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      LIMITED
LIABILITY COMPANY AGREEMENT

      


      OF

      


      PDC
MOUNTAINEER, LLC

      


      (A
Delaware limited liability company)

      


      


      


      Dated as
of October 29, 2009

      


      


      


      


      


      


      


      THE
LIMITED LIABILITY COMPANY INTERESTS REPRESENTED BY THIS LIMITED LIABILITY
COMPANY AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED, OR UNDER ANY OTHER APPLICABLE FEDERAL OR STATE
SECURITIES LAWS.  SUCH INTERESTS MAY NOT BE SOLD, ASSIGNED, PLEDGED OR
OTHERWISE DISPOSED OF AT ANY TIME WITHOUT EFFECTIVE REGISTRATION UNDER SUCH ACT
AND LAWS OR EXEMPTION THEREFROM, AND COMPLIANCE WITH THE OTHER RESTRICTIONS ON
TRANSFER SET FORTH HEREIN.

      



      
        
          
            HOU03:1220675.1

          

           


        

        
           


          
            

          

        

        
           


        

      


      TABLE
OF CONTENTS

       

      ARTICLE I
GENERAL 

       

      
        	
                 
      

              	
                SECTION
      1.1.

              	
                Formation and
      Organization 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      1.2.

              	
                Name 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      1.3.

              	
                Principal
      Office 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      1.4.

              	
                Registered Office and
      Registered Agent 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      1.5.

              	
                Term 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      1.6.

              	
                Purposes 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      1.7.

              	
                Powers 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      1.8.

              	
                Qualification in Other
      Jurisdictions 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      1.9.

              	
                Title to
      Property 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      1.10.

              	
                Payments of Individual
      Obligations 

              	
                 

              


      

       

      ARTICLE II
MANAGEMENT 

       

      
        	
                 
      

              	
                SECTION
      2.1.

              	
                Management of the
      Company by the Board of Managers 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      2.2.

              	
                Election of
      Managers 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      2.3.

              	
                Duties of the Board of
      Managers 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      2.4.

              	
                Approval  of
      the Board of Managers 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      2.5.

              	
                Board
      Deadlock 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      2.6.

              	
                Officers 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      2.7.

              	
                Chief Executive
      Officer. 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      2.8.

              	
                Performance of Duties;
      Liability of Managers and Officers 

              	
                 

              


      

       

      ARTICLE III
MEMBERS

       

      
        	
                 
      

              	
                SECTION
      3.1.

              	
                Admission of
      Members 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      3.2.

              	
                No Liability for
      Company Obligations 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      3.3.

              	
                Area of Mutual
      Interest; Outside Activities of Members and Their
      Affiliates 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      3.4.

              	
                No Resignation or
      Withdrawal by Members 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      3.5.

              	
                Representations and
      Warranties of Investor 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      3.6.

              	
                Representations and
      Warranties of PDC 

              	
                 

              


      

       

      ARTICLE IV
CAPITAL 

       

      
        	
                 
      

              	
                SECTION
      4.1.

              	
                Units 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      4.2.

              	
                Sharing
      Percentages 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      4.3.

              	
                Capital
      Contributions 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      4.4.

              	
                Capital
      Accounts 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      4.5.

              	
                Member
      Loans 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      4.6.

              	
                No Return of Capital
      Contributions 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      4.7.

              	
                Management
      Incentives 

              	
                 

              


      

       

      ARTICLE V ALLOCATIONS;
DISTRIBUTIONS 

       

      
        	
                 
      

              	
                SECTION
      5.1.

              	
                Allocations of Net
      Income or Net Loss 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      5.2.

              	
                Special
      Allocations 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      5.3.

              	
                Other Allocation
      Rules 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      5.4.

              	
                Allocations of Taxable
      Income or Loss 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      5.5.

              	
                Distributions 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      5.6.

              	
                Tax
      Distributions 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      5.7.

              	
                Special PDC
      Withdrawal 

              	
                 

              


      

       

      ARTICLE VI TRANSFER;
WITHDRAWAL; SALE RIGHTS; EXIT EVENTS 

       

      
        	
                 
      

              	
                SECTION
      6.1.

              	
                Restrictions on
      Transfer 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      6.2.

              	
                Involuntary
      Transfer 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      6.3.

              	
                Assignees 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      6.4.

              	
                Substitution 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      6.5.

              	
                Transfers Initiated by
      a Member 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      6.6.

              	
                Transfers Initiated by
      Third Parties 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      6.7.

              	
                Conditions to
      Tag-Along Sales and Drag-Along Sales 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      6.8.

              	
                Eastern OpCo
      Drag-Along; Option 

              	
                 

              


      

       

      ARTICLE VII DISSOLUTION;
WINDING UP 

       

      
        	
                 
      

              	
                SECTION
      7.1.

              	
                Dissolution 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      7.2.

              	
                Winding
      Up 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      7.3.

              	
                Application and
      Distribution of Proceeds of Liquidation 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      7.4.

              	
                Certificate of
      Cancellation 

              	
                 

              


      

       

      ARTICLE VIII LIABILITY AND
INDEMNIFICATION 

       

      
        	
                 
      

              	
                SECTION
      8.1.

              	
                No Liability for
      Company Debts 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      8.2.

              	
                Indemnification 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      8.3.

              	
                Advance Payment and
      Appearance as a Witness 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      8.4.

              	
                Insurance 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      8.5.

              	
                Nonexclusivity of
      Rights 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      8.6.

              	
                Savings
      Clause 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      8.7.

              	
                Company Responsibility
      for Indemnification Obligations 

              	
                 

              


      

       

      ARTICLE IX CERTAIN TAX
MATTERS 

       

      
        	
                 
      

              	
                SECTION
      9.1.

              	
                Partnership
      Classification 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      9.2.

              	
                Tax Returns and Tax
      Information 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      9.3.

              	
                Tax
      Elections 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      9.4.

              	
                Tax Matters
      Partner 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      9.5.

              	
                Withholding 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      9.6.

              	
                Tax
      Terminations 

              	
                 

              


      

       

      ARTICLE X BOOKS AND RECORDS;
REPORTS 

       

      
        	
                 
      

              	
                SECTION
      10.1.

              	
                Maintenance of and
      Access to Books and Records 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      10.2.

              	
                Bank
      Accounts 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      10.3.

              	
                Reports 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      10.4.

              	
                Fiscal
      Year 

              	
                 

              


      

       

      ARTICLE XI
DEFINITIONS 

       

      
        	
                 
      

              	
                SECTION
      11.1.

              	
                Definitions 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      11.2.

              	
                Other Defined
      Terms 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      11.3.

              	
                Construction 

              	
                 

              


      

       

      ARTICLE XII
MISCELLANEOUS 

       

      
        	
                 
      

              	
                SECTION
      12.1.

              	
                Notices 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      12.2.

              	
                Confidentiality 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      12.3.

              	
                Expenses 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      12.4.

              	
                Standstill 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      12.5.

              	
                Non-Solicitation 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      12.6.

              	
                Entire
      Agreement 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      12.7.

              	
                Waiver or
      Consent 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      12.8.

              	
                Amendment 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      12.9.

              	
                Choice of
      Law 

              	
                 

              


      

      
        	
                 
      

              	
                SECTION
      12.10.Public
      Announcement

              


      

      
        	
                 
      

              	
                SECTION
      12.11.Specific
      Performance

              


      

      
        	
                 
      

              	
                SECTION
      12.12.Binding
      Agreement

              


      

      
        	
                 
      

              	
                SECTION
      12.13.Benefit of
      Agreement

              


      

      
        	
                 
      

              	
                SECTION
      12.14.Further
      Assurances

              


      

      
        	
                 
      

              	
                SECTION
      12.15.Legal
      Counsel

              


      

      
        	
                 
      

              	
                SECTION
      12.16.Counterparts

              


      

      


       

      EXHIBITS

      


      Exhibit A
– Initial Development Plan and Budget

      Exhibit B
– Officers

      Exhibit C
– Members

      Exhibit D
– Area of Mutual Interest

      



      
        
          
            HOU03:1220675.1                                                                    

          

           


        

        
           


          
            

          

        

        
           


        

      


      LIMITED
LIABILITY COMPANY AGREEMENT

       

      


       

      OF

       

      


       

      PDC
MOUNTAINEER, LLC

       

      This
LIMITED LIABILITY COMPANY AGREEMENT OF PDC MOUNTAINEER, LLC, dated and effective
as of October 29, 2009 (this “Agreement”), is
entered into by and between Petroleum Development Corporation, a Nevada
corporation (“PDC”), and
LR-Mountaineer Holdings, L.P. a Delaware limited partnership (“Investor”).  Capitalized
terms used herein without definition shall have the respective meanings assigned
to such terms in Article
XI.

       

      W
I T N E S S E T H:

       

      WHEREAS,
PDC Mountaineer, LLC, (the “Company”) has been
formed as a limited liability company under the laws of the State of Delaware;
and

       

      WHEREAS,
the parties hereto desire to enter into this Agreement to evidence the admission
of each of the Members to the Company and to set forth their agreement with
regard to, among other things, the (i) regulation and management of the business
and affairs of the Company, (ii) making of Capital Contributions to the Company,
(iii) distribution of funds and other assets and the allocation of Net Income
and Net Loss and (iv) Transfer of Interests in the Company; and

       

      WHEREAS,
as of the date hereof, the Company, Eastern OpCo, JV OpCo, PDC and Riley Natural
Gas Company (“Riley”) are entering
into the Services Agreement, pursuant to which PDC and Riley will provide
certain services to the Company; and

       

      WHEREAS,
as of the date hereof, the Company, PDC and Investor are entering into a
Contribution Agreement, pursuant to which PDC is agreeing to contribute to the
Company, and the Company is agreeing to acquire from PDC, the Contributed
Assets;

       

      NOW,
THEREFORE, in consideration of the premises, the terms and provisions set forth
herein, the mutual benefits to be gained from the performance thereof and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

       

      ARTICLE
I

       

      GENERAL

       

      SECTION
1.1. Formation
and Organization

       

      .  The
Company has been formed as a Delaware limited liability company by the filing of
the Certificate of Formation of the Company (the “Certificate of
Formation”) on October 26, 2009 in the office of the Secretary of State
of the State of Delaware under and pursuant to the Act. The execution of the
Certificate of Formation by Daniel W. Amidon, in his capacity as an authorized
person, is hereby ratified and confirmed by each of the Members.  Upon
the filing of the Certificate of Formation with the Secretary of State of the
State of Delaware, such Daniel W. Amidon’s powers as an “authorized person”
within the meaning of the Act ceased.  The Members hereby agree that
during the term of the Company, the rights and obligations of the Members with
respect to the Company will be determined in accordance with the terms and
provisions of this Agreement and the Act, except where the Act provides that
such rights and obligations specified in the Act shall apply “unless otherwise
provided in a limited liability company agreement” or words of similar effect
and such rights and obligations are set forth in this
Agreement.  Notwithstanding anything herein to the contrary, Section
18-210 of the Act (entitled “Contractual Appraisal
Rights”) shall not apply or be incorporated into this
Agreement.

       

      SECTION
1.2. Name

       

      .  The
name of the Company is “PDC Mountaineer,
LLC.”  The business of the Company shall be conducted under the
name “PDC Mountaineer,
LLC” or such other name or names as the Board of Managers may determine
from time to time.

       

      SECTION
1.3. Principal
Office

       

      .  The
principal office of the Company shall be located at Bridgeport, West Virginia,
or such other place as the Board of Managers shall determine from time to
time.

       

      SECTION
1.4. Registered
Office and Registered Agent

       

      .  The
registered office of the Company required by the Act to be maintained in the
State of Delaware shall be the initial registered office named in the
Certificate of Formation or such other office (which need not be a place of
business of the Company) as the Board of Managers may designate from time to
time in the manner provided by Law.  The registered agent of the
Company in the State of Delaware shall be the initial registered agent named in
the Certificate of Formation or such other Person or Persons as the Board of
Managers may designate from time to time.

       

      SECTION
1.5. Term

       

      .  The
existence of the Company commenced as of the date upon which the Certificate of
Formation was filed in the office of the Secretary of State of the State of
Delaware, and the Company shall continue in existence until it is dissolved in
accordance with the provisions of this Agreement, and to the extent provided
under the Act, until its affairs are wound up and the Company is terminated in
accordance with the provisions of this Agreement and the Act.

       

      SECTION
1.6. Purposes

       

      .  The
purposes of the Company, whether carried out by it or through its subsidiaries,
are as follows:

       

      (a) to
acquire, develop, operate, exploit and maintain oil and natural gas properties
in the areas of the Appalachian Basin described and shown on Schedule 1.1 to the
Contribution Agreement (the “Area”);
and

       

      (b) to engage
in other necessary and appropriate activities incidental thereto that may be
lawfully conducted by a limited liability company under the Act.

       

      SECTION
1.7. Powers

       

      .  Subject
to the terms hereof, the Company shall have the power to do any and all acts
necessary, appropriate, proper, advisable, incidental or convenient to, or in
furtherance of, the purposes of the Company set forth in Section 1.6 hereof,
including the power to:

       

      (a) conduct
its business, carry on its operations and have and exercise the powers granted
to a limited liability company by the Act;

       

      (b) acquire
(by purchase, lease, contribution of property or otherwise), own, hold, operate,
maintain, improve, lease, sell, convey, finance, mortgage, transfer or dispose
of assets of the Company, including any working interests or other interests in
oil and gas properties and other real or personal property that may be
necessary, convenient or incidental to the accomplishment of the purposes of the
Company;

       

      (c) enter
into the Contribution Agreement and the Services Agreement (collectively, the
“Transaction
Agreements”) and perform and carry out its obligations thereunder and
exercise any rights available to it under or in connection with the
same;

       

      (d) enter
into, perform and carry out other contracts and leases necessary, convenient or
incidental to the accomplishment of the purposes of the Company and to extend,
renew, terminate, modify, amend, waive, execute, acknowledge or take any other
action with respect to any such contracts or leases;

       

      (e) hire,
appoint, manage and terminate employees and agents of the Company, and define
their duties and fix their compensation;

       

      (f) purchase,
take, receive, subscribe for or otherwise acquire, own, hold, vote, use, employ,
sell, mortgage, lend, pledge, or otherwise dispose of, and otherwise use and
deal in and with, shares or other interests in or obligations of corporations,
associations, general or limited partnerships, trusts or limited liability
companies;

       

      (g) borrow
money and issue evidences of Indebtedness, and to secure the same by a mortgage,
pledge or other lien on the real and personal property of the
Company;

       

      (h) lend
money for any proper purpose, to invest and reinvest the funds of the Company,
and to take and hold real and personal property for the payment of funds so
loaned or invested;

       

      (i) enter
into transactions, contracts, agreements or arrangements involving hedge
contracts, derivatives, forwards, swaps or similar contracts;

       

      (j) sue and
be sued, complain and defend, and participate in administrative or other
proceedings, and to pay, collect, compromise, litigate, arbitrate or otherwise
adjust or settle any and all other claims or demands of or against the
Company;

       

      (k) indemnify
any Person in accordance with and subject to applicable Law and to obtain any
and all types of insurance; and

       

      (l) take all
such other actions and to make, execute, acknowledge and file any and all
documents or instruments related to the exercise of any of the foregoing powers
or otherwise necessary, convenient or incidental to the accomplishment of the
purposes of the Company.

