Consolidated Current
Assets shall (i) include the unused amount of the total Commitments and (ii)
exclude any non-cash assets in respect of any Swap Agreement.
 
“Consolidated Current Liabilities” means with respect to the Parent and the
Restricted Subsidiaries, for any period, the consolidated current liabilities of
the Parent and the Restricted Subsidiaries; provided that Consolidated Current
Liabilities shall exclude (i) any non-cash liabilities or obligations in respect
of any Swap Agreement and (ii) current maturities under this Agreement and the
2007 Convertible Notes.

 
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“Consolidated Net Income” means with respect to the Parent and the Restricted
Subsidiaries, for any period, the aggregate of the net income (or loss) of the
Parent and the Restricted Subsidiaries after allowances for taxes for such
period determined on a consolidated basis in accordance with GAAP; provided that
there shall be excluded from such net income (to the extent otherwise included
therein) the following:  (i) the net income of any Person in which the Parent or
any Restricted Subsidiary has an interest (which interest does not cause the net
income of such other Person to be consolidated with the net income of the Parent
and the Restricted Subsidiaries in accordance with GAAP), except to the extent
of the amount of dividends or distributions actually paid in such period by such
other Person to the Parent or to a Restricted Subsidiary, as the case may be;
(ii) the net income (but not loss) during such period of any Restricted
Subsidiary to the extent that the declaration or payment of dividends or similar
distributions or transfers or loans by such Restricted Subsidiary is not at the
time permitted by operation of the terms of its charter or any agreement,
instrument or Governmental Requirement applicable to such Restricted Subsidiary
or is otherwise restricted or prohibited, in each case determined in accordance
with GAAP; (iii) the net income (or loss) of any Person acquired in a
pooling-of-interests transaction for any period prior to the date of such
transaction; (iv) any extraordinary gains or losses during such period,
including gains or losses attributable to (A) Property sales and (B) stock or
other equity purchases or divestitures; (v) any non-cash charges or losses and
any non-cash income or gains in respect of any Swap Agreement; and (vi) the
cumulative effect of a change in accounting principles and any gains or losses
attributable to writeups or writedowns of assets; and provided that if the
Parent or any Restricted Subsidiary shall acquire or dispose of any Property or
stock or other equity interests during such period or a Subsidiary shall be
redesignated pursuant to the terms of this Agreement as either an Unrestricted
Subsidiary or a Restricted Subsidiary, then, upon delivery to the Administrative
Agent of audited or reviewed financial statements or other financial statements
acceptable to the Administrative Agent that support a recalculation,
Consolidated Net Income shall be calculated after giving pro forma effect to
such acquisition, disposition or redesignation, as if such acquisition,
disposition or redesignation had occurred on the first day of such period.
 
“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or
otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.
 
“Credit Exposure” means, at any time, the sum of the outstanding principal
amount of the Loans of all Lenders as of such date, plus the aggregate LC
Exposure of all Lenders as of such date.
 
“Credit Party” means any of the Borrower, the Parent or any other Guarantor;
“Credit Parties” means, collectively, all of the Borrower, the Parent and each
other Guarantor.
 
“Default” means any event or condition that constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.
 
“Default Rate” has the meaning assigned to such term in Section 2.13(c).

 
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“Defaulting Lender” means any Lender that has, as determined by the
Administrative Agent, (a) failed to fund any portion of its Loans or
participations in Letters of Credit within three Business Days of the date
required to be funded by it hereunder, (b) notified the Parent, the Borrower,
the Administrative Agent, the Issuing Bank or any Lender in writing that it does
not intend to comply with any of its funding obligations under this Agreement or
has made a public statement to the effect that it does not intend to comply with
its funding obligations under this Agreement or under other agreements in which
it commits to extend credit, (c) failed, within three Business Days after
request by the Administrative Agent, to confirm that it will comply with the
terms of this Agreement relating to its obligations to fund prospective Loans
and participations in then outstanding Letters of Credit, (d) otherwise failed
to pay over to the Administrative Agent or any other Lender any other amount
required to be paid by it hereunder within three Business Days of the date when
due, unless the subject of a good faith dispute, or (e) (i) become or is
insolvent or has a parent company that has become or is insolvent or (ii) become
the subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee, administrator, assignee for the benefit of creditors or
similar Person charged with reorganization or liquidation of its business or
custodian, appointed for it, or has taken any action in furtherance of, or
indicating its consent to, approval of or acquiescence in any such proceeding or
appointment or has a parent company that has become the subject of a bankruptcy
or insolvency proceeding, or has had a receiver, conservator, trustee,
administrator, assignee for the benefit of creditors or similar Person charged
with reorganization or liquidation of its business or custodian appointed for
it, or has taken any action in furtherance of, or indicating its consent to,
approval of or acquiescence in any such proceeding or appointment.
 
“Disqualified Stock” means any Equity Interest that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable) or upon the happening of any event, matures or is mandatorily
redeemable (other than in connection with a change of control or an asset sale
(provided that such maturity or mandatory redemption resulting from such asset
sale is subject to any mandatory prepayments and commitment reductions required
hereunder or in accordance herewith)) for any consideration other than Equity
Interests (other than Disqualified Stock), pursuant to a sinking fund obligation
or otherwise, or is convertible or exchangeable for Indebtedness or redeemable
(other than in connection with a change of control or an asset sale (provided
that such maturity or mandatory redemption resulting from such asset sale is
subject to any mandatory prepayments and commitment reductions required
hereunder or in accordance herewith)) for any consideration other than Equity
Interests (other than Disqualified Stock) at the option of the holder thereof,
in whole or in part, on or prior to the date that is 91 days after the earlier
of (a) the Maturity Date and (b) the date on which there are no Loans, LC
Exposure or other obligations hereunder outstanding and all of the Commitments
are terminated.
 
“dollars” or “$” refers to lawful money of the United States of America.
 
“Domestic Subsidiary” means any Restricted Subsidiary organized under the laws
of any jurisdiction within the United States of America (including territories
thereof).
 
“EBITDAX” means, for any period, the sum of Consolidated Net Income for such
period, plus, to the extent deducted from Consolidated Net Income in such
period, the sum (determined without duplication) of the aggregate amount of
interest expense paid (or payable) in cash during such period on Indebtedness of
the Parent and the Restricted Subsidiaries (including the interest portion of
payments under Capital Leases and Synthetic Leases), taxes, depreciation,
depletion, amortization expenses, exploration expenses, impairments, other
noncash charges or losses and the amount of cash dividends and distributions
paid by the MLPs (directly or indirectly through any Unrestricted Subsidiaries)
to the Parent, the Borrower or any Restricted Subsidiary, minus, to the extent
included in Consolidated Net Income in such period, any noncash income included
in Consolidated Net Income.

 
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“Effective Date” means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
 
“Environmental Laws” means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, release or threatened release of any Hazardous Material or health
and safety matters.
 
“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Parent or any of its Subsidiaries directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
 
“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
equity interest.
 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.
 
“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with the Borrower, the Parent or any other Guarantor, is treated
as a single employer under Section 414(b) or (c) of the Code or, solely for
purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a
single employer under Section 414 of the Code.
 
“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Parent or any ERISA Affiliate of any liability
under Title IV of ERISA with respect to the termination of any Plan; (e) the
receipt by the Parent or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Parent or any ERISA Affiliate of any liability with respect to the withdrawal or
partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by
the Parent or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from the Parent or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.

 
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“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Adjusted LIBO Rate.
 
“Event of Default” has the meaning assigned to such term in Section 7.01.
 
“Excluded Taxes” means, with respect to the Administrative Agent, any Lender,
the Issuing Bank or any other recipient of any payment to be made by or on
account of any obligation of the Borrower or any other Credit Party hereunder or
under any Loan Document, (a) income or franchise taxes imposed on (or measured
by) its net income by the United States of America, or by the jurisdiction under
the laws of which such recipient is organized or in which its principal office
is located or, in the case of any Lender, in which its applicable lending office
is located, (b) any branch profits taxes imposed by the United States of America
or any similar tax imposed by any other jurisdiction in which the Borrower is
located and (c) in the case of a Foreign Lender (other than an assignee pursuant
to a request by the Borrower under Section 2.19(b)), any withholding tax that is
imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement (or designates a new lending office) or
is attributable to such Foreign Lender’s failure to comply with Section 2.17(e),
except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new lending office (or assignment), to
receive additional amounts from the Borrower with respect to such withholding
tax pursuant to Section 2.17(a).
 
“Existing Credit Facility” means that certain Amended and Restated Credit
Agreement dated as of December 4, 2003, among Parent, as borrower, JPMorgan
Chase Bank, N.A., successor by merger to Bank One, N.A. (Main Office Chicago),
as administrative agent, and lenders party thereto, as amended, supplemented,
restated or otherwise modified.
 
“Existing Letters of Credit” means each letter of credit issued and outstanding
on the Effective Date set forth on Schedule 2.06(k).
 
“Fair Market Value” means, with respect to any Property, the cash value that a
Person that is not an Affiliate of the Parent would pay in an arms-length
transaction to purchase the specified Property.
 
“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.
 
“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located.  For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.

 
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“GAAP” means generally accepted accounting principles in the United States of
America.
 
“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.
 
“Governmental Requirement” means any law, statute, code, ordinance, order,
determination, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate, license, authorization or other directive or requirement,
including, without limitation, Environmental Laws, energy regulations and
occupational, safety and health standards or controls, of any Governmental
Authority.
 
“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.
 
“Guarantor” means each of the Parent, PVA Oil & Gas, PVA Texas, PVMC and each
other Restricted Subsidiary that executes the Guaranty or otherwise guarantees
the Secured Obligations as of the Effective Date or thereafter, and its
successors and assigns.
 
“Guaranty” means each Guaranty made pursuant to this Agreement in favor of the
Administrative Agent, as amended, supplemented, restated or otherwise modified
from time to time in accordance with the terms of this Agreement and the other
Loan Documents.
 
“Hazardous Materials”  means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.
 
“Highest Lawful Rate” means, on any day, the maximum nonusurious rate of
interest permitted for that day by applicable law.  On each day, if any, that
Chapter 303 of the Texas Finance Code, as amended establishes the Highest Lawful
Rate, such rate shall be the “indicated (weekly) rate ceiling” (as defined in
Chapter 303 of the Texas Finance Code, as amended) for that day.

 
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“Hydrocarbon Interests” means all rights, titles, interests and estates now or
hereafter acquired in and to oil and gas leases, oil, gas and mineral leases, or
other liquid or gaseous hydrocarbon leases, mineral fee interests, overriding
royalty and royalty interests, net profit interests and production payment
interests, including any reserved or residual interests of whatever nature.
 
“Hydrocarbons” means oil, gas, casinghead gas, drip gasoline, natural gasoline,
condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and all
products refined or separated therefrom.
 
“Increase Effective Date” has the meaning assigned to such term in Section
2.05(b).
 
“Indebtedness” means, for any Person (without duplication): (i) all obligations
of such Person for borrowed money or evidenced by bonds, bankers’ acceptances,
debentures, notes or other similar instruments, other than surety or other
bonds; (ii) all obligations of such Person (whether contingent or otherwise) in
respect of letters of credit, surety or other bonds and similar instruments;
(iii) all obligations of such Person (other than for borrowed money) to pay the
deferred purchase price of Property or services (but excluding accounts payable
incurred in the ordinary course of business that are not more than 90 days past
due unless contested in good faith by appropriate proceedings and for which
adequate reserves under GAAP have been established therefor, and any guaranties
by the Parent, the Borrower or any Restricted Subsidiary of such accounts
payable); (iv) all Capital Lease Obligations; (v) all obligations under
Synthetic Leases; (vi) all Indebtedness (as described in the other clauses of
this definition) of others secured by a Lien on any asset of such Person,
whether or not such Indebtedness is assumed by such Person; (vii) all
Indebtedness (as described in the other clauses of this definition) of others
guaranteed by such Person or in which such Person otherwise assures a creditor
against loss of the debtor to the extent of the lesser of the amount of such
Indebtedness and the maximum stated amount of such guarantee or assurance
against loss; (viii) all obligations or undertakings of such Person to maintain
or cause to be maintained the financial position or covenants of others or to
purchase the Indebtedness or Property of others; (ix) all obligations to deliver
Hydrocarbons in consideration of advance payments (other than customary and
standard “take or pay” provisions in any gas sales or purchase contract or any
other similar contract), including, without limitation, obligations under
Advance Payment Contracts; and (x) any Indebtedness of a partnership for which
such Person is liable either by agreement or because of a Governmental
Requirement but only to the extent of such liability.
 
“Indemnified Taxes” means Taxes other than Excluded Taxes.
 
“Indemnitee” has the meaning assigned to such term in Section 9.03(b).
 
“Information” has the meaning assigned to such term in Section 9.12(a).
 
“Initial Reserve Report” has the meaning assigned to such term in Section
4.01(k).

 
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“Interest Election Request” means a request by the Borrower to convert or
continue a Borrowing in accordance with Section 2.08.
 
“Interest Payment Date” means (a) with respect to any ABR Loan, the last day of
each March, June, September and December, and (b) with respect to any Eurodollar
Loan, the last day of the Interest Period applicable to the Borrowing of which
such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest
Period of more than three months’ duration, each day prior to the last day of
such Interest Period that occurs at intervals of three months’ duration after
the first day of such Interest Period.
 
“Interest Period” means, with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
(or, with the consent of each Lender, nine or twelve months) thereafter, as the
Borrower may elect; provided, that (i) if any Interest Period would end on a day
other than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless, in the case of a Eurodollar Borrowing only, such
next succeeding Business Day would fall in the next calendar month, in which
case such Interest Period shall end on the next preceding Business Day and (ii)
any Interest Period pertaining to a Eurodollar Borrowing that commences on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period.  For purposes hereof, the date of a Eurodollar Borrowing
initially shall be the date on which such Eurodollar Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Eurodollar Borrowing.
 
“Investment” means, for any Person: (i) the acquisition (whether for cash,
Property, services or securities or otherwise) of Equity Interests of any other
Person (including, without limitation, any “short sale” or any sale of any
securities at a time when such securities are not owned by the Person entering
into such short sale), (ii) the making of any advance, loan or other extension
of credit to, any other Person (including the purchase of Property from another
Person subject to an understanding or agreement, contingent or otherwise, to
resell such Property to such Person, but excluding any such advance, loan or
extension of credit having a term not exceeding 90 days representing the
purchase price of inventory or supplies sold by such Person in the ordinary
course of business) or (iii) the entering into of any guarantee of, or other
contingent obligation with respect to, Indebtedness or other liability of any
other Person and (without duplication) any amount committed to be advanced, lent
or extended to such Person.
 
“Issuing Bank” means JPMorgan Chase Bank, N.A., in its capacity as the issuer of
Letters of Credit hereunder (including the Existing Letters of Credit), and its
successors in such capacity as provided in Section 2.06(i).  The Issuing Bank
may, in its discretion, arrange for one or more Letters of Credit to be issued
by Affiliates of the Issuing Bank, in which case the term “Issuing Bank” shall
include any such Affiliate with respect to Letters of Credit issued by such
Affiliate.
 
“LC Disbursement” means a payment made by the Issuing Bank pursuant to a Letter
of Credit.

 
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“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of
all outstanding Letters of Credit at such time, plus (b) the aggregate amount of
all LC Disbursements that have not yet been reimbursed by or on behalf of the
Borrower at such time.  The LC Exposure of any Lender at any time shall be its
Applicable Percentage of the total LC Exposure at such time (as modified or
re-allocated pursuant to Section 2.20, as applicable).
 
“Lender Party Financial Service Product” means agreements or other arrangements
under which any Person who is or was a Lender or Affiliate of a Lender at the
time such agreement or other arrangement was entered into provides any of the
following products or services to the Parent, the Borrower or any Restricted
Subsidiary: (a) credit cards, (b) credit card processing services, (c) debit
cards, (d) purchase cards, (e) ACH transactions, (f) cash management, including
controlled disbursement, accounts or services, or (g) foreign currency exchange.
 
“Lender Party Swap Agreement” means (i) any Swap Agreement between or among any
Credit Party and any Person who is or was a Lender or Affiliate of a Lender at
the time such Swap Agreement was entered into and (ii) any Swap Agreement that
is listed on Schedule 3.19 and is between or among any Credit Party and a Lender
or Affiliate of a Lender.
 
“Lenders” means the Persons listed on Schedule 2.01 and any other Person that
shall have become a party hereto pursuant to an Assignment and Assumption, other
than any such Person that ceases to be a party hereto pursuant to an Assignment
and Assumption.
 
“Letter of Credit” means any letter of credit issued pursuant to this Agreement
(including any Existing Letter of Credit).
 
“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, the rate appearing on Reuters Screen LIBOR01 Page1 (or on any successor
or substitute page of such Service, or any successor to or substitute for such
Service, providing rate quotations comparable to those currently provided on
such page of such Service, as determined by the Administrative Agent from time
to time for purposes of providing quotations of interest rates applicable to
dollar deposits in the London interbank market) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period, as the rate for dollar deposits with a maturity comparable to such
Interest Period.  In the event that such rate is not available at such time for
any reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing for
such Interest Period shall be the rate at which dollar deposits of $5,000,000
and for a maturity comparable to such Interest Period are offered by the
principal London office of the Administrative Agent in immediately available
funds in the London interbank market at approximately 11:00 a.m., London time,
two Business Days prior to the commencement of such Interest Period.
 
“Lien” means, with respect to any Property, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or
of such Property (including but not limited to any production payments and the
like payable out of Oil and Gas Properties), (b) the interest of a vendor or a
lessor under any conditional sale agreement, capital lease or title retention
agreement (or any financing lease having substantially the same economic effect
as any of the foregoing) relating to such Property and (c) in the case of
securities, any purchase option, call or similar right of a third party with
respect to such securities.

 
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“Loan Documents” means this Agreement, each Borrowing Request, each application
for a Letter of Credit, each Letter of Credit, each Collateral Document, any
promissory notes issued pursuant to Section 2.10, each Subordination Agreement,
all applications, all instruments, certificates and agreements now or hereafter
executed or delivered to the Administrative Agent or any Lender pursuant to any
of the foregoing, and all amendments, modifications, renewals, extensions,
increases and rearrangements of, and substitutions for, any of the
foregoing; provided that “Loan Documents” shall not include any Swap Agreement
or any Lender Party Financial Service Product.
 
“Loans” means the loans made by the Lenders to the Borrower pursuant to Section
2.03.
 
“Majority Lenders” means, at any time, Lenders having in the aggregate more than
50% of the Aggregate Commitment Amount, or, if the Commitments to make Loans and
the obligation of the Issuing Bank to issue Letters of Credit have been
terminated pursuant to Article VII, Lenders holding more than 50% of the
aggregate unpaid principal amount of the outstanding Credit Exposure; provided
that the Commitment of, and the portion of the Credit Exposure held or deemed
held by, any Defaulting Lender shall be excluded for purposes of making a
determination of the Majority Lenders.
 
“material adverse change” mean any event, development or circumstance that has
had or could reasonably be expected to have a Material Adverse Effect.
 
“Material Adverse Effect” means a material adverse effect on (i) the business,
Property, condition (financial or otherwise) or results of operations of the
Parent, the Borrower and the Restricted Subsidiaries taken as a whole, (ii) the
ability of the Parent, the Borrower and the Restricted Subsidiaries taken as a
whole to timely perform their obligations under the Loan Documents to which each
is a party, or (iii) the legality, validity or enforceability of any of the Loan
Documents or the rights, benefits or remedies of the Administrative Agent, the
Issuing Bank or the Lenders thereunder.
 
“Material Domestic Subsidiary” means, as of any date, any Restricted Subsidiary
organized under the laws of any jurisdiction within the United States of America
(including territories thereof) that (i) is a wholly-owned Restricted Subsidiary
and (ii) together with its Restricted Subsidiaries, owns Property having a Fair
Market Value of $10,000,000 or more.
 
“Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit) of any one or more of the Parent, the Borrower or any Restricted
Subsidiary in an aggregate principal amount exceeding $25,000,000.
 
“Material Swap Obligations” means obligations in respect of one or more Swap
Agreements of any one or more of the Parent, the Borrower or any Restricted
Subsidiary in an aggregate amount exceeding $25,000,000.  For purposes of
determining Material Swap Obligations, the obligations of the Parent, the
Borrower or any Restricted Subsidiary in respect of any Swap Agreement at any
time shall be the maximum aggregate amount (giving effect to any netting
agreements) that the Parent, the Borrower or such Restricted Subsidiary would be
required to pay if such Swap Agreement were terminated on the date of
determination.

 
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“Maturity Date” means November 19, 2012; provided that if any of the 2007
Convertible Notes remains outstanding on September 14, 2012, then the Maturity
Date shall be October 15, 2012.
 
“Maximum Facility Amount” means $525,000,000.
 
“Maximum Rate” has the meaning assigned to such term in Section 9.13.
 
“MLP” or “MLPs” means, individually or collectively, Penn Virginia Resource
Partners, L.P., a Delaware limited partnership, and Penn Virginia GP Holdings,
L.P., a Delaware limited partnership.
 
“Moody’s” means Moody’s Investors Service, Inc.
 
“Mortgage” means each mortgage or deed of trust executed and delivered by any
Credit Party, including pursuant to Section 5.13, and each mortgage supplement
after execution and delivery of such mortgage supplement, in each case, as
amended, supplemented, restated or otherwise modified from time to time in
accordance with the terms of this Agreement and the other Loan Documents.
 
“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA.
 
“Net Cash Proceeds” means, with respect to any of the transactions or events
described in Sections 5.17, 6.01(j) or 6.13 that results in a reduction in the
Borrowing Base, the positive difference, if any, of (a) the sum of cash and cash
equivalents received in connection with such transaction, but only as and when
so received, minus (b) the sum of (i) if applicable, the principal amount of any
Indebtedness that is secured by such asset (if any) and that is required to be
repaid in connection with the sale thereof (other than the Loans), (ii) the
out-of-pocket expenses incurred by the Parent, the Borrower or such Restricted
Subsidiary in connection with such transaction and (iii) if applicable, income
taxes reasonably estimated to be actually payable within two years of the date
of the relevant asset sale as a result of any gain recognized in connection
therewith.
 
“Non-Recourse Obligation” means Indebtedness as to which (a) none of the Parent,
the Borrower, any Restricted Subsidiary or any Assets of the Parent, the
Borrower or any Restricted Subsidiary (i) is obligated to provide credit support
in any form or (ii) is directly or indirectly liable and (b) no default with
respect to which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any Indebtedness of the Parent, the
Borrower or any Restricted Subsidiary to declare a default on such Indebtedness
of the Parent, the Borrower or such Restricted Subsidiary or cause the payment
of any such Indebtedness to be accelerated or payable prior to its stated
maturity or cause any Guarantee in respect of such Indebtedness to become
payable, in the case of (a) and (b) above, except for obligations that arise
solely as a result of such Person’s status as a general partner of a
partnership.

 
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“Obligations” means all obligations or liabilities of every nature of any Credit
Party from time to time owed to the Administrative Agent, the Issuing Bank, the
Lenders or any of them under any Loan Document, in each case, whether for
principal, interest, reimbursement of amounts drawn under any Letter of Credit,
funding indemnification amounts, fees, expenses, indemnification or otherwise.
 
“Oil and Gas Properties” means Hydrocarbon Interests; the Properties now or
hereafter pooled or unitized with Hydrocarbon Interests; all presently existing
or future unitization, pooling agreements and declarations of pooled units and
the units created thereby (including without limitation all units created under
orders, regulations and rules of any Governmental Authority) that may affect all
or any portion of the Hydrocarbon Interests; all operating agreements, contracts
and other agreements, including production sharing contracts and agreements that
relate to any of the Hydrocarbon Interests or the production, sale, purchase,
exchange or processing of Hydrocarbons from or attributable to such Hydrocarbon
Interests; all Hydrocarbons in and under and that may be produced and saved or
attributable to the Hydrocarbon Interests, including all oil in tanks, the lands
covered thereby and all rents, issues, profits, proceeds, products, revenues and
other incomes from or attributable to the Hydrocarbon Interests; all tenements,
hereditaments, appurtenances and Properties in any manner appertaining,
belonging, affixed or incidental to the Hydrocarbon Interests; and all
Properties, rights, titles, interests and estates described or referred to
above, including any and all Property, real or personal, now owned or
hereinafter acquired and situated upon, used, held for use or useful in
connection with the operating, working or development of any of such Hydrocarbon
Interests or Property (excluding drilling rigs, automotive equipment, rental
equipment or other personal Property which may be on such premises for the
purpose of drilling a well or for other similar temporary uses) and including
any and all oil wells, gas wells, injection wells or other wells, buildings,
structures, fuel separators, liquid extraction plants, plant compressors, pumps,
pumping units, field gathering systems, tanks and tank batteries, fixtures,
valves, fittings, machinery and parts, engines, boilers, meters, apparatus,
equipment, appliances, tools, implements, cables, wires, towers, casing, tubing
and rods, surface leases, rights-of-way, easements and servitudes together with
all additions, substitutions, replacements, accessions and attachments to any
and all of the foregoing.
 
“Organizational Documents” means (a) with respect to any corporation, its
certificate or articles of incorporation or organization, as amended, and its
by-laws, as amended, (b) with respect to any limited partnership, its
certificate of limited partnership, as amended, and its partnership agreement,
as amended, (c) with respect to any general partnership, its partnership
agreement, as amended, (d) with respect to any limited liability company, its
certificate of formation or articles of organization, as amended, and its
limited liability company agreement or operating agreement, as amended, and (e)
with respect to any other type of Person, any certificate, document or agreement
comparable to any of the foregoing.
 
“Other Taxes” means any and all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies arising from any
payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement.
 
“Parent” means Penn Virginia Corporation, a Virginia corporation.
 
“Participant” has the meaning set forth in Section 9.04(c)(i).

 
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“Patriot Act” has the meaning set forth in Section 9.16.
 
“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.
 
“Permitted Corporate Acquisition” means an Investment in the equity interests of
any Person for the purpose of acquiring such Person and its Subsidiaries, if
any, and with respect to which each of the following conditions is
satisfied:  (i) the Borrower shall have delivered to the Administrative Agent
and the Lenders written notice of such Investment describing such Investment in
reasonable detail not less than 10 Business Days prior such Investment being
consummated; (ii) the Borrower shall have delivered or caused to be delivered to
the Administrative Agent such additional documents or due diligence materials
with respect to such Investment as the Administrative Agent shall have
reasonably requested; (iii) the primary business of the Person acquired (and its
Subsidiaries, if any, taken as a whole) shall be the acquisition, exploration,
development, financing, ownership, operation, production, maintenance, storage,
transportation, gathering, processing and marketing of Hydrocarbons, Hydrocarbon
Interests and Oil and Gas Properties and related activities; (iv) after giving
effect to any such Investment, the Person acquired shall be a direct or indirect
wholly-owned Restricted Subsidiary, or will be merged with or into a Restricted
Subsidiary; (v) if such Person acquired (or the Restricted Subsidiary with or
into which such Person acquired is merged) or any Subsidiary of such Person
acquired (or such Restricted Subsidiary) is or becomes a Material Domestic
Subsidiary, such Person acquired (or such Restricted Subsidiary) and any such
Subsidiary shall have complied with the requirements of Section 5.13 (or the
Administrative Agent shall be satisfied, in its sole discretion, that
appropriate arrangements and progress shall have been made or shall then be in
process to cause such Person acquired (or such Restricted Subsidiary) to have
complied with the requirements of Section 5.13 reasonably promptly following the
consummation of such Investment); (vi) the Borrower shall have delivered to the
Administrative Agent a compliance certificate prepared by the Borrower in good
faith and in a manner, and using a methodology that is consistent with, the most
recent financial statements delivered pursuant to Section 5.01(c) giving pro
forma effect to the consummation of such Investment and confirming that no
Default or Event of Default shall exist either before or after, or result from,
the consummation of such Investment; (vii) to the extent that any Person
acquired or any Subsidiary of such Person acquired has any Indebtedness
outstanding at the time of the consummation of such Investment, which
Indebtedness is not otherwise permitted under Section 6.01 of the Credit
Agreement, the Administrative Agent shall be reasonably satisfied that such
Indebtedness has been (or, upon the consummation of such Investment, shall be)
repaid or otherwise satisfied and all liens securing any such Indebtedness have
been (or, upon the consummation of such Investment, shall be) released,
terminated or otherwise discharged; and (viii) the consideration payable in
respect of such Investment comprises capital stock of the Parent or cash,
provided that the aggregate amount of all cash Investments made by the Parent,
the Borrower and the Restricted Subsidiaries from and after the Effective Date,
in reliance on the terms and provisions of clause (f) of Section 6.04 (and this
definition) shall not exceed $100,000,000.

 
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“Permitted Investments” means: (a) direct obligations of the United States or
any agency thereof, or obligations guaranteed by the United States or any agency
thereof, in each case maturing within one year from the date of creation
thereof; (b) commercial paper maturing within one year from the date of creation
thereof rated in the investment grade by S&P or Moody’s; (c) deposits maturing
within one year from the date of creation thereof with, including certificates
of deposit issued by, any Lender or any office located in the United States of
any other bank or trust company which is organized under the laws of the United
States or any state thereof, has capital, surplus and undivided profits
aggregating at least $100,000,000 (as of the date of such Lender’s or bank or
trust company’s most recent financial reports) and has a short term deposit
rating of no lower than A2 or P2, as such rating is set forth from time to time,
by S&P or Moody’s, respectively; (d) fully collateralized repurchase agreements
with a term of not more than seven days for securities described in clause (a)
above and entered into with a Lender, an Affiliate of a Lender or a financial
institution satisfying the criteria described in clause (c) above; and
(e) deposits in money market funds investing exclusively in Investments
described in the foregoing clauses (a), (b), (c) and (d).
 
“Permitted Liens” means:  (i) Liens for taxes, assessments or other governmental
charges or levies which are not delinquent or that are being contested in good
faith by appropriate action and for which adequate reserves have been maintained
in accordance with GAAP; (ii) Liens in connection with workers’ compensation,
unemployment insurance or other social security, old age pension or public
liability obligations that are not delinquent or that are being contested in
good faith by appropriate action and for which adequate reserves have been
maintained in accordance with GAAP; (iii) operators’, vendors’, carriers’,
warehousemen’s, repairmen’s, mechanics’, suppliers’, workers’, materialmen’s,
construction or other like Liens arising by operation of law in the ordinary
course of business or incident to the exploration, development, operation and
maintenance of Oil and Gas Properties or statutory landlord’s liens, including
lessee or operator obligations under statutes, governmental regulations or
instruments related to the ownership, exploration and production of oil, gas and
minerals on private, state, federal or foreign lands or waters, each of which is
in respect of obligations that have not been outstanding more than 60 days or
that are being contested in good faith by appropriate proceedings and for which
adequate reserves have been maintained in accordance with GAAP; (iv) Liens that
(a) arise in the ordinary course of business under operating agreements, joint
venture agreements, oil and gas partnership agreements, oil and gas leases,
farm-out agreements, division orders, contracts for the sale, transportation or
exchange of oil and natural gas, unitization and pooling declarations and
agreements, area of mutual interest agreements, overriding royalty agreements,
marketing agreements, processing agreements, net profits agreements, development
agreements, gas balancing or deferred production agreements, injection,
repressuring and recycling agreements, salt water or other disposal agreements,
seismic or other geophysical permits or agreements, and other agreements that
are usual and customary in the oil and gas business and (b) are for claims that
either are not delinquent or are being contested in good faith by appropriate
proceedings and as to which the Parent, the Borrower or any Restricted
Subsidiary shall have set aside on its books such reserves as may be required
pursuant to GAAP, provided that any such Lien referred to in this clause does
not materially impair the use of the Property covered by such Lien for the
purposes for which such Property is held by the Borrower or any Restricted
Subsidiary or materially impair the value of such Property subject thereto; (v)
Liens reserved in oil and gas mineral leases, or created by statute, to secure
royalty, net profits interests, bonus payments, rental payments or other
payments out of or with respect to the production, transportation or processing
of Hydrocarbons, and compliance with the terms of such Hydrocarbon Interests,
provided that such Liens secure claims that either are not delinquent or are
being contested in good faith by appropriate proceedings and as to which the
Parent, the Borrower or the applicable Restricted Subsidiary shall have set
aside on its books such reserves as may be required pursuant to GAAP; (vi) Liens
arising solely by virtue of any statutory or common law provision relating to
banker’s liens, rights of set-off or similar rights and remedies and burdening
only deposit accounts or other funds maintained with a creditor depository
institution, provided that (a) no such deposit account is a dedicated cash
collateral account or is subject to restrictions against access by the depositor
in excess of those set forth by regulations promulgated by the Board, and (b) no
such deposit account is intended by the Parent, the Borrower or any Restricted
Subsidiaries to provide collateral to the depository institution; (vii) all
other non-consensual defects in title (which might otherwise constitute Liens)
arising in the ordinary course of the Parent’s, the Borrower’s or such
Restricted Subsidiary’s business or incidental to the ownership of their
respective Properties; provided that no such Liens shall secure the payment of
Indebtedness or shall, in the aggregate, materially detract from the value or
marketability of the Property subject thereto or materially impair the use or
operation thereof in the operation of the business of the Parent, the Borrower
or such Restricted Subsidiary; (viii) encumbrances (other than to secure the
payment of borrowed money or the deferred purchase price of Property or
services), easements, restrictions, servitudes, permits, conditions, covenants,
exceptions or reservations in any Property of the Parent, the Borrower or any
Restricted Subsidiary for the purpose of roads, pipelines, transmission lines,
transportation lines, distribution lines for the removal of gas, oil, coal or
other minerals or timber, and other like purposes, or for the joint or common
use of real estate, rights of way, facilities and equipment, and defects,
irregularities, zoning restrictions and deficiencies in title of any Property
that in the aggregate do not materially impair the use of such Property for the
purposes of which such Property is held by the Parent, the Borrower or any
Restricted Subsidiary or materially impair the value of such Property subject
thereto; (ix) Liens on cash or securities pledged to secure performance of
surety and appeal bonds, government contracts, performance and return of money
bonds, bids, trade contracts, leases, statutory obligations, regulatory
obligations and other obligations of a like nature incurred in the ordinary
course of business; and (x) judgment Liens not giving rise to an Event of
Default, provided that (a) any appropriate legal proceedings which may have been
duly initiated for the review of such judgment shall not have been finally
terminated or the period within which such proceeding may be initiated shall not
have expired and (b) no action to enforce such Lien has been commenced.