       

      SECTION
1.8. Qualification
in Other Jurisdictions

       

      .  The
Company shall execute and cause to be filed original or amended articles and/or
certificates and shall take any and all other actions as may be reasonably
necessary to perfect and maintain the status of the Company as a limited
liability company or similar type of entity under the laws of any other
jurisdictions in which the Company engages in business.  At the
request of the Board of Managers, each Member agrees to execute, acknowledge,
swear to, and deliver all certificates and other instruments conforming with
this Agreement that are necessary or appropriate to qualify, continue, and
terminate the Company as a foreign limited liability company or similar type of
entity in all such jurisdictions in which the Company may conduct
business.

       

      SECTION
1.9. Title
to Property

       

      .  All
property owned by the Company shall be owned by the Company as an entity, and no
Member shall have any ownership interest in such property in its individual
capacity, and each Member’s Interests in the Company shall be personal property
for all purposes.  The Company shall hold title to all of its property
in the name of the Company, not in the name of any Member.

       

      SECTION
1.10. Payments
of Individual Obligations

       

      .  The
Company’s credit and assets shall be used solely for the benefit of the Company,
and no asset of the Company shall be Transferred or encumbered for, or in
payment of, any individual obligation of any Member.

       

      ARTICLE
II

       

      MANAGEMENT

       

      SECTION
2.1. Management
of the Company by the Board of Managers

       

      .

       

      (a) Management by the Board of
Managers.  Except for matters
required by this Agreement to be approved by the Members or as provided in
nonwaivable provisions of the Act, the business and affairs of the Company shall
be managed and the powers of the Company shall be exercised by or under the
direction of a board of managers (the “Board of Managers” or
the “Board”).  Each
member of the Board of Managers is referred to herein as a “Manager” and
collectively as the “Managers.”

       

      (b) Place of
Meetings.  Meetings of the Board of Managers, regular or
special, will be held at such places, either within or without the State of
Delaware, as may be specified by the Board of Managers or the Manager calling
the meeting, as the case may be.  In the absence of specific
designation, meetings of the Board of Managers shall be held at the principal
office of the Company.

       

      (c) Regular
Meetings.  The Board of Managers shall meet on a quarterly
basis at such times and places as may be fixed from time to time by the Board
and communicated to all Managers.  Any and all business may be
transacted at any regular meeting.

       

      (d) Special
Meetings.  Special meetings of the Board of Managers shall be
held at any time upon the call of any Manager.  If a Manager desires
the Company to take or authorize any action that requires Approval of the Board
of Managers, the Manager shall request that the Board of Managers take action
with respect thereto by so notifying the Board of Managers and describing in
such notification (i) the nature of the transaction or business and (ii) the
proposed course of action recommended by the Manager.  The Manager
shall deliver the notification referred to above, together with any available
information that is reasonably necessary to enable the Board of Managers to
consider the advisability of the proposed course of action, to the Board of
Managers a reasonable period of time prior to the date by which action is to be
taken as proposed therein.  Notice of any such special meeting shall
be in writing and shall be given personally or by facsimile or Electronic
Transmission to each member of the Board of Managers at least three Business
Days prior to the date of the meeting.

       

      (e) Attendance at and Notice of
Meetings.  Attendance at a meeting of the Board of Managers
shall constitute a waiver of notice of such meeting, except where a Manager
attends a meeting for the express purpose of objecting to the transaction of any
business on the ground that the meeting is not lawfully called or convened, not
authorized by the Agreement or impermissible as a matter of Law.

       

      (f) Quorum.  At all
meetings of the Board of Managers, the quorum required for the transaction of
any business shall consist of the presence, either in person or by proxy, of at
least a majority of Managers, including at least one Investor Designee and at
least one PDC Designee.  A meeting at which a quorum is initially
present may continue to transact business, notwithstanding the withdrawal of
Managers; provided,
that at least one Investor Designee and at least one PDC Designee remains
present.

       

      (g) Voting.  Each
Investor Designee will have one vote and each PDC Designee will have one
vote.  All decisions will be made by a majority vote of all the
Managers, including at least one Investor Designee and at least one PDC
Designee, except that, notwithstanding anything to the contrary in this
Agreement, (i) with the exception of the Services Agreement, transactions and
any other matters between the Company and a Member or an Affiliate of such
Member shall require approval solely by the Managers designated by the other
Member, and (ii) any other matters for which this Agreement expressly provides
for approval by the Managers designated by a single Member shall be approved by
the Managers of such single Member.

       

      (h) Proxy. Each Board of Managers
Designee entitled to vote at a meeting of the Board of Managers may authorize
another Board of Managers Designee appointed by the same Designating Party to
act for such Board of Managers Designee by proxy, but no such proxy shall be
voted or acted upon after 11 months from its date, unless the proxy provides for
a longer period.  A duly executed proxy shall be irrevocable if it
states that it is irrevocable and if, and only as long as, it is coupled with an
interest sufficient in Law to support an irrevocable power.  A proxy
may be made irrevocable regardless of whether the interest with which it is
coupled is an interest in an Interest itself or an interest in the Company
generally.

       

      (i) Written
Consent.  Any action required or permitted to be taken at any
regular or special meeting of the Board of Managers may be taken without a
meeting, without prior notice, and without a vote, if a consent or consents in
writing, setting forth the action so taken, shall be signed by a majority of all
of the Managers including at least one Investor Designee and at least one PDC
Designee.

       

      (j) Telephonic
Meetings.  The Board of Managers may hold meetings by means of
conference telephone or similar communications equipment by means of which all
of the Managers participating in the meeting can hear each other, and
participation in such meeting shall constitute attendance and presence in person
at such meeting.

       

      (k) Minutes.  All
decisions and resolutions of the Board of Managers shall be reported in the
minutes of its meetings, which shall state the date, time and place of the
meeting (or the date of the written consent in the case of a consent executed in
lieu of a meeting), the persons present at the meeting, the resolutions put to a
vote (or the subject of a written consent) and the results of such voting (or
written consent).  The minutes of all meetings of the Board of
Managers shall be circulated to all Managers as soon as practical after each
meeting and shall be kept at the principal office of the Company.

       

      (l) Observers.  Each
Member shall be entitled to designate one observer (which may be the same or a
different individual from meeting to meeting) (an “Observer”) to attend
meetings of the Board of Managers.

       

      SECTION
2.2. Election
of Managers

       

      .

       

      (a) Qualifications.  Each
Manager shall be a natural person.  A Manager need not be a resident
of the State of Delaware, a Member or an officer of the Company.

       

      (b) Number.  The Board
of Managers shall be comprised of six members. Each Manager shall hold office
until a successor shall have been designated in accordance with the terms of
this Agreement.

       

      (c) Investor
Designees.  Investor shall be entitled to designate three
persons to serve on the Board (each, an “Investor
Designee”).  The initial Investor Designees are
Jonathan C. Farber, Townes G. Pressler, Jr. and J. William
Franklin, Jr., each of whom shall commence to serve on the Board as of the date
hereof.

       

      (d) PDC Designees.  PDC
shall be entitled to designate three persons to serve on the Board (each, a
“PDC
Designee”).  The initial PDC Designees are Richard W.
McCullough, Gysle R. Shellum and Barton R. Brookman, each of whom shall commence
to serve on the Board as of the date hereof.

       

      (e) Vacancies.  If any
member of the Board of Managers designated by Investor or PDC (in such capacity,
the “Designating
Party”) pursuant to paragraph (c) or (d) above (each, a “Board of Managers
Designee”) shall cease to serve as a member of the Board of Managers for
any reason, the vacancy resulting thereby shall be filled by another individual
to be designated by that Designating Party.

       

      (f) Removal.  Each
Board of Managers Designee may be removed and replaced, with or without cause,
at any time by his or her respective Designating Party in such Designating
Party’s sole discretion, but, may not be removed or replaced by any other
means.  A Designating Party who removes one or more of its Board of
Managers Designees from the Board of Managers shall promptly notify the other
Designating Party as to the name of its replacement designee(s).

       

      (g) Resignation.  A
Manager may resign from the Board of Managers at any time by giving written
notice to the Company and his or her Designating Party.  Such
resignation shall take effect three Business Days following receipt of that
notice or at such later time as shall be specified in the
notice.  Unless otherwise specified in the notice, the acceptance of a
resignation shall not be necessary to make it effective.

       

      (h) Compensation.  Mangers
shall be entitled to reimbursement from the Company for reasonable out-of-pocket
expenses incurred in connection with attending meetings of the Board of Managers
and fulfilling their duties as Managers, and the Observer designated by each
Member shall be entitled to reimbursement from the Company for reasonable
out-of-pocket expenses incurred in connection with attending meetings of the
Board of Managers, with all of the foregoing subject to such limitations as may
be established by the Board of Managers.  Otherwise, no Manager is
entitled to remuneration for services rendered or goods provided to the Company
in his or her capacity as a Manager.

       

      SECTION
2.3. Duties
of the Board of Managers

       

      .

       

      (a) To the
fullest extent permitted by the Act, a Manager, in performing his or her duties
and obligations as a Manager under this Agreement, shall be entitled to act or
omit to act at the direction of his or her Designating Party, considering only
such factors, including the separate interests of the Designating Party, as such
Manager or Designating Party chooses to consider, and any action of such Manager
or failure to act, taken or omitted in good faith reliance on the foregoing
provisions shall not, as between the Company and any other Member, on the one
hand, and such Manager or Designating Party, on the other hand, constitute a
breach of any duty (including any fiduciary or other similar duty, to the extent
such exist under the Act or any other applicable Law) on the part of such
Manager or Member to the Company or any other Manager or Member of the Company;
provided that the
implied contractual covenant of good faith and fair dealing is not hereby
eliminated.

       

      (b) The
Members (in their own names and in the name and on behalf of the Company)
hereby:  (i) agree that (A) the terms of this Section 2.3, to the
extent that they modify or limit a duty or other obligation, if any, that a
Manager may have to the Company or any Member under the Act or other applicable
Law, are reasonable in form, scope and content; and (B) the terms of this Section 2.3 shall
control to the fullest extent possible if it is in conflict with a duty, if any,
that a Manager may have to the Company or any Member, under the Act or any other
applicable Law; and (ii) waive to the fullest extent permitted by the Act,
any duty (including any fiduciary or other similar duty, to the extent such
exist under the Act or any other applicable Law), if any, that a Member may have
to the Company or another Member, pursuant to the Act or any other applicable
Law; provided that
contractual obligations specified in this Agreement are not hereby waived and
that the implied contractual covenant of good faith and fair dealing is not
hereby eliminated.

       

      (c) Each
Member (in its own name and in the name and on behalf of the Company),
acknowledges, affirms and agrees that (i) the Member would not be willing to
make an investment in or contribution to the Company, and no Manager designated
by such Member to serve on the Board of Managers would be willing to so serve,
in the absence of this Section 2.3, and (ii)
it has reviewed and understands the provisions of Section 18-1101(c) of the
Act.

       

      SECTION
2.4. Approval  of
the Board of Managers

       

      .

       

      (a) The
Company (or officers or agents acting on its behalf), on its own behalf or on
behalf of any of its subsidiaries, shall not take any action without the
Approval of the Board of Managers; provided, that the Company
(or officers or agents acting on its behalf), on its own behalf or on behalf of
any of its subsidiaries, may, absent the specific Approval of the Board of
Managers, take those actions (i) which are approved by the Board of Managers in
connection with or as part of approving a Development Plan and Budget, (ii)
which are in accordance with the policies set forth by the Board of Managers or
with agreements of the Company or its subsidiaries approved by the Board of
Managers, or (iii) which are delegated to the officers or agents of the Company
by the Board of Managers.

       

      (b) Unless
otherwise provided by the Board of Managers, the following actions are the only
actions that require approval of the Members:

       

      (i) the
taking of any action that would make it impossible to carry on the ordinary
business of the Company, including filing for bankruptcy protection;
and

       

      (ii) the
dissolution the Company.

       

      (c) Attached
as Exhibit A is the
initial development plan and budget for the Company (the “Initial Development Plan and
Budget”) covering the period from the Closing Date through June 30,
2010.  Thereafter, unless otherwise determined by the Board of
Managers, the Chief Executive Officer of the Company (the “CEO”) shall propose a
development plan and budget for the Company at least 60 days in advance of the
beginning of each such six-month period (each a “Development Plan and
Budget”).

       

      SECTION
2.5. Board
Deadlock

       

      (a) Development Plans and
Budgets.

       

      (i) In the
event that there is a tie vote of the Managers (a “Deadlock”) prior to the
earlier of the end of the Catch-Up Period and December 31, 2011 (the “Initial Deadlock
Period”) regarding approval of a Development Plan and Budget that is
applicable to the Initial Deadlock Period and that is not resolved through
negotiation by the Managers after a period of 60 days, Investor shall be
entitled to suspend the Company’s exploration and drilling activities and all
other cash expenditures of the Company, other than the minimum expenses required
for salaries and benefits of critical employees of the Company and to maintain
the existing operations of the Company (but not exploration, drilling, workover
or similar activities) (a “Suspension”), provided that there has not been an
Investor Default that remains uncured.  In the event that there is a
Deadlock following the Initial Deadlock Period regarding approval of a
Development Plan and Budget that is not resolved through negotiation by the
Managers after a period of 60 days, either Member shall be entitled to
effectuate a Suspension, provided that, in the case of a Suspension sought by
Investor, there has not been an Investor Default or other default on an
obligation to make a Capital Contribution that remains uncured, and in the case
of a Suspension sought by PDC, it has not defaulted on an obligation to make a
Capital Contribution that remains uncured.  During the pendency of a
Deadlock with respect to a Development Plan and Budget, the most
recently-approved Development Plan and Budget shall apply for purposes of
prudently maintaining existing operations (but excluding suspended activities);
provided, however, that, unless the
Board of Managers otherwise determines, in no event shall the Company incur any
expenses or pay funds in excess of the Company’s cash flow during a
Suspension.

       

      (ii) In the
event that Suspensions have been in effect for four consecutive six-month
periods, then either Member may (A) Transfer its Interest, subject to the
provisions set forth in Section 6.5 or 6.6 or (B) elect to
dissolve the Company under Section 7.1(d),
upon which the non-electing Member will designate the Liquidator, which designee
may be such non-electing Member or an Affiliate thereof.

       

      (iii) To the
extent a Suspension would cause the Company to lose its interest in any lease,
then (a) during the Initial Deadlock Period, PDC shall have, and (b) following
the Initial Deadlock Period, the non-suspending Member shall have, the right to
require the Company to promptly distribute the Company’s interest subject to
expiration under such lease to such Member (and such interest in such lease
shall thereafter be deemed excluded from the AMI) so that it may independently
continue such exploration and drilling activities in order to maintain the
expiring interest in such lease.

       

      (iv) In the
event that Investor effectuates a Suspension during the Initial Deadlock Period,
PDC shall be entitled to make a Capital Contribution (and receive in respect
thereof a corresponding increase in its Units and Sharing Percentage, without
penalty to Investor other than the dilution resulting from such increase) to
fund the suspended activities, and any such amounts shall be treated as having
been contributed pursuant to an approved Development Plan and Budget; provided, that PDC may not
make Capital Contributions of more than $20 million in the aggregate under
this Section 2.5(a)(iv).

       

      SECTION
2.6. Officers

       

      .

       

      (a) Delegation to
Officers.  The Board of Managers may delegate to the Company’s
officers or employees any of its powers in any manner it desires.

       

      (b) Appointment of
Officers.  The officers of the Company shall consist of a CEO,
a Chief Operating Officer (“COO”) and a
Secretary.  In addition, the Board of Managers shall have the
authority to elect such other officers, including a President, Vice Presidents
and assistant officers, as it may from time to time determine.  The
Board of Managers may appoint officers at any time.  The officers
shall serve at the pleasure of the Board of Managers, subject to all rights, if
any, of an officer under any contract of employment.  Any individual
may hold any number of offices.  The initial officers of the Company
are listed on Exhibit B.

       

      (c) Qualifications.  Each
officer of the Company shall be a natural person.  An officer need not
be a resident of the State of Delaware, a Member or a Manager of the
Company.

       

      (d) Authority.  Subject
to the provisions of this Article II, all
officers of the Company shall have such powers and authority, subject to the
direction and control of the Board of Managers, and shall perform such duties in
connection with the management of the business and affairs of the Company as are
provided in this Agreement, or as may be determined from time to time by
resolution of the Board of Managers.  In addition, except as otherwise
expressly provided herein, each officer shall have such powers and authority as
would be incident to his or her office if he or she served as a comparable
officer of a Delaware corporation.

       

      (e) Resignation.  An
officer of the Company may resign at any time by giving written notice to the
Board of Managers.  Such resignation shall take effect upon receipt of
that notice or at such later time as shall be specified in the notice and agreed
to by the Board of Managers.  Unless otherwise specified in the
notice, the acceptance of a resignation shall not be necessary to make it
effective.

       

      (f) Vacancies.  Any
vacancy occurring in an office may be filled by the Board of
Managers.

       

      (g) Removal.  Any
officer of the Company may be removed by the Board of Managers in its sole
discretion, but such removal shall be without prejudice to the contract rights,
if any, of the officer so removed.  Election as an officer of the
Company shall not of itself create any contract rights.

       

      (h) Delegation of
Authority.  In the case of any absence of any officer of the
Company or for any other reason that the Board of Managers may deem sufficient,
the Board of Managers may delegate some or all of the powers or duties of such
officer to any other officer for whatever period of time as the Board of
Managers deems appropriate.

       

      SECTION
2.7. Chief
Executive Officer.

       

      (a) Appointment.  Unless
otherwise approved by the Board of Managers, from and after 90 days following
the Closing, the CEO shall be a full-time employee of the Company and shall not
be an officer or Affiliate of either Member.

       

      (b) Term.  The CEO will
hold office until his death, resignation or removal. The CEO may be removed with
or without cause by the Board of Managers.

       

      (c) Authority.  Subject
to the power and authority of the Board of Managers to revoke or modify the
following or to direct the actions of the CEO, the CEO has responsibility and
authority for:

       

      (i) operating
and managing the day-to-day business and affairs of the Company in a manner
consistent with the Development Plans and Budgets and within such parameters as
may be established by the Board of Managers;

       

      (ii) proposing
revisions to the Development Plans and Budgets for submission to the Board of
Managers for approval;

       

      (iii) implementing
the Development Plans and Budgets as approved by the Board of Managers and
within such parameters as may be established by the Board of Managers;
and

       

      (iv) subject
to Section
2.4(a), executing bonds, mortgages or other contracts or instruments on
behalf of the Company.

       

      The CEO
will keep the Board of Managers reasonably informed of his actions.

       

      SECTION
2.8. Performance
of Duties; Liability of Managers and Officers

       

      .  A
Manager or an officer shall not be liable to the Company or to any Member for
any loss or damage sustained by the Company or any Member as a result of his or
her carrying out his or her duties as a Manager or officer in good faith, unless
the loss or damage shall have been the result of fraud, intentional or willful
misconduct or a knowing violation of Law by the Manager or officer.

       

      ARTICLE
III

       

      MEMBERS

       

      SECTION
3.1. Admission
of Members

       

      .

       

      (a) Each
Person identified in Exhibit C is
admitted to the Company as a Member.

       

      (b) Subject
to Section
2.4(a) and Article VI, any
Person to which Interests are issued by the Company after the date hereof shall
be admitted to the Company as a Member on the date of issuance of such
Interests.

       

      (c) Any
Person to which Interests are Transferred as permitted by Article VI shall be
admitted to the Company as a Member on the date upon which such Transfer has
been effected and the requirements set forth in Section 6.4 have been
satisfied.

       

      SECTION
3.2. No
Liability for Company Obligations

       

      .  Without
limiting the generality of Article VIII, a
Member is not liable for the debts, obligations and liabilities of the Company,
including under a judgment, decree or order of a court.

       

      SECTION
3.3. Area
of Mutual Interest; Outside Activities of Members and Their
Affiliates

       

      .

       

      (a) Each
Member hereby agrees to the provisions set forth in Exhibit D
hereto.

       

      (b) Except as
otherwise provided in Exhibit D:
(i) no Member or any of its present or future Affiliates or any of their
respective shareholders, partners, members, directors, managers, officers or
employees (each, a “Member Related
Party”) shall be expressly or impliedly restricted or prohibited by
virtue of this Agreement from engaging in other activities or business ventures
of any kind or character whatsoever; (ii) each Member and any Member
Related Party shall have the right to conduct, or to possess a direct or
indirect ownership interest in, activities and business ventures of every type
and description; (iii) no Member or any Member Related Party shall be
obligated by virtue of this Agreement to present any particular business
opportunity to the Company, and each Member and Member Related Party shall have
the right to take or pursue any such opportunity for its own account
(individually or as a partner, member, shareholder, fiduciary or otherwise) or
to present or recommend it to any third party; and (iv) neither the Company
nor any Member shall have any rights or claims by virtue of this Agreement or
the relationships created hereby in any activities or business ventures of (A)
in the instance of the Company, a Member or any Member Related Party, or (B) in
the instance of a Member, another Member or such other Member’s Member Related
Party (it being expressly understood and agreed that any and all such rights and
claims are hereby irrevocably waived by each Member on its behalf and on behalf
of the Company).

       

      (c) The
Members (in their own names and in the name and on behalf of the Company)
expressly:  (i) waive any conflicts of interest or potential
conflicts of interest that may arise by virtue of (A) in the instance of each
Member and its Affiliates, its or their respective activities outside of the
AMI, and (B) in the instance of PDC and its respective Affiliates, their
activities with respect to the Retained Assets, and agree that none of Investor,
or its present or future Affiliates or any of their respective shareholders,
partners, members, directors, managers, officers or employees (each, an “Investor Related
Party”), or PDC, or its present or future Affiliates or any of their
respective shareholders, partners, members, directors, managers, officers or
employees (each, a “PDC Related Party”)
shall have any liability to any Member, any Affiliate thereof, or the Company
with respect to such conflicts of interest or potential conflicts of interest;
and (ii) acknowledge and agree that none of (A) Investor or any Investor
Related Party or (B) PDC or any PDC Related Party will have any duty to disclose
to the Company, any other Member or the Board any business opportunities,
whether or not the Company might be interested in such business opportunity for
itself, that are outside of the AMI and, in the instance of PDC and a PDC
Related Party, that pertain to the Retained Assets.

       

      (d) The
Members (in their own names and in the name and on behalf of the Company)
hereby:  (i) agree that (A) the terms of this Section 3.3 and Exhibit D, to
the extent that they modify or limit a duty or other obligation, if any, that an
Investor Related Party or a PDC Related Party may have to the Company or another
Member under the Act or other applicable Law, are reasonable in form, scope and
content; and (B) the terms of this Section 3.3 and Exhibit D shall
control to the fullest extent possible if it is in conflict with a duty, if any,
that an Investor Related Party or a PDC Related Party may have to the Company or
another Member, the Act or any other applicable Law; and (ii) waive any
duty or other obligation, if any, that an Investor Related Party or a PDC
Related Party may have to the Company or another Member, pursuant to the Act or
any other applicable Law, to the extent necessary to give effect to the terms of
this Section
3.3 and Exhibit D.

       

      (e) The
Members (in their own names and in the name and on behalf of the Company)
acknowledge, affirm and agree that (i) the execution and delivery of this
Agreement by Investor and by PDC are of material benefit to the Company and the
Members, and that Investor and PDC would not be willing to (A) execute and
deliver this Agreement, and (B) make their agreed Capital Contributions to the
Company, without the benefit of this Section 3.3 and Exhibit D and
the agreement of the parties, thereto; and (ii) they have reviewed and
understand the provisions of Sections 18-1101(b) and (c) of the
Act.

       

      SECTION
3.4. No
Resignation or Withdrawal by Members

       

      .  Except
in connection with a Transfer of all of its Interest as permitted under Article VI, no Member
shall be entitled to resign or withdraw from the Company.

       

      SECTION
3.5. Representations
and Warranties of Investor

       

      .  Investor
represents and warrants to PDC as follows:

       

      (a) Ownership of
Investor.  Lime Rock Partners GP V, L.P. is the sole general
partner of and controls Investor and is the sole general partner of Lime Rock
Partners V, L.P.  LRP GP V, Inc. is the sole general partner of and
controls Lime Rock Partners GP V, L.P.  Investor and Lime Rock
Partners V, L.P. are limited partnerships that are directly or indirectly
managed and advised by Lime Rock Management LP.

       

      (b) Organization and Good
Standing.  Investor is a limited partnership duly organized,
validly existing and in good standing under the laws of the State of Delaware,
with full partnership power and authority to perform all its obligations under
this Agreement.  Investor is duly qualified to do business as a
foreign entity and is in good standing under the laws of each state or other
jurisdiction that is required by reason of (i) the ownership or use of the
properties owned or used by it, (ii) the nature of the activities conducted by
it or (iii) its participation in, including its satisfying its obligations to,
the Company.  Neither Investor nor any of its Affiliates nor any Lime
Rock Resources Entity owns a Controlling interest in any other Person engaged in
oil or natural gas acquisition, development, operations or exploitation in the
Area, except for a single portfolio company in which an Affiliate of Investor
currently owns less than 25% of the outstanding equity interests and designates
less than a majority of the members of the board of directors (or equivalent
governing body).

       

      (c) Authority; No
Conflict.

       

      (i) Enforceability.  This
Agreement constitutes the legal, valid and binding obligations of Investor,
enforceable against Investor in accordance with their respective terms, except
as the same may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors’ rights
generally and general equitable principles, regardless of whether enforceability
is considered in a proceeding at law or in equity.  Investor has the
right, power, authority and capacity to execute and deliver this Agreement and
to perform its obligations hereunder.

       

      (ii) No Conflict,
etc.  Neither the execution and delivery of this Agreement nor
the consummation or performance of any of the transactions contemplated hereby
will, directly or indirectly (with or without notice or lapse of
time):  (A) contravene, conflict with, or result in a violation
of any provision of the organizational documents of Investor;
(B) contravene, conflict with, or result in a violation of, or give any
Governmental Authority or other Person the right to challenge any of the
transactions contemplated by this Agreement or the Transaction Agreements or to
exercise any remedy or obtain any relief under any Law to which Investor, the
Company or its Members, may be subject; (C) contravene, conflict with or
result in a violation of any of the terms or requirements of, or give any
Governmental Authority the right to revoke, withdraw, suspend, cancel, terminate
or modify, any governmental authorization that is held by Investor; or
(D) contravene, conflict with or result in a violation or breach of any
provision of, or give any Person the right to declare a default or exercise any
remedy under, or to accelerate the maturity or performance of, or to cancel,
terminate or modify, any contract (1) under which Investor has or may acquire
any rights, (2) under which Investor has or may become subject to any
obligations or liability or (3) by which Investor or any of the assets owned or
used by it are bound.

       

      (iii) Consents and
Notices.  Investor is not required to give any notice to or
obtain any approval, consent, ratification, waiver or other authorization of any
Person (including any Governmental Authority) in connection with the execution
and delivery of this Agreement or the consummation or performance of any of the
transactions contemplated by this Agreement or the Transaction
Agreements.

       

      (d) Availability of
Funds.  Investor currently has sufficient immediately available
funds in cash to pay its Initial Capital Contribution and will have immediately
available funds in cash to pay any other amounts payable under this Agreement
when due, including the balance of the Minimum Funding Obligation, all without
any third-party consent or approval required.

       

      SECTION
3.6. Representations
and Warranties of PDC

       

      .  PDC
represents and warrants to Investor as follows:

       

      (a) Organization and Good
Standing.  PDC is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada, with full
corporate power and authority to perform all its obligations under this
Agreement.  PDC is duly qualified to do business as a foreign entity
and is in good standing under the laws of each state or other jurisdiction that
is required by reason of (i) the ownership or use of the properties owned or
used by it, (ii) the nature of the activities conducted by it or (iii) its
participation in, including its satisfying its obligations to, the
Company.  Except for the Drilling Partnerships, neither PDC nor any of
its Affiliates owns a Controlling interest in any other Person engaged in oil or
natural gas acquisition, development, operations or exploitation in the
Area.

       

      (b) Enforceability.  This
Agreement constitutes the legal, valid and binding obligations of PDC,
enforceable against PDC in accordance with their respective terms, except as the
same may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors’ rights
generally and general equitable principles, regardless of whether enforceability
is considered in a proceeding at law or in equity.  PDC has the right,
power, authority and capacity to execute and deliver this Agreement and to
perform its obligations hereunder.