 
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 “Permitted Refinancing Indebtedness” means Indebtedness (for purposes of this
definition, “new Indebtedness”) incurred in exchange for, or proceeds of which
are used to refinance, all or any portion of the Unsecured Notes (including any
settlement payments or other obligations in respect of Unsecured Notes for which
a conversion election has been made by the holder of such Unsecured Note) (the
“Refinanced Indebtedness”); provided that (a) the portion of such new
Indebtedness incurred to refinance the Refinanced Indebtedness is in an
aggregate principal amount not in excess of the sum of (i) the aggregate
principal amount then outstanding of the Refinanced Indebtedness (or, if the
Refinanced Indebtedness is exchanged or acquired for an amount less than the
principal amount thereof to be due and payable upon a declaration of
acceleration thereof, such lesser amount) and (ii) an amount necessary to pay
any fees and expenses, including premiums, related to such exchange or
refinancing; (b) such new Indebtedness has a stated maturity no earlier than the
date that is 91 days after the earlier of (i) the Maturity Date and (ii) the
date on which there are no Loans, LC Exposure or other obligations hereunder
outstanding and all of the Commitments are terminated and an average life no
shorter than the period beginning on the date of incurrence of such Indebtedness
and ending on the date that is 91 days after the Maturity Date; (c) such new
Indebtedness does not contain any covenants that are more onerous to the Parent,
the Borrower and its Subsidiaries than those imposed by the Refinanced
Indebtedness; (d) the stated interest or coupon rate of such new Indebtedness is
reasonably acceptable to the Administrative Agent; and (e) such new Indebtedness
(and any Guarantees in respect thereof) is unsecured.

 
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 “Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
 
“Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which the Parent or any ERISA Affiliate
is (or, if such plan were terminated, would under Section 4069 of ERISA be
deemed to be) an “employer” as defined in Section 3(5) of ERISA.
 
“Pledge Agreement” means the Pledge Agreement and Irrevocable Proxy of even date
herewith made by the Pledgors in favor of the Administrative Agent, as amended,
supplemented, restated or otherwise modified from time to time in accordance
with the terms of this Agreement and the other Loan Documents.
 
“Pledgor” means each of the Parent, the Borrower and each Guarantor other than
Parent that executes and delivers the Pledge Agreement, and its successors and
assigns.
 
“Prime Rate” means the rate of interest per annum publicly announced from time
to time by JPMorgan Chase Bank as its prime rate in effect at its office located
at 270 Park Avenue, New York, New York; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
 
“Property” of a Person means any and all property, whether real, personal,
tangible, intangible or mixed, of such Person, or other assets owned, leased or
operated by such Person.
 
“PVA Oil & Gas” means Penn Virginia Oil & Gas Corporation, a Virginia
corporation.
 
“PVA Texas” means Penn Virginia Oil & Gas, L.P., a Texas limited partnership.
 
“PVMC” means Penn Virginia MC Corporation, a Delaware corporation.
 
“Redemption” means the repurchase, redemption, prepayment, repayment or
defeasance (or the segregation of funds with respect to any of the foregoing) of
the Unsecured Notes.  “Redeem” has the correlative meaning thereto.
 
“Redetermination Date” means the date that the redetermined Borrowing Base
becomes effective subject to the notice requirements specified in Section 2.04
both for scheduled redeterminations and unscheduled redeterminations.
 
“Register” has the meaning set forth in Section 9.04(b)(iv).

 
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“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person’s Affiliates.
 
“Required Lenders” means, at any time, Lenders having in the aggregate at least
66-2/3% of the Aggregate Commitment Amount, or, if the Commitments to make Loans
and the obligation of the Issuing Bank to issue Letters of Credit have been
terminated pursuant to Article VII, Lenders holding at least 66-2/3% of the
aggregate unpaid principal amount of the outstanding Credit Exposure; provided
that the Commitment of, and the portion of the Credit Exposure held or deemed
held by, any Defaulting Lender shall be excluded for purposes of making a
determination of the Required Lenders.
 
“Reserve Report” means a report, in form and substance satisfactory to the
Administrative Agent, setting forth, as of each December 31 or June 30 (or such
other date in the event of an unscheduled redetermination) the oil and gas
reserves attributable to the Oil and Gas Properties of the Borrower and the
Guarantors, together with a projection of the rate of production and future net
income, taxes, operating expenses and capital expenditures with respect thereto
as of such date, based upon the pricing assumptions consistent with SEC
reporting requirements at the time.
 
“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in any Credit
Party, or any payment (whether in cash, securities or other Property), including
any sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any such Equity
Interests in any Credit Party, or any option, warrant or other right to acquire
any such Equity Interests in any Credit Party.
 
“Restricted Subsidiary” means, as of any date, each Subsidiary of the Parent,
other than Unrestricted Subsidiaries.  As of the Effective Date, the Restricted
Subsidiaries are designated on Schedule 3.13 as such.
 
“S&P” means Standard & Poor’s Ratings Group, a division of The McGraw Hill
Corporation.
 
“SEC” means the Securities and Exchange Commission or any successor Governmental
Authority.
 
“Secured Obligations” means, collectively, (i) all Obligations, (ii) all
liabilities and obligations of the Parent, the Borrower or any Restricted
Subsidiaries arising under any Lender Party Swap Agreement now or hereafter
existing between or among the Parent, the Borrower or any Restricted Subsidiary
and any Lender or any Affiliate of any Lender, as applicable, and (iii) all
liabilities and obligations of the Parent, the Borrower or any Restricted
Subsidiaries arising under any Lender Party Financial Service Product now or
hereafter existing between or among the Parent, the Borrower or any Restricted
Subsidiary and any Lender or any Affiliate of any Lender, as applicable.
 
“Stated Rate” has the meaning assigned to such term in Section 9.13.

 
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“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one, minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves), expressed as a decimal
established by the Board to which the Administrative Agent is subject, with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as “Eurocurrency Liabilities” in Regulation D of the Board).  Such reserve
percentages shall include those imposed pursuant to such
Regulation D.  Eurodollar Loans shall be deemed to constitute eurocurrency
funding and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D or any comparable regulation.  The
Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
 
“Subordination Agreement” means each Subordination Agreement made pursuant to
Section 4.01(m) or Section 6.01(g) by one or more Unrestricted Subsidiaries of
the Parent in favor of the Administrative Agent, the Issuing Bank and the
Lenders, substantially in the form of Exhibit D, as each may be amended,
supplemented, restated or otherwise modified from time to time in accordance
with the terms of this Agreement and the other Loan Documents.
 
“Subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
of which securities or other ownership interests representing more than 50% of
the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held by the parent or one or more Subsidiaries of the
parent or by the parent and one or more Subsidiaries of the parent.  Unless
otherwise expressly provided, all references herein to a “Subsidiary” shall mean
a Subsidiary of the Parent.
 
“Swap Agreement” means any agreement with respect to any swap, forward, future
or derivative transaction or option or similar agreement involving, or settled
by reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or measures
of economic, financial or pricing risk or value or any similar transaction or
any combination of these transactions; provided that no phantom stock or similar
plan providing for payments only on account of services provided by current or
former directors, officers, employees or consultants of the Parent, the Borrower
or the Restricted Subsidiaries shall be a Swap Agreement and provided, further,
that none of the options or warrants entered into by the Parent under the Call
Spread Transaction shall constitute a Swap Agreement.
 
“Synthetic Leases” means, in respect of any Person, all leases that shall have
been, or should have been, in accordance with GAAP, treated as operating leases
on the financial statements of the Person liable (whether contingently or
otherwise) for the payment of rent thereunder and which were properly treated as
indebtedness for borrowed money for purposes of U.S. federal income taxes, if
the lessee in respect thereof is obligated to either purchase for an amount in
excess of, or pay upon early termination an amount in excess of, 85% of the
residual value of the Property subject to such operating lease upon expiration
or early termination of such lease.

 
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“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.
 
“Total Debt” means all Indebtedness of the Parent, the Borrower and the
Restricted Subsidiaries on a consolidated basis described under clauses (i) and
(iii) through (x) of the definition of “Indebtedness”; provided that any
Indebtedness permitted by Section 6.01(g) of this Agreement shall, in any event,
be excluded from “Total Debt”.
 
“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the Alternate Base.
 
“Unused Commitment” means, with respect to each Lender at any time, such
Lender’s Commitment at such time, minus such Lender’s Credit Exposure at such
time.
 
“Unused Commitment Fee” means the commitment fee described in Section 2.12(a).
 
“Unrestricted Subsidiary” means (a) Penn Virginia Resource Holdings Corp., a
Delaware corporation, and each of its Subsidiaries and (b) any other Subsidiary
of the Parent that is designated as an Unrestricted Subsidiary either (i) on
Schedule 3.13 or (ii) in the manner set forth in Section 6.10.
 
“Unsecured Notes” means any senior unsecured notes, senior unsecured convertible
notes, subordinated unsecured notes, subordinated unsecured convertible notes or
senior subordinated unsecured convertible notes (including the 2007 Convertible
Notes), in each case, issued by the Parent, the Borrower or a Guarantor in one
or more transactions on or after November 21, 2007.
 
“Unsecured Notes Documents” means, as applicable, both individually and
collectively, any Unsecured Notes and any related Unsecured Notes Indenture.
 
“Unsecured Notes Indenture” means, collectively, any indenture (including the
2007 Convertible Notes Indenture) by and among the Parent, the Borrower or a
Guarantor, as issuer, and a trustee, and any and all related documentation
entered into in connection therewith, pursuant to which Unsecured Notes shall
have been issued, as the same may be amended, restated, modified or supplemented
from time to time.
 
“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.
 
SECTION 1.02.  Classification of Loans and Borrowings.  For purposes of this
Agreement, Loans may be classified and referred to by Type (e.g., a “Eurodollar
Loan” or “ABR Loan”).

 
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SECTION 1.03.  Terms Generally.  The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined.  Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms.  The words “include”, “includes” and “including”
shall be deemed to be followed by the phrase “without limitation”.  The word
“will” shall be construed to have the same meaning and effect as the word
“shall”.  Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, restated, supplemented or otherwise modified (subject to
any restrictions on such amendments, restatements, supplements or modifications
set forth herein), (b) any reference herein to any Person shall be construed to
include such Person’s successors and assigns, (c) the words “herein”, “hereof”
and “hereunder”, and words of similar import, shall be construed to refer to
this Agreement in its entirety and not to any particular provision hereof, (d)
all references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words “asset” and “property” shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
 
SECTION 1.04.  Accounting Terms; GAAP.  Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if the
Parent or the Borrower notifies the Administrative Agent that the Parent or the
Borrower requests an amendment to any provision hereof to eliminate the effect
of any change occurring after the date hereof in GAAP or in the application
thereof on the operation of such provision (or if the Administrative Agent
notifies the Parent or the Borrower that the Majority Lenders request an
amendment to any provision hereof for such purpose), regardless of whether any
such notice is given before or after such change in GAAP or in the application
thereof, then such provision shall be interpreted on the basis of GAAP as in
effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in
accordance herewith.
 
ARTICLE II

 
The Credits
 
SECTION 2.01.  Commitments.  Subject to the terms and conditions set forth
herein, each Lender agrees to make Loans to the Borrower from time to time
during the Availability Period in an aggregate principal amount that will not
result in (a) such Lender’s Credit Exposure exceeding such Lender’s Commitment
or (b) the sum of all of the Lenders’ Credit Exposures exceeding the sum of all
of the Lenders’ Commitments.  Within the foregoing limits and subject to the
terms and conditions set forth herein, the Borrower may borrow, prepay and
reborrow Loans.
 
SECTION 2.02.  Loans and Borrowings.  (a) Each Loan shall be made as part of a
Borrowing consisting of Loans made by the Lenders ratably in accordance with
their respective Commitments.  The failure of any Lender to make any Loan
required to be made by it shall not relieve any other Lender of its obligations
hereunder; provided that the Commitments of the Lenders are several and no
Lender shall be responsible for any other Lender’s failure to make Loans as
required.

 
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(b)           Subject to Section 2.14, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may request in
accordance herewith.  Each Lender at its option may, subject to Section 2.19(a),
make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate
of such Lender to make such Loan; provided that any exercise of such option
shall not affect the obligation of the Borrower to repay such Loan in accordance
with the terms of this Agreement.
 
(c)           At the commencement of each Interest Period for any Eurodollar
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $500,000 and not less than $1,000,000.  At the time that each ABR
Borrowing is made, such Borrowing shall be in an aggregate amount that is an
integral multiple of $100,000 and not less than $500,000; provided that an ABR
Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the total Commitments or that is required to finance the
reimbursement of an LC Disbursement as contemplated by
Section 2.06(e).  Borrowings of more than one Type may be outstanding at the
same time; provided that there shall not at any time be more than a total of ten
(10) Eurodollar Borrowings outstanding.
 
(d)          Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request, or to elect to convert or continue, any
Borrowing if the Interest Period requested with respect thereto would end after
the Maturity Date.
 
SECTION 2.03.  Requests for Borrowings.  To request a Borrowing, the Borrower
shall notify the Administrative Agent of such request by telephone (a) in the
case of a Eurodollar Borrowing, not later than 12:00 noon, New York City time,
three Business Days before the date of the proposed Borrowing or (b) in the case
of an ABR Borrowing, not later than 12:00 noon, New York City time, on the date
of the proposed Borrowing.  Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request in a form approved by the
Administrative Agent and signed by the Borrower.  Each such telephonic and
written Borrowing Request shall specify the following information in compliance
with Section 2.02:
 
(i)           the aggregate amount of the requested Borrowing;
 
(ii)          the date of such Borrowing, which shall be a Business Day;
 
(iii)         whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;
 
(iv)         in the case of a Eurodollar Borrowing, the initial Interest Period
to be applicable thereto, which shall be a period contemplated by the definition
of the term “Interest Period”; and
 
(v)          the location and number of the Borrower’s account to which funds
are to be disbursed, which shall comply with the requirements of Section 2.07.
 
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing.  If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month’s duration.  Promptly following
receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender’s Loan to be made as part of the requested Borrowing.
 
 
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SECTION 2.04.  Borrowing Base.
 
(a)           Amount.  For the period from and including the Effective Date to
but not including the first Redetermination Date, the amount of the Borrowing
Base shall be $420,000,000.  Notwithstanding the foregoing, the Borrowing Base
will be subject to interim adjustments pursuant to Sections 2.04(e), 5.12, 5.17,
6.01(j) and 6.13.
 
(b)           Redetermination.  On or before April 15th and October 15th of each
year, the Administrative Agent shall propose in writing to the Borrower and the
Lenders a new or reaffirmed Borrowing Base in accordance with Section 2.04(c)
(assuming receipt by the Administrative Agent of the Reserve Report in a timely
and complete manner).  After having received notice of such proposal by the
Administrative Agent, each Lender shall have 15 days to agree with such proposal
or disagree by proposing an alternate Borrowing Base.  If, at the end of such 15
days, any Lender has not communicated to the Administrative Agent its approval
or disapproval, such silence shall be deemed to be an approval of the new or
reaffirmed Borrowing Base proposed by the Administrative Agent.  If, however, at
the end of such 15-day period, all of the Lenders or the Required Lenders, as
applicable, have not approved or deemed to have approved, as aforesaid, the
proposed Borrowing Base, then the Borrowing Base shall be determined in
accordance with Section 2.04(d).  After such redetermined Borrowing Base is
approved by (a) all Lenders in the case of any increase in the Borrowing Base,
(b) the Required Lenders in the case of any maintenance or any decrease in the
Borrowing Base or (c) as otherwise determined as provided in Section 2.04(d),
the Administrative Agent will notify the Borrower and the Lenders of the amount
of the redetermined Borrowing Base, and such amount shall become effective and
applicable to the Borrower, the Administrative Agent, the Issuing Bank and the
Lenders on or about May 1st (with respect to each Reserve Report prepared as of
December 31) or November 1st (with respect to each Reserve Report prepared as of
June 30), as applicable, of each year.  Notwithstanding the foregoing, however,
any increase in the Borrowing Base shall require approval or deemed approval of
all the Lenders as set forth in this Section 2.04(b).
 
(c)           Reserve Reports.  Upon receipt of the Reserve Report and such
other reports, data and supplemental information, including the information
provided pursuant to Section 5.11, as may, from time to time, be reasonably
requested by the Required Lenders, the Administrative Agent will evaluate such
information.  The Administrative Agent, with the approval or deemed approval of
the Lenders as set forth in Section 2.04(b), but subject to the terms of
Section 2.04(b), shall, in good faith, redetermine the Borrowing Base based upon
such information and such other information (including, without limitation,
information described in the Reserve Report, the status of title with respect to
the Oil and Gas Properties and the existence of any other Indebtedness) as the
Administrative Agent deems appropriate in its discretion and consistent with
customary industry practices and its normal oil and gas lending criteria as it
exists at the particular time.  Such redetermination shall be accomplished not
later than and effective on or about the first (1st) day of each May and
November of each calendar year, assuming that the Borrower shall have furnished
the Reserve Report and other reports, data and supplemental information in a
timely and complete manner as required by Section 5.11.  In assessing whether to
approve or reject a proposed Borrowing Base, each Lender will assess, in good
faith, the Reserve Report and the other information as they deem appropriate in
its discretion and consistent with customary industry practices and its
respective oil and gas lending criteria and procedures as they exist at the
particular time.

 
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(d)           Consensus and Failure of Consensus.  Except as hereinafter
provided, the decision of the Lenders or the Required Lenders, as applicable,
with respect to any Borrowing Base determination shall control; provided,
however, that if the Lenders or the Required Lenders, as applicable, have not
approved or are not deemed to have approved the Borrowing Base as of the end of
the 15-day period specified in Section 2.04(b), the Borrowing Base shall be
redetermined at the highest amount approved by each Lender (if such redetermined
Borrowing Base constitutes an increase in the Borrowing Base in effect
immediately prior thereto) or the Required Lenders (if such redetermined
Borrowing Base constitutes a reaffirmation or decrease in the Borrowing Base in
effect immediately prior thereto), as applicable, and such amount shall then
become the Borrowing Base until the next scheduled redetermination pursuant to
Section 2.04(b) or the next date on which an interim redetermination occurs
under Section 2.04(e) or the next adjustment under either Section 5.17, 6.01(j)
or 6.13.  Notwithstanding the foregoing, however, any increase in the Borrowing
Base shall require approval or deemed approval of all the Lenders as set forth
in Section 2.04(a).
 
(e)           Interim Redeterminations.  The Borrower may, at its option, one
time during any 12-month period initiate an interim redetermination of the
Borrowing Base.  In addition, the Borrower may, at its option, in connection
with any acquisition (or any series of acquisitions occurring since the most
recent redetermination of the Borrowing Base) by the Parent, the Borrower or a
Restricted Subsidiary of Oil and Gas Properties having a purchase price, either
individually or in the aggregate, of $50,000,000 or more, initiate an interim
redetermination of the Borrowing Base.  The Administrative Agent (at the
direction of the Required Lenders, in their option) may one time during any
12-month period initiate an interim redetermination of the Borrowing Base.  The
Borrowing Base also may be redetermined in accordance with this Agreement upon
the occurrence of any of the events described in any of Sections 5.12, 5.17,
6.01(j) or 6.13.
 
SECTION 2.05.  Increase in Aggregate Commitment Amount.
 
(a)           Upon prior notice to the Administrative Agent, the Borrower may
from time to time, (i) request that the Lenders increase the Aggregate
Commitment Amount pro rata among the Lenders up to an amount not exceeding the
Maximum Facility Amount or (ii) invite additional financial institutions
acceptable to the Administrative Agent and the Issuing Bank to become Lenders
party to the Agreement so as to increase the Aggregate Commitment Amount to an
amount not exceeding the Maximum Facility Amount.  At the time of sending such
notice to the Lenders or any invitee, the Borrower (in consultation with the
Administrative Agent) shall specify the time period within which each Lender or
invitee, as applicable, is requested to respond (which shall in no event be less
than 10 Business Days from the date of delivery of such notice to the
Lenders).  If the Borrower has requested that the Lenders increase their
respective Commitment Amounts pro rata hereunder, each Lender shall notify the
Administrative Agent within such time period whether or not it agrees to
increase its respective Commitment Amount and, if so, whether by an amount equal
to, greater than, or less than its Applicable Percentage of such requested
increase and any Lender not responding within such time period shall be deemed
to have declined to increase its respective Commitment Amount.  Anything herein
contained to the contrary notwithstanding, no Lender shall have any obligation
whatsoever to increase its respective Commitment Amount hereunder.  The consent
of the Lenders shall not be required in order for any financial institution
acceptable to the Administrative Agent and the Issuing Bank to become a party to
this Agreement pursuant to this Section 2.05.
 
 
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(b)           If the Aggregate Commitment Amount is increased in accordance with
this Section 2.05, the Administrative Agent and the Borrower shall determine the
effective date of such increase (the “Increase Effective Date”).  The
Administrative Agent and the Borrower shall promptly notify the Lenders of the
final allocation of such increase and the Increase Effective Date.  Each
existing Lender that increases its Commitment Amount and each additional Lender,
if any, and the Borrower shall execute and deliver to the Administrative Agent
(which the Administrative Agent shall also execute to acknowledge its acceptance
thereof) an agreement substantially in the form of Exhibit B (an “Additional
Lender Agreement”).  Upon receipt by the Administrative Agent of Additional
Lender Agreements from existing Lenders or additional Lenders (together with an
Administrative Questionnaire, in the case of any additional Lender), if any, in
an amount sufficient to effectuate the increase requested by the
Borrower:  (1) the Aggregate Commitment Amount shall be increased, (2) the
Administrative Agent shall amend and distribute to the Borrower and the Lenders
a revised Schedule 2.01 of the Commitment Amounts of each Lender adding or
amending, as applicable, the Commitment Amount of any Lender executing the
Additional Lender Agreement and the revised Applicable Percentages of the
Lenders (which shall be deemed incorporated into this Agreement), (3) any
additional Lender shall be deemed to be a party in all respects to this
Agreement and the other Loan Documents to which the Lenders are party as of the
Increase Effective Date and (4) upon the Increase Effective Date, any increasing
or additional Lender party to the Additional Lender Agreement shall purchase
from each of the (other) Lenders party to the Agreement immediately prior to the
Increase Effective Date a pro rata portion of the outstanding Loans (and
participation interests in Letters of Credit) of each such (other) Lender such
that each Lender (including any additional Lender, if any) shall hold its
respective Applicable Percentage of the outstanding Loans (and participation
interests in Letters of Credit) as reflected on the revised Schedule 2.01
required by this Section 2.05, provided that the Borrower shall pay any amounts
due under Section 2.16 to the extent that any such purchase gives rise to the
costs indemnified thereby.
 
(c)           As a condition precedent to such increase, the Borrower shall
deliver to the Administrative Agent a certificate dated as of the Increase
Effective Date (in sufficient copies for each Lender) signed by a Authorized
Officer of the Borrower (i) certifying and attaching the resolutions adopted by
the Borrower approving or consenting to such increase, (ii) including a
certificate of the type described in Section 5.01(c) demonstrating pro forma
compliance with Section 6.09 after giving effect to such increase and (iii)
certifying that, before and after giving effect to such increase, the
representations and warranties contained in Article III are true and correct on
and as of the Increase Effective Date and no Default or Event of Default exists.
 
(d)           This Section shall supersede any provision in Section 9.02 to the
contrary.

 
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SECTION 2.06.  Letters of Credit.  (a) General.  Subject to the terms and
conditions set forth herein, the Borrower may request the issuance of Letters of
Credit for its own account, or the account of any other Credit Party, in a form
reasonably acceptable to the Administrative Agent and the Issuing Bank, at any
time and from time to time during the Availability Period.  In the event of any
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of any form of letter of credit application or other agreement
submitted by the Borrower to, or entered into by the Borrower with, the Issuing
Bank relating to any Letter of Credit, the terms and conditions of this
Agreement shall control.
 
(b)           Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions.  To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuing Bank) to the Issuing
Bank and the Administrative Agent (reasonably in advance of the requested date
of issuance, amendment, renewal or extension) a notice requesting the issuance
of a Letter of Credit, or identifying the Letter of Credit to be amended,
renewed or extended, and specifying the date of issuance, amendment, renewal or
extension (which shall be a Business Day), the date on which such Letter of
Credit is to expire (which shall comply with paragraph (c) of this Section), the
amount of such Letter of Credit, the name and address of the beneficiary thereof
and such other information as shall be necessary to prepare, amend, renew or
extend such Letter of Credit.  If requested by the Issuing Bank, the Borrower
also shall submit a letter of credit application on the Issuing Bank’s standard
form in connection with any request for a Letter of Credit.  A Letter of Credit
shall be issued, amended, renewed or extended only if (and upon issuance,
amendment, renewal or extension of each Letter of Credit the Borrower shall be
deemed to represent and warrant that), after giving effect to such issuance,
amendment, renewal or extension, (i) the LC Exposure shall not exceed
$20,000,000 and (ii) the aggregate Credit Exposure shall not exceed the lesser
of (x) the Aggregate Commitment Amount and (y) the Borrowing Base then in
effect, in each case, as such amounts may be adjusted from time to time in
accordance with this Agreement.
 
(c)           Expiration Date.  Each Letter of Credit shall expire at or prior
to the earlier of (i) the close of business on the date that is five Business
Days prior to the Maturity Date and (ii) one year after its issuance, provided,
however, that any Letter of Credit with a one-year term may provide for the
renewal thereof for additional one-year periods (which shall in no event extend
beyond the fifth business day prior to the Maturity Date) unless the Issuing
Bank provides prior notice of non-renewal to the beneficiary thereof.
 
(d)           Participations.  By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Lender, and each Lender hereby acquires from the Issuing
Bank, a participation in such Letter of Credit equal to such Lender’s Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit.  In consideration and in furtherance of the foregoing, each Lender
hereby absolutely and unconditionally agrees to pay to the Administrative Agent,
for the account of the Issuing Bank, such Lender’s Applicable Percentage of each
LC Disbursement made by the Issuing Bank and not reimbursed by the Borrower on
the date due as provided in paragraph (e) of this Section, or of any
reimbursement payment required to be refunded to the Borrower for any
reason.  Each Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph in respect of Letters of Credit is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including any amendment, renewal or extension of any Letter of
Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.
 
 
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(e)           Reimbursement.  If the Issuing Bank shall make any LC Disbursement
in respect of a Letter of Credit, the Borrower shall reimburse such LC
Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 12:00 noon, New York City time, on (i) the Business
Day that the Borrower receives such notice, if such notice is received prior to
10:00 a.m., New York City time, on the day of receipt, or (ii) the Business Day
immediately following the day that the Borrower receives such notice, if such
notice is not received prior to such time on the day of receipt; provided that
the Borrower shall, subject to the conditions to borrowing set forth herein,
automatically be deemed to have requested in accordance with Section 2.03 that
such payment be financed with an ABR Borrowing in an equivalent amount and, to
the extent so financed, the Borrower’s obligation to make such payment shall be
discharged and replaced by the resulting ABR Borrowing.  If the Borrower fails
to make such payment when due, the Administrative Agent shall notify each Lender
of the applicable LC Disbursement, the payment then due from the Borrower in
respect thereof and such Lender’s Applicable Percentage thereof.  Promptly
following receipt of such notice, each Lender shall pay to the Administrative
Agent its Applicable Percentage of the payment then due from the Borrower, in
the same manner as provided in Section 2.07 with respect to Loans made by such
Lender (and Section 2.07 shall apply, mutatis mutandis, to the payment
obligations of the Lenders), and the Administrative Agent shall promptly pay to
the Issuing Bank the amounts so received by it from the Lenders.  Promptly
following receipt by the Administrative Agent of any payment from the Borrower
pursuant to this paragraph, the Administrative Agent shall distribute such
payment to the Issuing Bank or, to the extent that Lenders have made payments
pursuant to this paragraph to reimburse the Issuing Bank, then to such Lenders
and the Issuing Bank as their interests may appear.  Any payment made by a
Lender pursuant to this paragraph to reimburse the Issuing Bank for any LC
Disbursement (other than the funding of ABR Loans as contemplated above) shall
not constitute a Loan and shall not relieve the Borrower of its obligation to
reimburse such LC Disbursement.
 
 
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(f)           Obligations Absolute.  The Borrower’s obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable and shall be performed strictly in accordance with
the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not strictly
comply with the terms of such Letter of Credit or (iv) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section, constitute a legal or equitable
discharge of, or provide a right of setoff against, the Borrower’s obligations
hereunder.  Except as set forth herein, neither the Administrative Agent, the
Lenders nor the Issuing Bank, nor any of their Related Parties, shall have any
liability or responsibility by reason of or in connection with the issuance or
transfer of any Letter of Credit or any payment or failure to make any payment
thereunder (irrespective of any of the circumstances referred to in the
preceding sentence), or any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or other communication under or
relating to any Letter of Credit (including any document required to make a
drawing thereunder), any error in interpretation of technical terms or any
consequence arising from causes beyond the control of the Issuing Bank; provided
that the foregoing shall not be construed to excuse the Issuing Bank from
liability to the Borrower to the extent of any damages (other than consequential
damages, claims in respect of which are hereby waived by the Borrower to the
extent permitted by applicable law) suffered by the Borrower that are caused by
the Issuing Bank’s failure to exercise care when determining whether drafts and
other documents presented under a Letter of Credit comply with the terms
thereof.  The parties hereto expressly agree that, in the absence of gross
negligence or willful misconduct on the part of the Issuing Bank (as finally
determined by a court of competent jurisdiction), the Issuing Bank shall be
deemed to have exercised care in each such determination (AND THE PARTIES HERETO
ACKNOWLEDGE AND AGREE THAT IT IS THE INTENTION OF THE PARTIES HERETO THAT THE
ISSUING BANK BE EXCUSED FOR ITS OWN NEGLIGENCE (OTHER THAN GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT), REGARDLESS OF WHETHER SUCH NEGLIGENCE IS SOLE OR
CONTRIBUTORY, ACTIVE OR PASSIVE, IMPUTED, JOINT OR TECHNICAL).  In furtherance
of the foregoing and without limiting the generality thereof, the parties agree
that, with respect to documents presented that appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Bank
may, in its sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.
 
(g)           Disbursement Procedures.  The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit.  The Issuing Bank shall promptly
notify the Administrative Agent and the Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the Lenders with respect to any such LC
Disbursement.
 
(h)           Interim Interest.  If the Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Loans; provided that,
if the Borrower fails to reimburse such LC Disbursement when due pursuant to
paragraph (e) of this Section, then Section 2.13(c) shall apply.  Interest
accrued pursuant to this paragraph shall be for the account of the Issuing Bank,
except that interest accrued on and after the date of payment by any Lender
pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be
for the account of such Lender to the extent of such payment.
 
 
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(i)            Replacement of the Issuing Bank.  The Issuing Bank may be
replaced at any time by written agreement among the Borrower, the Administrative
Agent and the successor Issuing Bank, with the consent of the replaced Issuing
Bank, such consent not to be unreasonably withheld or delayed.  The
Administrative Agent shall notify the Lenders of any such replacement of the
Issuing Bank.  At the time any such replacement shall become effective, the
Borrower shall pay all unpaid fees accrued for the account of the replaced
Issuing Bank pursuant to Section 2.12(b).  From and after the effective date of
any such replacement, (i) the successor Issuing Bank shall have all the rights
and obligations of the Issuing Bank under this Agreement with respect to Letters
of Credit to be issued thereafter and (ii) references herein to the term
“Issuing Bank” shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require.  After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.
 