       

      ARTICLE
IV

       

      CAPITAL

       

      SECTION
4.1. Units

       

      .

       

      (a) The
Company shall have one class of Interests, which shall be referred to herein as
“Units.”

       

      (b) The Units
shall be uncertificated.

       

      (c) In
connection with the Closing, the Company shall issue to PDC and Investor the
number of Units set forth opposite their respective names on Exhibit C (which
Units were calculated at a deemed value of $1,000 per Unit).

       

      (d) The
Company is authorized to, and shall, issue to Investor Units at $1,000 per Unit
for Capital Contributions made by Investor at or following the Closing in
respect of the Minimum Funding Obligation and under Section
4.3(f).

       

      (e) Exhibit C sets
forth the number of Units owned by each Member as of the date hereof giving
effect to the Capital Contribution of the Contributed Assets under the
Contribution Agreement and Investor’s Initial Capital Contribution. The Board of
Managers shall amend Exhibit C from
time to time to reflect any changes thereto resulting from any additional
subscriptions, Transfers or admissions effected in accordance with this
Agreement.

       

      (f) Notwithstanding
anything to the contrary in this Agreement (but without duplication), unless the
Board of Managers otherwise determines:  (i) Units shall have a
designated value of $1,000 per Unit; (ii) property contributed in-kind as a
Capital Contribution or distributed in-kind shall have a deemed value that is
mutually acceptable to the Member that makes such Capital Contribution or
receives such distribution, on the one hand, and the Managers that are not
designees of such Member, on the other hand; and (iii) Units shall be issued for
Capital Contributions, and redeemed and retired for distributions, by the
Company to a Member (including the Special PDC Withdrawal) (other than
distributions made in accordance with Section 2.5(a)(iii)
(Board Deadlock), 5.5 (Distributions),
5.6 (Tax
Distributions), 7.3 (Application and
Distribution of Proceeds of Liquidation) and 9.5 (Withholding)),
to the extent necessary to reflect an appropriate change in the Sharing
Percentage of the Member that makes such Capital Contribution or receives such
distribution.

       

      SECTION
4.2. Sharing
Percentages

       

      .  The
“Sharing
Percentage” of each Member at any time shall equal the aggregate number
of Units held by such Member at such time divided by the aggregate number of
Units then outstanding.  The Sharing Percentage of each Member as of
the date hereof is set forth opposite such Member’s name on Exhibit C under
the similarly titled column, as applicable.  In the event of a change
in Sharing Percentages, the Board of Managers shall revise Exhibit C to
reflect such change in Sharing Percentages.

       

      SECTION
4.3. Capital
Contributions

       

      .

       

      (a) On the
Closing Date, Investor shall be obligated to contribute to the Company the
amount in cash set forth opposite its name on Exhibit C under
the column “Initial
Capital Contributions” and PDC shall contribute the Contributed Assets to
the Company in accordance with and subject to the terms of the Contribution
Agreement, which Contributed Assets shall be valued at the Agreed Value, which
is set forth opposite PDC’s name on Exhibit C under
the column “Initial
Capital Contributions.” The contributions described in this paragraph (a)
are referred to herein as “Initial Capital
Contributions.”  In exchange for the Initial Capital
Contributions, and taking into account the Special PDC Withdrawal made pursuant
to Section 5.7
in connection with the Closing, the Company shall issue to each of Investor and
PDC the number of Units set forth opposite its name on Exhibit C under
the column entitled “Units.”

       

      (b) Notwithstanding
any other provision of this Agreement, Investor hereby agrees and commits to
make 100% of any and all cash Capital Contributions provided for herein (except
for cash payments required from PDC pursuant to the terms of the Contribution
Agreement (e.g., as a
result of Title Defects or Environmental Defects (as defined in the Contribution
Agreement) in the Contributed Assets)) until the Minimum Funding Obligation is
satisfied, and hereby further agrees and commits to satisfy the Minimum Funding
Obligation no later than December 31, 2011.  PDC shall have no
obligation to make any Capital Contributions to the Company until the Minimum
Funding Obligation is satisfied and except as required by the Contribution
Agreement.  After the Catch-Up Period, additional Capital
Contributions shall be funded by the Members in cash in proportion to their
then-existing Sharing Percentages, except as otherwise expressly provided herein
and except as required by the Contribution Agreement.

       

      (c) Subject
to Section 4.3(b),
from time to time after the date hereof, the Members shall be required to make
Capital Contributions to the Company as capital calls (collectively, “Capital Calls”) to
the extent approved by the Board of Managers or pursuant to an approved
Development Plan and Budget.  With respect to each Capital Call, the
Board of Managers shall send a written notice to each Member that shall state
(i) the amount of the Capital Contribution required of each Member, (ii) the
payment date for such Capital Contribution and (iii) the purposes for which the
Capital Contribution proceeds will be utilized by the Company.  Unless
otherwise specified by the Board of Managers, within 20 Business Days after the
date of the written notice referred to in the preceding sentence, each Member
required to make a Capital Contribution shall, subject to the provisions of this
Section 4.3, be
required to pay the full amount of the Capital Contribution requested pursuant
to such Capital Call by wire transfer of funds in United States
dollars.  Members making additional Capital Contributions under this
Section 4.3
will receive in respect thereof a number of Units equal to the amount of their
respective additional Capital Contributions divided by $1,000 or such other
price per Unit determined by the Board of Managers.

       

      (d) If
Investor fails for any reason to make a required Capital Contribution during the
Catch-Up Period or fails to satisfy timely the Minimum Funding Obligation and
such failure remains uncured by the later to occur of (x) 10 Business Days after
the due date therefor and (y) 2 Business Days after the PDC Designees have
provided written notice of such failure to Investor (such failure, an “Investor Default”),
the Investor shall be in default under this Agreement.  Effective as
of the occurrence of any Investor Default, PDC will have the right which shall
be exercisable for 10 Business Days after the occurrence of such Investor
Default (which shall not be exclusive of other available remedies at law,
including for breach of contract) to elect to (1) dissolve the Company and
wind up its affairs with a Liquidator appointed by PDC under Section 7.1,
(2) advance to the Company the amount of Investor’s then-due Capital
Contribution, which advance shall be treated by the Company and the Members as a
loan from PDC to Investor (an “Investor Sideways
Loan”) or (3) contribute to the Company the amount of Investor’s then-due
Capital Contribution (a “Substitute
Contribution”).

       

      (i) If PDC
elects to make an Investor Sideways Loan, such loan will be (A) payable on
demand and accrue interest at a rate of interest per annum equal to the lesser
of (1) the Prime Rate plus six percent and (2) the highest rate
permitted by applicable Law, and (B) secured by Investor’s Interest in the
Company.  Investor shall execute all documentation and take all action
reasonably requested by PDC to grant and perfect such security
interest.  Investor will not be entitled to any Distributions until
such Investor Sideways Loan is fully repaid.  The portion of
distributions which would otherwise have been distributed or paid to Investor
under Articles
V and VII if Investor had
funded the amounts for which an Investor Sideways Loan was made shall instead be
paid directly to PDC, and shall be deemed to have been paid to the Investor and
subsequently paid by Investor to PDC, until the Investor Sideways Loan is fully
repaid.

       

      (ii) If PDC
elects to make a Substitute Contribution, such contribution will be treated by
the Company and the Members as a PDC contribution of 110% of the amount actually
contributed by PDC for all purposes under this Agreement, including the issuance
of Units to PDC in respect thereof (an “Additional PDC
Contribution”).

       

      (e) After the
Catch-Up Period, if either Member fails for any reason to make a required
Capital Contribution and such failure remains uncured by the later to occur of
(x) 10 Business Days after the due date therefor and (y) 2 Business
Days after the designees on the Board of Managers of the other Member (the
“Non-Defaulting
Member”) have provided written notice of such failure to such Member
(such failure, a “Payment Default”),
such Member shall be in default under this Agreement (a “Defaulting
Member”).  Effective as of the occurrence of a Payment Default,
the Non-Defaulting Member will have the right which shall be exercisable for 10
Business Days after the occurrence of such Payment Default (which shall not be
exclusive of other available remedies at law, including for breach of contract)
to advance to the Company the amount of the Defaulting Member’s then-due Capital
Contribution, which advance will be treated by the Company and the Members as a
loan from the Non-Defaulting Member to the Defaulting Member (a “Sideways
Loan”).

       

      (i) A
Sideways Loan shall be (A) payable on demand and accrue interest at a rate
of interest per annum equal to the lesser of (1) the Prime Rate plus four
percent and (2) the highest rate permitted by applicable Law, and
(B) secured by the Defaulting Member’s Interest in the
Company.  The Defaulting Member shall execute all documentation and
take all action reasonably requested by the Non-Defaulting Member to grant and
perfect such security interest.  The Defaulting Member will not be
entitled to any Distributions until such Sideways Loan is fully repaid, and such
loan shall be repayable from that portion of each distribution or payment made
to the Members pursuant to Articles V and VII that would have
been distributed or paid to the Defaulting Member had it made the Capital
Contribution to the Company that was required of (but not made by)
it.  For purposes of adjusting and maintaining the balances of the
Defaulting Member’s Capital Account, (A) the amount of any Sideways Loan made by
the Non-Defaulting Member to the Defaulting Member shall be deemed to have been
contributed to the Company by the Defaulting Member and shall increase the
balance of the Defaulting Member’s Capital Account, and (B) the amount of any
distribution or payment otherwise payable to the Defaulting Member that is paid
to the Non-Defaulting Member in repayment of a Sideways Loan shall be treated as
if such amount had actually been distributed or paid to the Defaulting Member
pursuant to Article
V or VII, as the case may
be.

       

      (f) In the
event that PDC elects to take less than $11.5 million in the Subsequent Special
Withdrawal (including if it elects not to take any Subsequent Special
Withdrawal), Investor may elect to make an additional Capital Contribution by
March 31, 2011 in an amount equal to the difference between $11.5 million and
the amount, if any, taken in such Subsequent Special Withdrawal.

       

      SECTION
4.4. Capital
Accounts

       

      .

       

      (a) A
separate Capital Account for each Member shall be established and maintained on
the books of the Company in accordance with Treasury Regulations §
1.704-1(b)(2)(iv) and, to the extent not in conflict with such Treasury
Regulations, the provisions of this Agreement.  Each Member shall have
a single Capital Account that reflects all of its Interests, regardless of class
or the time or manner in which acquired.  Upon a Transfer
(or Transfer deemed to occur for tax purposes) of all or part of any
Interest, the Capital Account and Capital Contributions of the transferor
attributable to the transferred Interest shall carry over to the
transferee.

       

      (b) There
will be credited to the Capital Account of each Member (i) the amount of cash
and the initial Book Basis of any property contributed by such Member to the
Company, (ii) such Member’s share of Net Income and any items of income or gain
allocated to such Member pursuant to Sections 5.1 and
5.2, and (iii)
the amount of any liabilities of the Company assumed by such Member or that are
secured by any property distributed to such Member.

       

      (c) There
will be debited to the Capital Account of each Member (i) the amount of any cash
and the Book Basis of any property distributed by the Company to such Member,
(ii) such Member’s share of Net Loss, and any items of loss or deduction
allocated to such Member pursuant to Sections 5.1 and
5.2, and (iii)
the amount of any liabilities of such Member assumed by the Company or that are
secured by any property contributed by such Member to the Company.

       

      SECTION
4.5. Member
Loans

       

      .  Any
Member may, with the Approval of the Board of Managers, loan funds to the
Company.  Loans by a Member to the Company will not be treated as
Capital Contributions but will be treated as debt obligations having such terms
as are Approved by the Board of Managers.

       

      SECTION
4.6. No
Return of Capital Contributions

       

      .  Except
as expressly provided herein, a Member shall not be entitled to the return of
any part of its Capital Contributions or to be paid any interest, salary or draw
in respect of its Capital Contributions.  A Capital Contribution that
has not been repaid is not a liability of the Company or any
Member.

       

      SECTION
4.7. Management
Incentives

       

      .  The
members hereby agree to grant “profits interest” or other equity incentives
(collectively, “Equity
Incentives”) to the executive management team of the Company and its
subsidiaries, subject to the following:

       

      (a) the
aggregate grant of the Equity Incentives shall not exceed 5% of the
fully-diluted Interests;

       

      (b) the
Equity Incentives shall not entitle the recipients thereof to any voting or
management rights in the Company;

       

      (c) the two
most senior executives shall receive Equity Incentives in amounts to be
determined by the Board of Managers, and the identity of the other members of
the executive management team that will receive Equity Incentives and the
amounts issued to each will be in the discretion of the Board of Managers in
consultation with the CEO;

       

      (d) the
Equity Incentives will vest as determined by the Board of Managers, subject to
acceleration upon the occurrence of a Final Exit Event at rates to be determined
by the Board of Managers, which rates may vary based upon the achievement of
rates of return or performance thresholds to be determined by the Board of
Managers;

       

      (e) this
Agreement shall be amended to the extent necessary to provide for the Equity
Incentives; and

       

      (f) the Board
of Managers may in its discretion determine to modify any of the foregoing terms
and conditions or impose new terms and conditions with respect to grants of any
or all Equity Incentives, and it may determine to increase the pool of Equity
Incentives available for grant (5% of the fully diluted Interests as of the
Closing) and the participants that are eligible to receive Equity
Incentives.

       

      ARTICLE
V

       

      ALLOCATIONS;
DISTRIBUTIONS

       

      SECTION
5.1. Allocations
of Net Income or Net Loss

       

      .  After
making the allocations set forth in Section 5.2, for
purposes of maintaining the Capital Accounts, the Company’s items of Net Income
and Net Loss (or items thereof) for each Allocation Year shall be allocated
among the Members in a manner such that the Capital Account of each Member,
immediately after making such allocations is, as nearly as possible, equal
(proportionately) to (a) the amount of distributions that would be made to such
Member if the Company were dissolved, its affairs wound up and its assets sold
for cash equal to their Book Basis (assuming for this purpose only that the Book
Basis of an asset that secures a nonrecourse liability for purposes of Treasury
Regulations § 1.1001-2 is no less than the amount of such liability that is
allocated to such asset in accordance with Treasury Regulations §
1.704-2(d)(2)), all Company liabilities were satisfied (limited with respect to
each nonrecourse liability to the Book Basis of the asset securing such
liability), and the net assets of the Company were distributed in accordance
with the second sentence of Section 5.5(a), minus
(b) the sum of such Member’s share of “partnership minimum gain” (as defined in
Treasury Regulations § 1.704-2(b)(2)) and “partner nonrecourse debt minimum
gain” (as defined in Treasury Regulations § 1.704-2(i)(2)).