(j)            Cash Collateralization.  If any Event of Default shall occur and
be continuing or if required pursuant to Section 2.11, on the Business Day that
the Borrower receives notice from the Administrative Agent or the Majority
Lenders demanding the deposit of cash collateral pursuant to this paragraph, the
Borrower shall deposit in an account with the Administrative Agent, in the name
of the Administrative Agent and for the benefit of the Lenders, an amount in
cash equal to the LC Exposure as of such date, plus any accrued and unpaid
interest thereon; provided that the obligation to deposit such cash collateral
shall become effective immediately, and such deposit shall become immediately
due and payable, without demand or other notice of any kind, upon the occurrence
of any Event of Default with respect to the Borrower described in clause (h) or
(i) of Section 7.01.  The Borrower hereby grants to the Administrative Agent,
for the benefit of the Issuing Bank and the Lenders, an exclusive first priority
and continuing perfected security interest in and Lien on such account and all
cash, checks, drafts, certificates and instruments, if any, from time to time
deposited or held in such account, all deposits or wire transfers made thereto,
any and all investments purchased with funds deposited in such account, all
interest, dividends, cash, instruments, financial assets and other Property from
time to time received, receivable or otherwise payable in respect of, or in
exchange for, any or all of the foregoing, and all proceeds, products,
accessions, rents, profits, income and benefits therefrom, and any substitutions
and replacements therefor.  Such deposit shall be held by the Administrative
Agent as collateral for the payment and performance of the obligations of the
Borrower under this Agreement.  The Administrative Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal, over such
account.  Other than any interest earned on the investment of such deposits,
which investments shall be made at the option and sole discretion of the
Administrative Agent and at the Borrower’s risk and expense, such deposits shall
not bear interest.  Interest or profits, if any, on such investments shall
accumulate in such account.  Moneys in such account shall be applied by the
Administrative Agent to reimburse the Issuing Bank for LC Disbursements for
which it has not been reimbursed and, to the extent not so applied, shall be
held for the satisfaction of the reimbursement obligations of the Borrower for
the LC Exposure at such time or, if the maturity of the Loans has been
accelerated (but subject to the consent of Majority Lenders), be applied to
satisfy other obligations of the Borrower under this Agreement.  If at any time
the amount of cash collateral held by the Administrative Agent pursuant hereto
shall exceed the LC Exposure as of such date, Administrative Agent shall return
such excess to the Borrower within two Business Days thereafter.  If the
Borrower is required to provide an amount of cash collateral hereunder as a
result of the occurrence of an Event of Default, such amount (to the extent not
applied as aforesaid) shall be returned to the Borrower within two Business Days
after all Events of Default have been cured or waived.

 
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(k)           Existing Letters of Credit.  All Existing Letters of Credit shall
be deemed to be issued under this Agreement as of the Effective Date and shall
constitute Letters of Credit hereunder for all purposes (including
Section 2.06(b)), and no notice requesting issuance thereof shall be required
hereunder.  Each reference herein to the issuance of a Letter of Credit shall
include any such deemed issuance.  All fees accrued on the Existing Letters of
Credit to but excluding the Effective Date shall be for the account of the
Issuing Bank and the lenders under the Existing Credit Facility, and all fees
accruing on the Existing Letters of Credit on and after the Effective Date shall
be for the account of the Issuing Bank and the Banks as provided herein.
 
SECTION 2.07.  Funding of Borrowings.  (a) Each Lender shall make each Loan to
be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 1:00 p.m., New York City time, to the account of
the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders.  The Administrative Agent will make such Loans available
to the Borrower by promptly crediting the amounts so received, in like funds, to
an account of the Borrower maintained with the Administrative Agent designated
by the Borrower in the applicable Borrowing Request; provided that ABR Loans
made to finance the reimbursement of an LC Disbursement as provided in
Section 2.06(e) shall be remitted by the Administrative Agent to the Issuing
Bank.
 
(b)           Unless the Administrative Agent shall have received written notice
from a Lender prior to the proposed date of any Eurodollar Borrowing or prior to
1:00 p.m., New York City time, on the date any proposed ABR Borrowing, as
applicable, that such Lender will not make available to the Administrative Agent
such Lender’s share of such Borrowing, the Administrative Agent may assume that
such Lender has made such share available on such date in accordance with
paragraph (a) of this Section and may, in reliance upon such assumption, make
available to the Borrower a corresponding amount.  In such event, if a Lender
has not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith within two Business Days
after demand therefor such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to the Borrower to
but excluding the date of payment to the Administrative Agent, at (i) in the
case of such Lender, the greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation or (ii) in the case of the Borrower, the interest rate
applicable to ABR Loans.  If such Lender pays such amount to the Administrative
Agent, then such amount shall constitute such Lender’s Loan included in such
Borrowing.
 
 
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SECTION 2.08.  Interest Elections.  (a) Each Borrowing initially shall be of the
Type specified in the applicable Borrowing Request and, in the case of a
Eurodollar Borrowing, shall have an initial Interest Period as specified in such
Borrowing Request.  Thereafter, the Borrower may elect to convert such Borrowing
to a different Type or to continue such Borrowing and, in the case of a
Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in
this Section.  The Borrower may elect different options with respect to
different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing.
 
(b)           To make an election pursuant to this Section, the Borrower shall
notify the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required under Section 2.03 if the Borrower were
requesting a Borrowing of the Type resulting from such election to be made on
the effective date of such election.  Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Interest Election Request in a
form approved by the Administrative Agent and signed by the Borrower.
 
(c)           Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02:
 
(i)           the Borrowing to which such Interest Election Request applies and,
if different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing (in
which case the information to be specified pursuant to clauses (iii) and (iv)
below shall be specified for each resulting Borrowing);
 
(ii)         the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;
 
(iii)         with respect to any Borrowing, whether the resulting Borrowing is
to be an ABR Borrowing or a Eurodollar Borrowing; and
 
(iv)        if the resulting Borrowing is a Eurodollar Borrowing, the Interest
Period to be applicable thereto after giving effect to such election, which
shall be a period contemplated by the definition of the term “Interest Period”.
 
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month’s duration.
 
(d)          Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender’s portion of each resulting Borrowing.
 
(e)           If the Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be converted to
an ABR Borrowing.  Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing and the Administrative Agent, at the
request of the Majority Lenders, so notifies the Borrower, then, so long as an
Event of Default is continuing (i) no outstanding Borrowing may be converted to
or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar
Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.

 
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SECTION 2.09.  Termination and Reduction of Commitments.  (a) Unless previously
terminated, each Lender’s Commitment and the Commitments shall terminate on the
Maturity Date.
 
(b)           The Borrower may at any time terminate, or from time to time
reduce, the Commitments; provided that (i) each reduction of the Commitments
shall be in an amount that is an integral multiple of $5,000,000 and not less
than $5,000,000 and (ii) the Borrower shall not terminate or reduce the
Commitments if, after giving effect to any concurrent prepayment of the Loans in
accordance with Section 2.11, the Credit Exposure would exceed the total
Commitments, as so reduced.
 
(c)           The Borrower shall notify the Administrative Agent of any election
to terminate or reduce the Commitments under paragraph (b) of this Section at
least three Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof.  Promptly
following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof.  Each notice delivered by the Borrower pursuant
to this Section shall be irrevocable; provided that a notice of termination of
the Commitments delivered by the Borrower may state that such notice is
conditioned upon the effectiveness of other credit facilities, in which case
such notice may be revoked by the Borrower (by notice to the Administrative
Agent on or prior to the specified effective date) if such condition is not
satisfied.  Any termination or reduction of the Commitments shall be
permanent.  Each reduction of the Commitments shall be made ratably among the
Lenders in accordance with their respective Commitment.
 
SECTION 2.10.  Repayment of Loans; Evidence of Debt.  (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
each Lender the then unpaid principal amount of each Loan on the Maturity Date.
 
(b)           Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Borrower to such
Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.
 
(c)           The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder for the account of the Lenders and each Lender’s share thereof.
 
(d)           The entries made in the accounts maintained pursuant to
paragraphs (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein absent manifest error;
provided that the failure of any Lender or the Administrative Agent to maintain
such accounts or any error therein shall not in any manner affect the obligation
of the Borrower to repay the Loans in accordance with the terms of this
Agreement.

 
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(e)           Any Lender may request that Loans made by it be evidenced by a
promissory note.  In such event, the Borrower shall prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) and in a
form approved by the Administrative Agent; provided that any promissory note
issued to evidence any Lender’s Loans shall be in a stated amount equal to such
Lender’s Commitment Amount.  Thereafter, the Loans evidenced by such promissory
note and interest thereon shall at all times (including after assignment
pursuant to Section 9.04) be represented by one or more promissory notes in such
form payable to the order of the payee named therein (or, if such promissory
note is a registered note, to such payee and its registered assigns).
 
SECTION 2.11.  Prepayment of Loans.
 
(a)           Mandatory Prepayments.  At any time that a Borrowing Base
Deficiency shall occur, the Borrower shall:
 
(i)           If such Borrowing Base Deficiency results from a redetermination
of the Borrowing Base pursuant to Sections 2.04(b), 2.04(e) or 5.12, at the
Borrower’s election, take any either or both of the following actions to
eliminate the Borrowing Base Deficiency: (A) prepay the Loans in an aggregate
principal amount equal to such Borrowing Base Deficiency, together with interest
on the principal amount paid accrued to the date of such prepayment and any
funding indemnification amounts required by Section 2.16, and, if a Borrowing
Base Deficiency remains after prepaying all of the Loans as a result of LC
Exposure, pay to the Administrative Agent on behalf of the Lenders an amount
equal to such remaining Borrowing Base Deficiency to be held as cash collateral
in a special collateral account as provided in Section 2.06(j), or (B) provide
additional Collateral acceptable to the Administrative Agent with a fair market
value greater than or equal to the amount of such Borrowing Base
Deficiency.  The Borrower shall be obligated to make such prepayment, deposit of
cash collateral or provide additional Collateral within 60 days following its
receipt of written notice from the Administrative Agent of the existence of the
Borrowing Base Deficiency.
 
(ii)          If such Borrowing Base Deficiency results from a reduction of the
Borrowing Base in accordance with Sections 5.17, 6.01(j) or 6.13, use the Net
Cash Proceeds of the transaction giving rise to the reduction of the Borrowing
Base pursuant to any such Section, promptly, but in any event within two (2)
Business Days of receipt of such Net Cash Proceeds, to prepay the Loans in an
aggregate principal amount equal to such Borrowing Base Deficiency, together
with interest on the principal amount paid accrued to the date of such
prepayment and any funding indemnification amounts required by Section 2.16,
and, if a Borrowing Base Deficiency remains after prepaying all of the Loans as
a result of LC Exposure, pay to the Administrative Agent on behalf of the
Lenders an amount equal to such remaining Borrowing Base Deficiency to be held
as cash collateral in a special collateral account as provided in
Section 2.06(j); provided that if, after application of such Net Cash Proceeds
in accordance with the foregoing, any Borrowing Base Deficiency shall remain,
then the Borrower shall eliminate such remaining Borrowing Base Deficiency in
accordance with the foregoing clause (i).
 
 
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(iii)         Amounts applied to the prepayment of Loans pursuant to this
Section shall be first applied ratably to ABR Loans then outstanding and, upon
payment in full of all outstanding ABR Loans, second, to Eurodollar Loans then
outstanding, and if more than one Eurodollar Loan is then outstanding, to each
such Eurodollar Loan beginning with the Eurodollar Loan with the fewest number
of days remaining in the Interest Period applicable thereto until paid in full,
and then to the Eurodollar Loan with the next fewest number of days remaining in
the Interest Period applicable thereto until paid in full, and continuing in a
similar fashion until the Borrowing Base Deficiency has been eliminated or, in
the case of any prepayment pursuant to the foregoing clause (ii), until such Net
Cash Proceeds have been exhausted.
 
(b)           Optional Prepayment of Loans.  The Borrower shall have the right
at any time and from time to time to prepay any Borrowing in whole or in part,
without premium or penalty, but subject to the requirements of Sections 2.09(b)
and 2.16.  The Borrower shall notify the Administrative Agent by telephone
(confirmed by telecopy) of any optional prepayment (i) in the case of a
Eurodollar Borrowings, not later than 12:00 noon, New York City time, three
Business Days before the date of prepayment or (ii) in the case of prepayment of
any ABR Borrowings, not later than 12:00 noon New York City time, on the date of
such prepayment.  Such notice shall be irrevocable and shall specify the
prepayment date and the principal amount of the Borrowings or portion thereof to
be prepaid; provided that, if a notice of prepayment is given in connection with
a conditional notice of termination of the Commitments as contemplated by
Section 2.09, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.09.  Promptly following
receipt of any such notice of prepayment, the Administrative Agent shall advise
the Lenders of the contents thereof.  Each partial prepayment of any Borrowings
shall be in an amount that would be permitted in the case of an advance of a
Borrowing of the same Type as provided in Section 2.02.  Each prepayment of a
Borrowing shall be applied ratably to the Loans included in the prepaid
Borrowing.  Prepayments shall be accompanied by accrued interest to the extent
required by Section 2.13 and any amount payable under Section 2.16.
 
SECTION 2.12.  Fees.  (a) Subject to the provisions of Section 2.20, the
Borrower agrees to pay to the Administrative Agent, for the account of each
Lender (excluding any Defaulting Lenders), an unused commitment fee (the “Unused
Commitment Fee”) equal to the Applicable Rate set forth under the heading Unused
Commitment Fee Rate multiplied by the daily average of each such Lender’s Unused
Commitment.  Such Unused Commitment Fee shall be calculated on the basis of a
year consisting of 360 days and shall be payable in arrears on the last day of
each March, June, September and December and on the Maturity Date for any period
then ending for which the Unused Commitment Fee shall not have been previously
paid.  In the event the Commitments terminate on any date other than the last
day of March, June, September or December, the Borrower agrees to pay to the
Administrative Agent, for the account of each Lender (excluding any Defaulting
Lenders), on the date of such termination, each such Lender’s Unused Commitment
Fee due for the period from the last day of the immediately preceding March,
June, September or December, as the case may be, to the date such termination
occurs.
 
 
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(b)           Subject to the provisions of Section 2.20, the Borrower agrees to
pay (i) to the Administrative Agent for the account of each Lender (excluding
any Defaulting Lenders) a participation fee with respect to its participations
in Letters of Credit, which shall accrue at the same Applicable Rate used to
determine the interest rate applicable to Eurodollar Loans on the average daily
amount of such Lender’s LC Exposure (excluding any portion thereof attributable
to unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date on which such Lender’s
Commitment terminates and the date on which such Lender ceases to have any LC
Exposure, and (ii) to the Issuing Bank a fronting fee equal to the greater of
(x) $500 or (y) 1/8 of 1% per annum on the average daily amount of the LC
Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the Effective Date to but
excluding the later of the date of termination of the Commitments and the date
on which there ceases to be any LC Exposure, as well as the Issuing Bank’s
standard fees with respect to the issuance, amendment, renewal or extension of
any Letter of Credit or processing of drawings thereunder.  Participation fees
and fronting fees accrued through and including the last day of March, June,
September and December of each year shall be payable on the third Business Day
following such last day, commencing on the first such date to occur after the
Effective Date; provided that all such fees shall be payable on the date on
which the Commitments terminate and any such fees accruing after the date on
which the Commitments terminate shall be payable on demand.  Any other fees
payable to the Issuing Bank pursuant to this paragraph shall be payable within
10 days after demand.  All participation fees and fronting fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).
 
(c)           The Borrower agrees to pay to the Administrative Agent, for its
own account, fees payable in the amounts and at the times separately agreed upon
between the Borrower and the Administrative Agent.
 
(d)          All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to the Issuing
Bank, in the case of fees payable to it) for distribution, in the case of Unused
Commitment Fees and participation fees, to the Lenders.  Fees paid shall not be
refundable under any circumstances, except in the case of any overpayment due to
erroneous calculation or invoicing thereof.
 
SECTION 2.13.  Interest.  (a) The Loans comprising each ABR Borrowing shall bear
interest at the Alternate Base Rate plus the Applicable Rate.
 
(b)          Eurodollar Loans shall bear interest at the Adjusted LIBO Rate for
the Interest Period in effect for such Borrowing plus the Applicable Rate.
 
(c)           Notwithstanding the foregoing, (i) if a Default or an Event of
Default has occurred and is continuing, the Majority Lenders may, at their
option, by notice to the Borrower declare that no Borrowing may be made as,
converted into or continued as a Eurodollar Borrowing, (ii) during the
continuance of an Event of Default the Majority Lenders may, at their option, by
notice to the Borrower, declare that (A) each Eurodollar Borrowing shall bear
interest for the remainder of the applicable Interest Period plus 2% per annum,
(B) each ABR Borrowing shall bear interest at a rate per annum equal to the
Alternate Base Rate in effect from time to time plus 2% per annum and (C) the
fees described in Section 2.12(b) shall be increased by 2% per annum, provided
that, during the continuance of an Event of Default under clauses (h) or (i) of
Section 7.01, the interest rates forth in clauses (A) and (B) above and the
increase in the Letter of Credit fee set forth in clause (C) above shall be
applicable to all Borrowings without any election or action on the part of the
Administrative Agent or any Lender (as applicable, the “Default Rate”).
 
 
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(d)           Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan and upon termination of the Commitments;
provided that (i) interest accrued pursuant to paragraph (c) of this Section
shall be payable on demand, (ii) in the event of any repayment or prepayment of
any Loan (other than a prepayment of an ABR Loan prior to the end of the
Availability Period unless such prepayment is made to reduce a Borrowing Base
Deficiency), accrued interest on the principal amount repaid or prepaid shall be
payable on the date of such repayment or prepayment and (iii) in the event of
any conversion of any Eurodollar Loan prior to the end of the current Interest
Period therefor, accrued interest on such Loan shall be payable on the effective
date of such conversion.
 
(e)           All interest hereunder shall be computed on the basis of a year of
360 days, except that interest computed by reference to the Alternate Base Rate
at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day).  The applicable Alternate Base Rate,
Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.
 
SECTION 2.14.  Alternate Rate of Interest.  If prior to the commencement of any
Interest Period for a Eurodollar Borrowing:
 
(a)           the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable,
for such Interest Period; or
 
(b)           the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (or Lender) of
making or maintaining their Loans (or its Loan) included in such Borrowing for
such Interest Period;
 
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective,
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.
 
 
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SECTION 2.15.  Increased Costs.  (a) If any Change in Law shall:
 
(i)           impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of, or
credit extended by, any Lender (except any such reserve requirement reflected in
the Adjusted LIBO Rate) or the Issuing Bank; or
 
(ii)          impose on any Lender or the Issuing Bank or the London interbank
market any other condition affecting this Agreement or Eurodollar Loans made by
such Lender or any Letter of Credit or participation therein;
 
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing Bank,
as the case may be, for such additional costs incurred or reduction suffered.
 
(b)          If any Lender or the Issuing Bank determines that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender’s or the Issuing Bank’s capital or on the capital of
such Lender’s or the Issuing Bank’s holding company, if any, as a consequence of
this Agreement or the Loans made by, or participations in Letters of Credit held
by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level
below that which such Lender or the Issuing Bank or such Lender’s or the Issuing
Bank’s holding company could have achieved but for such Change in Law (taking
into consideration such Lender’s or the Issuing Bank’s policies and the policies
of such Lender’s or the Issuing Bank’s holding company with respect to capital
adequacy), then from time to time the Borrower will pay to such Lender or the
Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank or such Lender’s or the Issuing
Bank’s holding company for any such reduction suffered.
 
(c)           A certificate of a Lender or the Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or the Issuing Bank or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the Borrower and shall be conclusive absent
manifest error.  The Borrower shall pay such Lender or the Issuing Bank, as the
case may be, the amount shown as due on any such certificate within 10 Business
Days after receipt thereof.
 
(d)          Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender’s or the Issuing Bank’s right to demand such compensation; provided
that the Borrower shall not be required to compensate a Lender or the Issuing
Bank pursuant to this Section for any increased costs or reductions incurred
more than 270 days prior to the date that such Lender or the Issuing Bank, as
the case may be, notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender’s or the Issuing Bank’s
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 270-day period referred to above shall be extended to include the period of
retroactive effect thereof.
 
 
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SECTION 2.16.  Break Funding Payments.  In the event of (a) the payment of any
principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto, (c) the failure to borrow, convert, continue or
prepay any Eurodollar Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice may be revoked under Section
2.11(b) and is revoked in accordance therewith) or (d) the assignment of any
Eurodollar Loan other than on the last day of the Interest Period applicable
thereto as a result of a request by the Borrower pursuant to Section 2.05 or
Section 2.19, then, in any such event, the Borrower shall compensate each Lender
for the loss, cost and expense attributable to such event.  In the case of a
Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to
include an amount determined by such Lender to be the excess, if any, of (i) the
amount of interest which would have accrued on the principal amount of such Loan
had such event not occurred, at the Adjusted LIBO Rate that would have been
applicable to such Loan, for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest that would accrue on
such principal amount for such period at the interest rate which such Lender
would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the eurodollar
market.  A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section shall be delivered
to the Borrower and shall be conclusive absent manifest error.  The Borrower
shall pay such Lender the amount shown as due on any such certificate within 10
days after receipt thereof.
 
SECTION 2.17.  Taxes.  (a) Any and all payments by or on account of any
obligation of the Borrower hereunder shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided that if the
Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent, Lender or
Issuing Bank (as the case may be) receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower shall make
such deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.
 
(b)           In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.

 
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(c)           The Borrower shall indemnify the Administrative Agent, each Lender
and the Issuing Bank, within 10 Business Days after written demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent, such Lender or the Issuing Bank, as the case may be, on or
with respect to any payment by or on account of any obligation of the Borrower
hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any penalties, interest
and reasonable expenses arising therefrom or with respect thereto, whether or
not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority.  A certificate as to the amount
of such payment or liability delivered to the Borrower by a Lender or the
Issuing Bank, or by the Administrative Agent on its own behalf or on behalf of a
Lender or the Issuing Bank, shall be conclusive absent manifest error.
 
(d)           As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
 
(e)           Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by applicable
law or reasonably requested by the Borrower as will permit such payments to be
made without withholding or at a reduced rate.
 
(f)           If the Administrative Agent or a Lender determines, in its sole
discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by the Borrower or with respect to which the
Borrower has paid additional amounts pursuant to this Section 2.17, it shall pay
over such refund to the Borrower (but only to the extent of indemnity payments
made, or additional amounts paid, by the Borrower under this Section 2.17 with
respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Administrative Agent or such Lender and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided, that the Borrower, upon the request of
the Administrative Agent or such Lender, agrees to repay the amount paid over to
the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority.  This Section shall not be construed to
require the Administrative Agent or any Lender to make available its tax returns
(or any other information relating to its taxes which it deems confidential) to
the Borrower or any other Person.
 
SECTION 2.18.  Payments Generally; Pro Rata Treatment; Sharing of
Set-offs.  (a) The Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or reimbursement of LC
Disbursements, or of amounts payable under Section 2.15, 2.16 or 2.17, or
otherwise) prior to 12:00 noon, New York City time, on the date when due, in
immediately available funds, without set-off or counterclaim.  Any amounts
received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon.  All such payments
shall be made to the Administrative Agent at its offices at 270 Park Avenue, New
York, New York, except payments to be made directly to the Issuing Bank as
expressly provided herein and except that payments pursuant to Sections 2.15,
2.16, 2.17 and 9.03 shall be made directly to the Persons entitled thereto.  The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof.  If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension.  All payments
hereunder shall be made in dollars.

 
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(b)           If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
(i) first, towards payment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal
and unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.
 
(c)           If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans or participations in LC Disbursements resulting in
such Lender receiving payment of a greater proportion of the aggregate amount of
its Loans and participations in LC Disbursements and accrued interest thereon
than the proportion received by any other Lender, then the Lender receiving such
greater proportion shall purchase (for cash at face value) participations in the
Loans and participations in LC Disbursements of other Lenders to the extent
necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans and participations in LC
Disbursements; provided that (i) if any such participations are purchased and
all or any portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to the extent
of such recovery, without interest, and (ii) the provisions of this paragraph
shall not be construed to apply to any payment made by the Borrower pursuant to
and in accordance with the express terms of this Agreement or any payment
obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans or participations in LC Disbursements to any
assignee or participant, other than to the Borrower or any Subsidiary or
Affiliate thereof (as to which the provisions of this paragraph shall
apply).  The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of the Borrower in the amount
of such participation.
 
(d)           Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the Issuing Bank hereunder that the
Borrower will not make such payment, the Administrative Agent may assume that
the Borrower has made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the Lenders or the Issuing Bank,
as the case may be, the amount due.  In such event, if the Borrower has not in
fact made such payment, then each of the Lenders or the Issuing Bank, as the
case may be, severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender or Issuing Bank with interest
thereon, for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Administrative Agent, at the
greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation.
 
 
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(e)           If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.06(d) or (e), 2.07(b), 2.18(d) or 9.03(c), then the
Administrative Agent may, in its discretion and notwithstanding any contrary
provision hereof, (i) apply any amounts thereafter received by the
Administrative Agent for the account of such Lender and for the benefit of the
Administrative Agent or the Issuing Bank to satisfy such Lender’s obligations
under such Sections until all such unsatisfied obligations are fully paid and/or
(ii) hold any such amounts in a segregated account as cash collateral for, and
application to, any future funding obligations of such Lender under such
Sections; in the case of each of (i) and (ii) above, in any order as determined
by the Administrative Agent in its discretion.
 
SECTION 2.19.  Mitigation Obligations; Replacement of Lenders.  (a) If any
Lender requests compensation under Section 2.15, or if the Borrower is required
to pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.17, then such Lender shall use
reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 2.15 or 2.17, as the case may be, in the future and
(ii) would not subject such Lender to any unreimbursed cost or expense and would
not otherwise be disadvantageous to such Lender.  The Borrower hereby agrees to
pay all reasonable costs and expenses incurred by any Lender in connection with
any such designation or assignment.
 
(b)          If any Lender requests compensation under Section 2.15, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
or if any Lender becomes a Defaulting Lender, or if any Lender fails to execute
an amendment or waiver with respect to the Loan Documents that is executed by
the Required Lenders, then the Borrower may, at its sole expense and effort,
upon notice to such Lender and the Administrative Agent, require such Lender to
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in Section 9.04), all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) the Borrower shall have received the prior
written consent of the Administrative Agent (and if a Commitment is being
assigned, the Issuing Bank), which consent shall not unreasonably be withheld,
(ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in LC Disbursements,
accrued interest thereon, accrued fees and all other amounts payable to it
hereunder, from the assignee (to the extent of such outstanding principal and
accrued interest and fees) or the Borrower (in the case of all other amounts)
and (iii) in the case of any such assignment resulting from a claim for
compensation under Section 2.15 or payments required to be made pursuant to
Section 2.17, such assignment will result in a reduction in such compensation or
payments.  A Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such assignment
and delegation cease to apply.
 
 
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SECTION 2.20.  Defaulting Lenders.  Notwithstanding any provision of this
Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the
following provisions shall apply for so long as such Lender is a Defaulting
Lender:
 
(a)           fees shall cease to accrue on the unfunded portion of the
Commitment of such Defaulting Lender pursuant to Section 2.12(a);
 
(b)           the Commitment and Credit Exposure of such Defaulting Lender shall
not be included in determining whether all Lenders, the Majority Lenders or the
Required Lenders have taken or may take any action hereunder (including any
consent to any amendment or waiver pursuant to Section 9.02); provided that any
waiver, amendment or modification requiring the consent of all Lenders or each
affected Lender that affects such Defaulting Lender differently from other
affected Lenders shall require the consent of such Defaulting Lender;
 
(c)           if any LC Exposure exists at the time a Lender becomes a
Defaulting Lender then:
 
(i)           all or any part of such LC Exposure shall be reallocated among the
non-Defaulting Lenders in accordance with their respective Applicable
Percentages but only to the extent (x) the sum of all non-Defaulting Lenders’
Credit Exposures plus such Defaulting Lender’s LC Exposure does not exceed the
total of all non-Defaulting Lenders’ Commitments and (y) the conditions set
forth in Section 4.02 are satisfied at such time; and
 
(ii)          if the reallocation described in clause (i) above cannot, or can
only partially, be effected, the Borrower shall within one Business Day
following notice by the Administrative Agent cash collateralize such Defaulting
Lender’s LC Exposure (after giving effect to any partial reallocation pursuant
to clause (i) above) in accordance with the procedures set forth in
Section 2.06(j) for so long as such LC Exposure is outstanding;
 
(iii)         if the Borrower cash collateralizes any portion of such Defaulting
Lender’s LC Exposure pursuant to Section 2.20(c), the Borrower shall not be
required to pay any fees to such Defaulting Lender pursuant to Section 2.12(b)
with respect to such Defaulting Lender’s LC Exposure during the period such
Defaulting Lender’s LC Exposure is cash collateralized;
 
(iv)         if the LC Exposure of the non-Defaulting Lenders is reallocated
pursuant to Section 2.20(c), then the fees payable to the Lenders pursuant to
Section 2.12(a) and Section 2.12(b) shall be adjusted in accordance with such
non-Defaulting Lenders’ Applicable Percentages; or
 
(v)          if any Defaulting Lender’s LC Exposure is neither cash
collateralized nor reallocated pursuant to Section 2.20(c), then, without
prejudice to any rights or remedies of the Issuing Bank or any Lender hereunder,
all letter of credit fees payable under Section 2.12(b) with respect to such
Defaulting Lender’s LC Exposure shall be payable to the Issuing Bank until such
LC Exposure is cash collateralized and/or reallocated; and
 
 
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(d)           so long as any Lender is a Defaulting Lender the Issuing Bank
shall not be required to issue, amend or increase any Letter of Credit, unless
it is satisfied that the related exposure will be 100% covered by the
Commitments of the non-Defaulting Lenders and/or cash collateral will be
provided by the Borrower in accordance with Section 2.20(c), and participating
interests in any such newly issued or increased Letter of Credit shall be
allocated among non-Defaulting Lenders in a manner consistent with Section
2.20(c)(i) (and Defaulting Lenders shall not participate therein).
 
In the event that the Administrative Agent, the Borrower and the Issuing Bank
each agrees that a Defaulting Lender has adequately remedied all matters that
caused such Lender to be a Defaulting Lender, then the LC Exposure of the
Lenders shall be readjusted to reflect the inclusion of such Lender’s Commitment
and on such date such Lender shall purchase at par such of the Loans of the
other Lenders as the Administrative shall determine may be necessary in order
for such Lender to hold such Loans in accordance with its Applicable Percentage.
 
ARTICLE III

 
Representations and Warranties
 
Each of the Parent and the Borrower represents and warrants to the Lenders that:
 
SECTION 3.01.  Existence; Organization; Powers.  The Parent, the Borrower and
each Restricted Subsidiary: (a) is duly organized or formed, legally existing
and in good standing, if applicable, under the laws of the jurisdiction of its
formation, except as to any Restricted Subsidiary where the failure to so exist
or remain in good standing could not reasonably be expected to have a Material
Adverse Effect, (b) has all requisite power, and has all material governmental
licenses, authorizations, consents and approvals necessary to own its assets and
carry on its business as now being or as proposed to be conducted, except where
failure to have such power could not reasonably be expected to have a Material
Adverse Effect, and (c) is qualified to do business in all jurisdictions in
which the nature of the business conducted by it makes such qualification
necessary and where failure so to qualify could reasonably be expected to have a
Material Adverse Effect.
 
SECTION 3.02.  Authorization; Enforceability.  The Parent, the Borrower and each
Restricted Subsidiary have all necessary power and authority to execute, deliver
and perform its obligations under this Agreement and the Loan Documents to which
it is a party.  The execution, delivery and performance by the Parent, the
Borrower and each Restricted Subsidiary of this Agreement and the Loan Documents
to which it is a party have been duly authorized by all necessary corporate or
partnership action, and this Agreement and the Loan Documents constitute the
legal, valid and binding obligations of the Parent, the Borrower and each
Restricted Subsidiary party thereto, enforceable in accordance with their terms,
except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally and
general principles of equity, regardless of whether considered in a proceeding
in equity or at law.
 
 
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SECTION 3.03.  Governmental Approvals; No Conflicts.  No authorizations,
approvals or consents of, and no filings or registrations with, any Governmental
Authority or any third Person are necessary for the execution, delivery or
performance by the Parent, the Borrower or any Restricted Subsidiary of this
Agreement or the Loan Documents or for the validity or enforceability thereof,
except for (i) the recording and filing of the Collateral Documents as required
by this Agreement and (ii) those third party approvals or consents which, if not
made or obtained, would not cause a Default or Event of Default hereunder, could
not reasonably be expected to have a Material Adverse Effect and do not have an
adverse effect on the enforceability of the Loan Documents.  Neither the
execution and delivery of this Agreement or any Loan Document, nor compliance
with the terms and provisions hereof or thereof, will conflict with or result in
a breach of, or require any consent that has not been obtained as of the
Effective Date under, the respective Organizational Documents of the Parent, the
Borrower or any Restricted Subsidiary, any Governmental Requirement, any
Unsecured Notes Document or any other material agreement or instrument to which
the Parent, the Borrower or any Restricted Subsidiary is a party or by which it
is bound or to which it or its Properties are subject, or constitute a default
under any Unsecured Notes Document or any such agreement or instrument, or
result in the creation or imposition of any Lien upon any of the revenues or
assets of the Parent, the Borrower or any Restricted Subsidiary pursuant to the
terms of any Unsecured Notes Documents or any such agreement or instrument,
other than the Liens created by the Loan Documents.
 
SECTION 3.04.  Financial Condition; No Material Adverse Change.
 
(a)           The Parent has heretofore furnished to the Administrative Agent
and the Lenders its consolidated balance sheet, and the related consolidated
statements of income, cash flows and shareholders’ equity of the Parent and its
Subsidiaries (a) as of and for the fiscal year ended December 31, 2008, audited
by and accompanied by the unqualified opinion of KPMG LLP, independent certified
public accountants, and (b) as of and for the fiscal quarter ended
June 30, 2009, certified by an Authorized Officer that such financial statements
present fairly in all material respects, the financial condition and results of
operations of the Parent and its Subsidiaries as of such dates and for such
periods.  Such financial statements were prepared in accordance with GAAP
applied on a consistent basis.  Since the date of the audited financial
statements of the Parent that have most recently been delivered pursuant to
Section 5.01(a), there has been no material adverse change.
 
(b)           Except as disclosed to the Administrative Agent in writing, none
of the Parent, the Borrower or any Restricted Subsidiary has any material
contingent liabilities, material liabilities for taxes, unusual and material
forward or long-term commitments or material unrealized or anticipated losses
from any unfavorable commitments, except as referred to or reflected or provided
for in the consolidated balance sheets of the Parent or as otherwise disclosed
to the Lenders in writing.
 
(c)           The Parent and the Borrower have disclosed to the Lenders in
writing any and all facts that, in the reasonable good faith judgment of the
Parent and the Borrower, could reasonably be expected to result in a Material
Adverse Effect.
 
 
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SECTION 3.05.  Properties.
 
(a)           Each of the Parent, the Borrower and the Restricted Subsidiaries
has good and defensible title to its material Oil and Gas Properties and good
title to its material personal Properties, in each case, free and clear of all
Liens except Liens permitted by Section 6.02.  After giving full effect to Liens
permitted by Section 6.02, the Parent, the Borrower or the Restricted
Subsidiary, as applicable, specified as the owner owns the net interests in
production attributable to the Hydrocarbon Interests as reflected in the most
recently delivered Reserve Report, and the ownership of such Properties shall
not in any material respect obligate the Parent, the Borrower or such Restricted
Subsidiary to bear the costs and expenses relating to the maintenance,
development and operations of each such Property in an amount in excess of the
working interest of each Property set forth in the most recently delivered
Reserve Report that is not offset by a corresponding proportionate increase in
the Parent’s, the Borrower’s or such Restricted Subsidiary’s net revenue
interest in such Property.
 
(b)           All material leases and agreements necessary for the conduct of
the business of the Parent, the Borrower and the Restricted Subsidiaries are
valid and subsisting, in full force and effect, and there exists no default or
event or circumstance that with the giving of notice or the passage of time or
both would give rise to a default under any such lease or leases, except as
could not reasonably be expected to have a Material Adverse Effect.
 
(c)           The rights, Properties and other assets presently owned, leased or
licensed by the Parent, the Borrower and the Restricted Subsidiaries, including,
without limitation, all easements and rights of way, include all rights,
Properties and other assets necessary to permit the Parent, the Borrower and the
Restricted Subsidiaries to conduct their business in all material respects in
the same manner as such business has been conducted prior to the Effective Date.
 
(d)           All of the assets and Properties of the Parent, the Borrower and
the Restricted Subsidiaries that are reasonably necessary for the operation of
their business are in good working condition and are maintained in accordance
with prudent business standards.
 
SECTION 3.06.  Litigation and Environmental Matters.  (a) Except as set forth on
Schedule 3.06, there are no actions, suits or proceedings by or before any
arbitrator or Governmental Authority pending against or, to the knowledge of the
Parent or the Borrower, threatened against or affecting the Parent, the Borrower
or any of the Restricted Subsidiaries (i) as to which there is a reasonable
possibility of an adverse determination and that, if adversely determined, could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect or (ii) that involve this Agreement or the other Loan
Documents.
 
(b)           Except as could not be reasonably expected to have a Material
Adverse Effect (or with respect to (iii), (iv) and (v) below, where the failure
to take such actions could not be reasonably expected to have a Material Adverse
Effect):
 
(i)           neither any Property of the Parent, the Borrower or any Restricted
Subsidiary, nor the operations conducted thereon, violate any order or
requirement of any court or Governmental Authority or any Environmental Laws;

 
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(ii)           no Property of the Parent, the Borrower or any Restricted
Subsidiary nor the operations currently conducted thereon or, to the knowledge
of the Parent or the Borrower, by any prior owner or operator of such Property
or operation, are in violation of or subject to any existing, pending or
threatened action, suit, investigation, inquiry or proceeding by or before any
court or Governmental Authority or to any remedial obligations under
Environmental Laws;
 
(iii)           all notices, permits, licenses or similar authorizations, if
any, required to be obtained or filed in connection with the operation or use of
any and all Property of the Parent, the Borrower and each Restricted Subsidiary,
including, without limitation, past or present treatment, storage, disposal or
release of a hazardous substance or solid waste into the environment, have been
duly obtained or filed, and the Parent, the Borrower and each Restricted
Subsidiary are in compliance with the terms and conditions of all such notices,
permits, licenses and similar authorizations;
 
(iv)           all hazardous substances, solid waste and oil and gas exploration
and production wastes, if any, generated at any and all Property of the Parent,
the Borrower or any Restricted Subsidiary have in the past been transported,
treated and disposed of in accordance with Environmental Laws and so as not to
pose an imminent and substantial endangerment to public health or welfare or the
environment, and, to the knowledge of the Parent or the Borrower, all such
transport carriers and treatment and disposal facilities have been and are
operating in compliance with Environmental Laws and so as not to pose an
imminent and substantial endangerment to public health or welfare or the
environment, and are not the subject of any existing, pending or threatened
action, investigation or inquiry by any Governmental Authority in connection
with any Environmental Laws;
 
(v)           the Parent and the Borrower have taken all steps reasonably
necessary to determine and have determined that no hazardous substances, solid
waste or oil and gas exploration and production wastes, have been disposed of or
otherwise released, and there has been no threatened release of any hazardous
substances on or to any Property of the Parent, the Borrower or any Restricted
Subsidiary, except in compliance with Environmental Laws and so as not to pose
an imminent and substantial endangerment to public health or welfare or the
environment;
 
(vi)           to the extent applicable, all Property of the Parent, the
Borrower and each Restricted Subsidiary currently satisfies all design,
operation and equipment requirements imposed by the Oil Pollution Act of 1990
and neither the Parent nor the Borrower has any reason to believe that such
Property, to the extent subject thereto, will not be able to maintain compliance
with the requirements thereof during the term of this Agreement; and
 
(c)           none of the Parent, the Borrower or any Restricted Subsidiary has
any known material contingent liability in connection with any release or
threatened release of any oil, hazardous substance or solid waste into the
environment.

 
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SECTION 3.07.  Compliance with Laws and Agreements.  None of the Parent, the
Borrower or any Restricted Subsidiary has violated any applicable Governmental
Requirement binding upon it or its Properties or failed to obtain any license,
permit, franchise or other governmental authorization necessary for the
ownership of any of its Properties or the conduct of its business, which
violation or failure would have (in the event such violation or failure were
asserted by any Person through appropriate action) a Material Adverse
Effect.  None of the Parent, the Borrower or any Restricted Subsidiary is in
default nor has any event or circumstance occurred that, but for the expiration
of any applicable grace period or the giving of notice, or both, would
constitute a default under any Unsecured Notes Documents or any other material
agreement or instrument to which the Borrower or any Restricted Subsidiary is a
party or by which the Borrower or any Restricted Subsidiary is bound which
default could reasonably be expected to have a Material Adverse Effect.  No
Default hereunder has occurred and is continuing.
 
SECTION 3.08.  Investment Company Status.  None of the Parent, the Borrower or
any Restricted Subsidiary is an “investment company” or a company “controlled”
by an “investment company,” within the meaning of the Investment Company Act of
1940, as amended.
 
SECTION 3.09.  Taxes.  Each of the Parent, the Borrower and the Restricted
Subsidiaries has filed all United States Federal income tax returns and all
other tax returns that are required to be filed by it and has paid all material
taxes due pursuant to such returns or pursuant to any assessment received by the
Parent, the Borrower or any Restricted Subsidiary, except any such taxes that
are being contested in good faith by appropriate proceedings diligently
conducted and for which adequate reserves are being maintained in accordance
with GAAP.  The charges, accruals and reserves on the books of the Parent, the
Borrower and the Restricted Subsidiaries in respect of taxes and other
governmental charges are, in the opinion of the Parent, adequate.  No tax lien
has been filed and, to the knowledge of the Parent or the Borrower, no claim is
being asserted with respect to any such tax or other such governmental charge.
 
SECTION 3.10.  ERISA.  No ERISA Event has occurred or is reasonably expected to
occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect.  The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by more
than $2,000,000 the fair market value of the assets of such Plan, and the
present value of all accumulated benefit obligations of all underfunded Plans
(based on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $2,000,000 the fair
market value of the assets of all such underfunded Plans.

 
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SECTION 3.11.  Disclosure.  The Parent and the Borrower have disclosed to the
Lenders all agreements, instruments and corporate or other restrictions to which
either of them or any of the Restricted Subsidiaries is subject, and all other
matters known to it, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect.  No reports, financial
statements, certificates or other information furnished by or on behalf of the
Parent or the Borrower to the Administrative Agent or any Lender in connection
with the negotiation of this Agreement or delivered hereunder (as modified or
supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, the Parent represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.  There
is no fact peculiar to the Parent, the Borrower or any Restricted Subsidiary
that has a Material Adverse Effect or in the future is reasonably likely to have
(so far as the Parent or the Borrower can now foresee) a Material Adverse Effect
and that has not been set forth in this Agreement or the other documents,
certificates and statements furnished to the Administrative Agent by or on
behalf of the Parent, the Borrower or any Restricted Subsidiary prior to, or on,
the Effective Date in connection with the transactions contemplated
hereby.  There are no statements or conclusions in any Reserve Report which are
based upon or include misleading information or fail to take into account
material information regarding the matters reported therein, it being understood
that each Reserve Report is necessarily based upon professional opinions,
estimates and projections and that neither the Parent nor the Borrower warrants
that such opinions, estimates and projections will ultimately prove to have been
accurate.  No representation or warranty is made with respect to any Oil and Gas
Properties to which no proved Hydrocarbon Interests are properly attributed.
 
SECTION 3.12.  Use of Loans and Letters of Credit.  The proceeds of the Loans
and the Letters of Credit shall be used (a) to provide working capital to the
Parent, the Borrower and the Restricted Subsidiaries and for other general
corporate purposes, (b) to finance capital expenditures and acquisitions
(including acquisitions of the Equity Interests in Persons owning Oil and Gas
Properties) by the Parent, the Borrower and the Restricted Subsidiaries, (c) to
provide for letters of credit for the account of the Parent, the Borrower and
the Restricted Subsidiaries and (d) to purchase, refinance, restructure,
rearrange, renew, extend and continue the Indebtedness outstanding under the
Existing Credit Facility.  Neither the Parent nor the Borrower is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose, whether immediate, incidental or ultimate, of buying or
carrying margin stock (within the meaning of Regulation U or X of the
Board).  No part of the proceeds of any Loan or Letter of Credit will be used
for any purpose which violation the provisions of Regulations T, U or X of the
Board.
 
SECTION 3.13.  Subsidiaries.  Except as set forth on Schedule 3.13 or as
disclosed in writing to the Administrative Agent (which shall promptly furnish a
copy to the Lenders) that shall be a supplement to Schedule 3.13, the Borrower
has no Subsidiaries other than Penn Virginia Resource Holdings Corp. and its
Subsidiaries.  Schedule 3.13 identifies each Subsidiary (other than Penn
Virginia Resource Holdings Corp. and its Subsidiaries) as either Restricted or
Unrestricted, and each Restricted Subsidiary on such schedule is a wholly-owned
Subsidiary.
 
SECTION 3.14.  Jurisdiction of Incorporation or Organization.  The jurisdiction
of organization, name as listed in the public records of its jurisdiction of
organization and location of the principal place of business or, if it has more
than one place of business, the chief executive office of the Parent, the
Borrower and each Restricted Subsidiary is set forth on Schedule 3.13 (or, in
each case, as set forth in a notice delivered to the Administrative Agent
pursuant to Section 5.01(k) in accordance with Section 9.01).

 
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SECTION 3.15.  Maintenance of Properties.  Except for such acts or failures to
act as could not be reasonably expected to have a Material Adverse Effect, the
Oil and Gas Properties (and properties unitized therewith) have been maintained,
operated and developed in a good and workmanlike manner and in conformity with
all applicable laws and all rules, regulations and orders of all duly
constituted authorities having jurisdiction and in conformity with the
provisions of all leases, subleases or other contracts comprising a part of the
Hydrocarbon Interests and other contracts and agreements forming a part of the
Oil and Gas Properties; specifically in this connection, except for those as
could not be reasonably expected to have a Material Adverse Effect, (i) after
the Effective Date, no Oil and Gas Property is subject to having allowable
production reduced below the full and regular allowable (including the maximum
permissible tolerance) because of any overproduction (whether or not the same
was permissible at the time) prior to the Effective Date and (ii) none of the
wells comprising a part of the Oil and Gas Properties (or properties unitized
therewith) owned by the Parent, the Borrower or any of the Restricted
Subsidiaries is deviated from the vertical more than the maximum permitted by
applicable laws, regulations, rules and orders, and such wells are, in fact,
bottomed under and are producing from, and the well bores are wholly within, the
Oil and Gas Properties (or in the case of wells located on properties unitized
therewith, such unitized properties) owned by the Parent, the Borrower or any of
the Restricted Subsidiaries.
 
SECTION 3.16.  Insurance.  The Parent or the Borrower has, and has caused all of
the Restricted Subsidiaries to have, (i) all insurance policies sufficient for
the compliance by each of them with all material Governmental Requirements and
all material agreements and (ii) insurance coverage in at least amounts and
against such risk (including, without limitation, public liability) that are
usually insured against by companies similarly situated and engaged in the same
or a similar business for the assets and operations of the Parent, the Borrower
and the Restricted Subsidiaries.  The Administrative Agent and the Lenders have
been named as additional insureds in respect of such liability insurance
policies.
 
SECTION 3.17.  Gas Imbalances, Prepayments.  Except as set forth on
Schedule 3.17 or as disclosed in writing to the Administrative Agent and the
Lenders in connection with the most recently delivered Reserve Report, on a net
basis there are no gas imbalances, take or pay or other prepayments that would
require the Parent, the Borrower or any of the Restricted Subsidiaries to
deliver Hydrocarbons produced from their respective Oil and Gas Properties at
some future time without then or thereafter receiving full payment therefor
exceeding two Bcf of gas (or its equivalent) of gas in the aggregate on a net
basis.
 
SECTION 3.18.  Marketing of Production.  Except for contracts listed and in
effect on the date hereof on Schedule 3.18, and thereafter either disclosed in
writing to the Administrative Agent or included in the most recently delivered
Reserve Report (with respect to all of which contracts the Parent and the
Borrower represent that they or the Restricted Subsidiaries are receiving a
price for all production sold thereunder that is computed substantially in
accordance with the terms of the relevant contract and are not having deliveries
curtailed substantially below the subject Property’s delivery capacity), no
material agreements exist that are not cancelable on 60 days notice or less
without penalty or detriment for the sale of production from the Parent’s, the
Borrower’s or the Restricted Subsidiaries’ Hydrocarbons (including, without
limitation, calls on or other rights to purchase, production, whether or not the
same are currently being exercised) and that (a) pertain to the sale of
production at a fixed price and (b) have a maturity or expiry date of longer
than six (6) months from the date hereof.

 
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SECTION 3.19.  Hedging Transactions.  Schedule 3.19 sets forth, as of the
Effective Date, a true and complete list of all Swap Agreements (including
commodity price swap agreements, forward agreements or contracts of sale which
provide for prepayment for deferred shipment or delivery of oil, gas or other
commodities) of the Parent, the Borrower and each Restricted Subsidiary, the
material terms thereof (including the type, term, effective date, termination
date and notional amounts or volumes), the net mark to market value thereof, all
credit support agreements relating thereto (including any margin required or
supplied) and the counterparty to each such agreement.
 
SECTION 3.20.  Restriction on Liens.  None of the Parent, the Borrower or any of
the Restricted Subsidiaries is a party to any material agreement or arrangement
(other than instruments creating Liens permitted by Sections 6.02, but then only
on the Property subject of such Lien), or subject to any order, judgment, writ
or decree, that either restricts or purports to restrict its ability to grant
Liens to the Administrative Agent and the Lenders on or in respect of their
respective assets or Properties to secure the Secured Obligations and the Loan
Documents.
 
SECTION 3.21.  Intellectual Property.  The Parent, the Borrower and the
Restricted Subsidiaries either own or have valid licenses or other rights to use
all databases, geological data, geophysical data, engineering data, maps,
interpretations and other technical information used in their business as
presently conducted, subject to the limitations contained in the agreements
governing the use of the same, which limitations are customary for companies
engaged in the business of the exploration and production of Hydrocarbons, with
such exceptions as could not reasonably be expected to have a Material Adverse
Effect.
 
SECTION 3.22.  Material Personal Property.  All pipelines, wells, gas processing
plants, platforms and other material improvements, fixtures and equipment owned
in whole or in part by the Parent, the Borrower or any of the Restricted
Subsidiaries that are necessary to conduct normal operations are being
maintained in a state adequate to conduct normal operations, and with respect to
such of the foregoing which are operated by the Parent, the Borrower or any of
the Restricted Subsidiaries, in a manner consistent with the Parent’s, the
Borrower’s or the Restricted Subsidiaries’ past practices (other than those the
failure of which to maintain in accordance with this Section 3.22 could not
reasonably be expect to have a Material Adverse Effect).
 
SECTION 3.23.  Business.  The Parent, the Borrower and the Restricted
Subsidiaries have not conducted and are not conducting any business other than
businesses relating to the acquisition, exploration, development, financing,
ownership, operation, production, maintenance, storage, transportation,
gathering, processing and marketing of Hydrocarbons, Hydrocarbon Interests and
the Oil and Gas Properties and related activities.

 
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SECTION 3.24.  Solvency.  None of the Parent, the Borrower or any Restricted
Subsidiary (i) is “insolvent” (within the meaning of Section 101(32) of the
Bankruptcy Code, Section 2 of the Uniform Fraudulent Conveyance Act or Section 2
of the Uniform Fraudulent Transfer Act) or will become insolvent as a result of
the incurrence of any obligation under this Agreement or any other Loan Document
to which it is a party; or (ii) has unreasonably small capital (after giving
effect to the transactions contemplated in this Agreement or any other Loan
Document to which it is a party) for the conduct of its existing and
contemplated business.  Each of the Parent, the Borrower and the Restricted
Subsidiaries is able to perform its contingent obligations and other commitments
as they mature in the normal course of business.
 
SECTION 3.25.  Licenses, Permits, Etc.  The Borrower and each of the Restricted
Subsidiaries possess such valid franchises, certificates of convenience and
necessity, operating rights, licenses, permits, consents, authorizations,
exemptions and orders of Governmental Authorities, as are necessary to carry on
their business as now conducted and as proposed to be conducted, except to the
extent a failure to obtain any such item could not reasonably be expected to
result in a Material adverse Effect.
 
SECTION 3.26.  Fiscal Year.  The fiscal year of the Parent and the Borrower is
January 1 through December 31.
 
SECTION 3.27.  Seniority Designation.  For the purposes of the Unsecured Notes
Documents or any Permitted Refinancing Indebtedness, the Secured Obligations
have been irrevocably designated as “senior indebtedness” (or such other
applicable term denoting seniority) ranking, as applicable, equally in right of
payment with any senior unsecured notes (including any such notes that are
convertible) issued under such Unsecured Notes Documents and senior in right of
payment to any subordinated unsecured notes or senior subordinated unsecured
notes (including any such notes that are convertible) issued under such
Unsecured Notes Documents without giving effect to rights in the Collateral of
the Administrative Agent, the Issuing Bank, the Lenders and the other
beneficiaries thereof.
 
ARTICLE IV
 
Conditions
 
SECTION 4.01.  Effective Date.  The obligations of the Lenders to make Loans and
of the Issuing Bank to issue Letters of Credit hereunder shall not become
effective until the date on which each of the following conditions is satisfied
(or waived in accordance with Section 9.02):
 
(a)           Credit Agreement.  The Administrative Agent shall have received
from each party hereto either (i) a counterpart of this Agreement signed on
behalf of such party or (ii) written evidence satisfactory to the Administrative
Agent (which may include telecopy transmission of a signed signature page of
this Agreement) that such party has signed a counterpart of this Agreement.

 
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(b)           Collateral Documents.  The Administrative Agent (or its counsel)
shall have received the following documents:  (A) the Guaranty duly completed
and executed by the Parent and each Material Domestic Subsidiary that exists on
the Effective Date; (B) the Mortgages and all documents and instruments duly
completed and executed, including Uniform Commercial Code financing statements,
required by law or reasonably requested by the Administrative Agent with respect
to such Mortgages; (C) any promissory notes requested by a Lender pursuant to
Section 2.10 payable to the order of each such requesting Lender duly executed
and completed by the Borrower; and (D) the other Collateral Documents duly
completed and executed in a sufficient number of counterparts for recording, if
necessary; provided that, to the extent that Administrative Agent receives any
such documents in a form other than original counterparts thereof, the
Administrative Agent shall be reasonably satisfied that duly completed and
executed counterparts thereof, in a sufficient number for recording, if
necessary, have been executed by the applicable Credit Party and appropriate
arrangements have been made for the prompt delivery thereof to the
Administrative Agent or its counsel.  In connection with the execution and
delivery of the Collateral Documents, the Administrative Agent shall be
reasonably satisfied that, upon the filing or recordation thereof, the
Collateral Documents create or continue, as applicable, first priority,
perfected Liens (subject only to Liens permitted pursuant to Section 6.02) on at
least 70% of the total value of the Oil and Gas Properties evaluated in the
Initial Reserve Report.
 
(c)           Pledge Agreements.  The Administrative Agent shall have received
the Pledge Agreement, dated as of the Effective Date, duly executed and
delivered by the Parent, the Borrower and each other Guarantor that owns Equity
Interests in any Restricted Subsidiary, together with (as applicable) stock
certificates representing 100% of such outstanding Equity Interests, and stock
powers and instruments of transfer, endorsed in blank, with respect to such
stock certificates, and all documents and instruments, including Uniform
Commercial Code Financing Statements (Form UCC-1), required by law or reasonably
requested by the Administrative Agent to be filed, registered or recorded to
create or perfect the Liens intended to be created under the Pledge Agreement.
 
(d)           Organizational Documents.  The Administrative Agent shall have
received a certificate of the Secretary or an Assistant Secretary of each Credit
Party dated as of the Effective Date, on which the Administrative Agent and the
Lenders may conclusively rely until the Administrative Agent receives notice in
writing from the Parent or the Borrower to the contrary, certifying:
 
(i)           that attached to each such certificate are (1) a true and complete
copy of the Organizational Documents of such Credit Party, as the case may be,
as in effect on the date of such certificate and (2) a true and complete copy of
a certificate from the Governmental Authority of the state of such entity’s
organization certifying that such entity is duly organized and validly existing
in such jurisdiction;
 
(ii)          that attached to such certificate is a true and complete copy of
resolutions duly adopted by the board of directors of such Credit Party, as
applicable, authorizing the execution, delivery and performance of each of the
Loan Documents to which such Credit Party is or is intended to be a party; and
 
(iii)         as to the incumbency and specimen signature of each officer of
such Credit Party (1) who is authorized to execute the Loan Documents to which
such Credit Party is or is intended to be a party and (2) who will, until
replaced by another officer or officers duly authorized for that purpose, act as
its representative for the purposes of signing documents and giving notices and
other communications in connection with this Agreement and the transactions
contemplated hereby.

 
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(e)           Qualification and Good Standing.  The Administrative Agent shall
have received certificates of the appropriate state agencies with respect to the
existence and good standing of the Parent, the Borrower and each Guarantor in
the jurisdiction of its organization and the qualification as a foreign entity
and good standing of the Parent, the Borrower and each Guarantor in each other
jurisdiction with respect to which a Mortgage is being delivered by the Parent,
the Borrower or such Guarantor, as applicable, pursuant to this Section 4.01.
 
(f)          Legal Opinions.  The Administrative Agent shall have received a
written legal opinion addressed to the Administrative Agent, the Issuing Bank
and the Lenders in form and substance satisfactory to the Administrative Agent
from (i) Nancy M. Snyder, Esq., as general counsel to the Parent, the Borrower
and the Guarantors, (ii) Thompson Knight LLP, special Texas counsel to the
Parent and the Borrower, and (iii) local counsel in each of the following
states:  Mississippi, Oklahoma and West Virginia.  The Parent and the Borrower
hereby request such counsel to deliver such opinion.
 
(g)          UCC and Lien Searches.  The Administrative Agent shall have
received appropriate UCC search certificates for the Parent, the Borrower and
each Guarantor in its jurisdiction of organization, and any other jurisdiction
reasonably requested by the Administrative Agent, reflecting no prior liens or
security interests encumbering the Collateral other than those being assigned or
released on or prior to the Effective Date and those permitted by Section 6.02.
 
(h)           Insurance.  The Administrative Agent and the Lenders shall have
received certificates, dated within 15 days of the Effective Date, from the
Parent’s insurers reflecting (a) compliance with all of the insurance required
by Section 5.05 and by the Collateral Documents and (b) that such insurance is
in full force and effect.
 
(i)            Compliance Certificate.  The Administrative Agent shall have
received from the Parent and the Borrower a compliance certificate substantially
in the form of Exhibit C.
 
(j)            Financial Statements.  The Administrative Agent shall have
received the financial statements described in Section 3.04(a).
 
(k)           Initial Reserve Report.  The Administrative Agent shall have
received a reserve engineering report as of December 31, 2008, prepared by one
or more Approved Petroleum Engineers, as supplemented by a reserve report as of
June 30, 2009 prepared by or under the supervision of the chief engineer of the
Parent (which supplemental reserve report shall be certified by the chief
engineer of the Parent as being true and accurate and having been prepared in
accordance the procedures used to prepare the December 31, 2008 engineering
report) (collectively, the “Initial Reserve Report”) with respect to the value
of the Oil and Gas Properties of the Parent, the Borrower and the Restricted
Subsidiaries acceptable to the Administrative Agent using such reasonable
assumptions as the Administrative Agent shall specify (including such discount
rates and projected hydrocarbon price assumptions) and such other reserve,
engineering, geological and title information as may be requested by the
Administrative Agent.
 
(l)            Existing Credit Agreement.  The Administrative Agent shall have
received satisfactory evidence that the Existing Credit Facility and the other
“Loan Documents” defined therein shall have been repaid in full and terminated
and all Liens related thereto shall be fully released.

 
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(m)         Subordination Agreement.  The Administrative Agent shall have
received the Subordination Agreement from each Unrestricted Subsidiary
designated as on Schedule 4.01(m) duly executed by each such Unrestricted
Subsidiary.
 
(n)          Satisfactory Legal Form.  All documents executed or submitted
pursuant hereto by and on behalf of the Parent, the Borrower or any other Credit
Party shall be in form and substance reasonably satisfactory to the
Administrative Agent and its counsel.  The Administrative Agent and its counsel
shall have received all information, approvals, documents or instruments as the
Administrative Agent or its counsel may reasonably request.
 
(o)          Fees and Expenses.  The Administrative Agent and the Lenders shall
have received all fees and other amounts due and payable pursuant to this
Agreement or any other Loan Document on or prior to the date hereof, including,
to the extent invoiced, reimbursement or payment of all reasonable out-of-pocket
expenses (including reasonable fees, charges and disbursements of counsel)
required to be reimbursed or paid by any Credit Party hereunder or under any
other Loan Document.
 
The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding.
 
SECTION 4.02.  Each Credit Event.  The obligation of each Lender to make a Loan
on the occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew
or extend any Letter of Credit, is subject to the satisfaction of the following
conditions:
 
(a)           The representations and warranties of the Parent, the Borrower and
the Guarantors set forth in this Agreement and in the other Loan Documents shall
be true and correct in all material respects, or, to the extent that a
particular representation or warranty is qualified as to materiality, such
representation or warranty shall be true and correct, in each case, on and as of
the date of such Borrowing or the date of issuance, amendment, renewal or
extension of such Letter of Credit, as applicable, except to the extent any such
representations and warranties are expressly limited to an earlier date, in
which case, on and as of the date of such Borrowing or the date of issuance,
amendment, renewal or extension of such Letter of Credit, as applicable, such
representations and warranties shall continue to be true and correct as of such
specified earlier date.
 
(b)           At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter of
Credit, as applicable, no Default shall have occurred and be continuing.
 
(c)           At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter of
Credit, as applicable, no event, development or circumstance has occurred or
shall then exist that has resulted in, or could reasonably be expected to have,
a Material Adverse Effect.

 
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(d)           The making of such Loan or the issuance, amendment, renewal or
extension of such Letter of Credit, as applicable, would not conflict with, or
cause any Lender or the Issuing Bank to violate or exceed, any applicable
Governmental Requirement, and no Change in Law shall have occurred, and no
litigation shall be pending or threatened, which does or, with respect to any
threatened litigation, seeks to, enjoin, prohibit or restrain the making or
repayment of any Loan, the issuance, amendment, renewal, extension or repayment
of any Letter of Credit or any participations therein or the consummation of the
transactions contemplated by this Agreement or any other Loan Document.
 
(e)           The receipt by the Administrative Agent of a Borrowing Request in
accordance with Section 2.03 or a request for a Letter of Credit in accordance
with Section 2.06(b), as applicable.
 
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a) and
(b) of this Section.
 