       

      SECTION
5.2. Special
Allocations

       

      .  Notwithstanding
Section 5.1,
for each Allocation Year, the following items of income, gain, loss and
deduction shall, to the extent not previously reflected in the Capital Accounts
of the Members, be specially allocated to their Capital Accounts, in the
following order and priority:

       

      (a) If there
is a net decrease in “partnership minimum gain” (as defined in Treasury
Regulations § 1.704-2(b)(2) and as computed under Treasury Regulations §
1.704-2(d)) for any Allocation Year, then, to the extent required by the
Treasury Regulations, items of income (determined in accordance with the
provisions of Treasury Regulations § 1.704-2(f)(6)) shall be specially allocated
to the Members in an amount equal to each Member’s share of the net decrease in
partnership minimum gain (determined in accordance with the provisions of
Treasury Regulations § 1.704-2(g)).  This Section 5.2(a) shall
be interpreted consistently with, and subject to the exceptions contained in,
Treasury Regulations § 1.704-2(f).

       

      (b) If there
is a net decrease in “partner nonrecourse debt minimum gain” (as defined in
Treasury Regulations § 1.704-2(i)(2)) for any Allocation Year, then, to the
extent required by Treasury Regulations, items of income (determined in
accordance with the provisions of the Treasury Regulations § 1.704-2(i)(4))
shall be specially allocated to the Members in an amount equal to each Member’s
share of the net decrease in partner nonrecourse debt minimum gain (determined
in accordance with the provisions of Treasury Regulations §
1.704-2(i)(5)).  This Section 5.2(b) shall
be interpreted consistently with, and subject to the exceptions contained in,
Treasury Regulations § 1.704-2(i)(4).

       

      (c) If any
Member unexpectedly receives any adjustment, allocation or distribution
described in Treasury Regulations §§ 1.704-1(b)(2)(ii)(d)(4), (5) or (6), which
causes or increases a deficit balance in such Member’s Adjusted Capital Account,
such Member will be allocated items of income (including gross income) in an
amount and manner sufficient to eliminate, to the extent required by the
Treasury Regulations, the deficit balance in the Member’s Adjusted Capital
Account as quickly as possible; provided that an allocation
pursuant to this Section 5.2(c) shall
be made only to the extent that the Member has a deficit balance in its Adjusted
Capital Account after all other allocations provided for in Section 5.1 and this
Section 5.2 have
been tentatively made as if this Section 5.2(c) was
not in this Agreement.  This Section 5.2(c)
is intended to be a “qualified income offset” as that term is used in Treasury
Regulations § 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
therewith.

       

      (d) “Nonrecourse
deductions” (as defined in Treasury Regulations §§1.704-2(b)(1) and (c)) for any
Allocation Year shall be allocated among the Members in accordance with their
Sharing Percentages.

       

      (e) “Partner
nonrecourse deductions” (as defined in Treasury Regulations §1.704-2(i)(2))
shall be specially allocated to the Members who bear the economic risk of loss
with respect to the liability to which the deductions are attributable,
determined in accordance with the principles of Treasury Regulations §
1.704-2(i)(l).

       

      (f) To the
extent an adjustment to the adjusted tax basis of any Company asset pursuant to
Sections 734(b) or 743(b) of the Code is required to be taken into account in
determining Capital Accounts under Treasury Regulations § 1.704-1(b)(2)(iv)(m),
the amount of the adjustment shall be included as an item of gain (if positive)
or loss (if negative) and shall be specially allocated to the Members consistent
with the manner in which their Capital Accounts are required to be adjusted by
such Treasury Regulation.

       

      (g) Simulated
Depletion Deductions, Simulated Loss, and IDCs with respect to each Oil and Gas
Property shall be allocated among the Members in proportion to the manner in
which the Simulated Basis of such property is allocated between the Members
pursuant to Section
5.3(a), provided,
however, if the percentage depletion method is used, any excess
percentage depletion shall be allocated in accordance with Treasury Regulation
Section 1.704-1(b)(4)(iii).

       

      SECTION
5.3. Other
Allocation Rules

       

      .

       

      (a) For
purposes of computing the Members’ Capital Accounts, the Simulated Basis of each
Oil and Gas Property will be allocated among the Members in proportion to their
Sharing Percentages.  Upon an adjustment to the Book Basis of an Oil
and Gas Property pursuant to a Revaluation Event, the Simulated Basis may be
reallocated among the Members, but only in a manner consistent with the
provisions of Treasury Regulations § 1.704-1(b)(2)(iv)(k), Section 613A(c)(7)(D)
of the Code and the Treasury Regulations thereunder.

       

      (b) Net
Income, Net Loss, and any other items of income, gain, loss or deduction
(including Simulated Depletion Deductions, Simulated Loss, and Simulated Gain)
shall be allocated to the Members pursuant to this Article V as of the
last day of each Allocation Year; provided, that Net Income,
Net Loss, and such other items shall also be allocated at such times as the Book
Basis of the Company’s property are adjusted pursuant to the definition of Book
Basis.

       

      (c) Solely
for purposes of determining a Member’s proportionate share of “excess
nonrecourse liabilities” of the Company within the meaning of Treasury
Regulations § 1.752-3(a)(3), the Members’ interests in the Partnership’s profits
are in proportion to their Sharing Percentages.

       

      SECTION
5.4. Allocations
of Taxable Income or Loss

       

      .

       

      (a) Except as
provided in subsections (b)-(d) below or as otherwise required by the Code or
Treasury Regulations, solely for federal income tax purposes, items of Company
taxable income, gain, loss and deduction for each Allocation Year shall be
allocated among the Members in the same manner as each correlative item of
income, gain, loss and deduction, as determined for Capital Account purposes, is
allocated pursuant to Sections 5.1 and
5.2.

       

      (b) For
purposes of Treasury Regulations §§ 1.704-1(b)(2)(iv)(k)(2) and
1.704-1(b)(4)(v), the amount realized on the disposition of any Oil and Gas
Property shall be allocated (i) first to the Members in an amount equal to the
remaining Simulated Basis of such property in the same proportions as the
Simulated Basis of such property was allocated to the Members pursuant to Section 5.3(a), and
(ii) any remaining amount realized shall be allocated to the Members in the same
ratio as the Simulated Gain.

       

      (c) If
property contributed to the Company by a Member has an adjusted tax basis that
differs from its initial Book Basis on the date of contribution or if the Book
Basis of property is adjusted upon the occurrence of a Revaluation Event,
income, gain, loss and deductions with respect to such property will, solely for
tax purposes, be allocated among the Members so as to take account of such
difference.  Such allocations will be made among the Members in the
manner provided in Section 704(c) of the Code, pursuant to the remedial
allocation method described in Treasury Regulation §1.704-3(d).

       

      (d) Depreciation,
depletion, IDCs, and amortization recapture amounts under Sections 1245, 1250 or
1254 of the Code, if any, resulting from any sale or disposition of tangible or
intangible depreciable, depletable or amortizable property shall be allocated to
the Members in the same proportions that the depreciation, depletion, IDCs or
amortization being recaptured was allocated.

       

      (e) The
Members acknowledge that the U.S. federal income tax deduction for cost or
percentage depletion with respect to each separate Oil and Gas Property owned by
the Company must be computed separately by each Member in accordance with
Section 613A(c)(7)(D) of the Code, rather than by the Company.  For
purposes of such computation, each Member shall be allocated a share of the
adjusted basis in each Oil and Gas Property acquired during an Allocation Year
equal to its Sharing Percentage at the end of such Allocation
Year.  Each Member shall separately keep records of its share of the
adjusted basis for any cost or percentage depletion allowable on such Oil and
Gas Property, and use such adjusted basis in the computation of its gain or loss
on the disposition of such Oil and Gas Property.  Upon the request of
the Company, each Member shall advise the Company of its adjusted basis in each
Oil and Gas Property as computed in accordance with the provisions of this Section
5.4(e).  The amount of gain or loss to be recognized by a
Member for income tax purposes as a result of the sale or other taxable
disposition of an Oil and Gas Property shall be equal to the difference between
the amount realized from such sale or disposition allocated to such Member and
such Member’s adjusted basis in such Oil and Gas Property.

       

      SECTION
5.5. Distributions

       

      .

       

      (a) Except as
otherwise provided in Section 5.6 and Section 5.7,
Distributions (other than in connection with a liquidation pursuant to Article VII) of
Available Cash may be made to the Members solely at such times and in such
amounts as the Board of Managers determines, and any such Distribution of
Available Cash shall be made to the Members in accordance with their
then-existing Sharing Percentages.  Distributions of cash in
connection with (w) a liquidation pursuant to Article VII,
(x) a Final Exit Event, (y) a leveraged recapitalization or (z) a sale
of assets of the Company having a value in excess of 15% of the enterprise value
of the Company shall be made to the Members in the following order of
priority:

       

      (i) first,
100% to Investor until it has received cumulative distributions under this Section 5.5(a)(i)
equal to the Investor Preference Amount;

       

      (ii) thereafter,
100% to PDC until it has received cumulative distributions under this Section 5.5(a)(ii)
equal to the Investor Preference Amount; and

       

      (iii) thereafter,
to the Members in accordance with their then-existing Sharing
Percentages.

       

      Proceeds
from sales of all the Interests in a Final Exit Event or from Significant
Interest Sales shall be allocated between the Members as if the Company had
received such proceeds in a sale of its assets and Distributed such proceeds
pursuant to clause (i) through (iii) of this Section 5.5(a),
as applicable, provided
that if a Significant Interest Sale involves the sale of Units by one Member
disproportionately in excess of its Sharing Percentage at the time, the proceeds
in respect of such excess Units shall be allocated to such Member separately and
shall not be subject to the priority set forth immediately
above.  Each Member agrees to pay to the other Member such amounts as
necessary to give effect to the immediately preceding sentence in connection
with any sale of all of the Interests in a Final Exit or any Significant
Interest Sale.  Any such payment shall be treated by the Members as a
reallocation of the sales price with respect to such sales for federal income
tax purposes.

       

      (b) Except as
provided in Section
2.5(a) and Article VII,
Distributions of assets in kind may be made to the Members solely at such times
and in such amounts as the Board of Managers determines.  If assets
are distributed in kind other than pursuant to Section 2.5(a)(iii),
then the Board of Managers shall determine the value of each distributed asset,
and such distribution shall be treated as a distribution of cash in an amount
equal to such asset value and such distribution shall be subject to Section 5.5(a) and
Article VII, as
applicable.

       

      (c) No
Distribution may be made if prohibited by Section 18-607 of the Act or other
applicable Law.

       

      SECTION
5.6. Tax
Distributions

       

      .  To
the extent of Available Cash, the Company shall make aggregate distributions of
cash (“Minimum Tax
Distributions”) to each Member in an amount, which when added to the
cumulative amount of prior distributions made to such Member (other than the
Special PDC Withdrawal), will at least equal the cumulative amount of federal,
state and local income tax payable solely by reason of such Member’s
distributive share, within the meaning of Section 704(b) of the Code, of the
cumulative income, gain, loss and deductions of the Company, assuming for such
purposes that (i) any such income and gain reduced by losses and deductions
(including for this purpose, a deduction equal to such Member’s share of
Simulated Depletion Deductions) attributable to the Member by reason of its
interest in the Company is subject to federal, state or local income tax at the
Assumed Tax Rate and (ii) the cumulative distributive share of any unused
deductions and losses of the Company allocated to a Member may be carried
forward.  The Board of Managers shall cause the Company to make such
Minimum Tax Distributions quarterly during each Fiscal Year of the Company based
upon estimated allocations of income, gain, loss and deductions (including for
this purpose, a deduction equal to such Member’s share of Simulated Depletion
Deductions) of the Company for such Fiscal Year, and future Minimum Tax
Distributions shall be adjusted to reflect any differences between estimated and
actual allocations of Company income, gain, loss and deductions (including for
this purpose, a deduction equal to such Member’s share of Simulated Depletion
Deductions).  To the extent that such Minimum Tax Distributions
requirement increases the amount distributed beyond the amount to which a Member
would be entitled under Sections 5.5 and
7.3 (ignoring
this Section
5.6), the excess portion shall be considered a prepayment of future
distributions allocable to such Member.  Any amount distributed to a
Member pursuant to this Section 5.6
shall be treated as an advance of, and shall reduce the amount which such Member
is otherwise entitled to receive thereafter pursuant to Sections 5.5 and
7.3.  If
upon termination of a Member’s Interest in the Company or upon the winding up
and liquidation of the Company, a Member shall have received distributions
pursuant to this Section 5.6 in excess
of the amount of distributions to which such Member would be entitled under
Sections 5.5
and 7.3
(ignoring this Section
5.6), such Member shall promptly repay such excess to the
Company.

       

      SECTION
5.7. Special
PDC Withdrawal

       

      .  On
the date hereof, the Company shall distribute $45 million in cash to PDC (the
“Initial Special
Withdrawal”), which distribution shall be treated by the Company and the
Members as a return of capital to PDC to the extent such Initial Special
Withdrawal meets the requirements of Treasury Regulations Section 1.707-4(d) and
PDC provides to the Company documentation adequate to support such treatment on
or before the due date for filing the Company’s partnership return to which the
Initial Special Withdrawal relates.  To the extent that the Initial
Special Withdrawal does not meet the requirements of Treasury Regulations
Section 1.707-4(d), the Initial Special Withdrawal will be treated as
consideration by the Company to PDC in exchange for a portion of PDC’s Initial
Capital Contribution.  Following the Closing Date and until December
31, 2010, at the election of PDC in its sole discretion and without any other
approval required, the Company shall distribute promptly up to an additional
$11.5 million to PDC (any such subsequent distribution the “Subsequent Special
Withdrawal,” and, together with the Initial Special Withdrawal the “Special PDC
Withdrawal”), which distribution shall be treated as a return of capital
to PDC to the extent such Subsequent Special Withdrawal meets the requirements
of Treasury Regulations Section 1.707-4(d) and PDC provides to the Company
documentation adequate to support such treatment on or before the due date for
filing the Company’s partnership return to which the Subsequent Special
Withdrawal relates.  To the extent that the Subsequent Special
Withdrawal does not meet the requirements of Treasury Regulations Section
1.707-4(d), the Subsequent Special Withdrawal will be treated as consideration
by the Company to PDC in exchange for a portion of PDC’s Initial Capital
Contribution.  PDC’s Units (and corresponding Sharing Percentage) will
be reduced in proportion to the amount of any Subsequent Special
Withdrawal.