ARTICLE V
 
Affirmative Covenants
 
Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in
full and all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, the Parent and the Borrower covenant
and agree with the Lenders that:
 
SECTION 5.01.  Financial Statements; Other Information.  The Parent or the
Borrower, as applicable, will furnish to the Administrative Agent and each
Lender:
 
(a)           as soon as available and in any event within 120 days after the
end of each fiscal year of the Parent, the audited consolidated statements of
income, shareholders’ equity, changes in financial position and cash flow of the
Parent and its Subsidiaries, and the related audited consolidated balance sheets
of the Parent and its Subsidiaries as at the end of such fiscal year, setting
forth in each case in comparative form the corresponding figures for the
preceding fiscal year, and accompanied by either (x) with respect to any audited
financial statements, the related opinion of independent public accountants of
recognized national standing acceptable to the Administrative Agent which
opinion shall state that such financial statements fairly present, in all
material respects, the consolidated financial condition and results of
operations of the Parent and its Subsidiaries as at the end of, and for, such
fiscal year and that such financial statements have been prepared in accordance
with GAAP except for such changes in such principles with which the independent
public accountants shall have concurred and such opinion shall not contain a
“going concern” or like qualification or exception, or (y) with respect to any
unaudited financial statements, the certificate of an Authorized Officer, which
certificate shall state that such financial statements fairly present, in all
material respects, the consolidated financial condition and results of
operations of the Parent and its Subsidiaries in accordance with GAAP, as at the
end of, and for, such period;

 
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(b)           as soon as available and in any event within 60 days after the end
of each of the first three fiscal quarters of each fiscal year of the Parent,
consolidated statements of income, shareholders’ equity, changes in financial
position and cash flow of the Parent and its Subsidiaries for such period and
for the period from the beginning of the respective fiscal year to the end of
such period, and the related consolidated balance sheets as at the end of such
period, setting forth in each case in comparative form the corresponding figures
for the corresponding period in the preceding fiscal year, accompanied by the
certificate of an Authorized Officer, which certificate shall state that such
financial statements fairly present, in all material respects, the consolidated
financial condition and results of operations of the Parent and its Subsidiaries
in accordance with GAAP, as at the end of, and for, such period (subject to
normal year-end audit adjustments);
 
(c)           at the time it furnishes each set of financial statements under
Sections 5.01(a) and (b) above, a certificate substantially in the form of
Exhibit C executed by an Authorized Officer (A) certifying as to the matters set
forth therein and stating that no Event of Default has occurred and is
continuing (or, if any Event of Default has occurred and is continuing,
describing the same in reasonable detail) and (B) setting forth in reasonable
detail the computations necessary to determine whether the Parent, the Borrower
and the Restricted Subsidiaries are in compliance with Section 6.09 as of the
end of the respective fiscal quarter or fiscal year;
 
(d)           promptly upon receipt thereof, a copy of each other report or
letter submitted to the Parent, the Borrower or any of the Restricted
Subsidiaries by independent accountants in connection with any annual, interim
or special audit made by them of the books of the Parent, the Borrower or any
Restricted Subsidiary, and a copy of any response by the Parent, the Borrower or
any such Restricted Subsidiary, or the Board of Directors of the Parent, the
Borrower or any such Restricted Subsidiary, to such letter or report;
 
(e)           promptly upon its becoming available, each financial statement,
report, notice or proxy statement sent by the Parent to shareholders generally
and each Form 10-K, Form 10-Q, registration statement or prospectus filed by the
Parent with any securities exchange or the SEC;
 
(f)           promptly after the furnishing thereof, copies of any financial
statement, report or notice (other than ministerial notices) furnished to any
Person pursuant to the terms of any preferred stock designation, indenture
(including any Unsecured Notes Indenture), loan or credit or other similar
agreement in respect of Indebtedness in excess of $10,000,000, other than this
Agreement and not otherwise required to be furnished to the Lenders pursuant to
any other provision of this Section 5.01;
 
(g)           promptly following the written request from the Administrative
Agent thereof, a list of all Persons purchasing Hydrocarbons from the Parent,
the Borrower or any Restricted Subsidiary accounting for at least 80% in the
aggregate of the revenues resulting from the sale of all Hydrocarbons in the
six-month period prior to the “as of” date of the most recently delivered
Reserve Report;

 
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(h)           together with the delivery of the financial information to be
supplied under Sections 5.01(a) and (b), a report, in form and substance
satisfactory to the Administrative Agent, setting forth as of the last Business
Day of such fiscal quarter or fiscal year, a true and complete list of all Swap
Agreements (including commodity price swap agreements, forward agreements or
contracts of sale which provide for prepayment for deferred shipment or delivery
of oil, gas or other commodities) of the Parent, the Borrower and each
Restricted Subsidiary, the material terms thereof (including the type, term,
effective date, termination date and notional amounts or volumes), the net mark
to market value therefor, any new credit support agreements relating thereto not
listed on Schedule 3.19, any margin required or supplied under any credit
support document, and the counterparty to each such agreement;
 
(i)           concurrently with any delivery of financial statements under
Section 5.01(a), a certificate of insurance coverage from each insurer or its
authorized agent or broker with respect to the insurance required by
Section 5.05, in form and substance satisfactory to the Administrative Agent,
and, if requested by the Administrative Agent or any Lender, all copies of the
applicable policies;
 
(j)           prompt written notice (and in any event within 30 days prior
thereto) of any change in (i) any Credit Party’s corporate name, (ii) the
location of any Credit Party’s chief executive office or principal place of
business, (iii) the Credit Party’s identity or corporate structure or in the
jurisdiction in which such Person is incorporated or formed, (iv) any Credit
Party’s jurisdiction of organization or such Credit Party’s organizational
identification number in such jurisdiction of organization and (v) any Credit
Party’s federal taxpayer identification number;
 
(k)           promptly, but in any event, by the time specified in any of
Sections 5.17, 5.20 or 6.13, as applicable, written notice of the transactions,
events or circumstances described in such Section for which notice is required
to be given;
 
(l)           at the time it furnishes each set of financial statements under
Sections 5.01(a) or (b) above, a certificate executed by an Authorized Officer
of the Parent certifying as to the aggregate amount of all outstanding
intercompany Indebtedness permitted pursuant to Section 6.01(g) as of the end of
the respective fiscal year or fiscal quarter and setting forth in reasonable
detail the Unrestricted Subsidiary payor and the recipient with respect thereto,
whether a Subordination Agreement from such payor has been provided to the
Administrative Agent (which Subordination Agreement shall remain in full force
and effect as of the date of such certificate) and such additional information
related thereto as the Administrative Agent may request; and
 
(m)           promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Parent, the Borrower or any Restricted Subsidiary, or compliance with the terms
of this Agreement, as the Administrative Agent or any Lender may reasonably
request.
 
Documents required to be delivered pursuant to Section 5.01(a), (b) or (e) (to
the extent any such documents are included in materials otherwise filed with the
SEC) shall be deemed to be delivered hereunder upon such filing with the SEC on
the date of such filing.
 
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SECTION 5.02.  Notices of Material Events.  The Parent or the Borrower, as
applicable, will furnish to the Administrative Agent and each Lender prompt
written notice of the following:
 
(a)           the occurrence of any Default;
 
(b)           the commencement of any legal or arbitral proceedings, and of all
proceedings before any Governmental Authority filed against the Parent, the
Borrower or any Restricted Subsidiary, except proceedings that, if adversely
determined, could not reasonably be expected to result in liability not fully
covered by insurance, subject to normal deductibles, in excess of $10,000,000
(whether individually or in the aggregate);
 
(c)           in the event the amount of contested taxes or claims not
previously disclosed in the financial statements delivered under Section 5.01(a)
and Section 5.01(b) above exceeds $10,000,000 in the aggregate at any one time,
prompt written notice from an Authorized Officer describing such circumstances,
in detail satisfactory to the Administrative Agent;
 
(d)           prompt written notice, and in any event within three Business
Days, of the occurrence of any Casualty Event to Oil and Gas Properties subject
to any Mortgage or the commencement of any action or proceeding for the taking
of any Oil and Gas Properties subject to any Mortgage with a value exceeding
$10,000,000 under power of eminent domain or by condemnation, nationalization or
similar proceeding;
 
(e)           the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to result in
liability of the Parent, the Borrower and the Restricted Subsidiaries in an
aggregate amount exceeding $10,000,000; and
 
(f)           any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
 
Each notice delivered under this Section shall be accompanied by a statement of
an Authorized Officer of the Parent (or the Borrower, if applicable) setting
forth the details of the event or development requiring such notice and any
action taken or proposed to be taken with respect thereto.
 
SECTION 5.03.  Existence; Conduct of Business.  Each of the Parent and the
Borrower will, and will cause each of the Restricted Subsidiaries to, do or
cause to be done all things necessary to preserve, renew and keep in full force
and effect its legal existence and the rights, licenses, permits, privileges and
franchises material to the conduct of their business, except where the failure
to so preserve, renew or keep could not reasonably be expected to have a
Material Adverse Effect; provided that the foregoing shall not prohibit any
merger, consolidation, liquidation or dissolution permitted under Section 6.03.

 
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SECTION 5.04.  Payment of Obligations, Taxes and Material Claims.  Each of the
Parent and the Borrower will, and will cause each of the Restricted Subsidiaries
to, pay the Obligations according to the terms set forth in this Agreement and
the Loan Documents and do and perform every act and discharge all of the
obligations to be performed and discharged by them under this Agreement and the
Loan Documents, at the time or times and in the manner specified.  The Parent
and the Borrower will, and will cause each of the Restricted Subsidiaries to,
pay (a) all taxes imposed upon it or any of its assets or with respect to any of
its franchises, business, income or profits before any material penalty or
interest accrues thereon and (b) all material claims (including, without
limitation, claims for labor, services, materials and supplies) for sums that
have become due and payable and that by law have or might become a Lien (other
than Liens permitted pursuant to Section 6.02) on any of its assets; provided,
however, that no payment of taxes or claims shall be required if (i) the amount,
applicability or validity thereof is currently being contested in good faith by
appropriate action promptly initiated and diligently conducted in accordance
with good business practices and no Oil and Gas Property subject to any Mortgage
with a value in excess of $10,000,0000 is subject to levy or execution, (ii) the
Parent, as and to the extent required in accordance with GAAP, shall have set
aside on its books reserves (segregated to the extent required by GAAP) deemed
by it to be adequate with respect thereto and (iii) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.
 
SECTION 5.05.  Maintenance of Properties; Insurance.
 
(a)           Each of the Parent and the Borrower will, and will cause each of
the Restricted Subsidiaries to: (i) except as permitted in Section 6.03,
preserve and maintain its existence and all of its material rights, privileges
and franchises and maintain, if necessary, its qualification to do business in
each other jurisdiction in which its Oil and Gas Properties is located or the
ownership of its Properties requires such qualification, except where the
failure to so qualify could not reasonably be expected to have a Material
Adverse Effect; (ii) keep books of record and account in accordance with GAAP;
(iii) comply with all Governmental Requirements if failure to comply with such
requirements could reasonably be expected to have a Material Adverse Effect; and
(iv) keep, or cause to be kept, insured by financially sound and reputable
insurers all Property of a character usually insured by Persons engaged in the
same or similar business similarly situated against loss or damage of the kinds
and in the amounts customarily insured against by such Persons and carry such
other insurance against risks as is usually carried by such Persons.  The loss
payable clauses or provisions in such insurance policy or policies insuring any
of the Collateral shall be endorsed in favor of and made payable to the
Administrative Agent as its interests may appear and naming the Administrative
Agent and the Lenders as “additional insureds” and shall provide that the
insurer will endeavor to give at least 10 days’ prior notice of any cancellation
to the Administrative Agent.
 
(b)           Each of the Parent and the Borrower will, and will cause each of
the Restricted Subsidiaries to, operate its Properties or cause such Properties
to be operated in a careful and efficient manner in accordance with the
practices of the industry and in compliance with all applicable contracts and
agreements and in compliance with all Governmental Requirements, including,
without limitation, applicable Environmental Laws and all applicable laws, rules
and regulations of every other Governmental Authority from time to time
constituted to regulate the development and operation of its Oil and Gas
Properties and the production and sale of Hydrocarbons and other minerals
therefrom, except, in each case, where the failure to comply could not
reasonably be expected to have a Material Adverse Effect.

 
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(c)           Each of the Parent and the Borrower will, and will cause each of
the Restricted Subsidiaries to, at its own respective expense, do or cause to be
done all things reasonably necessary to preserve and keep in good repair,
working order and efficiency (ordinary wear and tear excepted) all of its
material Oil and Gas Properties and other material Properties, including,
without limitation, all equipment, machinery and facilities, and from time to
time will make all the reasonably necessary repairs, renewals and replacements
so that at all times the state and condition of its material Oil and Gas
Properties and other material Properties will be preserved and maintained,
except to the extent such failure to so preserve and keep could not reasonably
be expected to have a Material Adverse Effect.  Each of the Parent and the
Borrower will, and will cause each of the Restricted Subsidiaries to,
promptly:  (a) pay and discharge, or make reasonable and customary efforts to
cause to be paid and discharged, all delay rentals, royalties, expenses and
indebtedness accruing under the leases or other agreements affecting or
pertaining to its Oil and Gas Properties and will do all other things necessary
to keep unimpaired their rights with respect thereto and prevent any forfeiture
thereof or default thereunder, and (b) perform or make reasonable and customary
efforts to cause to be performed, in accordance with industry standards, the
obligations required by each and all of the assignments, deeds, leases,
sub-leases, contracts and agreements affecting its interests in its Oil and Gas
Properties and other material Properties, except in each case of clauses (a) and
(b) to the extent such failure could not reasonably be expected to have a
Material Adverse Effect and except for dispositions permitted by Section
6.13.  Each of the Parent and the Borrower will, and will cause each of the
Restricted Subsidiaries to, operate its Oil and Gas Properties and other
material Properties or cause or make reasonable and customary efforts to cause
such Oil and Gas Properties and other material Properties to be operated in
accordance with the practices of the industry and in material compliance with
all applicable contracts and agreements and in compliance in all material
respects with all Governmental Requirements, except where the failure to do so
could not reasonably be expected to result in a Material Adverse Effect.  To the
extent that none of the Parent, the Borrower or any Restricted Subsidiary is the
operator of such Property, the Parent and the Borrower shall use reasonable
efforts to cause the operator to comply with this Section 5.05(c).
 
SECTION 5.06.  Books and Records; Inspection Rights.  Each of the Parent and the
Borrower will, and will cause each of the Restricted Subsidiaries to, keep
proper books of record and account in which full, true and correct entries are
made of all dealings and transactions in relation to its business and
activities.  Each of the Parent and the Borrower will, and will cause each of
the Restricted Subsidiaries to, permit any representatives designated by the
Administrative Agent or any Lender, upon reasonable prior notice, to visit and
inspect its properties, to examine and make extracts from its books and records
and to discuss its affairs, finances and condition with its officers and
independent accountants, all at such reasonable times and as often as reasonably
requested.
 
SECTION 5.07.  Compliance with Laws.  Each of the Parent and the Borrower will,
and will cause each of the Restricted Subsidiaries to, comply with all laws,
rules, regulations and orders of any Governmental Authority applicable to it or
its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
 
SECTION 5.08.  Use of Proceeds and Letters of Credit.  The proceeds of the Loans
and Letters of Credit will be used only for (i) providing working capital for
the Parent, the Borrower and the Restricted Subsidiaries and for other general
corporate purposes, (ii) financing capital expenditures and acquisitions (other
than acquisitions of “margin stock”) of the Parent, the Borrower and the
Restricted Subsidiaries, (iii) providing for letters of credit for the account
of the Parent, the Borrower and the Restricted Subsidiaries and (iv) purchasing,
refinancing, restructuring, rearranging, renewing, extending and continuing the
outstanding Indebtedness under the Existing Credit Facility.  No part of the
proceeds of any Loan will be used, whether directly or indirectly, for any
purpose that entails a violation of any of the Regulations of the Board,
including Regulations T, U and X.  Letters of Credit will be issued only to
support general corporate purposes of the Parent, the Borrower and the
Restricted Subsidiaries.

 
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SECTION 5.09.  Environmental Matters.
 
(a)           Each of the Parent and the Borrower will, and will cause each
Restricted Subsidiary to, establish and implement such procedures as may be
reasonably necessary to continuously determine and assure that any failure of
the following could not reasonably be expected to have a Material Adverse
Effect: (a) all Property of the Parent, the Borrower and the Restricted
Subsidiaries and the operations conducted thereon and other activities of the
Parent, the Borrower and the Restricted Subsidiaries are in compliance with and
do not violate the requirements of any Environmental Laws, (b) no oil, oil and
gas production or exploration wastes, hazardous substances or solid wastes are
disposed of or otherwise released on or to any Property owned by any such party
except in compliance with Environmental Laws, (c) no hazardous substance will be
released on or to any such Property in a quantity equal to or exceeding that
quantity which requires reporting pursuant to Section 103 of the Comprehensive
Environmental, Response, Compensation, and Liability Act of 1980, as amended,
and (d) no oil, oil and gas exploration and production wastes or hazardous
substances or solid wastes are released on or to any such Property so as to pose
an imminent and substantial endangerment to public health or welfare or the
environment.
 
(b)           The Parent or the Borrower will promptly notify the Administrative
Agent and the Lenders in writing of any threatened action, investigation or
inquiry by any Governmental Authority against the Parent, the Borrower or any of
the Restricted Subsidiaries or their Properties of which the Parent or the
Borrower has knowledge in connection with any Environmental Laws (excluding
routine testing and corrective action) if the Parent or the Borrower reasonably
anticipates that such action will result in liability, not fully covered by
insurance, subject to normal deductibles (whether individually or in the
aggregate) in excess of $10,000,000.
 
SECTION 5.10.  Further Assurances.  The Parent and the Borrower will, at their
expense, and will cause each Restricted Subsidiary to, promptly execute and
deliver to the Administrative Agent all such other documents, agreements and
instruments reasonably requested by the Administrative Agent to comply with,
cure any defects or accomplish the covenants and agreements of the Parent, the
Borrower or any Restricted Subsidiary, as the case may be, in this Agreement or
any other Loan Document, or to further evidence and more fully describe the
Collateral, or to correct any omissions in this Agreement or any other Loan
Document, or to state more fully the security obligations set out herein or in
any of the Collateral Documents, or to perfect, protect or preserve any Liens
created pursuant to any of the Collateral Documents or the priority thereof, or
to make any recordings, file any notices or obtain any consents, all as may be
reasonably necessary or appropriate in connection therewith.

 
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SECTION 5.11.  Reserve Reports.
 
(a)           On or before April 1 and October 1 of each year, the Parent or the
Borrower shall furnish to the Administrative Agent and the Lenders a Reserve
Report.  The Reserve Report as of December 31 of each year shall be prepared (x)
by one or more Approved Petroleum Engineers or (y) by or under the supervision
of the chief engineer of the Parent (who shall certify such Reserve Report to be
true and accurate and to have been prepared in accordance with the procedures
used in the immediately preceding December 31 Reserve Report) and audited by one
or more Approved Petroleum Engineers.  The June 30 Reserve Report of each year
shall be prepared by or under the supervision of the chief engineer of the
Parent, who shall certify such Reserve Report to be true and accurate and to
have been prepared in accordance with the procedures used in the immediately
preceding December 31 Reserve Report.
 
(b)           In the event of an unscheduled redetermination of the Borrowing
Base, the Parent or the Borrower shall furnish to the Administrative Agent and
the Lenders a Reserve Report prepared by or under the supervision of the chief
engineer of the Parent who shall certify such Reserve Report to be true and
accurate and to have been prepared in accordance with the procedures used in the
immediately preceding Reserve Report.  For any unscheduled redetermination
requested by the Required Lenders or the Parent or the Borrower pursuant to
Section 2.04(e), the Parent or the Borrower shall provide such Reserve Report
with an “as of” date as required by the Administrative Agent as soon as
possible, but in any event no later than 30 days following the receipt of such
request.
 
(c)           With the delivery of each Reserve Report, the Parent or the
Borrower shall provide to the Administrative Agent and the Lenders, a
certificate from an Authorized Officer certifying that, to his knowledge (after
reasonable inquiry) and in all material respects:  (i) the information contained
in the Reserve Report and any other information delivered in connection
therewith is true and correct, (ii) the Parent, the Borrower or the Restricted
Subsidiaries owns good and defensible title to the Oil and Gas Properties
evaluated in such Reserve Report and such Properties are free of all Liens
except for Liens permitted by Section 6.02, (c) except as set forth on an
exhibit to the certificate, on a net basis there are no gas imbalances, take or
pay or other prepayments with respect to the Oil and Gas Properties evaluated in
such Reserve Report which would require the Parent, the Borrower or any
Restricted Subsidiary to deliver Hydrocarbons produced from such Oil and Gas
Properties at some future time without then or thereafter receiving full payment
therefor, (d) none of such Oil and Gas Properties have been sold since the date
of the last Borrowing Base determination except as set forth on an exhibit to
the certificate, which certificate shall list the Oil and Gas Properties sold
and in such detail as reasonably required by the Majority Lenders, and (e)
attached thereto is a schedule of the Oil and Gas Properties evaluated by such
Reserve Report that are subject to Mortgages.
 
SECTION 5.12.  Title Information.
 
(a)           On or before the delivery to the Administrative Agent and the
Lenders of each Reserve Report required by Section 5.11, the Parent or the
Borrower will deliver title information in form and substance reasonably
acceptable to the Administrative Agent covering enough of the Oil and Gas
Properties evaluated by such Reserve Report so that the Administrative Agent
shall have received together with title information previously delivered to the
Administrative Agent, satisfactory title information on at least 75% of the
total value of the proved Oil and Gas Properties evaluated by such Reserve
Report.

 
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(b)           If the Parent and the Borrower have provided title information for
additional Properties under Section 5.12(a), the Parent and the Borrower shall,
within 60 days of notice from the Administrative Agent that title defects or
exceptions exist with respect to such additional Properties, either (i) cure any
such title defects or exceptions (including defects or exceptions as to
priority) that are not permitted by Section 6.02 raised by such information,
(ii) substitute acceptable proved Oil and Gas Properties with no title defects
or exceptions (except for Liens permitted pursuant to Section 6.02) having an
equivalent value or (iii) deliver title information in form and substance
acceptable to the Administrative Agent so that the Administrative Agent shall
have received, together with title information previously delivered to the
Administrative Agent, satisfactory title information on at least 75% of the
total value of the proved Oil and Gas Properties evaluated by such Reserve
Report.
 
(c)           If the Parent and the Borrower are unable to cure any title defect
requested by the Administrative Agent or the Lenders to be cured within the
60-day period or if neither the Parent nor the Borrower complies with the
requirements to provide acceptable title information covering 75% of the total
value of the proved Oil and Gas Properties evaluated in the most recent Reserve
Report, such default shall not be a Default or an Event of Default, but instead
the Administrative Agent and the Lenders shall have the right to exercise the
following remedy in their sole discretion from time to time, and any failure to
so exercise this remedy at any time shall not be a waiver as to future exercise
of the remedy by the Administrative Agent or the Lenders.  To the extent that
the Administrative Agent or the Lenders are not satisfied with title to any such
Oil and Gas Property after the 60-day period has elapsed and the value
attributed to all such unacceptable Oil and Gas Property during any period
between two successive regularly scheduled Redetermination Dates, when
aggregated with (A) the net reduction (determined in accordance with
Section 5.17) in the value attributable to the Credit Party’s Swap Agreements
during such period and (B) the Fair Market Value assigned to any Oil and Gas
Properties (or Restricted Subsidiaries owning Oil and Gas Properties) sold,
transferred, assigned or conveyed pursuant to Section 6.13 during such period by
the Required Lenders in good faith in determining the Borrowing Base then in
effect, exceeds five percent (5%) of the Borrowing Base then in effect, the
Administrative Agent and the Required Lenders shall have the right to reduce the
Borrowing Base in accordance with Section 2.04.
 
SECTION 5.13.  Additional Collateral; Additional Guarantors.
 
(a)           In connection with each redetermination of the Borrowing Base, the
Borrower shall review the Reserve Report and the list of current Oil and Gas
Properties subject to Mortgages to ascertain whether such Oil and Gas Properties
represent at least 75% of the total value of the proved Oil and Gas Properties
evaluated in the most recent Reserve Report and included in the Borrowing Base
after giving effect to exploration and production activities, acquisitions,
dispositions and production.  In the event that the Oil and Gas Properties
subject to Mortgages do not represent at least 75% of such total value, then the
Parent or the Borrower shall, and shall cause the Restricted Subsidiaries to,
grant to the Administrative Agent as security for the Secured Obligations a
first-priority Lien interest (subject only to Liens permitted pursuant to
Section 6.02) on additional Oil and Gas Properties not already subject to a Lien
of the Collateral Documents such that after giving effect thereto, the Oil and
Gas Properties subject to Mortgages will represent at least 75% of such total
value.  All such Liens will be created and perfected by and in accordance with
the provisions of mortgages, deeds of trust, security agreements and financing
statements or other Collateral Documents, all in form and substance reasonably
satisfactory to the Administrative Agent and in sufficient executed (and
acknowledged where necessary or appropriate) counterparts for recording
purposes.  In order to comply with the foregoing, if any Restricted Subsidiary
places a Lien on its Oil and Gas Properties and such Restricted Subsidiary is
not a Guarantor, then it shall become a Guarantor and comply with
Section 5.13(b).

 
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(b)           The Parent and the Borrower shall promptly cause each Restricted
Subsidiary that either (x) is or becomes a Material Domestic Subsidiary or
(y) has guaranteed the Unsecured Notes or other Material Indebtedness, in each
case, to guarantee the Secured Obligations pursuant to a Guaranty.  In
connection with any such guaranty, the Parent and the Borrower shall, or shall
cause (i) such Restricted Subsidiary to execute and deliver a Guaranty, (ii) the
parent of such Restricted Subsidiary to pledge all of the capital stock of such
Restricted Subsidiary (including, without limitation, delivery of original stock
certificates evidencing the capital stock of such Restricted Subsidiary,
together with an appropriate undated stock powers for each certificate duly
executed in blank by the registered owner thereof) and (iii) execute and deliver
such other additional closing documents, certificates and legal opinions as
shall reasonably be requested by the Administrative Agent.
 
SECTION 5.14.  ERISA Information and Compliance.  As soon as available, and in
any event, within 10 days after the Parent or the Borrower obtains knowledge of
any of the following, the Parent or the Borrower will furnish and will cause
each ERISA Affiliate to promptly furnish to the Administrative Agent with
sufficient copies to the Lenders (a) a written notice signed by an Authorized
Officer describing the occurrence of any ERISA Event or of any material
“prohibited transaction,” as described in section 406 of ERISA or in section
4975 of the Code, in connection with any Plan or any trust created thereunder,
and specifying what action the Parent, the Borrower or the ERISA Affiliate is
taking or proposes to take with respect thereto, and, when known, any action
taken or proposed by the Internal Revenue Service, the Department of Labor or
the PBGC with respect thereto, (b) copies of any notice of the PBGC’s intention
to terminate or to have a trustee appointed to administer any Plan and (c) a
written notice of the Parent’s, the Borrower’s or an ERISA Affiliate’s
participation in a Multiemployer Plan.  With respect to each Plan (other than a
Multiemployer Plan), the Parent or the Borrower will, and will cause each ERISA
Affiliate to, (i) satisfy in full and in a timely manner, without incurring any
material late payment or underpayment charge or penalty and without giving rise
to any Lien, all of the contribution and funding requirements of section 412 of
the Code (determined without regard to subsections (d), (e), (f) and (k)
thereof) and of section 302 of ERISA (determined without regard to sections 303,
304 and 306 of ERISA), and (ii) pay, or cause to be paid, to the PBGC in a
timely manner, without incurring any material late payment or underpayment
charge or penalty, all premiums required pursuant to sections 4006 and 4007 of
ERISA.
 
SECTION 5.15.  Business of the Borrower.  The primary business of the Parent,
the Borrower and the Restricted Subsidiaries is and will continue to be the
acquisition, exploration, development, financing, ownership, operation,
production, maintenance, storage, transportation, gathering, processing and
marketing of Hydrocarbons, Hydrocarbon Interests and Oil and Gas Properties and
related activities.

 
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SECTION 5.16.  Permits, Licenses.  Each of the Parent and the Borrower shall,
and shall cause each Restricted Subsidiary to, maintain all material patents,
copyrights, trademarks, service marks and trade names necessary to conduct its
business, including, without limitation all consents, permits, licensees and
agreements material to its Oil and Gas Properties, except as could not
reasonably be expected to have a Material Adverse Effect.
 
SECTION 5.17.  Swap Agreement Termination.  To the extent that, during any
period between two successive regularly scheduled Redetermination Dates, (a) the
Parent, the Borrower or any Restricted Subsidiary changes the material terms of
any commodity-price Swap Agreement, terminates any such Swap Agreement or enters
into a new commodity-price Swap Agreement that has the effect of creating an
off-setting position and the product of (i) the amount of the decrease in the
notional volumes covered by such Swap Agreement times (ii) the excess of (x) the
strike or fixed rate payor price over (y) the “price deck” used in calculating
the Borrowing Base then in effect, when aggregated with (A) the value attributed
to all title defects with respect to Borrowing Base Properties identified during
such period and (B) the Fair Market Value assigned to any Oil and Gas Properties
(or Restricted Subsidiaries owning Oil and Gas Properties) by the Required
Lenders in good faith in determining the Borrowing Base then in effect that have
been sold, transferred, assigned or conveyed pursuant to Section 6.13 during
such period, exceeds five percent (5%) of the Borrowing Base then in effect, the
Parent or the Borrower will give the Administrative Agent and the Lenders prompt
written notice of such event and the Administrative Agent and the Required
Lenders shall have the right to reduce the Borrowing Base in accordance with
Section 2.04 promptly following receipt of such notice.
 
SECTION 5.18.  Restricted Subsidiaries.  Except as permitted by Sections 6.03
and 6.13, at all times, the Parent and the Borrower shall directly or indirectly
through a wholly-owned Restricted Subsidiary retain full, absolute and
unencumbered title to all of the issued and outstanding stock or other ownership
interests in each Restricted Subsidiary
 
SECTION 5.19.  Agreements Respecting Unrestricted Subsidiaries.  The Parent and
the Borrower shall, and shall cause each Restricted Subsidiary to, operate each
Unrestricted Subsidiary in such a manner as to make it apparent to all creditors
of such Unrestricted Subsidiary that such Unrestricted Subsidiary is a legal
entity separate and distinct from the Parent, the Borrower or any Restricted
Subsidiary and, as such, is solely responsible for its debts and other
obligations (including maintaining separate books of account).
 
SECTION 5.20.  Additional Covenants Upon Issuance of Unsecured Notes.  If the
Parent issues any additional Unsecured Notes permitted under Section 6.01(j)
hereof, the Parent shall:
 
(a)           deliver, or cause to be delivered, to the Administrative Agent not
later than five Business Days following the date on which any prospectus or
offering memorandum prepared in connection with the original issuance of any
Unsecured Notes is delivered to the prospective or actual holders of the
Unsecured Notes, a final, true and correct copy of such prospectus or offering
memorandum;

 
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(b)           deliver to the Administrative Agent not more than 10 Business Days
after the date of issuance of any Unsecured Notes by the Parent, a true and
correct copy of the Unsecured Notes Indenture (or any supplement (if any) to the
Unsecured Notes Indenture) entered into by the Parent in connection with the
Unsecured Notes;
 
(c)           deliver to the Administrative Agent concurrently with the issuance
of any Unsecured Notes, a certificate of an Authorized Officer confirming such
issuance and setting forth the aggregate principal amount of Unsecured Notes
issued;
 
(d)           deliver to the Administrative Agent and the Lenders promptly such
other related materials evidencing the issuance of the Unsecured Notes as the
Administrative Agent may reasonably request; and
 
(e)           if, after giving effect to the issuance of any Unsecured Notes and
the automatic reduction of the Borrowing Base pursuant to Section 6.01(j), the
aggregate outstanding Credit Exposure would exceed the Borrowing Base as so
reduced, repay Loan and cash collateralize Letters of Credit in accordance with
Section 2.11(a).
 
SECTION 5.21.  Certain Post-Effective Date Matters.  Not later than 60 days
after the Effective Date, the Parent and the Borrower shall, or shall cause one
or more of the Restricted Subsidiaries to, deliver to the Administrative Agent
(a) additional Mortgages duly completed and executed in a sufficient number of
counterparts for recording, if necessary, and all documents and instruments,
including Uniform Commercial Code financing statements, required by law or
reasonably requested by the Administrative Agent with respect to such Mortgages
to create first priority, perfected Liens (subject only to Liens permitted
pursuant to Section 6.02) on additional Oil and Gas Properties such that, when
aggregated with the total value of the Oil and Gas Properties covered by the
Mortgages delivered pursuant to Section 4.01(b)(B), at least 75% of the total
value of the Oil and Gas Properties evaluated in the Initial Reserve Report are
covered by a first priority, perfected Liens (subject only to Liens permitted
pursuant to Section 6.02), (b) such title information as the Administrative
Agent may reasonably require satisfactory to the Administrative Agent setting
forth the status of title with respect to those Oil and Gas Properties covered
by a Mortgage (including any Mortgage delivered under Section 4.01(b)) that were
not previously covered by a mortgage under the Existing Credit Facility, (c) a
written legal opinion addressed to the Administrative Agent, the Issuing Bank
and the Lenders in form and substance satisfactory to the Administrative Agent
from (i) Nancy M. Snyder, Esq., as general counsel to the mortgagors under such
additional Mortgages, and (ii) local counsel in each jurisdiction where such
additional Mortgages are to be recorded (and the Parent and the Borrower hereby
request such counsel to deliver such opinion) and (d) a schedule of the Oil and
Gas Properties evaluated in the Initial Reserve Report that are subject to
Mortgages after giving effect to the additional Mortgages delivered pursuant to
clause (a) above.
 