       

      ARTICLE
VI

       

      TRANSFER;
WITHDRAWAL; SALE RIGHTS; EXIT EVENTS

       

      SECTION
6.1. Restrictions
on Transfer

       

      .

       

      (a) No
Transfer of Interests may be made, in whole or in part, other than in accordance
with this Article VI, and
any Transfer or attempted Transfer of Interest in violation of this Article VI or
any provision of this Agreement shall be void ab initio.  In the
case of any Transfer made in contravention of this Article VI that
cannot be treated as void under applicable Law, the transferee shall have only
such rights as it is required to have under applicable Law, but shall not be
admitted as a Member.  The Members agree that a breach of the
provisions of the restrictions on Transfers set forth in this Article VI may cause
irreparable injury to the Company and the Members for which monetary damages (or
other remedy at law) are inadequate in view of (i) the complexities and
uncertainties in measuring the actual damages that would be sustained by reason
of the failure of a person to comply with such provisions, and (ii) the
uniqueness of the Company’s business and the relationship among the
Members.  Accordingly, the Members agree that the restrictions on
Transfers may be enforced by specific performance.

       

      (b) During
the period ending on the four-year anniversary of the Closing Date (the “Restricted Period”),
no Member or its successor(s) may Transfer its Interest except (i) as
approved by the Managers designated by the Member not seeking to Transfer its
Interest, (ii) for a PDC Change of Control or Permitted Pledge,
(iii) an assignment by PDC to a wholly-owned subsidiary (for so long as the
recipient remains a wholly-owned subsidiary of PDC), (iv) an assignment by
Investor to a Permitted Investor Transferee (for so long as the recipient
remains a Permitted Investor Transferee) or (v) a distribution in-kind of
Investor’s interests in the Company to “Accredited Investors” (as such term is
defined in section 501 of Regulation D promulgated under the Securities Act of
1933), upon Investor’s liquidation or as may be required under Investor’s
charter documents (“Permitted
Transfers”); provided that Investor may
not Transfer its rights to appoint and remove Investor Designees or under Sections 6.5, 6.6 or
6.8 in
connection with the preceding clause (iv) or (v) without the prior approval of
the PDC Designees unless such rights are Transferred as an entirety as part of,
and together with, a Transfer pursuant to clause (iv) or (v) of at least 35% of
the then-outstanding Units to a single Permitted Investor
Transferee.  For the avoidance of doubt, Investor may assign its
rights and obligations to make Capital Contributions hereunder to Permitted
Investor Transferees (for so long as the recipient remains a Permitted Investor
Transferee) without the consent of PDC.  Following the Restricted
Period, Permitted Transfers provided for in this Section 6.1(b)
shall continue to be permitted, and other Transfers by either Member shall be
subject to (and may be made only in accordance with) Sections 6.5 and
6.6.

       

      (c) If a PDC
Change of Control occurs before the three-year anniversary of the Closing Date,
the Restricted Period shall end on the third anniversary of the Closing Date
and, until such third anniversary:

       

      (i) during
the Catch-Up Period, approval of any Development Plan and Budget (including any
Capital Calls provided for therein) shall require only the approval of the
Investor Designees; and

       

      (ii) after the
Catch-Up Period, approval of the portion of any Development Plan and Budget
funded by the debt (including existing debt and the incurrence of additional
debt on arms’ length terms) or cash flow of the Company shall require only the
approval of the Investor Designees, and any remaining portion of any such
Development Plan and Budget (including any Capital Calls provided for therein)
shall require the Approval of the Board of Managers.

       

      If a PDC
Change of Control occurs between the third anniversary and the fourth
anniversary of the Closing Date, the Restricted Period shall end upon the
occurrence of such PDC Change of Control.

       

      (d) Any costs
incurred by the Company in connection with any proposed or actual Transfer by a
Member of all or a part of its Interest shall be borne by such Member, subject
to Section
6.7(b).

       

      (e) Notwithstanding
anything to the contrary in this Section 6.1, a
Transfer of an Interest shall be null and void ab initio if (i) following
the proposed Transfer, the Company would constitute a “publicly traded
partnership” for purposes of Section 7704 of the Code, (ii) such
Transfer would result in the violation of any applicable federal or state
securities Laws, (iii) the transferee is financially incapable of carrying
out the transferee’s obligations under the Agreement or (iv) such Transfer is
described in Section
9.6, unless consented to by the non-Transferring Member.

       

      SECTION
6.2. Involuntary
Transfer

       

      .  To
the fullest extent permitted by Law, any Transfer of Interests in connection
with any bankruptcy, insolvency or similar proceedings involving a Member or
pursuant to any judicial order, legal process, execution or attachment and any
other involuntary Transfer not otherwise expressly provided for in this
Agreement shall be subject to the restrictions set forth in this
Agreement.

       

      SECTION
6.3. Assignees

       

      .  Unless
an assignee of an Interest becomes a Member in accordance with the provisions
set forth below, such assignee shall not be entitled to any of the rights
granted to a Member hereunder in respect of such Interest (including the power
to designate Managers), other than the right to receive allocations of income,
gain, loss, deduction, credit and similar items and distributions to which the
assignor would otherwise be entitled, to the extent such items are
assigned.

       

      SECTION
6.4. Substitution

       

      .

       

      (a) An
assignee of the Interest of a Member, or any portion thereof, may become a
Member entitled to all of the rights of a Member in respect of such Interest if
(i) the assignor gives the assignee such right in accordance with the provisions
of this Article
VI, (ii) the Board of Managers consents in writing to such
substitution; and (iii) the assignee executes and delivers such instruments, in
form and substance reasonably satisfactory to the Board of Managers, as the
Board of Managers may deem reasonably necessary to effect such substitution and
to confirm the agreement of the assignee to be bound by all of the terms and
provisions of this Agreement.

       

      (b) Notwithstanding
anything to the contrary contained herein, an assignee of Interests of a Member
constituting at least 35% of the then-outstanding Units shall automatically
become a substitute Member entitled to all of the rights of a Member in respect
of such Interest if the assignment of such Interest is pursuant to Sections 6.5 or 6.6.

       

      SECTION
6.5. Transfers
Initiated by a Member

       

      .

       

      (a) After the
Restricted Period unless otherwise approved by the Board of Managers, if either
Member desires to sell all or any portion of its Interest (the “Selling Member”),
such Selling Member shall provide the other Member (the “Non-Selling Member”)
a right of first offer to acquire such Interest (the “Sale Interest”) by
delivering a written notice (the “Selling Member
Notice”) to the Non-Selling Member stating the Selling Member’s
intentions and describing the Sale Interest.  The Non-Selling Member
shall have a period of 30 days (the “Selling Member Notice
Period”) from receipt of the Selling Member Notice to deliver a written
offer (the “Non-Selling Member
Offer”) to the Selling Member, which Non-Selling Member Offer shall
include the purchase price (payable in cash) at which it is willing to purchase
the Sale Interest and the proposed terms of sale.  The Selling Member
shall have a period of 30 days from receipt of the Non-Selling Member offer (the
“Non-Selling Member
Offer Period”) to notify the Non-Selling Member that it accepts the
Non-Selling Member Offer.  If the Selling Member accepts the
Non-Selling Member Offer prior to the expiration of the Non-Selling Member Offer
Period, the parties shall effectuate such Transfer within 30 days after the end
of the Non-Selling Member Offer Period.

       

      (b) If the
Selling Member does not accept the Non-Selling Member Offer prior to the
expiration of the Non-Selling Member Offer Period, the Selling Member for a
period of 120 days thereafter may seek a bona fide offer for cash to purchase
the Sale Interest (a “Third Party Offer”)
from a third party (the “Third Party
Purchaser”).  If the Selling Member obtains a Third Party
Offer, the Selling Member shall deliver the Third Party Offer to the Non-Selling
Member, which Third Party Offer shall describe the Sale Interest and the
proposed purchase price (payable in cash) and terms of sale. The delivery of the
Third Party Offer to the Non-Selling Member shall constitute a binding offer to
sell the Sale Interest to the Non-Selling Member on the terms set forth therein
at a cash purchase price 8% higher than the Third Party Offer.  The
Non-Selling Member shall have a period of 30 days (the “Third Party Offer
Period”) from receipt by it of the Third Party Offer to (i) notify
the Selling Member that it accepts the Third Party Offer and will pay a cash
purchase price for the Selling Member’s Interest that is 8% higher than, but
otherwise on the same terms and conditions as, the Third Party Offer, (ii)
tag-along and participate in the proposed transaction or (iii) decline to
participate in the proposed transaction.  If the Non-Selling Member
accepts the Third Party Offer prior to the expiration of the Third Party Offer
Period, the parties shall effectuate such Transfer within 30 days after the end
of the Third Party Offer Period.  If the Non-Selling Member exercises
its tag-along rights under Section 6.5(b)(ii)
prior to the expiration of the Third Party Offer Period, the Non-Selling Member
shall sell an amount of its Interest (the “Non-Selling
Interest”) equal to the Sale Interest to the Third Party Purchaser along
with the Sale Interest in the Third Party Offer (a “Non-Seller Tag-Along
Sale”); provided
that if the aggregate of the Selling Interest and the Non-Selling Interest
exceeds the maximum aggregate number of Units that the Third Party Purchaser
desires to purchase, then each Member shall sell its Pro Rata Sale Share of
Units.  “Pro Rata Sale Share” of Units means a number of Units equal
to the product of (i) the quotient determined by dividing (1) the number of
Units for sale by such Member by (2) the sum of the Selling Interest and the
Non-Selling Interest and (ii) the aggregate number of Units to be sold in the
contemplated Transfer.  If the Non-Selling Member declines to
participate in the proposed transaction, or fails to notify the Selling Member
of its intent prior to the expiration of the Third Party Offer Period, the
Selling Member may Transfer the Sale Interest to the Third Party Purchaser on
the terms and conditions of the Third Party Offer.  In the event that
the Selling Member’s sale to the Third Party Purchaser is not consummated within
90 days following the expiration of the Third Party Offer Period, the
Non-Selling Member’s rights under this Section 6.5 with
respect to the Sale Interest shall again become effective, and the Selling
Member shall not thereafter Transfer any of the Sale Interest without first
offering such interest to the Non-Selling Member in the manner provided in this
Section
6.5.

       

      (c) If the
Selling Member has initiated the process provided for in this Section 6.5 with
respect to all of its Interest and the Non-Selling Member fails to purchase the
Selling Member’s Interest and does not exercise its tag-along rights under Section 6.5(b), then
the Selling Member may determine in its sole discretion that it desires to sell
all of the Interest in the Company for cash, including the Interest of the
Non-Selling Member, to the Third-Party Purchaser (a “Drag-Along
Sale”).  If the Selling Member determines that it intends to
cause a Drag-Along Sale to be consummated, it shall give not less than 10 days’
prior written notice to the Non-Selling Member of such intent (the “Drag-Along
Notice”).  Upon receipt of such Drag-Along Notice, the
Non-Selling Member will be obligated to Transfer all of its Interest to the
Third-Party Purchaser upon the same terms and conditions as the Selling
Member.

       

      (d) Upon any
Transfer to a Third Party Purchaser, the Selling Member shall deliver to the
Company and the Non-Selling Member a copy of the document evidencing such
Transfer.

       

      (e) Notwithstanding
anything contained in this Section 6.5, there
shall be no liability on the part of the Selling Member to the Non-Selling
Member if the Non-Seller Tag-Along Sale or Drag-Along Sale pursuant to this
Section 6.5 is
not consummated for whatever reason.  Whether to effect a transfer of
Interests by the Selling Member is in the sole and absolute discretion of the
Selling Member.

       

      (f) If
Investor is the Non-Selling Member and PDC is the Selling Member of all or a
part of its Interest under this Section 6.5,
Investor’s rights and obligations under this Section 6.5 may
be assigned to and exercised through (in addition to a Permitted Investor
Transferee) a portfolio company Controlled by Investor or a Permitted Investor
Transferee.

       

      SECTION
6.6. Transfers
Initiated by Third Parties

       

      .

       

      (a) After the
Restricted Period, if either Member (the “Offered Member”)
receives an unsolicited bona fide offer (an “Unsolicited Third Party
Offer”) from a third party (the “Third Party Offeror”)
for the Transfer of all or any portion of its Interest (the “Offered Interest”)
that the Offered Member is willing to accept, the Offered Member shall provide
the other Member (the “Non-Offered Member”)
a right of first refusal and tag-along rights pursuant to the procedures
described in this Section
6.6.  The Offered Member shall deliver a written notice of the
proposed terms of the Unsolicited Third Party Offer (the “Offer Notice”) to the
Non-Offered Member, which Offer Notice shall include a description of the
Offered Interest and the purchase price at which the Third Party Offeror wishes
to purchase the Offered Interest.  The Non-Offered Member shall have a
period of 45 days (the “Offer Notice Period”)
from receipt of the Offer Notice to (i) elect to purchase the Offered Interest
for cash on the same terms and conditions as the Unsolicited Third Party Offer
(except that the Non-Offered Member shall pay cash in the amount of the Fair
Market Value of any non-cash consideration included in the Unsolicited Third
Party Offer, (ii) tag-along and participate in the proposed transaction or
(iii) decline to participate in the proposed transaction and retain its
Interest.  If the Non-Offered Member exercises its rights under Section 6.6(a)(i)
prior to the expiration of the Offer Notice Period, the parties shall effectuate
such Transfer within 30 days after the end of the Offer Notice
Period.  If the Non-Offered Member exercises its rights under Section 6.6(a)(ii)
prior to the expiration of the Offer Notice Period, the Non-Offered Member may
sell a proportional amount (the “Non-Offered
Interest”) equal to the Offered Interest to the Third Party Offeror along
with the Offered Interest in the Unsolicited Third Party Offer (a “Non-Offered Tag-Along
Sale” and, together with a Non-Seller Tag-Along Sale, a “Tag-Along Sale”);
provided that if the
aggregate of the Offered Interest and the Non-Offered Interest exceeds the
maximum aggregate number of Units that the Third Party Offeror desires to
purchase, then each Member shall sell its Pro Rata Offered Share of
Units.  “Pro Rata Offered Share” of Units means a number of Units
equal to the product of (x) the quotient determined by dividing (1) the number
of Units offered for sale by such Member by (2) the sum of the Offered Interest
and the Non-Offered Interest and (y) the aggregate number of Units to be sold in
the contemplated Transfer.  If the Non-Offered Member declines to
participate in the proposed transaction or fails to notify the Offered Member of
its intent prior to the expiration of the Offer Notice Period, the Offered
Member may thereafter Transfer the Offered Interest to the Third Party Offeror
on the terms and conditions of the Unsolicited Third Party Offer.  In
the event that the Offered Member and the Third Party Offeror fail to consummate
the Transfer of the Offered Interest within 90 days following the expiration of
the Offer Notice Period, the Non-Offered Member’s rights under this Section 6.6 with
respect to the Offered Interest shall again become effective, and the Offered
Member shall not thereafter Transfer any of the Offered Interest without first
offering such interest to the Non-Offered Member in the manner provided in this
Section
6.6.

       

      (b) Upon any
Transfer to a Third Party Offeror, the Offered Member shall deliver to the
Company and the Non-Offered Member a copy of the document evidencing such
Transfer.

       

      (c) Notwithstanding
anything contained in this Section 6.6,
there shall be no liability on the part of the Offered Member to the Non-Offered
Member if the Non-Offered Tag-Along Sale pursuant to this Section 6.6 is
not consummated for whatever reason.  Whether to effect a transfer of
Interests by the Offered Member is in the sole and absolute discretion of the
Offered Member.

       

      (d) If
Investor is the Non-Offered Member and PDC is the Offered Member of all or a
part of its Interest under this Section 6.6,
Investor’s rights and obligations under this Section 6.6 may
be assigned to and exercised through (in addition to a Permitted Investor
Transferee) a portfolio company Controlled by Investor or a Permitted Investor
Transferee.

       

      SECTION
6.7. Conditions
to Tag-Along Sales and Drag-Along Sales

       

      .  Notwithstanding
anything contained in Sections 6.5 or
6.6, the rights
and obligations of the other Members to participate in a Tag-Along Sale or
Drag-Along Sale are subject to the following conditions:

       

      (a) upon
consummation of such Tag-Along Sale or Drag-Along Sale, all of the Members
participating therein will receive the same form of consideration;

       

      (b) the
Non-Selling Member or Non-Offered Member participating therein shall not be
obligated to pay any expenses incurred in connection with any unconsummated
Tag-Along Sale or Drag-Along Sale (other than such Non-Selling Member’s or
Non-Offered Member’s own out-of-pocket expenses, for which such Non-Selling
Member or Non-Offered Member shall bear sole responsibility), and each such
Member shall be obligated to pay only its pro rata share (based on the amount of
the purchase price received) of expenses incurred in connection with a
consummated Tag-Along Sale or Drag-Along Sale to the extent such expenses are
incurred for the benefit of all such Members and are not otherwise paid by the
Company or another person;

       

      (c) the
Non-Selling Member or Non-Offered Member may not, without the written consent of
such Non-Selling Member or Non-Offered Member, become obligated with respect to
(A) any representation or warranty other than (x) a representation and warranty
that relates solely to such Non-Selling Member or Non-Offered Member’s title to
its Interest and its authority and capacity to execute and deliver the subject
purchase and sale agreement or (y) a representation and warranty that relates to
the Company and its operations which each Member is severally making to the
purchaser, or (B) any indemnity obligation beyond a pro rata portion (based
on and limited to the value of consideration received by such Non-Selling Member
or Non-Offered Member in the Tag-Along Sale or Drag-Along Sale) of the indemnity
obligations which obligate the Selling Member or Offered Member and the
Non-Selling Member or Non-Offered Member and then, such indemnity obligations
shall be several and not joint or (C) any other continuing obligation on such
Non-Selling Member or Non-Offered Member  in favor of any other person
following the Transfer of such Non-Selling Member or Non-Offered Member’s
Interests (other than obligations relating to representations and warranties
that relate solely to such Non-Selling Member or Non-Offered Member and not to
any other Member or the indemnification obligation provided for in clause (B)
above);

       

      (d) the
Non-Selling Member or Non-Offered Member shall not be obligated to consummate
such Tag-Along Sale or Drag-Along Sale with respect to its Interest unless the
Selling Member or Offered Member consummates such Tag-Along Sale or Drag-Along
Sale with respect to their Interest on the terms and conditions contemplated by
the Third Party Offer or Unsolicited Third Party Offer; and

       

      (e) the
Non-Selling Member or Non-Offered Member shall cooperate in good faith with and
provide all reasonably necessary information and documentation (excluding
confidential, proprietary or competitively-sensitive information and
documentation) for, and generally take all commercially reasonable action
necessary to assist in, the consummation of a Tag-Along Sale or Drag-Along Sale
with respect to its Interest.

       

      SECTION
6.8. Eastern
OpCo Drag-Along; Option

       

      .

       

      (a) For so
long as the Services Agreement remains in effect, at the election of Investor,
upon a Final Exit Event, PDC shall be obligated to transfer all of the equity
interests of Eastern OpCo to the Third Party Purchaser or Third Party Offeror or
acquirer.

       

      (b) The
Company, at the option of the Investor Designees, shall have the option to
purchase all of the equity interests of Eastern OpCo from PDC for $1, which
option shall be exercisable immediately after the expiration of all covenants
and restrictions preventing the exercise of such option in the
Indenture.  Upon exercise of such option, PDC shall deliver good and
marketable title to the equity interests of Eastern OpCo to the Company, free
and clear of all liens, charges, claims and encumbrances.

       

      ARTICLE
VII

       

      DISSOLUTION;
WINDING UP

       

      SECTION
7.1. Dissolution

       

      .  The
Company shall be dissolved only upon the first to occur of any of the following
events (“Dissolution
Events”):

       

      (a) the
election of the Board of Managers;

       

      (b) the
election to dissolve the Company at any time after the occurrence of a
Termination Event by the Members not committing the breach or violation of this
Agreement that caused the Termination Event;

       

      (c) the
election to dissolve the Company by either Investor or PDC following a sale of
substantially all of the Company’s assets;

       

      (d) the
election to dissolve the Company by a Member after a Deadlock under Section
2.5(a);

       

      (e) the
election to dissolve the Company by PDC after an Investor Default under Section 4.3(d)(1);
or

       

      (f) the entry
of a decree of judicial dissolution under Section 18-802 of the
Act.

       

      SECTION
7.2. Winding
Up

       

      .  Upon
the occurrence of a Dissolution Event, the business of the Company shall be
wound up and shall, except to the extent consistent with such winding up,
cease.  The Board of Managers (or a Member acting pursuant to Section 2.5(a) or
Section 4.3(d))
shall act as liquidator unless it elects to appoint one or more other Persons,
who may or may not be Members, to act as Liquidator.  The Liquidator
shall proceed diligently to wind up the business and affairs of the Company and
may determine all matters in connection with the winding up of the Company,
including any arrangements to be made with creditors, the amount or necessity of
reserves to cover contingent or unforeseen liabilities, and whether, to what
extent, for what consideration, and on what terms any or all of the assets of
the Company are to be sold.  The Liquidator may in its discretion
retain any obligations due to the Company and distribute (or apply in
satisfaction of Company obligations) the proceeds thereof as
collected.  The Liquidator may not engage in transactions with the
assets of the Company from which it receives a personal benefit; provided, however, that if
the Liquidator is a Member, it shall not be precluded from bidding for and
acquiring Company assets in connection with a liquidation for consideration
mutually agreed by such Member and the Board of Manager Designees of the other
Member.  The costs and expenses of the winding up and liquidation of
the Company shall be borne by the Company.  Until final distribution,
the Liquidator shall continue to manage the Company’s affairs and, if the
Liquidator is a Person other than the Board of Managers, shall, to the extent
consistent with the Liquidator’s obligations, have all of the power and
authority of the Board of Managers and be entitled to indemnification and
advance payment of expenses in accordance with the provisions of this Agreement
as if the Liquidator were the Board of Managers.  The Liquidator shall
give or cause to be given all notices to creditors required by applicable Law
and, in addition to any reports otherwise required by this Agreement to be given
to the Members, shall cause a proper accounting of the Company’s assets,
liabilities and operations to be made and furnished to the Members as of the
date all assets of the Company are finally distributed to the Members or applied
in payment of Company liabilities.

       

      SECTION
7.3. Application
and Distribution of Proceeds of Liquidation

       

      .  During
or upon completion of the winding up of the Company, the assets of the Company
shall be applied and distributed by the Liquidator, in one or more installments,
in the following order and priority:

       

      (a) to the
payment, or provision for payment, of the costs and expenses of the winding
up;

       

      (b) to the
payment, or provision for payment, of creditors of the Company (including
Members, other than in respect of Distributions) in the order of priority
provided by Law;

       

      (c) to the
establishment of any reserves deemed necessary or appropriate by the Liquidator
to provide for contingent or unforeseen liabilities of the Company;
and

       

      (d) the
balance shall be distributed to the Members in accordance with Section 5.5.

       

      SECTION
7.4. Certificate
of Cancellation

       

      .  On
completion of the distribution of Company assets as provided herein, the
Liquidator (or such other Person or Persons as the Act may require or permit)
shall file a Certificate of Cancellation with the Secretary of State of the
State of Delaware, cancel any other filings as necessary and take such other
actions as may be necessary to terminate the existence of the
Company.

       

      ARTICLE
VIII

       

      LIABILITY
AND INDEMNIFICATION

       

      SECTION
8.1. No
Liability for Company Debts

       

      .  Except
as expressly provided in the Act, the debts, obligations and liabilities of the
Company, whether arising in contract, tort or otherwise, shall be solely the
debts, obligations and liabilities of the Company, and no Covered Person shall
be liable for any such debts, obligations or liabilities.

       

      SECTION
8.2. Indemnification

       

      .  To
the fullest extent permitted by Law, the Company shall indemnify and defend each
Covered Person from and against any and all Covered Losses arising from any and
all claims, demands, causes of action, actions, suits or proceedings, whether
civil, criminal, administrative or investigative, in which such Covered Person
may be involved, or is threatened to be involved, as a party or otherwise, by
reason of its status as such, regardless of whether any of the foregoing arise
from the sole, partial or concurrent negligence of such Covered Person; provided, however, that the
Company shall not indemnify a Covered Person for Covered Losses arising directly
from fraud, intentional or willful misconduct or a knowing violation of the
Law.  The termination of any action, suit or proceeding by judgment,
order, settlement or upon a plea of nolo contendere, or its equivalent shall
not, of itself, create a presumption that the Covered Person failed to meet the
standards for indemnification set forth in the immediately preceding
sentence.  Any indemnification hereunder shall be satisfied solely out
of the assets of the Company.  In no event may a Covered Person
subject the Members to personal liability by reason of these indemnification
provisions.  The indemnification provided by this Section 8.2 shall be
in addition to, but not duplicative of, any other rights to which a Covered
Person or any other Person may be entitled under any agreement to which the
Company is a party, pursuant to any vote of the Members, as a matter of Law or
otherwise, and shall continue as to a Covered Person who has ceased to serve in
such capacity and shall inure to the benefit of the heirs, successors, assigns
and administrators of the Covered Person.

       

      SECTION
8.3. Advance
Payment and Appearance as a Witness

       

      .  To
the fullest extent permitted by applicable Law, expenses (including legal fees)
incurred by a Covered Person in defending any claim, demand, cause of action,
action, suit or proceeding shall, from time to time, be advanced by the Company
prior to the final disposition of such claim, demand, cause of action, action,
suit or proceeding upon receipt by the Company of an undertaking by or on behalf
of the Covered Person to repay such amount if it shall be finally determined
that the Covered Person is not entitled to be indemnified as authorized in Section
8.2.  The Company shall pay or reimburse reasonable expenses
incurred by a Person who is or was a Member, Manager, officer or employee of the
Company in connection with their appearance as a witness or other participant in
a proceeding at a time when they are not a named defendant or respondent in the
proceeding.

       

      SECTION
8.4. Insurance

       

      .  The
Company may procure and maintain insurance, to the extent and in such amounts as
Approved by the Board of Managers, in its sole discretion, on behalf of Covered
Persons and such other Persons as the Board of Managers shall determine, against
any liability that may be asserted against or expenses that may be incurred by
any such Person in connection with the activities of the Company or such
indemnities, regardless of whether the Company would have the power to indemnify
such Person against such liability under the provisions of this
Agreement.  The Company may enter into indemnity contracts with
Covered Persons and adopt written procedures pursuant to which arrangements are
made for the advancement of expenses and the funding of obligations under Section 8.3 and
containing such other procedures regarding indemnification as are
appropriate.

       

      SECTION
8.5. Nonexclusivity
of Rights

       

      .  The
indemnification and advancement of expenses provided by, or granted pursuant to,
this Article
VIII shall not be deemed exclusive of, and shall not limit, any other
rights or remedies to which any Covered Person may be entitled or which may
otherwise be available to any Covered Person at Law or in equity.

       

      SECTION
8.6. Savings
Clause

       

      .  If
all or any part of this Article VIII shall be
invalidated for any reason by any court of competent jurisdiction, the Company
shall nevertheless indemnify and hold harmless each Covered Person, and may
indemnify and hold harmless any other Person, for costs, charges, expenses
(including attorneys’ fees), judgments, fines and amounts paid in settlement, in
connection with any claim, to the fullest extent permitted by any portion of
this Article
VIII not invalidated and to the fullest extent otherwise permitted by
applicable Law.

       

      SECTION
8.7. Company
Responsibility for Indemnification Obligations

       

      .  Notwithstanding
anything to the contrary in this Agreement, the Company and the Members hereby
acknowledge that a Covered Person may have rights to indemnification,
advancement of expenses and/or insurance pursuant to charter documents or
agreements with the employer of such Covered Person, a Member or a direct or
indirect parent or brother/sister Affiliate of the Covered Person or Member
(collectively, the “Last Resort
Indemnitors”).  On the other hand, a Covered Person may also
have rights to indemnification, advancement of expenses and/or insurance
provided by a subsidiary of the Company or pursuant to agreements with third
parties in which the Company or any subsidiary of the foregoing has an interest
(collectively, the “First Resort
Indemnitors”).  Notwithstanding anything to the contrary in
this Agreement, as to each Covered Person’s rights to indemnification and
advancement of expenses pursuant to this Article VIII,
the Company and the Members hereby agree that:

       

      (a) the First
Resort Indemnitors, if any, are the indemnitors of first resort (i.e., their indemnity
obligations to such Covered Person are primary and any obligation of the Company
to advance expenses or to provide indemnification for the Claims incurred by
such Covered Person are secondary), and the First Resort Indemnitors shall be
obligated to indemnify such Covered Person for the full amount of all Claims and
expenses covered by this Article VIII, to
the full extent of their indemnity obligations to the Covered Person and to the
extent of the First Resort Indemnitors’ assets legally available to satisfy such
obligations, without regard to any rights the Covered Person may have against
the Company or the Last Resort Indemnitors;

       

      (b) the
Company is the indemnitor of second resort (i.e., its indemnity and
advancement of expense obligations to such Covered Person are secondary to the
obligations of any First Resort Indemnitors, but precede any indemnity and
advancement of expense obligations of any Last Resort Indemnitors), and the
Company shall be liable for the full amount of all remaining Claims and expenses
covered by this Article VIII
after the application of Section 8.7(a),
to the full extent of its obligations under the other subsections of this Article VIII and
to the extent of the Company’s assets legally available to satisfy such
obligations, without regard to any rights such Covered Person may have against
the Last Resort Indemnitors; and

       

      (c) the Last
Resort Indemnitors, if any, are the indemnitors of last resort and shall be
obligated to indemnify such Covered Person for any remaining Claims and expenses
covered by this Article VIII
only after the application of Sections 8.7(a)
and 8.7(b).