ARTICLE VI
 
Negative Covenants
 
Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full and
all Letters of Credit have expired or terminated and all LC Disbursements shall
have been reimbursed, the Parent and the Borrower covenant and agree with the
Lenders that:

 
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SECTION 6.01.  Indebtedness.  The Parent and the Borrower will not, and will not
permit any Restricted Subsidiary to, create, incur, assume or permit to exist
any Indebtedness, except:
 
(a)           the Obligations arising under this Agreement or any other Loan
Document or any guaranty of or suretyship arrangement for the Obligations
arising under any Loan Document;
 
(b)           Indebtedness under the Unsecured Notes outstanding on the
Effective Date listed on Schedule 6.01(b), and any Permitted Refinancing
Indebtedness in respect thereof;
 
(c)           Indebtedness of the Parent, the Borrower or any Restricted
Subsidiary existing on the Effective Date (other than Indebtedness under
Unsecured Notes outstanding on the Effective Date) that is listed on Schedule
6.01(c), and any refinancings, renewals or extensions (but not increases)
thereof;
 
(d)           Indebtedness under Capital Leases (as required to be reported on
the consolidated financial statements of the Parent pursuant to GAAP) not to
exceed $10,000,000;
 
(e)           Indebtedness associated with bonds or surety obligations required
by Governmental Requirements in connection with the operation of the Oil and Gas
Properties;
 
(f)           unsecured intercompany Indebtedness between (a) any of the Parent,
the Borrower and any Restricted Subsidiary or (b) any Restricted Subsidiaries to
the extent permitted by Section 6.04(d); provided that any such Indebtedness is
not held, assigned, transferred, negotiated or pledged to any Person other than
the Parent, the Borrower or a Restricted Subsidiary, and provided further that
any such Indebtedness owed by the Borrower or any Guarantor to any (other)
Guarantor shall be subordinated to the Secured Obligations on terms set forth in
the Guaranty;
 
(g)           to the extent that it constitutes Indebtedness, unsecured
intercompany Indebtedness owed by any of the Parent, the Borrower and any
Restricted Subsidiary to any Unrestricted Subsidiary (x) existing on the
Effective Date (together with any capitalized interested with respect thereto)
or (y) in respect of the proceeds of (i) distributions or dividends from an MLP
or (ii) sales of Equity Interests of an MLP, in each case, actually paid in cash
by such Unrestricted Subsidiary to any of the Parent, the Borrower or any
Restricted Subsidiary; provided that, in each case, any such Indebtedness (if
any) is not held, assigned, transferred, negotiated or pledged to any Person
other than a wholly-owned Subsidiary of the Parent, and provided further that
any such Indebtedness shall be subordinated to the Secured Obligations on terms
set forth in the Subordination Agreement;
 
(h)           endorsements of negotiable instruments for collection in the
ordinary course of business;
 
(i)           other Indebtedness (not included under subsections (a) through (h)
of this Section 6.01) not to exceed $25,000,000 in the aggregate at any one time
outstanding; and

 
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(j)           unsecured Indebtedness under (a) Unsecured Notes (other than the
Unsecured Notes outstanding on the Effective Date and any Permitted Refinancing
Indebtedness in respect thereof) and any Guarantees of any Credit Party in
respect thereof, in an aggregate principal amount not exceeding $120,000,000 at
any time outstanding, provided that (1) such Unsecured Notes and any Unsecured
Notes Indenture under which such Unsecured Notes are issued contain customary
terms and conditions for unsecured notes of similar type and of like tenor and
amount and do not contain any covenants (other than in connection with a change
of control or other fundamental change affecting the Parent or a termination of
trading with respect to the Parent’s capital stock) that are more onerous to the
Parent, the Borrower and the Restricted Subsidiaries than those imposed by this
Agreement or the other Loan Documents, (2) the final stated maturity date of
such Unsecured Notes and the average life of such Unsecured Notes (based on the
stated final maturity date and payment schedule provided at the date of issuance
of such Unsecured Notes) shall not be earlier than 91 days after the Maturity
Date (as in effect on the date of issuance of such Unsecured Notes) and (3) at
the time of and immediately after giving effect to each incurrence of such
Indebtedness, no Default shall have occurred and be continuing, and provided
further that immediately upon any incurrence of Indebtedness permitted by this
clause (k), the Borrowing Base then in effect shall be automatically reduced by
an amount equal to 30% of the aggregate principal amount of such Indebtedness
incurred (calculated at the face amount of the Indebtedness incurred without
giving effect to any original issue discount) and (b) any Permitted Refinancing
Indebtedness in respect thereof.
 
SECTION 6.02.  Liens.  The Parent and the Borrower will not, and will not permit
any Restricted Subsidiary to, create, incur, assume or permit to exist any Lien
on any of its Properties (now owned or hereafter acquired), except:
 
(a)           Liens securing the payment of any Secured Obligations;
 
(b)           Permitted Liens;
 
(c)           Liens securing leases giving rise to Indebtedness allowed under
Section 6.01(d) but only on the Property under lease;
 
(d)           Liens disclosed on Schedule 6.02;
 
(e)           any Lien arising out of the refinancing, extension, renewal or
refunding of any Indebtedness secured by any Lien permitted by any of the
foregoing clauses in this Section 6.02; provided that any such Indebtedness is
not increased beyond the amount thereof outstanding on the Effective Date (other
than increases associated with the capitalization of refinancing costs) and is
not secured by any additional assets; and
 
(f)           additional Liens upon Property that does not constitute Collateral
created after the date hereof, provided that the aggregate obligations secured
thereby and incurred on or after the date hereof shall not exceed $5,000,000 in
the aggregate at any one time outstanding.

 
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SECTION 6.03.  Fundamental Changes.  (a) Each of the Parent and the Borrower
will not, and will not permit any Restricted Subsidiary to, merge into or
consolidate with any other Person, or permit any other Person to merge into or
consolidate with it, or sell, transfer, lease or otherwise dispose of (in one
transaction or in a series of transactions) all or substantially all of its
assets, or all or substantially all of the stock of any of the Restricted
Subsidiaries (in each case, whether now owned or hereafter acquired), except as
permitted pursuant to Section 6.13, or liquidate or dissolve, except that, if at
the time thereof and immediately after giving effect thereto no Default shall
have occurred and be continuing, (i) any Person may merge into the Parent or the
Borrower in a transaction in which the Parent or the Borrower, respectively, is
the surviving Person, (ii) any Person may merge into any Guarantor in a
transaction in which the surviving entity is wholly-owned, directly or
indirectly, by the Borrower and such surviving entity is such Guarantor or
expressly assumes in writing (in form and substance satisfactory to the
Administrative Agent) all obligations of such Guarantor under the Loan
Documents, (iii) any Person may merge into any Restricted Subsidiary that is not
a Guarantor in a transaction in which the surviving entity is wholly-owned,
directly or indirectly, by the Borrower and, if such surviving entity
constitutes a Material Domestic Subsidiary, the Parent, the Borrower and such
surviving entity comply with the requirements of Section 5.13, (iv) any
Restricted Subsidiary may sell, transfer, lease or otherwise dispose of its
assets to the Parent, the Borrower or another Restricted Subsidiary and (v) any
Restricted Subsidiary may liquidate or dissolve if the Parent or the Borrower
determines in good faith that such liquidation or dissolution is in the best
interests of the Parent and the Borrower and is not materially disadvantageous
to the Lenders; provided that any such merger involving a Person that is not a
wholly-owned Subsidiary immediately prior to such merger shall not be permitted
unless also permitted by Section 6.04.
 
(b)           The Parent and the Borrower will not, and will not permit any
Restricted Subsidiary to, engage to any material extent in any business other
than businesses of the type conducted by the Parent, the Borrower and the
Restricted Subsidiaries on the date of execution of this Agreement and
businesses reasonably related thereto.  From and after the date hereof, the
Parent and the Borrower will not, and will not permit any Restricted Subsidiary
to, acquire or make any other expenditures (whether such expenditure is capital,
operating or otherwise) in or related to any Oil and Gas Properties not located
within the geographical boundaries of the United States or form or acquire any
Subsidiary organized under any jurisdiction outside of the United States.
 
SECTION 6.04.  Investments, Loans and Advances.  Each of the Parent and the
Borrower will not, and will not permit any Restricted Subsidiary to, make or
permit to remain outstanding any loans or advances to or Investments in any
Person, except that the foregoing restriction shall not apply to:  (a)
Investments reflected in the financial statements delivered pursuant to Section
3.04(a) or that are disclosed to the Lenders on Schedule 6.04; (b) Permitted
Investments; (c) accounts receivable arising in the ordinary course of business;
(d) Investments made by (i) the Parent in or to the Borrower or the Guarantors,
(ii) the Borrower in or to the Guarantors, (iii) any Restricted Subsidiary in
the Borrower or any Guarantor or (iv) the Parent, the Borrower or any Restricted
Subsidiary in or to all other Domestic Subsidiaries that are not Guarantors in
an aggregate amount at any one time outstanding not to exceed $10,000,000;
(e) Investments in direct ownership interests in additional Oil and Gas
Properties and gas gathering systems related thereto or related to farm-out,
farm-in, joint operating, joint venture or area of mutual interest agreements,
gathering systems, pipelines or other similar arrangements that are usual and
customary in the oil and gas exploration and production business; (f) Permitted
Corporate Acquisitions; and (g) other Investments, including Investments in
Unrestricted Subsidiaries, not to exceed $25,000,000 in the aggregate at any
time outstanding.

 
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SECTION 6.05.  Hedging Transactions.  Each of the Parent and the Borrower will
not, and will not permit any Restricted Subsidiary to, enter into:
 
(a)           any Swap Agreement in respect of commodities except for Swap
Agreements with an Approved Counterparty the notional volumes for which (when
aggregated with other commodity Swap Agreements then in effect other than basis
differential swaps on volumes already hedged pursuant to other Swap Agreements)
do not exceed, as of the date any such Swap Agreement is executed, the lesser
of:
 
(i)           80% of the Parent’s, the Borrower’s and the Restricted
Subsidiaries’ reasonably anticipated projected production of crude oil and
condensate (with respect to crude oil and condensate related transactions) for
each month in the period during which such Swap Agreement is in effect and 80%
of the Parent’s, the Borrower’s and the Restricted Subsidiaries’ projected
production of natural gas (with respect to natural gas related transactions) for
each month in the period during which such Swap Agreement is in effect, in each
case, from proved Hydrocarbon Interests as set forth on the most recent Reserve
Report; and
 
(ii)          90% of the Parent’s, the Borrower’s and the Restricted
Subsidiaries’ reasonably anticipated projected production of crude oil and
condensate (with respect to crude oil and condensate related transactions) for
each month in the period during which such Swap Agreement is in effect and 90%
of the Parent’s, the Borrower’s and the Restricted Subsidiaries’ projected
production of natural gas (with respect to natural gas related transactions) for
each month in the period during which such Swap Agreement is in effect, in each
case, from proved developed producing Hydrocarbon Interests as set forth on the
most recent Reserve Report; or
 
(b)           any Swap Agreement with respect to the interest rate on any
Indebtedness except for Swap Agreements with one or more Approved Counterparties
and provided that the aggregate notional principal amount of all Indebtedness
that is the subject of all such Swap Agreements does not exceed the outstanding
principal amount of Indebtedness for borrowed money.
 
For purposes of clause (a) of this Section 6.05, forecasts of projected
production shall equal the projections for proved Hydrocarbon Interests or
proved developed producing Hydrocarbon Interests, as applicable, set out in the
most recent Reserve Report as revised to account for any increase or decrease
therein anticipated because of information obtained by the Parent and the
Borrower subsequent to the publication of the most recent Reserve Report,
including the Parent’s or Borrower’s internal forecasts of production decline
rates for existing wells and additions to or deletions from anticipated future
production from new wells and acquisitions coming on stream or failing to come
on stream.

 
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SECTION 6.06.  Restricted Payments.  The Parent will not directly or indirectly
declare or pay or incur any liability to pay, and the Parent will not permit the
Borrower or any Restricted Subsidiaries to directly or indirectly declare or
pay, or incur any liability to pay any dividends or other distributions;
provided that (i) the Borrower or any Restricted Subsidiary may pay dividends or
make distributions to the Parent, the Borrower or any other Restricted
Subsidiary and (ii) if no Borrowing Base Deficiency then exists and no Event of
Default or Default has occurred and is continuing or would result therefrom, the
Parent may (a) declare and pay dividends solely in additional shares of Equity
Interests of the Parent, (b) repurchase or redeem shares of its capital stock
issued to its employees, officers or directors in an amount not to exceed
$1,000,000 in any 12-month period, (c) on or after December 31, 2009, pay cash
dividends and distributions to its shareholders from funds legally available for
such purpose during any fiscal year in an amount not in excess of $15,000,000,
and (d) make any mandatory or optional cash payments or deliveries of the
Parent’s capital stock, or any combination thereof, in settlement of its
obligations under the 2007 Convertible Notes Indenture upon conversion or
required repurchase of any 2007 Convertible Notes or the Call Spread
Transaction.
 
SECTION 6.07.  Transactions with Affiliates.  The Parent and the Borrower will
not, and will not permit any Restricted Subsidiaries to, sell, lease or
otherwise transfer any Property or assets to, or purchase, lease or otherwise
acquire any Property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates (other than the Parent, the Borrower
and the Restricted Subsidiaries), except (a) on terms and conditions not less
favorable to the Parent, the Borrower or such Restricted Subsidiary than could
be obtained on an arm’s-length basis from unrelated third parties,
(b) transactions between or among the Parent, the Borrower and any Restricted
Subsidiary not involving any other Affiliate and (c) any payments permitted by
Section 6.06.
 
SECTION 6.08.  Restrictive Agreements.  The Parent and the Borrower will not,
and will not permit any Restricted Subsidiary to, directly or indirectly, enter
into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon (a) the ability of the
Parent, the Borrower or any Restricted Subsidiary to create, incur or permit to
exist any Lien upon any of its Property or assets or (b) the ability of any
Restricted Subsidiary to pay dividends or other distributions to the Borrower or
the ability of the Borrower or any Restricted Subsidiary to pay dividends or
other distributions to the Parent, in each case, with respect to any shares of
its capital stock or to make or repay loans or advances to the Parent or the
Borrower or any Restricted Subsidiary or to Guarantee Indebtedness of the
Parent, the Borrower or any Restricted Subsidiary; provided that (i) the
foregoing shall not apply to restrictions and conditions imposed by law, by this
Agreement or the Unsecured Notes Documents, (ii) the foregoing shall not apply
to restrictions and conditions existing on the date hereof identified on
Schedule 6.08 (but shall apply to any extension or renewal of, or any amendment
or modification expanding the scope of, any such restriction or condition),
(iii) the foregoing shall not apply to customary restrictions and conditions
contained in agreements relating to the sale of a subsidiary pending such sale,
provided that such restrictions and conditions apply only to the subsidiary that
is to be sold and such sale is permitted hereunder, (iv) clause (a) of the
foregoing shall not apply to restrictions or conditions imposed by any agreement
relating to secured Indebtedness permitted by this Agreement if such
restrictions or conditions apply only to the property or assets securing such
Indebtedness and (v) clause (a) of the foregoing shall not apply to customary
provisions in leases and other contracts restricting the assignment thereof.

 
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SECTION 6.09.  Financial Covenants.
 
(a)           Total Debt to EBITDAX Ratio.  The Parent will not, at any time,
permit its ratio of Total Debt as of such time to EBITDAX (i) for any period of
four consecutive fiscal quarters ending on or prior to June 30, 2011, for which
financial statements are available to be greater than 4.0 to 1.0, and (ii) for
any period of four consecutive fiscal quarters ending on or after September 30,
2011, for which financial statements are available to be greater than 3.5 to
1.0.  For purposes of calculating Total Debt, at any time that the aggregate
Credit Exposure is less than $20,000,000, Total Debt shall be reduced by the
aggregate amount of all cash and Permitted Investments held at such time by the
Parent, the Borrower or any Restricted Subsidiary.
 
(b)           Current Ratio.  The Parent will not permit, as of the last day of
any fiscal quarter, its ratio of (i) Consolidated Current Assets to (ii)
Consolidated Current Liabilities to be less than 1.0 to 1.0.
 
SECTION 6.10.  Designation and Conversion of Restricted and Unrestricted
Subsidiaries; Indebtedness of Unrestricted Subsidiaries.
 
(a)           Unless designated as an Unrestricted Subsidiary on Schedule 3.13
as of the Effective Date or thereafter pursuant to Section 6.10(b), any Person
that becomes a direct or indirect Subsidiary of the Parent or any Restricted
Subsidiary shall be classified as a Restricted Subsidiary, provided that any
Person that becomes a Subsidiary of an Unrestricted Subsidiary shall be
classified as an Unrestricted Subsidiary.
 
(b)           The Parent or the Borrower may designate any Restricted Subsidiary
as an Unrestricted Subsidiary if (i) such designation is made by the Parent or
the Borrower in a written notice to the Administrative Agent and (ii) such
designation is approved by the Required Lenders.  The Parent or the Borrower may
designate any newly formed or newly acquired direct Subsidiary of the Parent,
the Borrower or any Restricted Subsidiary as an Unrestricted Subsidiary if (i)
such designation is made by the Parent or the Borrower in a written notice to
the Administrative Agent and (ii) no Default or Event of Default shall then
exist or would result from such designation.  Except as provided in this
Section, no Restricted Subsidiary may be redesignated as an Unrestricted
Subsidiary.
 
(c)           The Parent or the Borrower may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary if after giving effect to such
designation, (i) the representations and warranties of the Parent, the Borrower
and the Restricted Subsidiaries contained in this Agreement and each of the
other Loan Documents are true and correct in all material respects on and as of
such date as if made on and as of the date of such redesignation (or, if stated
to have been made expressly as of an earlier date, were true and correct as of
such date), (ii) no Event of Default or Default would exist or result therefrom
and (iii) the Parent or the Borrower complies with the requirements of
Sections 5.13.
 
(d)           The Parent and the Borrower shall not, and shall not permit any
Unrestricted Subsidiary to, incur any Indebtedness except as a Non-Recourse
Obligation.

 
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SECTION 6.11.  Proceeds of Loans.  The Parent and the Borrower will not permit
the proceeds of the Loans or any Letter of Credit to be used for any purpose
other than those permitted by Section 5.08.  None of the Parent, the Borrower or
any Person acting on behalf of the Parent or the Borrower has taken or will take
any action which might cause any of the Loan Documents to violate Regulation T,
U or X or any other regulation of the Board or to violate Section 7 of the
Securities Exchange Act of 1934 or any rule or regulation thereunder, in each
case as now in effect or as the same may hereinafter be in effect.  If requested
by the Administrative Agent, the Borrower will furnish to the Administrative
Agent and each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form U-1 or such other form referred to in Regulation U,
Regulation T or Regulation X of the Board, as the case may be.
 
SECTION 6.12.  ERISA Compliance.  The Parent and the Borrower will not at any
time:  (a) engage in, or permit any ERISA Affiliate to engage in, any
transaction in connection with which the Parent, the Borrower or any ERISA
Affiliate could be subjected to either a material civil penalty assessed
pursuant to section 502(c), (i) or (l) of ERISA or a material tax imposed by
Chapter 43 of Subtitle D of the Code with respect to a Plan; (b) terminate, or
permit any ERISA Affiliate to terminate, any Plan in a manner, or take any other
action with respect to any Plan, that could result in any liability to the
Parent, the Borrower or any ERISA Affiliate to the PBGC that could reasonably be
expected to have a Material Adverse Effect; (c) fail to make, or permit any
ERISA Affiliate to fail to make, full payment when due of all amounts which,
under the provisions of any Plan, agreement relating thereto or applicable law,
the Parent, the Borrower or any ERISA Affiliate is required to pay as
contributions thereto if such failure could reasonably be expected to have a
Material Adverse Effect; (d) permit to exist, or allow any ERISA Affiliate to
permit to exist, any accumulated funding deficiency within the meaning of
Section 302 of ERISA or section 412 of the Code, whether or not waived, with
respect to any Plan that exceeds $2,000,000; (e) except as provided in
Section 6.12(g), permit, or allow any ERISA Affiliate to permit, the actuarial
present value of the benefit liabilities under any Plan maintained by the Parent
or any ERISA Affiliate which is regulated under Title IV of ERISA to exceed the
current value of the assets (computed on a plan termination basis in accordance
with Title IV of ERISA) of such Plan allocable to such benefit liabilities by
more than $2,000,000, with the term “actuarial present value of the benefit
liabilities” having the meaning specified in section 4041 of ERISA; (f)
contribute to or assume an obligation to contribute to, or permit any Subsidiary
or ERISA Affiliate to contribute to or assume an obligation to contribute to,
any Multiemployer Plan if such action could reasonably be expected to have a
Material Adverse Effect; (g) acquire, or permit any ERISA Affiliate to acquire,
an interest in any Person that causes such Person to become an ERISA Affiliate
with respect to the Parent or any ERISA Affiliate if such Person sponsors,
maintains or contributes to, or at any time in the six-year period preceding
such acquisition has sponsored, maintained or contributed to, (i) any
Multiemployer Plan if the funding status of such Multiemployer Plan is such that
a total or partial withdrawal from it by such Person could reasonably be
expected to have a Material Adverse Effect or (ii) any other Plan that is
subject to Title IV of ERISA under which the actuarial present value of the
benefit liabilities under such Plan exceeds the current value of the assets
(computed on a plan termination basis in accordance with Title IV of ERISA) of
such Plan allocable to such benefit liabilities by an amount in excess of
$2,000,000; (h) incur, or permit any ERISA Affiliate to incur, a liability to or
on account of a Plan under sections 515, 4062, 4063, 4064, 4201 or 4204 of ERISA
in excess of $2,000,000; or (i) amend, or permit any ERISA Affiliate to amend, a
Plan resulting in an increase in current liability such that the Borrower or any
ERISA Affiliate is required to provide security to such Plan under section
401(a)(29) of the Code.

 
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SECTION 6.13.  Sale of Properties.  The Parent and the Borrower will not, and
will not permit any Restricted Subsidiary to, sell, assign, farm-out, convey or
otherwise transfer any Property or any interest in any Property except for
(a) the sale of Hydrocarbons in the ordinary course of business; (b) farmouts of
undeveloped acreage and assignments in connection with such farmouts; (c) the
sale or transfer of equipment that is no longer necessary for the business of
the Parent, the Borrower or any Restricted Subsidiary or is replaced by
equipment of at least comparable value and use; (d) the sale, transfer or other
disposition of Equity Interests in Unrestricted Subsidiaries; and (e) sales or
other dispositions (including Casualty Events and dispositions resulting from
the exercise of eminent domain, condemnation or nationalization) of Oil and Gas
Properties or any interest therein or all of the Equity Interests in Restricted
Subsidiaries owning Oil and Gas Properties; provided that if such Oil and Gas
Properties (or Oil and Gas Properties of such Restricted Subsidiaries) included
in the most recently delivered Reserve Report during any period between two
successive regularly scheduled Redetermination Dates have a Fair Market Value
(individually or in the aggregate) that, when aggregated with (i) the value
attributed to all title defects with respect to Borrowing Base Properties
identified during such period and (ii) the net reduction (determined in
accordance with Section 5.17) in the value attributable to the Credit Party’s
Swap Agreements during such period, exceeds five percent (5%) of the Borrowing
Base then in effect, the Borrowing Base shall be reduced in an amount equal to
the value, if any, assigned such Property by the Required Lenders in good faith
in determining the Borrowing Base then in effect; and provided further that if
any such sale or other disposition is of a Restricted Subsidiary owning Oil and
Gas Properties, such sale or other disposition shall include all the Equity
Interests of such Restricted Subsidiary.  To determine the amount by which the
Borrowing Base shall be adjusted, the Parent or the Borrower shall give the
Administrative Agent and the Lenders notice of the proposed sale or other
disposition not less than 10 days prior to the date of the proposed sale or
other disposition.  The Administrative Agent shall, in good faith and utilizing
the Reserve Reports and other data, reports and information delivered in
connection with the most recent redetermination of the Borrowing Base (or the
initial determination, as applicable), propose to the Lenders a reduction to the
Borrowing Base in accordance with the standards set forth in
Section 2.04.  Thereafter, the Lenders shall have five days to approve or object
to such proposed amount; and any failure to object shall be deemed to be an
approval.  In the event there is no approval or deemed approval, the
Administrative Agent shall poll the Lenders to ascertain the smallest reduction
to the Borrowing Base then acceptable to a number of Lenders sufficient to
constitute the Required Lenders for purposes of this Section 6.13 and such
amount shall then be the allocated value of the Property subject to such sale or
disposition.
 
SECTION 6.14.  Environmental Matters.  None of the Parent, the Borrower or any
Restricted Subsidiary will cause or permit any of its Property to be in
violation of, or do anything or permit anything to be done which will subject
any such Property to any remedial obligations under, any Environmental Laws,
assuming disclosure to the applicable Governmental Authority of all relevant
facts, conditions and circumstances, if any, pertaining to such Property where
such violations or remedial obligations could reasonably be expected to result
in an Environmental Liability to the Parent, the Borrower or the Restricted
Subsidiaries in excess of $10,000,000.
 
SECTION 6.15.  Subsidiaries.  The Parent and the Borrower shall not, and shall
not permit any Restricted Subsidiary to, create or acquire any additional
Restricted Subsidiary or redesignate any Unrestricted Subsidiary as a Restricted
Subsidiary unless the Parent and the Borrower comply with Section 5.13.  The
Parent and the Borrower shall not, and shall not permit any Restricted
Subsidiary to, sell, assign or otherwise dispose of any Equity Interest in any
Restricted Subsidiary except in compliance with Section 6.13.

 
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SECTION 6.16.  Gas Imbalances, Take-or-Pay or Other Prepayments.  The Parent and
the Borrower will not allow gas imbalances, take-or-pay or other prepayments
with respect to the Oil and Gas Properties of the Parent, the Borrower or the
Restricted Subsidiaries that would require the Parent, the Borrower or any
Restricted Subsidiary to deliver Hydrocarbons produced on Oil and Gas Properties
at some future time without then or thereafter receiving full payment therefor
in excess of two Bcf of gas (or its equivalent) in the aggregate on a net basis
for the Parent, the Borrower and the Restricted Subsidiaries.
 
SECTION 6.17.  Fiscal Year; Fiscal Quarter.  The Parent and the Borrower shall
not, and shall not permit any Subsidiaries to, change its fiscal year or any of
its fiscal quarters.
 
SECTION 6.18.  Repayment of Unsecured Notes; Amendment of Unsecured Notes
Documents.  The Parent will not, and will not permit the Borrower or any
Subsidiary to:  (i) call, make or offer to make any optional or voluntary
Redemption of, or otherwise optionally or voluntarily Redeem, any of the
Unsecured Notes or any Permitted Refinancing Indebtedness in respect thereof;
provided, however, that the Parent may prepay the Unsecured Notes or any
Permitted Refinancing Indebtedness with the proceeds of (A) any Permitted
Refinancing Indebtedness, (B) the net cash proceeds of a sale of capital stock
(other than Disqualified Stock) of the Parent that is contemporaneous with such
Permitted Refinancing Indebtedness or (C) a combination of any Permitted
Refinancing Indebtedness and the net cash proceeds of a sale of capital stock
(other than Disqualified Stock) of the Parent that is contemporaneous with such
Permitted Refinancing Indebtedness; and provided further that so long as (x) no
Borrowing Base Deficiency then exists and (y) no Event of Default or Default has
occurred and is continuing or would result therefrom, the Parent shall be
permitted to make any optional cash payments or deliveries of the Parent’s
capital stock, or any combination thereof, in settlement of its obligations
under the 2007 Convertible Notes Indenture upon the conversion or required
repurchase of any 2007 Convertible Notes thereunder (and, for the avoidance of
doubt, nothing in this Section 6.18 shall limit the Parent’s ability to make any
scheduled payments or mandatory prepayments with respect to any Unsecured
Notes); or (ii) amend, modify, waive or otherwise change, consent or agree to
any amendment, modification, waiver or other change to, any of the terms of any
Unsecured Notes Documents or any Permitted Refinancing Indebtedness if the
effect thereof would be to shorten its maturity or average life or increase the
amount of any payment of principal thereof or increase the rate or shorten any
period for payment of interest thereon, provided that the foregoing shall not
prohibit the execution of (1) supplemental indentures associated with the
incurrence of additional Unsecured Notes to the extent permitted by
Section 6.01(j), (2) other indentures or agreements in connection with the
issuance of Permitted Refinancing Indebtedness, (3) supplemental indentures to
add guarantors if required by the terms of any Unsecured Notes Indenture
provided such Person complies with Section 5.13(b), or (4) amendments,
modifications, waivers or other changes that are acceptable to the
Administrative Agent and not materially adverse to the Lenders.

 
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SECTION 6.19.  Marketing Activities.  The Parent and the Borrower will not, and
will not permit any of the Restricted Subsidiaries to, engage in marketing
activities for any Hydrocarbons or enter into any contracts related thereto
other than (a) contracts for the sale of Hydrocarbons scheduled or reasonably
estimated to be produced from their proved Oil and Gas Properties during the
period of such contract, (b) contracts for the sale of Hydrocarbons scheduled or
reasonably estimated to be produced from proved Oil and Gas Properties of third
parties during the period of such contract associated with the Oil and Gas
Properties of the Parent, the Borrower and the Restricted Subsidiaries that the
Parent, the Borrower or one of the Restricted Subsidiaries has the right to
market pursuant to joint operating agreements, unitization agreements or other
similar contracts that are usual and customary in the oil and gas business and
(c) other contracts for the purchase and/or sale of Hydrocarbons of third
parties (i) that have generally offsetting provisions (i.e. corresponding
pricing mechanics, delivery dates and points and volumes) such that no
“position” is taken and (ii) for which appropriate credit support has been taken
to alleviate the material credit risks of the counterparty thereto.
 
SECTION 6.20.  Sale or Discount of Receivables.  Except for receivables obtained
by the Parent, the Borrower or any Restricted Subsidiary out of the ordinary
course of business or the settlement of joint interest billing accounts in the
ordinary course of business or discounts granted to settle collection of
accounts receivable or the sale of defaulted accounts arising in the ordinary
course of business in connection with the compromise or collection thereof and
not in connection with any financing transaction, the Parent and the Borrower
will not, and will not permit any Restricted Subsidiary to, discount or sell
(with or without recourse) any of its notes receivable or accounts receivable.
 
ARTICLE VII

Events of Default; Remedies; Application of Proceeds

 
SECTION 7.01.  If any of the following events (“Events of Default”) shall occur:
 
(a)           the Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;
 
(b)           the Borrower shall fail to pay any interest on any Loan or any fee
or any other amount (other than an amount referred to in clause (a) of this
Section) payable under this Agreement, when and as the same shall become due and
payable, and such failure shall continue unremedied for a period of three
Business Days;
 
(c)           any representation or warranty made or deemed made by or on behalf
of the Borrower or any Subsidiary in or in connection with this Agreement or any
amendment or modification hereof or waiver hereunder, or in any report,
certificate, financial statement or other document furnished pursuant to or in
connection with this Agreement or any amendment or modification hereof or waiver
hereunder, shall prove to have been incorrect in any material  respect when made
or deemed made;
 
(d)           the Parent or the Borrower shall fail to observe or perform any
covenant, condition or agreement contained in Section 5.02(a), 5.03 (with
respect to either the Parent’s or the Borrower’s existence) or 5.08 or in
Article VI;

 
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(e)           the Parent or the Borrower shall fail to observe or perform any
covenant, condition or agreement contained in this Agreement (other than those
specified in clause (a), (b) or (d) of this Section), and such failure shall
continue unremedied for a period of 30 days after notice thereof from the
Administrative Agent to the Parent or the Borrower (which notice will be given
at the request of any Lender);
 
(f)           the Parent, the Borrower or any Restricted Subsidiary shall fail
to make any payment (whether of principal or interest and regardless of amount)
in respect of any Material Indebtedness or any Material Swap Obligation, when
and as the same shall become due and payable;
 
(g)           (i) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables or
permits (with or without the giving of notice, the lapse of time or both) the
holder or holders of any Material Indebtedness or any trustee or agent on its or
their behalf to cause any Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled
maturity, other than a conversion of the 2007 Convertible Notes pursuant to the
terms of the 2007 Convertible Notes Indenture, or (ii) a default or early
termination event shall occur and be continuing under any Swap Agreement of the
Borrower or any Restricted Subsidiary which results in Material Swap Obligations
being due by the Borrower or such Restricted Subsidiary, and such Material Swap
Obligations are not paid when due or within three Business Days thereafter;
provided that this clause (g) shall not apply to secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness;
 
(h)           an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of the Parent, the Borrower or any Restricted Subsidiary or its
debts, or of a substantial part of its assets, under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or hereafter in
effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Parent, the Borrower or any Restricted
Subsidiary or for a substantial part of its assets, and, in any such case, such
proceeding or petition shall continue undismissed for 60 days or an order or
decree approving or ordering any of the foregoing shall be entered;
 
(i)           the Parent, the Borrower or any Restricted Subsidiary shall
(i) voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect,
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in clause (h) of this
Section, (iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Parent, the
Borrower or any Restricted Subsidiary or for a substantial part of its assets,
(iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the benefit
of creditors or (vi) take any action for the purpose of effecting any of the
foregoing;
 
(j)           the Parent, the Borrower or any Restricted Subsidiary shall become
unable, admit in writing its inability or fail generally to pay its debts as
they become due;

 
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(k)           a judgment or judgments for the payment of money in excess of
$25,000,000 (net of any amount payable because of insurance) in the aggregate
shall be rendered by a court against the Parent, the Borrower or any Restricted
Subsidiary and the same shall not be discharged (or provision shall not be made
for such discharge), or a stay of execution thereof shall not be procured,
within 30 days from the date of entry thereof and the Parent, the Borrower or
such Restricted Subsidiary, as applicable, shall not, within such period of 30
days, or such longer period during which execution of the same shall have been
stayed, appeal in good faith therefrom and cause the execution thereof to be
stayed during such appeal;
 
(l)           an ERISA Event shall have occurred that, in the opinion of the
Majority Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in a Material Adverse Effect;
 
(m)           the Loan Documents after delivery thereof shall for any reason,
except to the extent permitted by the terms thereof, cease to be in full force
and effect and valid, binding and enforceable in accordance with their terms
against the Parent, the Borrower or a Guarantor party thereto, or cease to
create a valid and perfected Lien of the priority required thereby on any of the
Collateral purported to be covered thereby, except to the extent permitted by
the terms of this Agreement, or the Borrower or any Restricted Subsidiary or any
of their Affiliates shall so state in writing; or
 
(n)           any Change in Control occurs;
 
then, and in every such event (other than an event with respect to the Parent,
the Borrower or any Guarantor described in clause (h) or (i) of this Section),
and at any time thereafter during the continuance of such event, the
Administrative Agent may, and at the request of the Majority Lenders shall, by
notice to the Borrower, take either or both of the following actions, at the
same or different times:  (i) terminate the Commitments, and thereupon the
Commitments shall terminate immediately, and (ii) declare the Loans then
outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared to be
due and payable), and thereupon the principal of the Loans so declared to be due
and payable, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower; and in case of any event with
respect to the Parent, the Borrower or any Guarantor described in clause (h) or
(i) of this Section, the Commitments shall automatically terminate and the
principal of the Loans then outstanding, together with accrued interest thereon
and all fees and other obligations of the Borrower accrued hereunder, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower.  In
the case of the occurrence of an Event of Default, the Administrative Agent, the
Issuing Bank and the Lenders will have all other rights and remedies available
at law and equity.
 
SECTION 7.02.      Application of Payments.  Any amount received by the
Administrative Agent from the exercise of any rights or remedies hereunder or
under any of the Collateral Documents shall be applied by the Administrative
Agent to payment of the Secured Obligations in the following order unless a
court of competent jurisdiction shall otherwise direct:

 
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(a)           FIRST, to payment of all reasonable costs and expenses of the
Administrative Agent incurred in connection with the collection and enforcement
of the Secured Obligations or of any security interest granted to the
Administrative Agent in connection with any collateral securing the Secured
Obligations;
 
(b)           SECOND, to payment of that portion of the Obligations constituting
accrued and unpaid interest and fees, pro rata among the Lenders and their
Affiliates in accordance with the amount of such accrued and unpaid interest and
fees owing to each of them;
 
(c)           THIRD, to payment of the principal of the Obligations, the net
early termination payments or other liabilities and obligations under any Lender
Party Swap Agreement and any obligations or liabilities under any Lender Party
Financial Service Product, in each case, then due and unpaid from the Borrower
or any Restricted Subsidiary to any of the Lenders or their Affiliates, pro rata
among the Lenders and their Affiliates in accordance with their respective
shares of the aggregate amount of the principal of the Obligations, the net
early termination payments or other obligations under any Lender Party Swap
Agreement and any other liabilities and obligations under any Lender Party
Financial Service Product, in each case, then due and unpaid owing to them;
 
(d)           FOURTH, to payment of any Secured Obligations (other than those
listed above) pro rata among those parties to whom such Secured Obligations are
due in accordance with the amounts owing to each of them;
 
(e)           FIFTH, to serve as cash collateral to be held by the
Administrative Agent to secure the LC Exposure; and
 
(f)           SIXTH, any surplus thereafter remaining shall be paid to the
Borrower or its successor or assigns as its or their interests shall appear.
 
ARTICLE VIII
 
The Administrative Agent
 
SECTION 8.01.  Appointment; Powers.  Each of the Lenders and the Issuing Bank
hereby irrevocably appoints the Administrative Agent as its agent and authorizes
the Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof,
together with such actions and powers as are reasonably incidental thereto.
 
SECTION 8.02.  Agents as Lenders.  The bank serving as the Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the
Administrative Agent, and such bank and its Affiliates may accept deposits from,
lend money to and generally engage in any kind of business with the Parent, the
Borrower or any Subsidiary or other Affiliate thereof as if it were not the
Administrative Agent hereunder.

 
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SECTION 8.03.  Duties and Obligations of Administrative Agent.  The
Administrative Agent shall not have any duties or obligations except those
expressly set forth herein.  Without limiting the generality of the foregoing,
(a) the Administrative Agent shall not be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is continuing,
(b) the Administrative Agent shall not have any duty to take any discretionary
action or exercise any discretionary powers, except discretionary rights and
powers expressly contemplated hereby that the Administrative Agent is required
to exercise in writing as directed by the Majority Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02), and (c) except as expressly set forth herein, the
Administrative Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to the Parent, the
Borrower or any of its Subsidiaries that is communicated to or obtained by the
bank serving as Administrative Agent or any of its Affiliates in any
capacity.  The Administrative Agent shall not be liable for any action taken or
not taken by it with the consent or at the request of the Majority Lenders (or
such other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02) or in the absence of its own gross
negligence or willful misconduct (IT BEING THE INTENTION OF THE PARTIES HERETO
THAT THE ADMINISTRATIVE AGENT BE INDEMNIFIED IN THE CASE OF ITS OWN NEGLIGENCE
(OTHER THAN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT), REGARDLESS OF WHETHER SUCH
NEGLIGENCE IS SOLE OR CONTRIBUTORY, ACTIVE OR PASSIVE, IMPUTED, JOINT OR
TECHNICAL).  The Administrative Agent shall be deemed not to have knowledge of
any Default unless and until written notice thereof is given to the
Administrative Agent by the Parent, the Borrower or a Lender, and the
Administrative Agent shall not be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or in
connection with this Agreement, (ii) the contents of any certificate, report or
other document delivered hereunder or in connection herewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth herein, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement or any other agreement, instrument or document or
(v) the satisfaction of any condition set forth in Article IV or elsewhere
herein, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent.
 
SECTION 8.04.  Reliance by Administrative Agent.  The Administrative Agent shall
be entitled to rely upon, and shall not incur any liability for relying upon,
any notice, request, certificate, consent, statement, instrument, document or
other writing believed by it to be genuine and to have been signed or sent by
the proper Person.  The Administrative Agent also may rely upon any statement
made to it orally or by telephone and believed by it to be made by the proper
Person, and shall not incur any liability for relying thereon.  The
Administrative Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.
 
SECTION 8.05.  Subagents.  The Administrative Agent may perform any and all its
duties and exercise its rights and powers by or through any one or more
sub-agents appointed by the Administrative Agent.  The Administrative Agent and
any such sub-agent may perform any and all its duties and exercise its rights
and powers through their respective Related Parties.  The exculpatory provisions
of the preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.

 
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SECTION 8.06.  Resignation or Removal of Administrative Agent.  Subject to the
appointment and acceptance of a successor Administrative Agent as provided in
this paragraph, the Administrative Agent may resign at any time by notifying the
Lenders, the Issuing Bank and the Borrower.  Upon any such resignation, the
Majority Lenders shall have the right, in consultation with the Borrower, to
appoint a successor.  If no successor shall have been so appointed by the
Majority Lenders and shall have accepted such appointment within 30 days after
the retiring Administrative Agent gives notice of its resignation, then the
retiring Administrative Agent may, on behalf of the Lenders and the Issuing
Bank, appoint a successor Administrative Agent which shall be a bank with an
office in New York, New York, or an Affiliate of any such bank.  Upon the
acceptance of its appointment as Administrative Agent hereunder by a successor,
such successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder.  The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor.  After the Administrative Agent’s
resignation hereunder, the provisions of this Article and Section 9.03 shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while it was acting as Administrative
Agent.
 
SECTION 8.07.  No Reliance.  Each Lender acknowledges that it has, independently
and without reliance upon the Administrative Agent or any other Lender and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement.  Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any related agreement or any document furnished hereunder or thereunder.  In
this regard, each Lender acknowledges that Mayer Brown LLP is acting in this
transaction as special counsel to the Administrative Agent only.  Each other
party hereto will consult with its own legal counsel to the extent that it deems
necessary in connection with this Agreement and the other Loan Documents and the
matters contemplated herein and therein.
 
SECTION 8.08.  Administrative Agent May File Proofs of Claim.  In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Borrower or any of its Subsidiaries, the
Administrative Agent (irrespective of whether the principal of any Loan shall
then be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Administrative Agent shall have made any demand on
the Borrower) shall be entitled and empowered, by intervention in such
proceeding or otherwise:

 
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(a)           to file and prove a claim for the whole amount of the principal
and interest owing and unpaid in respect of the Loans and all other Indebtedness
that are owing and unpaid and to file such other documents as may be necessary
or advisable in order to have the claims of the Lenders and the Administrative
Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders and the Administrative Agent and their
respective agents and counsel and all other amounts due the Lenders and the
Administrative Agent under Section 9.03) allowed in such judicial proceeding;
and
 
(b)           to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
 
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Section 9.03.
 
Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender any plan
of reorganization, arrangement, adjustment or composition affecting the
Indebtedness or the rights of any Lender or to authorize the Administrative
Agent to vote in respect of the claim of any Lender in any such proceeding.
 
SECTION 8.09.  Authority of Administrative Agent to Execute Collateral Documents
and Release Collateral and Liens.  Each Lender and the Issuing Bank hereby
empower and authorize the Administrative Agent to execute and deliver to the
Parent, the Borrower or the Guarantors, as applicable, on their behalf the
Collateral Documents and all related financing statements and any financing
statements, agreements, documents or instruments as shall be necessary or
appropriate to effect the purposes of the Collateral Documents.  Each Lender and
the Issuing Bank hereby authorizes the Administrative Agent to release any
collateral that is permitted to be sold or released pursuant to the terms of the
Loan Documents.  Each Lender and the Issuing Bank hereby authorizes the
Administrative Agent to execute and deliver to the Borrower, at the Borrower’s
sole cost and expense, any and all releases of Liens, termination statements,
assignments or other documents reasonably requested by the Borrower in
connection with any sale or other disposition of Property to the extent such
sale or other disposition is permitted by the terms of Section 6.13 or is
otherwise authorized by the terms of the Loan Documents.
 
SECTION 8.10.  The Arranger, the Co-Syndication Agents and the Co-Documentation
Agents.  The arranger, bookrunner, the co-syndication agents and the
co-documentation agents shall have no duties, responsibilities or liabilities
under this Agreement and the other Loan Documents other than their duties,
responsibilities and liabilities in their capacity as Lenders hereunder.

 
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ARTICLE IX
 
Miscellaneous
 
SECTION 9.01.  Notices.  (a) Except in the case of notices and other
communications expressly permitted to be given by telephone (and subject to
paragraph (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopy, as follows:
 
(i)           if to the Parent, to it at Penn Virginia Corporation, Three Radnor
Corporate Center, Suite 300, 100 Matsonford Road, Radnor, Pennsylvania 19087,
Attention of Steven A. Hartman (Telecopy No. (610) 687-3688), with a copy to
Penn Virginia Corporation, Three Radnor Corporate Center, Suite 300, 100
Matsonford Road, Radnor, Pennsylvania 19087, Attention of Nancy M. Snyder
(Telecopy No. (610) 687-3688);
 
(ii)           if to the Borrower, to it at Penn Virginia Holding Corp., 300
Delaware Avenue, Suite 550, Wilmington, Delaware 19801, Attention of Steven A.
Hartman (Telecopy No. (302) 225-0625), with a copy to (A) Penn Virginia
Corporation, Three Radnor Corporate Center, Suite 300, 100 Matsonford Road,
Radnor, Pennsylvania 19087, Attention of Steven A. Hartman (Telecopy No. (610)
687-3688) and (B) Penn Virginia Corporation, Three Radnor Corporate Center,
Suite 300, 100 Matsonford Road, Radnor, Pennsylvania 19087, Attention of Nancy
M. Snyder (Telecopy No. (610) 687-3688);
 
(iii)           if to the Administrative Agent, to JPMorgan Chase Bank, Loan and
Agency Services Group, 10 South Dearborn, Floor 07, Chicago, IL 60603-2003,
Attention of Leonida G. Mischke, (Telecopy No. 312-385-7096);
 
(iv)           if to the Issuing Bank, to it at 10 South Dearborn, Floor 07,
Chicago, IL  60603-2003, Attention of Phyllis Huggins (Telecopy No.
312-732-2729); and
 
(v)           if to any other Lender, to it at its address (or telecopy number)
set forth in its Administrative Questionnaire.
 
(b)           Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications pursuant to procedures
approved by the Administrative Agent; provided that the foregoing shall not
apply to notices pursuant to Article II unless otherwise agreed by the
Administrative Agent and the applicable Lender.  The Administrative Agent or the
Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.
 
(c)           Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the other parties
hereto.  All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt.

 
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SECTION 9.02.  Waivers; Amendments.  (a) No failure or delay by the
Administrative Agent, the Issuing Bank or any Lender in exercising any right or
power hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power.  The
rights and remedies of the Administrative Agent, the Issuing Bank and the
Lenders hereunder are cumulative and are not exclusive of any rights or remedies
that they would otherwise have.  No waiver of any provision of this Agreement or
consent to any departure by the Borrower therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this Section,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given.  Without limiting the generality of the
foregoing, the making of a Loan or issuance of a Letter of Credit shall not be
construed as a waiver of any Default, regardless of whether the Administrative
Agent, any Lender or the Issuing Bank may have had notice or knowledge of such
Default at the time.
 
(b)           Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrower and the Majority Lenders or by the Borrower and the
Administrative Agent with the consent of the Majority Lenders; provided that no
such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, increase the Borrowing Base or amend the
specified approval standards set forth in Section 2.04 without the written
consent of each Lender or maintain or decrease the Borrowing Base without the
written consent of the Required Lenders, (ii) reduce the principal amount of any
Loan or LC Disbursement or reduce the rate of interest thereon, or reduce any
fees payable hereunder, without the written consent of each Lender affected
thereby, (iii) postpone the scheduled date of payment of the principal amount of
any Loan or LC Disbursement, or any interest thereon, or any fees payable
hereunder, or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date of expiration of any Commitment, without the written
consent of each Lender affected thereby, (iv) change Section 2.18(b) or (c) or
Section 7.02 in a manner that would alter the pro rata sharing of payments
required thereby, without the written consent of each Lender, (v) change any of
the provisions of this Section or the definition of “Majority Lenders” or
“Required Lenders” or any other provision hereof specifying the number or
percentage of Lenders required to waive, amend or modify any rights hereunder or
make any determination or grant any consent hereunder, without the written
consent of each Lender, or (vi) release any Credit Party from its obligations
under the Loan Documents or release all or substantially all of the Collateral
for the Obligations arising under this Agreement, except in connection with any
sales, transfers, leases, dispositions or other transactions permitted by
Section 6.03 or Section 6.13, without the prior written consent of each Lender;
provided further that no such agreement shall (x) amend, modify or otherwise
affect the rights or duties of the Administrative Agent or the Issuing Bank
hereunder without the prior written consent of the Administrative Agent or the
Issuing Bank, as the case may be, or (y) release any of the Collateral, except
in connection with any sales, transfers, leases, dispositions or other
transactions permitted by Section 6.03 or Section 6.13, without the written
consent of the Administrative Agent (it being acknowledged by the Credit Parties
that the Administrative Agent may condition such consent on the Credit Parties
having assigned, novated, terminated, unwound or otherwise obtained a release
from any obligations or liabilities under Swap Agreements (or with respect to
projected production of Hydrocarbons hedged thereunder) attributable to the
Collateral to be released.  Notwithstanding anything to the contrary herein, no
Defaulting Lender shall have any right to approve or disapprove any amendment,
waiver or consent hereunder, except that the Commitment of such Lender may not
be increased or extended without the consent of such Lender.

 
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SECTION 9.03.  Expenses; Indemnity; Damage Waiver.  (a) The Borrower shall pay
(i) all reasonable out-of-pocket expenses incurred by the Administrative Agent
and its Affiliates, including the reasonable fees, charges and disbursements of
counsel for the Administrative Agent, in connection with the syndication of the
credit facilities provided for herein, the preparation and administration of
this Agreement or any amendments, modifications or waivers of the provisions
hereof (whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing
Bank in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder and (iii) all
out-of-pocket expenses incurred by the Administrative Agent, the Issuing Bank or
any Lender, including the fees, charges and disbursements of any counsel for the
Administrative Agent, the Issuing Bank or any Lender, in connection with the
enforcement or protection of its rights in connection with this Agreement,
including its rights under this Section, or in connection with the Loans made or
Letters of Credit issued hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
Loans or Letters of Credit.
 
(b)           THE PARENT AND THE BORROWER SHALL INDEMNIFY THE ADMINISTRATIVE
AGENT, THE ISSUING BANK AND EACH LENDER, AND EACH RELATED PARTY OF ANY OF THE
FOREGOING PERSONS (EACH SUCH PERSON BEING CALLED AN “INDEMNITEE”), AGAINST, AND
HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS, DAMAGES,
LIABILITIES AND RELATED EXPENSES, INCLUDING THE FEES, CHARGES AND DISBURSEMENTS
OF ANY COUNSEL FOR ANY INDEMNITEE, INCURRED BY OR ASSERTED AGAINST ANY
INDEMNITEE ARISING OUT OF, IN CONNECTION WITH OR AS A RESULT OF (I) THE
EXECUTION OR DELIVERY OF THIS AGREEMENT OR ANY AGREEMENT OR INSTRUMENT
CONTEMPLATED HEREBY, THE PERFORMANCE BY THE PARTIES HERETO OF THEIR RESPECTIVE
OBLIGATIONS HEREUNDER OR THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED
HEREBY, (II) ANY LOAN OR LETTER OF CREDIT OR THE USE OF THE PROCEEDS THEREFROM
(INCLUDING ANY REFUSAL BY THE ISSUING BANK TO HONOR A DEMAND FOR PAYMENT UNDER A
LETTER OF CREDIT IF THE DOCUMENTS PRESENTED IN CONNECTION WITH SUCH DEMAND DO
NOT STRICTLY COMPLY WITH THE TERMS OF SUCH LETTER OF CREDIT), (III) ANY ACTUAL
OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS MATERIALS ON OR FROM ANY PROPERTY
OWNED OR OPERATED BY THE PARENT, THE BORROWER OR ANY OF THE RESTRICTED
SUBSIDIARIES, OR ANY ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO THE PARENT,
THE BORROWER OR ANY OF THE RESTRICTED SUBSIDIARIES, OR (IV) ANY ACTUAL OR
PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF
THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY AND
REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO; PROVIDED THAT SUCH
INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH
LOSSES, CLAIMS, DAMAGES, LIABILITIES OR RELATED EXPENSES ARE DETERMINED BY A
COURT OF COMPETENT JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE
RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE (IT
BEING ACKNOWLEDGED AND AGREED THAT IT IS THE INTENTION OF THE PARTIES HERETO
THAT THE INDEMNITEES BE INDEMNIFIED IN THE CASE OF THEIR OWN NEGLIGENCE (OTHER
THAN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT), REGARDLESS OF WHETHER SUCH
NEGLIGENCE IS SOLE OR CONTRIBUTORY, ACTIVE OR PASSIVE, IMPUTED, JOINT OR
TECHNICAL).

 
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(c)      To the extent that the Parent or the Borrower fails to pay any amount
required to be paid by it to the Administrative Agent or the Issuing Bank under
paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the
Administrative Agent or the Issuing Bank, as the case may be, such Lender’s
Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent or the Issuing Bank in its capacity as such.
 
(d)     To the extent permitted by applicable law, neither the Parent nor the
Borrower shall assert, and each hereby waives, any claim against any Indemnitee,
on any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with or as a result of this Agreement or any agreement or instrument
contemplated hereby, any Loan or Letter of Credit or the use of the proceeds
thereof.
 
(e)     All amounts due under this Section shall be payable promptly after
written demand therefor.
 
SECTION 9.04.  Successors and Assigns.  (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit), except that (i) neither the
Parent nor the Borrower may assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of the Issuing Bank and
each Lender (and any attempted assignment or transfer by the Parent or the
Borrower without such consent shall be null and void) and (ii) no Lender may
assign or otherwise transfer its rights or obligations hereunder except in
accordance with this Section.  Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank that issues any Letter of Credit), Participants
(to the extent provided in paragraph (c) of this Section) and, to the extent
expressly contemplated hereby, the Related Parties of each of the Administrative
Agent, the Issuing Bank and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.
 
(b)(i)  Subject to the conditions set forth in paragraph (b)(ii) below, any
Lender may assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans at the time owing to it) with the prior written consent (such
consent not to be unreasonably withheld) of:

 
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(A)           the Borrower, provided that no consent of the Borrower shall be
required for an assignment to a Lender, an Affiliate of a Lender, an Approved
Fund or, if an Event of Default has occurred and is continuing, any other
assignee;
 
(B)           the Administrative Agent, provided that no consent of the
Administrative Agent shall be required for an assignment of any Commitment to an
assignee that is a Lender with a Commitment immediately prior to giving effect
to such assignment; and
 
(C)           the Issuing Bank, provided that no consent of the Issuing Bank
shall be required for an assignment of any Commitment to an assignee that is a
Lender with a Commitment immediately prior to giving effect to such assignment;
 
provided, however, that no Lender may assign all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans at the time owing to it) to the Parent or any Affiliate of the
Parent without the consent of all of the Lenders.
 
(ii)           Assignments shall be subject to the following additional
conditions:
 
(A)           except in the case of an assignment to a Lender or an Affiliate of
a Lender, the amount of the Commitment Amount of the assigning Lender subject to
each such assignment (determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Administrative Agent) shall
not be less than $5,000,000 unless each of the Borrower and the Administrative
Agent otherwise consent, provided that no such consent of the Borrower shall be
required if an Event of Default has occurred and is continuing;
 
(B)           each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender’s rights and obligations under
this Agreement;
 
(C)           the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500; and
 
(D)           the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire in which the assignee
designates one or more individuals to whom all syndicate-level information
(which may contain material non-public information about the Credit Parties and
their related parties or their respective securities) will be made available and
who may receive such information in accordance with the assignee’s compliance
procedures and applicable laws, including Federal and state securities laws.

 
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(iii)           Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) of this Section, from and after the effective date specified
in each Assignment and Assumption the assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.15, 2.16 and 2.17 (with respect to amounts accruing
during the period such Lender was a party hereto and for which such Lender was
entitled to reimbursement or indemnity) and Section 9.03).  Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not
comply with this Section 9.04 shall be treated for purposes of this Agreement as
a sale by such Lender of a participation in such rights and obligations in
accordance with paragraph (c) of this Section.
 
(iv)           The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain at one of its offices a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitment of, and principal amount of the
Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof
from time to time (the “Register”).  The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent, the Issuing Bank and the
Lenders may treat each Person whose name is recorded in the Register pursuant to
the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary.  The Register shall be available for
inspection by the Borrower, the Issuing Bank and any Lender, at any reasonable
time and from time to time upon reasonable prior notice.
 
(v)           Upon its receipt of a duly completed Assignment and Assumption
executed by an assigning Lender and an assignee, the assignee’s completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Assumption and record the information contained therein in the Register;
provided that if either the assigning Lender or the assignee shall have failed
to make any payment required to be made by it pursuant to Section 2.06(d) or
(e), 2.07(b), 2.18(d) or 9.03(c), the Administrative Agent shall have no
obligation to accept such Assignment and Assumption and record the information
therein in the Register unless and until such payment shall have been made in
full, together with all accrued interest thereon.  No assignment shall be
effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this paragraph.

 
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(c)(i) Any Lender may, without the consent of the Borrower, the Administrative
Agent or the Issuing Bank, sell participations to one or more banks or other
entities (a “Participant”) in all or a portion of such Lender’s rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans owing to it); provided that (A) such Lender’s obligations under
this Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (C) the Borrower, the Administrative Agent, the Issuing Bank and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement.  Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in the first proviso to Section
9.02(b) that affects such Participant.  Subject to paragraph (c)(ii) of this
Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 2.15, 2.16 and 2.17 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section.  To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 9.08 as though it were a Lender, provided
that such Participant agrees to be subject to Section 2.18(c) as though it were
a Lender.
 
(ii)           A Participant shall not be entitled to receive any greater
payment under Section 2.15 or 2.17 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower’s prior written consent.  A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 2.17 unless
the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with
Section 2.17(e) as though it were a Lender.
 
(d)           Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including without limitation any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
 
SECTION 9.05.  Survival.  All covenants, agreements, representations and
warranties made by the Parent or the Borrower herein and in the certificates or
other instruments delivered in connection with or pursuant to this Agreement
shall be considered to have been relied upon by the other parties hereto and
shall survive the execution and delivery of this Agreement and the making of any
Loans and issuance of any Letters of Credit, regardless of any investigation
made by any such other party or on its behalf and notwithstanding that the
Administrative Agent, the Issuing Bank or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this Agreement is outstanding and unpaid or any
Letter of Credit is outstanding and so long as the Commitments have not expired
or terminated.  The provisions of Sections 2.15, 2.16, 2.17 and 9.03 and
Article VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision hereof.

 
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SECTION 9.06.  Counterparts; Integration; Effectiveness.  This Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract.  This Agreement, the other
Loan Documents and any separate letter agreements with respect to fees payable
to the Administrative Agent constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof.  Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.  Delivery of an executed
counterpart of a signature page of this Agreement by telecopy or other
electronic transmission shall be effective as delivery of a manually executed
counterpart of this Agreement.
 
SECTION 9.07.  Severability.  Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
 
SECTION 9.08.  Right of Setoff.  If an Event of Default shall have occurred and
be continuing, each Lender and each of its Affiliates is hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations at any time owing
by such Lender or Affiliate to or for the credit or the account of the Parent or
the Borrower against any of and all the obligations of the Parent or the
Borrower now or hereafter existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this
Agreement and although such obligations may be unmatured.  The rights of each
Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) that such Lender may have.
 
SECTION 9.09.  Governing Law; Jurisdiction; Consent to Service of
Process.  (a) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAW OF THE STATE OF TEXAS.
 
(b)           EACH OF THE PARENT AND THE BORROWER HEREBY IRREVOCABLY SUBMITS TO
THE NON EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR TEXAS STATE COURT
SITTING IN HARRIS COUNTY, TEXAS, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS, AND EACH OF THE PARENT AND THE BORROWER HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION
IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT
FORUM.  NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT, THE
ISSUING BANK OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE PARENT OR THE
BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.

 
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(c)           The Parent and the Borrower hereby irrevocably and unconditionally
waive, to the fullest extent it may legally and effectively do so, any objection
which it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any court referred to
in paragraph (b) of this Section.  Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
 
(d)           Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01.  Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
 
SECTION 9.10.WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
 
SECTION 9.11.  Headings.  Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
 
SECTION 9.12.  Confidentiality.  (a)  Each of the Administrative Agent, the
Issuing Bank and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (i) to
its and its Affiliates’ directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that (A) the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information confidential
and (B) in any event, it shall be responsible for any subsequent disclosure by
such Person in violation hereof), (ii) to the extent requested by any regulatory
or self-regulatory authority, (iii) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (iv) to any other party
to this Agreement, (v) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or the enforcement
of rights hereunder, (vi) subject to an agreement containing provisions
substantially the same as those of this Section, to (x) any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement or (y) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Parent or the Borrower and its obligations, (vii) with the consent of the
Borrower or (viii) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section or (ii) becomes available to
the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential
basis from a source other than the Parent or the Borrower.  For the purposes of
this Section, “Information” means all information received from the Parent or
the Borrower relating to the Parent, the Borrower or their respective
businesses, other than any such information that is available to the
Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis
prior to disclosure by the Parent or the Borrower.  Any Person required to
maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.

 
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(b)           EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN SECTION
9.12(a) FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL
NON-PUBLIC INFORMATION CONCERNING THE PARENT, THE BORROWER AND ITS RELATED
PARTIES OR THEIR RESPECTIVE SECURITIES AND CONFIRMS THAT IT HAS DEVELOPED
COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND
THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH
THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES
LAWS.
 
(c)           ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS,
FURNISHED BY THE PARENT, THE BORROWER OR THE ADMINISTRATIVE AGENT PURSUANT TO,
OR IN THE COURSE OF ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL
INFORMATION, WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE PARENT,
THE BORROWER, THE CREDIT PARTIES AND THEIR RELATED PARTIES OR THEIR RESPECTIVE
SECURITIES.  ACCORDINGLY, EACH LENDER REPRESENTS TO THE BORROWER AND THE
ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE
A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN MATERIAL
NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND
APPLICABLE LAW.

 
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SECTION 9.13.  Interest Rate Limitation.  The Parent, the Borrower, the
Administrative Agent and the Lenders intend to strictly comply with all
applicable laws, including applicable usury laws.  Accordingly, the provisions
of this Section 9.13 shall govern and control over every other provision of this
Agreement or any other Loan Document that conflicts or is inconsistent with this
Section 9.13, even if such provision declares that it controls.  As used in this
Section 9.13, the term “interest” includes the aggregate of all charges, fees,
benefits or other compensation which constitute interest under applicable law,
provided that, to the maximum extent permitted by applicable law, (a) any
non-principal payment shall be characterized as an expense or as compensation
for something other than the use, forbearance or detention of money and not as
interest, and (b) all interest at any time contracted for, reserved, charged or
received shall be amortized, prorated, allocated and spread, in equal parts
during the full term of the Obligations.  In no event shall the Parent, the
Borrower or any other Person be obligated to pay, or any Lender have any right
or privilege to reserve, receive or retain, (i) any interest in excess of the
maximum amount of nonusurious interest permitted under the applicable laws (if
any) of the United States or of any other applicable state or (ii) total
interest in excess of the amount which such Lender could lawfully have
contracted for, reserved, received, retained or charged had the interest been
calculated for the full term of the Obligations at the Highest Lawful Rate.  On
each day, if any, that the interest rate (the “Stated Rate”) called for under
this Agreement or any other Loan Document exceeds the Highest Lawful Rate, the
rate at which interest shall accrue shall automatically be fixed by operation of
this sentence at the Highest Lawful Rate for that day, and shall remain fixed at
the Highest Lawful Rate for each day thereafter until the total amount of
interest accrued equals the total amount of interest which would have accrued if
there were no such ceiling rate as is imposed by this sentence.  Thereafter,
interest shall accrue at the Stated Rate unless and until the Stated Rate again
exceeds the Highest Lawful Rate when the provisions of the immediately preceding
sentence shall again automatically operate to limit the interest accrual
rate.  The daily interest rates to be used in calculating interest at the
Highest Lawful Rate shall be determined by dividing the applicable Highest
Lawful Rate per annum by the number of days in the calendar year for which such
calculation is being made.  None of the terms and provisions contained in this
Agreement or in any other Loan Document that directly or indirectly relate to
interest shall ever be construed without reference to this Section 9.13, or be
construed to create a contract to pay for the use, forbearance or detention of
money at an interest rate in excess of the Highest Lawful Rate.  If the term of
any Obligation is shortened by reason of acceleration of maturity as a result of
any Event of Default or by any other cause, or by reason of any required or
permitted prepayment, and if for that (or any other) reason any Lender at any
time, including but not limited to, the stated maturity, is owed or receives
(and/or has received) interest in excess of interest calculated at the Highest
Lawful Rate, then and in any such event all of any such excess interest shall be
canceled automatically as of the date of such acceleration, prepayment or other
event which produces the excess, and, if such excess interest has been paid to
such Lender, it shall be credited pro tanto against the then-outstanding
principal balance of the Borrower’s obligations to such Lender, effective as of
the date or dates when the event occurs which causes it to be excess interest,
until such excess is exhausted or all of such principal has been fully paid and
satisfied, whichever occurs first, and any remaining balance of such excess
shall be promptly refunded to its payor.  Chapter 346 of the Texas Finance Code
(which regulates certain revolving credit accounts) shall not apply to this
Agreement or to any Loan, nor shall this Agreement or any Loan be governed by or
be subject to the provisions of such Chapter 346 in any manner whatsoever.
 
SECTION 9.14.  Collateral Matters; Lender Party Swap Agreements and Lender Party
Financial Service Products.  The benefit of the Collateral Documents and of the
provisions of this Agreement relating to the Collateral shall also extend to,
secure and be available on a pro rata basis (as set forth in Section 7.03 of
this Agreement) to each Lender or Affiliate of a Lender that is (i) a
counterparty to a Lender Party Swap Agreement (including any Lender Party Swap
Agreement in existence prior to the date hereof) or (ii) a provider under a
Lender Party Financial Service Product (including any Lender Party Financial
Service Product in existence prior to the date hereof), in each case, with
respect to any obligations of the Parent, the Borrower or any Restricted
Subsidiary arising under such Lender Party Swap Agreement or Lender Party
Financial Service Product, as applicable, but only with respect to any Lender
Party Swap Agreement or Lender Party Financial Service Product, and the
transactions thereunder, that were entered into while such Person or its
Affiliate was a Lender or prior to such time until such obligations are paid in
full or otherwise expire or are terminated (and notwithstanding that the
outstanding Obligations have been repaid in full and the Commitments have
terminated); provided that with respect to any Lender Party Swap Agreement or
Lender Party Financial Service Product that remains secured after the
counterparty thereto or provider of Financial Service Product thereunder is no
longer a Lender or an Affiliate of a Lender or the outstanding Obligations have
been repaid in full and the Commitments have terminated, the provisions of
Article VIII shall also continue to apply to such counterparty or provider in
consideration of its benefits hereunder and each such counterparty or provider
shall, if requested by the Administrative Agent, promptly execute and deliver to
the Administrative Agent all such other documents, agreements and instruments
reasonably requested by the Administrative Agent to evidence the continued
applicability of the provisions of Article VIII.  Notwithstanding the foregoing,
no Lender or Affiliate of a Lender (or former Lender or Affiliate of a former
Lender) shall have any voting or consent right under this Agreement or any
Collateral Document as a result of the existence of obligations owed to it under
a Lender Party Swap Agreement or Lender Party Financial Service Product that is
secured any Collateral Document.

 
97

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SECTION 9.15.  No Third Party Beneficiaries.  This Agreement, the other Loan
Documents, and the agreement of the Lenders to make Loans and the Issuing Bank
to issue, amend, renew or extend Letters of Credit hereunder are solely for the
benefit of the Parent and the Borrower, and no other Person (including, without
limitation, any Subsidiary of the Borrower, any obligor, contractor,
subcontractor, supplier or materialman) shall have any rights, claims, remedies
or privileges hereunder or under any other Loan Document against the
Administrative Agent, any other Agent, the Issuing Bank or any Lender for any
reason whatsoever.  There are no third party beneficiaries.
 
SECTION 9.16.  USA PATRIOT Act.  Each Lender that is subject to the requirements
of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Patriot Act”) hereby notifies the Parent and the Borrower that
pursuant to the requirements of the Patriot Act, it is required to obtain,
verify and record information that identifies the Parent and the Borrower, which
information includes the name and address of the Parent and the Borrower and
other information that will allow such Lender to identify the Parent and the
Borrower in accordance with the Patriot Act.
 
SECTION 9.17.  NO ORAL AGREEMENTS.  THE LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 
98

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

 
PENN VIRGINIA HOLDING CORP., as Borrower
       
By 
/s/ Steven A. Hartman
 
Name:  Steven A. Hartman
 
Title:  Vice President and Treasurer
 
PENN VIRGINIA CORPORATION, as Parent
   
By
/s/ Steven A. Hartman
 
Name:  Steven A. Hartman
 
Title:  Vice President and Treasurer

 
S - 1

--------------------------------------------------------------------------------

 
 
JPMORGAN CHASE BANK, N.A., as
Administrative Agent, Issuing Bank and a Lender
   
By 
/s/ Jo Linda Papadakis
 
Name:  Jo Linda Papadakis
 
Title:  Vice President

 
S - 2

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BANK OF AMERICA, N.A., as a Lender
   
By 
/s/ Adam H. Fey
 
Name:  Adam H. Fey
 
Title:  Vice President

 
S - 3

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WELLS FARGO BANK, N.A., as a Lender
   
By 
/s/ Thomas E. Stelmar, Jr.
 
Name:  Thomas E. Stelmar, Jr.
 
Title:  AVP/Portfolio Manager

 
S - 4

--------------------------------------------------------------------------------

 
 
 

 
BNP PARIBAS, as a Lender
       
By
/s/ Betsy Jocher
   
Name:  Betsy Jocher
   
Title:  Director
       
By
/s/ Edward Pak
   
Name:  Edward Pak
   
Title:  Vice President

 
S - 5

--------------------------------------------------------------------------------

 
 

 
ROYAL BANK OF CANADA, as a Lender
       
By
/s/ Don J. McKinnerney
   
Name:  Don J. McKinnerney
   
Title:  Authorized Signatory

 
S - 6

--------------------------------------------------------------------------------

 
 

 
BANK OF MONTREAL, as a Lender
       
By
/s/ Gumaro Tijerina
   
Name:  Gumaro Tijerina
   
Title:  Director

 
S - 7

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CAPITAL ONE, N.A., as a Lender
       
By
/s/ Matthew L. Molero
   
Name:  Matthew L. Molero
   
Title:  Asst. Vice President

 
S - 8

--------------------------------------------------------------------------------

 
 

 
THE BANK OF NOVA SCOTIA, as a Lender
       
By
/s/ David G. Mills
   
Name:  David G. Mills
   
Title:  Managing Director

 
S - 9

--------------------------------------------------------------------------------

 
 

 
BANK OF OKLAHOMA, N.A., as a Lender
       
By
/s/ Jason B. Webb
   
Name:  Jason B. Webb
   
Title:  Vice President

 
S - 10

--------------------------------------------------------------------------------

 
 

 
BARCLAYS BANK PLC, as a Lender
       
By
/s/ Ritam Bhalla
   
Name:  Ritam Bhalla
   
Title:  Vice President

 
S - 11

--------------------------------------------------------------------------------

 
 

 
COMERICA BANK, as a Lender
       
By
/s/ Peter L. Sefzik
   
Name:  Peter L. Sefzik
   
Title:  Senior Vice President

 
S - 12

--------------------------------------------------------------------------------

 
 

 
PNC BANK, NATIONAL ASSOCIATION, as a Lender
       
By
/s/ Richard C. Munsick
   
Name:  Richard C. Munsick
   
Title:  Senior Vice President

 
S - 13

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Schedule 2.01
COMMITMENT AMOUNTS
 
Lender
 
Commitment Amount
   
Percentage
 
JPMorgan Chase Bank, N.A.
  $ 30,000,000.00       10.000000000 %
Bank of America, N.A.
  $ 30,000,000.00       10.000000000 %
Wells Fargo Bank, N.A.
  $ 30,000,000.00       10.000000000 %
BNP Paribas
  $ 30,000,000.00       10.000000000 %
Royal Bank of Canada
  $ 30,000,000.00       10.000000000 %
Bank of Montreal
  $ 24,000,000.00       8.000000000 %
Capital One, N.A.
  $ 24,000,000.00       8.000000000 %
The Bank of Nova Scotia
  $ 24,000,000.00       8.000000000 %
Bank of Oklahoma, N.A.
  $ 19,500,000.00       6.500000000 %
Barclays Bank PLC
  $ 19,500,000.00       6.500000000 %
Comerica Bank
  $ 19,500,000.00       6.500000000 %
PNC Bank, National Association
  $ 19,500,000.00       6.500000000 %
Total:
  $ 300,000,000.00       100.000000000 %

 
Schedule 2.01

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EXHIBIT A

ASSIGNMENT AND ASSUMPTION
 
This Assignment and Assumption (the “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the
“Assignee”).  Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended, the
“Credit Agreement”), receipt of a copy of which is hereby acknowledged by the
Assignee.  The Standard Terms and Conditions set forth in Annex 1 attached
hereto are hereby agreed to and incorporated herein by reference and made a part
of this Assignment and Assumption as if set forth herein in full.
 
For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of the Assignor’s rights and
obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the
amount and percentage interest identified below of all of such outstanding
rights and obligations of the Assignor under the respective facilities
identified below (including any letters of credit guarantees included in such
facilities) and (ii) to the extent permitted to be assigned under applicable
law, all claims, suits, causes of action and any other right of the Assignor (in
its capacity as a Lender) against any Person, whether known or unknown, arising
under or in connection with the Credit Agreement, any other documents or
instruments delivered pursuant thereto or the loan transactions governed thereby
or in any way based on or related to any of the foregoing, including contract
claims, tort claims, malpractice claims, statutory claims and all other claims
at law or in equity related to the rights and obligations sold and assigned
pursuant to clause (i) above (the rights and obligations sold and assigned
pursuant to clauses (i) and (ii) above being referred to herein collectively as
the “Assigned Interest”).  Such sale and assignment is without recourse to the
Assignor and, except as expressly provided in this Assignment and Assumption,
without representation or warranty by the Assignor.
 
1.
Assignor:
 
______________________________
       
2.
Assignee:
 
______________________________
     
[and is an Affiliate/Approved Fund of [identify Lender]2]
       
3.
Borrower(s):
 
______________________________
       
4.
Administrative Agent:
 
______________________, as the administrative agent under the Credit Agreement

 

--------------------------------------------------------------------------------

2 Select as applicable.

 
A-1

--------------------------------------------------------------------------------

 

5.
Credit Agreement:
 
[The [amount] Credit Agreement dated as of _______ among [name of Borrower(s)],
the Lenders parties thereto, [name of Administrative Agent], as Administrative
Agent, and the other agents parties thereto]
       
6.
Assigned Interest:
   

 
Facility Assigned3
 
Aggregate Amount of
Commitment/Loans
for all Lenders
 
Amount of
Commitment/Loans
Assigned
 
Percentage Assigned
of
Commitment/Loans4
      $     $          %     $     $          %     $     $          %

Effective Date:   _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE
AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE
REGISTER THEREFOR.]
 
The Assignee agrees to deliver to the Administrative Agent a completed
Administrative Questionnaire in which the Assignee designates one or more Credit
Contacts to whom all syndicate-level information (which may contain material
non-public information about the Borrower, the Credit Parties] and [its] [their]
Related Parties or their respective securities) will be made available and who
may receive such information in accordance with the Assignee’s compliance
procedures and applicable laws, including Federal and state securities laws.
 
The terms set forth in this Assignment and Assumption are hereby agreed to:
 

 
ASSIGNOR
     
[NAME OF ASSIGNOR]
       
By:
     
Title:
       
ASSIGNEE
     
[NAME OF ASSIGNEE]
       
By:
     
Title:

 

--------------------------------------------------------------------------------

3 Fill in the appropriate terminology for the types of facilities under the
Credit Agreement that are being assigned under this Assignment (e.g.
“Commitment,” etc.). 
4 Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders thereunder.

 
A-2

--------------------------------------------------------------------------------

 
 
[Consented to and]5 Accepted:
     
[NAME OF ADMINISTRATIVE AGENT], as
 
Administrative Agent
       
By
     
Title:
       
[Consented to:]6
     
[NAME OF RELEVANT PARTY]
       
By
     
Title:
 

 

--------------------------------------------------------------------------------

5 To be added only if the consent of the Administrative Agent is required by the
terms of the Credit Agreement. 
6 To be added only if the consent of the Borrower and/or other parties (e.g.
Issuing Bank) is required by the terms of the Credit Agreement.

 
A-3

--------------------------------------------------------------------------------

 

ANNEX 1
 
[__________________]7
 
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
 
1.             Representations and Warranties.
 
1.1           Assignor.  The Assignor (a) represents and warrants that (i) it is
the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect
to (i) any statements, warranties or representations made in or in connection
with the Credit Agreement or any other Loan Document8, (ii) the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Loan Documents or any collateral thereunder, (iii) the financial condition of
the Borrower, any of its Subsidiaries or Affiliates or any other Person
obligated in respect of any Loan Document or (iv) the performance or observance
by the Borrower, any of its Subsidiaries or Affiliates or any other Person of
any of their respective obligations under any Loan Document.
 
1.2           Assignee.  The Assignee (a) represents and warrants that (i) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
satisfies the requirements, if any, specified in the Credit Agreement that are
required to be satisfied by it in order to acquire the Assigned Interest and
become a Lender, (iii) from and after the Effective Date, it shall be bound by
the provisions of the Credit Agreement as a Lender thereunder and, to the extent
of the Assigned Interest, shall have the obligations of a Lender thereunder,
(iv) it has received a copy of the Credit Agreement, together with copies of the
most recent financial statements delivered pursuant to Section ___ thereof, as
applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on the Administrative Agent or any other Lender, and (v) if it is a Foreign
Lender9, attached to the Assignment and Assumption is any documentation required
to be delivered by it pursuant to the terms of the Credit Agreement, duly
completed and executed by the Assignee; and (b) agrees that (i) it will,
independently and without reliance on the Administrative Agent, the Assignor or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents, and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.
 

--------------------------------------------------------------------------------

7 Describe Credit Agreement at option of Administrative Agent. 
8 The term “Loan Document” should be conformed to that used in the Credit
Agreement. 
9 The concept of  “Foreign Lender” should be conformed to the section in the
Credit Agreement governing withholding taxes and gross-up.

 
Annex - 1

--------------------------------------------------------------------------------

 

2.           Payments.  From and after the Effective Date, the Administrative
Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) to the Assignor for
amounts which have accrued to but excluding the Effective Date and to the
Assignee for amounts which have accrued from and after the Effective Date.
 
3.           General Provisions.  This Assignment and Assumption shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns.  This Assignment and Assumption may be
executed in any number of counterparts, which together shall constitute one
instrument.  Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a
manually executed counterpart of this Assignment and Assumption.  This
Assignment and Assumption shall be governed by, and construed in accordance
with, the law of the State of New York [confirm that choice of law provision
parallels the Credit Agreement].

 
Annex - 2

--------------------------------------------------------------------------------

 

EXHIBIT B
FORM OF
ADDITIONAL LENDER AGREEMENT

To:                JPMorgan Chase Bank, National Association,
            as Administrative Agent

The Borrower, the Administrative Agent, the Issuing Bank, the other Agents and
certain Lenders have heretofore entered into a Credit Agreement, dated as of
November 18, 2009, as amended from time to time (the “Credit
Agreement”).  Capitalized terms not otherwise defined herein shall have the
meaning given to such terms in the Credit Agreement.

This Additional Lender Agreement is being delivered pursuant to Section 2.5(ii)
of the Credit Agreement.

[Language for Existing Lender]

[Please be advised that the undersigned has agreed to increase its Commitment
under the Credit Agreement effective as of [_______________] from $_________ to
$_________ and (b) that it shall continue to be a party in all respect to the
Credit Agreement and the other Loan Documents to which the Lenders are party.]

[Language for New Lender]

[Please be advised that the undersigned has agreed (a) to become a Lender under
the Credit Agreement effective as of [_______________] with a Commitment of
$____________ and (b) that it shall be deemed to be a party in all respect to
the Credit Agreement and the other Loan Documents to which the Lenders are
party.]

 
Very truly yours,
     
[LENDER]
     
By:
 
Name:
 
Title:

 
Exhibit B

--------------------------------------------------------------------------------

 
 
EXHIBIT C

FORM OF

COMPLIANCE CERTIFICATE
As of [______]

To:           The Lenders parties to the Credit Agreement Described Below

This Compliance Certificate (this “Certificate”) is furnished pursuant to that
certain Credit Agreement dated as of November 18, 2009 (as amended, modified,
renewed or extended from time to time, the “Agreement”) among Penn Virginia
Holding Corp. (the “Borrower”), Penn Virginia Corporation (the “Parent”), the
lenders party thereto and JP Morgan Chase Bank, N.A., as Administrative
Agent.  Unless otherwise defined herein, capitalized terms used in this
Certificate have the meanings ascribed thereto in the Agreement.
 
The undersigned hereby certifies that:
 
1.         I am the duly elected Executive Vice President and Chief Financial
Officer of the Parent;
 
2.         I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions
and conditions of the Parent, the Borrower and the Restricted Subsidiaries
during the accounting period covered by the attached financial statements;
 
3.         The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which constitutes
an Event of Default during or at the end of the accounting period covered by the
attached financial statements or as of the date of this Certificate, except as
set forth below;
 
4.         Schedule I attached hereto sets forth financial data and computations
evidencing the compliance by the Parent, the Borrower and the Restricted
Subsidiaries with certain covenants of the Agreement, all of which data and
computations are true, complete and correct; and
 
5.         Schedule II attached hereto sets forth the various reports and
deliveries which are required at this time under the Agreement, the Collateral
Documents and the other Loan Documents and the status of compliance.
 
Described below are the exceptions, if any, to paragraph 3 by listing, in
detail, the nature of the condition or event, the period during which it has
existed and the action which the Parent has taken, is taking, or proposes to
take with respect to each such condition or event:
 

 
None
   

 
 
Exhibit C

--------------------------------------------------------------------------------

 
 
EXHIBIT C

The foregoing certifications, together with the computations set forth in
Schedule I hereto and the financial statements delivered with this Certificate
in support hereof, are made and delivered this [_________].
 

 
PENN VIRGINIA CORPORATION
       
By:
   
Name:
 
Title:

[Schedule I and II to be attached]

 
Exhibit C

--------------------------------------------------------------------------------

 
 
EXHIBIT D

FORM OF

 
SUBORDINATION AGREEMENT
 
SUBORDINATION AGREEMENT (this “Agreement”) dated as of [______], by and among
[___________], a [_______] and [________], a [______] (“[_______]”, and together
with [______], collectively the “PVA Debtors”), a [_______] and [________], a
[______] (“[_______]”, and together with [______], collectively the
“Subordinated Creditors”) and in favor of JPMorgan Chase Bank, N.A., as
Administrative Agent, for the benefit of the Senior Creditors (as defined
herein).
 
RECITALS
 
1.           PVHC is a party to that certain Credit Agreement dated as of
November 18, 2009, with PVC, as Parent, each of the “Lenders” named therein (the
“Lenders”), JPMorgan Chase Bank, National Association, as Administrative Agent
(the “Administrative Agent”), and the other Agents parties thereto (as the same
may from time to time be amended, modified, refinanced or replaced, the “Credit
Agreement”).
 
2.           The PVA Debtors, except for PVHC (the “Guarantors”), have delivered
a certain Guaranty dated as of November 18, 2009, pursuant to which the
Guarantors have guaranteed all of the “Obligations” (as defined in the Credit
Agreement) of PVHC under the Credit Agreement and the other Loan Documents.
 
3.           The PVA Debtors and the Subordinated Creditors were required to
enter into those certain Subordination Agreements identified on Schedule I
hereto (the “Existing Subordination Agreements”) pursuant to that certain
Amended and Restated Credit Agreement dated as of December 4, 2003, among PVC,
as borrower, JPMorgan Chase Bank, N.A., successor by merger to Bank One, N.A.
(Main Office Chicago), as administrative agent, and lenders party thereto, as
amended, supplemented, restated or otherwise modified.
 
4.           The Subordinated Creditors have made or may make certain
intercompany loans or advances to PVA Debtors.
 
5.           To induce the Administrative Agent, the Issuing Bank and the
Lenders to enter into the Credit Agreement and make the loans and other
extensions of credit contemplated thereby, the Subordinated Creditors have
agreed to execute and deliver this Agreement and subordinate the indebtedness of
the PVA Debtors owed to the Subordinated Creditors to all of the “Obligations”
(as defined in the Credit Agreement) of PVHC owed to the Lenders under the
Credit Agreement or the “Guaranteed Obligations” (as defined in the Guaranty) of
the Guarantors, as the case may be, and the other Loan Documents related
thereto.
 
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:

 
Exhibit D - 1

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ARTICLE X
Definitions
 
SECTION 10.01.  Definitions.  Unless otherwise defined herein, all capitalized
terms referred to herein shall have the meaning given to them in the Credit
Agreement.
 
“Senior Creditors” shall mean the Administrative Agent, the Lenders (including
any Lender acting as an “Issuing Bank” under the Credit Agreement) and any
Lender or Affiliate of a Lender party to Lender Party Swap Agreement or a Lender
Party Financial Service Product, and any permitted assignees of any of the
foregoing pursuant to the terms of the Credit Agreement.
 
“Senior Indebtedness” shall mean any and all indebtedness, liabilities and
obligations owed by any PVA Debtor to any Lender, Affiliate of a Lender, Issuing
Bank or Administrative Agent under the Loan Documents.  The Senior Indebtedness
shall include amounts accruing subsequent to the filing of any bankruptcy,
receivership, insolvency or similar petition.
 
“Subordinated Indebtedness” shall mean, for each PVA Debtor, the Indebtedness of
such PVA Debtor to any Subordinated Creditor.
 
ARTICLE XI
Subordination
 
SECTION 11.01.  Agreement to Subordinate.  Each Subordinated Creditor agrees
that the Subordinated Indebtedness is subordinated in right of payment, to the
extent and in the manner provided in this Article II, to the payment when due of
all Senior Indebtedness.
 
SECTION 11.02.  Liquidation, Dissolution, Bankruptcy.  Upon any payment or
distribution of the assets of any PVA Debtor to creditors upon a total or
partial liquidation or a total or partial dissolution of such PVA Debtor (other
than, to the extent permitted by the Credit Agreement or the other Loan
Documents, a voluntary dissolution of such PVA Debtor or merger of such PVA
Debtor into any wholly owned subsidiary of any PVA Debtor solely for the purpose
of permitting such PVA Debtor or such wholly owned Subsidiary to assume all
obligations in respect of the Subordinated Indebtedness as if it were the direct
obligor with respect thereto and in which all the assets of such PVA Debtor are
transferred to such PVA Debtor or such wholly owned Subsidiary and no material
payment or distribution is made to creditors) or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to such
PVA Debtor or its Property:
 
(i)           the Senior Creditors shall be entitled to receive payment in full
in cash of such Senior Indebtedness before the Subordinated Creditors shall be
entitled to receive any payments in respect of the Subordinated Indebtedness;
and
 
(ii)          until such Senior Indebtedness is paid in full in cash, any
distribution made by or on behalf of any PVA Debtor to which any Subordinated
Creditor would be entitled but for this Article II shall be made to the Senior
Creditors as their interests may appear, except that all Subordinated Creditors
may receive and retain shares of stock and any debt securities that are
subordinated to all Senior Indebtedness to at least the same extent as the
Subordinated Indebtedness.

 
Exhibit D - 2

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SECTION 11.03.  Default on Senior Indebtedness.  No PVA Debtor may make any
payments in respect of the Subordinated Indebtedness nor repurchase, redeem or
otherwise retire any of the Subordinated Indebtedness (collectively, “pay the
Subordinated Indebtedness”) if a “Default” or “Event of Default” has occurred
and is continuing under the Credit Agreement or such payment would create a
“Default” or “Event of Default” thereunder; provided, however, any PVA Debtor
may pay the Subordinated Indebtedness without regard to the foregoing if such
PVA Debtor receives written notice approving such payment from the
Administrative Agent.
 
SECTION 11.04.  When Distribution Must Be Paid Over.  If a distribution or
payment is made in respect of the Subordinated Indebtedness to a Subordinated
Creditor that because of this Article II should not have been made to it, such
Subordinated Creditor shall hold it in trust for the Senior Creditors and
promptly pay it over to the Administrative Agent for the benefit of the Lenders,
the Administrative Agent and the Issuing Bank.
 
SECTION 11.05.  Subrogation.  After all Senior Indebtedness is paid in full and
until the Subordinated Indebtedness is paid in full, each Subordinated Creditor
shall be subrogated to the rights of the Senior Creditors to receive
distributions applicable to such Senior Indebtedness.
 
SECTION 11.06.  Agreement Not to Pursue Actions.  Until the Administrative Agent
notifies the Subordinated Creditors that all Senior Indebtedness shall have been
paid in full, the Subordinated Creditors will not commence any action or
proceeding against any PVA Debtor to recover all or any part of the Subordinated
Indebtedness or join with any other creditor, unless the Administrative Agent
shall also join, in bringing any proceedings against such Person under any
bankruptcy, reorganization, readjustment of debt, arrangement of debt,
receivership, liquidation or insolvency law or statute of the Federal or any
state government.
 
SECTION 11.07.  Subordination May Not Be Impaired by Subordinated Creditors.  No
right of any Senior Creditor to enforce the subordination of the Subordinated
Indebtedness shall be impaired by any act or failure to act by such Subordinated
Creditor or by its failure to comply with this Agreement. The Senior Creditors
may extend, renew, increase, modify or amend the terms of such Senior
Indebtedness and otherwise deal freely with any Subordinated Creditors, all
without affecting the liabilities and obligations of the parties to this
Agreement or any other Subordinated Creditor.
 
SECTION 11.08.  Subordinated Creditors Not Fiduciary for Senior Creditors.  A
Subordinated Creditor shall not be deemed to owe any fiduciary duty to the
Senior Creditors and shall not be liable to any such Senior Creditor if it shall
mistakenly pay over or distribute to any other Person, money or assets to which
any Senior Creditor shall be entitled by virtue of this Article II or otherwise,
unless such payment or distribution was a result of the negligence or willful
misconduct of such Subordinated Creditor.

 
Exhibit D - 3

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SECTION 11.09.  Reliance by Senior Creditors on Subordination Provisions.  Each
Subordinated Creditor acknowledges and agrees that the foregoing subordination
provisions are, and are intended to be, an inducement and a consideration to
each Senior Creditor, whether such Senior Indebtedness was created or acquired
before or after the incurrence of the Subordinated Indebtedness, to acquire and
continue to hold, or to continue to hold, such Subordinated Indebtedness and
such Senior Creditor shall be deemed conclusively to have relied on such
subordination provisions in acquiring and continuing to hold, or in continuing
to hold, such Subordinated Indebtedness.  Each Subordinated Creditor
acknowledges and agrees that this Agreement is for the benefit of the Senior
Creditors and any permitted assignees of the Senior Indebtedness, and each such
Senior Creditor and assignee is a third party beneficiary of this Agreement and,
as such, shall be entitled to enforce the obligations of Subordinated Creditors
hereunder.
 
SECTION 11.10.  Liens Subordinated.  Each Subordinated Creditor agrees that the
Subordinated Indebtedness shall be at all times unsecured, provided that if any
Lien arises by statute or other operation of law upon the property of any PVA
Debtor securing payments of the Subordinated Indebtedness, such Lien shall be
and remain inferior and subordinated to any Liens securing payments of the
Senior Indebtedness regardless of whether such encumbrances in favor of such
Subordinated Creditor or the Senior Creditors presently exist or are hereafter
created or attached.  If, notwithstanding the foregoing, a Subordinated Creditor
shall obtain a Lien on property of a PVA Debtor that is not subject to a Lien in
favor of the Senior Creditors, then such Subordinated Creditor agrees not to
exercise any rights under the instruments evidencing such Liens, and not to
receive any payments or distributions in respect of such Liens, until the Senior
Creditors have received payment of the Senior Indebtedness in full in cash.  If
under any applicable bankruptcy, insolvency or other similar law, a Subordinated
Creditor receives a secured claim in lieu of a set-off, then such Subordinated
Creditor agrees not to exercise any rights under such secured claim, and not to
receive any payments or distributions in respect of such secured claim, until
the Senior Creditors have received payment of the Senior Indebtedness in full in
cash.
 
ARTICLE XII
Miscellaneous
 
SECTION 12.01.  Notice.  Any demand, notice or communication to be made or given
hereunder shall be made or given in the manner provided for in the Credit
Agreement.
 
SECTION 12.02.  Governing Law; Waiver of Jury Trial.
 
(i)           THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF TEXAS.
 
(ii)          EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS,
FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE STATE OF
TEXAS SITTING IN HOUSTON, HARRIS COUNTY, TEXAS AND OF THE UNITED STATES DISTRICT
COURT OF THE SOUTHERN DISTRICT OF TEXAS, HOUSTON DIVISION, AND ANY APPELLATE
COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH
OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL
CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN SUCH TEXAS STATE OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT.
EACH OF THE PARTIES HERETO AGREES THAT, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY
RIGHT THAT THE SENIOR CREDITORS MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT AGAINST BORROWER OR ITS PROPERTIES IN THE
COURTS OF ANY JURISDICTION.

 
Exhibit D - 4

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(iii)         EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES,
TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY COURT REFERRED TO
IN PARAGRAPH (b) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
 
(iv)         EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS BY
REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE
STATE OF TEXAS. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO
THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
 
(v)          EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE SENIOR CREDITORS HAVE BEEN INDUCED
TO ENTER INTO THE CREDIT AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION.

 
Exhibit D - 5

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SECTION 12.03.  Severability.  In the event that one or more of the provisions
contained in this Agreement shall be finally judicially determined to be
invalid, illegal or unenforceable in any respect by a court of competent
jurisdiction the validity, legality or enforceability of the remaining
provisions hereof shall not be affected or impaired thereby and the parties
agree to negotiate in good faith to agree on a provision which is enforceable
and which preserves the economic bargain of the parties to the greatest extent
possible.  Each of the Sections of this Agreement is hereby declared to be
separate and distinct.
 
SECTION 12.04.  Benefit of the Agreement.  This Agreement shall inure to the
benefit of the Lenders and be binding upon the Subordinated Creditors and their
respective successors and assigns.
 
SECTION 12.05.  Entire Agreement.  This Agreement constitutes the entire
agreement between the parties hereto and with respect to the subject matter
hereof supersedes any prior agreement, undertaking, declarations, commitments or
representations, written or oral, in respect thereof. There are no unwritten
oral agreements among the parties.
 
SECTION 12.06.  Amendments.  This Agreement may not be modified or amended
except by an instrument in writing signed by the Subordinated Creditors or by
their respective successors or permitted assigns and consented to by the
Required Lenders.
 
SECTION 12.07.  No Waivers, Remedies.  No failure to exercise and no delay in
exercising any right hereunder shall operate as a waiver thereof nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law except
as otherwise expressly provided herein.
 
SECTION 12.08.  Counterparts.  This Agreement may be executed in counterparts,
each of which so executed shall be deemed to be an original and such
counterparts together shall constitute one and the same instrument.
 
SECTION 12.09.  Further Assurances.  The parties hereto agree to take all such
further actions and to execute, acknowledge and deliver all such further
documents that are necessary or useful to carry out the purposes of this
Agreement.
 
SECTION 12.10.  Reinstatement.  To the extent that any payments on the Senior
Indebtedness or proceeds of any collateral are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid by
the Administrative Agent or any Senior Creditor to a trustee, debtor in
possession, receiver or other Person under any bankruptcy law, common law or
equitable cause, then to such extent, obligations hereunder with respect to the
Subordinated Indebtedness so satisfied shall be revived and continue as if such
payment or proceeds had not been received and the Administrative Agent’s and the
Senior Creditors’ Liens, interests, rights, powers and remedies under the Loan
Documents and this Agreement shall continue in full force and effect.  In such
event, each Loan Document and this Agreement shall be automatically reinstated
and the PVA Debtors and the Subordinated Creditors shall take such action as may
be reasonably requested by the Administrative Agent and the Senior Creditors to
effect such reinstatement.

 
Exhibit D - 6

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SECTION 12.11.  NO ORAL AGREEMENTS.  THIS AGREEMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES 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.
 
SECTION 12.12.  Termination of Existing Subordination Agreements.  Each party
hereto hereby agrees that the Existing Subordination Agreements are hereby
terminated.

 
Exhibit D - 7

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IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the
date first written above.
 

 
PVA DEBTORS:
     
[_________],
 
a [___________]
       
By:
   
Name:
 
Title:
     
[_________],
 
a [___________]
       
By:
   
Name:
 
Title:
     
SUBORDINATED CREDITORS:
       
[_________],
 
a [___________]
       
By:
   
Name:
 
Title:
     
[_________],
 
a [___________]
       
By:
   
Name:
 
Title:

 

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SCHEDULE I
 
EXISTING SUBORDINATION AGREEMENTS
 
1.      Subordination Agreement, dated as of December 4, 2003, by and among Penn
Virginia Corporation, a Virginia corporation, Penn Virginia Resource LP Corp., a
Delaware corporation, Penn Virginia Resource Holdings Corp., a Delaware
corporation, Powell River Rail Corporation, a Virginia corporation, and Kanawha
Rail Corp., a Virginia corporation.
 
2.      Subordination Agreement, dated as of December 4, 2003, by and among Penn
Virginia Holding Corp., a Delaware corporation, and Penn Virginia Resource GP,
LLC, a Delaware limited liability company.
 
3.      Subordination Agreement, dated as of December 4, 2003, by and among Penn
Virginia Oil & Gas Corporation, a Virginia corporation, and Penn Virginia
Resource LP Corp., a Delaware corporation.
 
4.      Subordination Agreement, dated as of December 4, 2003, by and among Penn
Virginia Oil & Gas Corporation, a Texas corporation, Enersearch, Inc., a
Virginia corporation, Penn Virginia Resource GP, LLC, a Delaware limited
liability company, and Kanawha Rail Corp., a Virginia corporation.
 
5.      Subordination Agreement, dated as of January 28, 2005, by and among Penn
Virginia Oil & Gas LP LLC, a Delaware limited liability company, and Penn
Virginia Resource LP Corp., a Delaware corporation.
 
6.      Subordination Agreement, dated as of January 28, 2005, by and among Penn
Virginia Oil & Gas GP LLC, a Delaware limited liability company, and Penn
Virginia Resource LP Corp., a Delaware corporation.

 

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