       

      The
Company and the Members further agree that no advancement or payment by any Last
Resort Indemnitors on behalf of a Covered Person with respect to any Claim or
expense covered by the other sections of this Article VIII
shall affect the foregoing and such Last Resort Indemnitors shall have a right
of contribution and/or be subrogated to the extent of such advancement or
payment to all of the rights of recovery of such Covered Person against the
Company.  The Last Resort Indemnitors, if any, are express third party
beneficiaries of the terms of this Section 8.7.

       

      ARTICLE
IX

       

      CERTAIN
TAX MATTERS

       

      SECTION
9.1. Partnership
Classification

       

      .  Except
with the prior written consent of all Members, the Company shall not (i) convert
or reorganize into any other legal form or take any action that would result in
the Company no longer being classified as a partnership for federal income tax
purposes, (ii) elect under Treasury Regulation § 301.7701-3 or otherwise to be
classified other than as a partnership, or (iii) elect to exclude the Company
from the application of the provisions of subchapter K of chapter 1 of subtitle
A of the Code or any similar provisions of applicable state Law and no Member
shall take any action inconsistent with such limitations.

       

      SECTION
9.2. Tax
Returns and Tax Information

       

      . The CEO
shall, subject to the approval of the Board of Managers, cause the Company to
maintain the Capital Accounts of the Members in accordance with Section
4.4.  The CEO shall cause all required federal, state, local
and foreign tax returns of the Company to be prepared and timely
filed.  Each Member shall have the right to review the Company’s
United States federal income tax return prior to the filing of such
return.  Each Member shall furnish to the Company all pertinent
information in its possession relating to the Company, its assets and operations
necessary to enable the Company’s tax returns to be prepared and timely
filed.

       

      SECTION
9.3. Tax
Elections

       

      .  Except
as provided otherwise in this Agreement, the CEO shall, subject to the approval
of the Board of Managers, have the authority to make all tax elections permitted
to be made by the Company; provided, however, that no
election shall be made to classify the Company as an association taxable as a
corporation without the consent of all the Members.  The CEO shall, at
the request of any Member, cause the Company to make an election under Section
754 of the Code.

       

      SECTION
9.4. Tax
Matters Partner

       

      .  PDC
shall be the “tax matters partner” of the Company within the meaning of
Section 6231(a)(7) of the Code, and is authorized to represent the Company
in connection with any examination of the Company’s affairs by any tax
authority, including administrative and judicial proceedings, and to expend
Company funds for professional services and the costs associated
therewith.  The tax matters partner shall take such action as may be
necessary to cause to the extent possible each other Member to become a “notice
partner” within the meaning of Section 6223 of the Code.  Any Member
may participate at such Member’s expense in any such administrative or judicial
proceeding to the extent permitted by Law.  The tax matters partner
shall keep the other Members fully informed of all facts and developments
relating to any tax audits, exams, litigation, or other tax proceedings and
shall forward to each other Member copies of all significant written
communications it may receive in that capacity.  The Company shall
reimburse PDC for all reasonable costs incurred by PDC in connection with PDC’s
duties and obligations as tax matters partner of the Company; provided, that to the extent
reasonably practicable, PDC shall not incur any such costs without the prior
approval of the Board of Managers, which approval shall not be unreasonably
withheld.  The tax matters partner shall not bind any Member to a
settlement agreement without obtaining the consent of such Member.

       

      SECTION
9.5. Withholding

       

      .  The
Company may withhold and pay to any applicable tax authority all amounts
required by any Law to be withheld by the Company from or with respect to
Distributions to a Member or from or with respect to a Member’s distributive
share of Company taxable income or loss (or item thereof).  Each
Member shall timely provide to the Company all information, forms and
certifications necessary or appropriate to enable the Company to comply with any
such withholding obligation and covenants to the Company that the information,
forms and certifications furnished by it shall be true and accurate in all
respects.  Any amounts so withheld in respect of a Member shall be
treated as a distribution to such Member for all purposes of this
Agreement.

       

      SECTION
9.6. Tax
Terminations

       

      .  If
either PDC and its Controlled Affiliates (the “PDC Group”) or
Investor and its Controlled Affiliates (“Investor Group”),
Transfers, in the aggregate, a fifty percent (50%) interest in the capital and
profits of the Company within a twelve (12) month period, the Member to which
such group relates, on the one hand, shall indemnify and hold harmless the other
Members, on the other hand, for any deferral of depreciation deductions
allocable to the other Members as a result of any Code Section 708(b)(1)(B)
termination caused by the Transfer, determined using an annual discount rate of
ten percent (10%) and the Assumed Tax Rate.

       

      ARTICLE
X

       

      BOOKS
AND RECORDS; REPORTS

       

      SECTION
10.1. Maintenance
of and Access to Books and Records

       

      .  At
all times until the dissolution and termination of the Company, the Company
shall maintain separate books, records and accounts that accurately and fairly
reflect in reasonable detail the transactions and dispositions of the assets of
the Company.  In addition, the Company shall keep and maintain at its
principal office all Records and information required to be kept and maintained
in accordance with the Act and shall make such information available to any
Member or representative requesting the same within five days after receipt of a
written request by the Company.  The Board of Managers shall permit
each of the Members, from time to time and at reasonable intervals, (i) to
examine, audit and make copies of the Records of the Company as well as all such
other data and information in the possession or control of the Board of Managers
concerning the Company, Company properties and the ownership and operation
thereof, which Records shall be available to the Members or their
representatives at all reasonable times at the principal office of the Company,
or at such other office where such information is maintained, upon the written
request of any Member, and (ii) to discuss the business, financial condition and
results of operations of the Company with officers, accountants, and other
representatives of the Company.

       

      SECTION
10.2. Bank
Accounts

       

      .  The
Board of Managers shall cause to be established and maintained for and in the
name of the Company one or more bank or investment accounts or
arrangements.

       

      SECTION
10.3. Reports

       

      .  The
Company shall furnish the following to the Members:

       

      (a) Within 30
days after the end of each month: monthly financial statements (which shall be
prepared from the Company’s books and records and need not be GAAP) and
operational reports, including drilling reports and production estimates for
such month;

       

      (b) Within 45
days after the end of each Fiscal Quarter: (i) the unaudited quarterly financial
statements for such fiscal quarter; (ii) a report of the activities during such
fiscal quarter in the form reasonably satisfactory to Investor; (iii)
year-to-date figures compared to the Development Plan and Budget, with variances
delineated; (iv) a summary of hedging positions; and (v) an updated land
summary

       

      (c) Within 90
days after the end of each Fiscal Year (beginning with the 2009 Fiscal Year):
(i) audited consolidated financial statements prepared in accordance with GAAP
by a nationally-recognized independent accounting firm appointed by the Board of
Managers (unless the Board decides otherwise), together with a copy of the
auditor’s letter to management; (ii) year-to-date figures compared to the
Development Plan and Budget, with variances delineated; and (iii) an annual
reserve report prepared by an independent engineer appointed by the Board of
Managers;

       

      (d) Within 45
days after the end of each Allocation Year, an estimated Schedule K-1, (ii)
within 60 days after the end of each Allocation Year, a draft Schedule K-1, and
(iii) within 75 days after the end of each Allocation Year, a final Schedule
K-1, along with copies of all other federal, state, or local income tax returns
or reports filed by the Company for the previous year as may be required as a
result of the operations of the Company;

       

      (e) Any known
defaults under material contracts and material litigation proceedings;
and

       

      (f) Any other
information or reports reasonably requested by any Member.

       

      SECTION
10.4. Fiscal
Year

       

      .  The
fiscal year of the Company shall be the calendar year (“Fiscal
Year”).

       

      ARTICLE
XI

       

      DEFINITIONS

       

      SECTION
11.1. Definitions

       

      . Except
as otherwise required by the context, the following terms shall have the
following meanings:

       

      “Act”
means the Delaware Limited Liability Company Act, as amended from time to time,
or any successor statute thereto.

       

      “Adjusted
Capital Account” means, as of the end of each Allocation Year, the balance in a
Member’s Capital Account (a) increased by (i) any additional Capital
Contributions the Member makes or is obligated to make, or is treated as
obligated to make pursuant to the provisions of Treasury Regulations §
1.704-1(b)(2)(ii)(c), (ii) the amount such Member is deemed obligated to restore
pursuant to Treasury Regulations § 1.704-2(g) (1)), and (iii) the amount such
Member is deemed obligated to restore pursuant to Treasury Regulations §
1.704-2(i)(5)), and (b) decreased by any adjustments, allocations or
distributions described in Treasury Regulations §§ 1.704-1(b)(2)(ii)(d)(4),
(5) and (6).  This definition shall be interpreted and applied
consistently with the provisions of Treasury Regulations
§ 1.704-1(b)(2)(ii)(d).

       

      “Affiliate”
means, with respect to any Person, any other Person that directly, or indirectly
through one or more intermediaries, Controls, is Controlled by, or is under
common Control with, such Person.

       

      “Agreed
Value” means the value set forth opposite PDC’s name on Exhibit C under
the column “Initial
Capital Contributions.”

       

      “Allocation
Year” means (a) the Company’s taxable year for U.S. federal income tax purposes,
or (b) any portion of the period described in clause (a) for which the Company
is required to allocate Net Income, Net Loss, and other items of Company income,
gain, loss or deduction for U.S. federal income tax purposes.

       

      “AMI” has
the meaning given such term in Exhibit D.

       

      “Approval
of the Board of Managers” means the approval or consent of a majority of the
Managers and the phrase “Approved by the Board of Managers” has a correlative
meaning.

       

      “Assumed
Tax Rate” means, as of the time of determination, the highest combined marginal
federal, state and local income tax rates that apply to an individual residing
in New York County, New York, taking into account rate differences that may
apply to the character of the income so allocated, without reduction for
deductions or credits not related to the activities of the Company.

       

      “Available
Cash” means that amount of cash on hand (including cash equivalents and
temporary investments of Company cash but excluding cash proceeds from
transactions in clauses (w) through (z) in Section 5.5(a)) from time to time
that the Board of Managers determines in its sole discretion is in excess of
amounts required to pay or provide for payment of existing and projected
obligations, capital expenditures and acquisitions, and to provide a reasonable
reserve for working capital and contingencies.

       

      “Bankruptcy
Event” means the occurrence of any of the following events with respect to a
Member: (i) voluntarily filing a petition in bankruptcy, making an assignment
for the benefit of the creditors of the Member, (ii) filing a petition or answer
seeking, consenting to or acquiescing in any reorganization, arrangement,
readjustment, liquidation, dissolution or similar relief with respect to the
Member under any statute, Law or regulation, or (iii) taking any action seeking,
consenting to or acquiescing in the appointment of a trustee, receiver or
liquidator of the Member or any substantial part of the properties and assets of
the Member.

       

      “Book
Basis” means, with respect to each Company asset, the adjusted basis of the
asset for federal income tax purposes, except that (a) the initial Book Basis of
an asset other than money contributed by a Member to the Company shall be the
fair market value of the asset on the date of contribution, as agreed by the
contributor and the Board of Managers (excluding designees of any Managers
appointed by the contributor), (b) upon the occurrence of a Revaluation Event,
the Book Basis of all Company assets (including intangibles) shall be adjusted
to their respective fair market values (taking Section 7701(g) of the Code into
account) on such date, as determined by the Board of Managers, (c) the Book
Basis of any Company asset distributed to any Member will be adjusted to equal
the fair market value (taking Section 7701(g) of the Code into account) of such
asset on the date of distribution as agreed by the Board of Managers (excluding
designees of any Managers appointed by the recipient) and the recipient, (d) the
Book Basis of Company assets shall be increased (or decreased) to reflect any
adjustments to the adjusted basis of such assets pursuant to
Sections 734(b) or 743(b) of the Code, but only to the extent that such
adjustments are taken into account in determining Capital Accounts pursuant to
Treasury Regulations Section 1.704-1(b)(2)(iv)(m) and Section 5.2(g); provided, however, that Book Basis
shall not be adjusted to the extent the Board of Managers determines that an
adjustment pursuant to clause (b) above is necessary or appropriate in
connection with a transaction that would otherwise result in an adjustment
pursuant to this clause (d), and (e) if the Book Basis of any Company asset has
been determined pursuant to the preceding subsections (b) or (d), the Book Basis
of the asset shall thereafter be adjusted by Simulated Depletion Deductions or
Book Depreciation in lieu of any depletion, depreciation, amortization or other
cost recovery deductions otherwise allowable for federal income tax
purposes.

       

      “Book
Depreciation” means, with respect to any depreciable or amortizable Company
asset, an amount that bears the same ratio to the Book Basis of such asset as
the amount of depreciation, amortization or other cost recovery deductions with
respect to such asset, computed for federal income tax purposes, bears to the
adjusted tax basis of such asset; provided, however, that, if the
adjusted tax basis of the asset is zero, Book Depreciation shall be determined
under any reasonable method selected by the Board of Managers, and; provided, further, if such
asset is subject to adjustments under the remedial allocation method of Treasury
Regulations § 1.704-3(d), Book Depreciation shall be determined under
Treasury Regulation § 1.704-3(d)(2).

       

      “Business
Day” means a day, other than Saturday, Sunday or any other day on which
commercial banks in New York, New York are authorized or required by Law to
close.

       

      “Capital
Account” means the account established for each Member pursuant to Section 4.4.

       

      “Capital
Contribution” means the amount of money and the initial Book Basis of any asset
other than money (net of liabilities secured thereby that the Company is treated
as having assumed or taken subject to pursuant to Section 752 of the Code)
contributed by a Member or a Member’s predecessors in interest to the capital of
the Company.

       

      “Catch-Up
Period” means the period beginning on the date hereof and ending when Investor
has satisfied the Minimum Funding Obligation.

       

      “Closing”
means the closing of the transactions contemplated by this Agreement and the
Transaction Agreements.

       

      “Closing
Date” means October 29, 2009.

       

      “Code”
means the Internal Revenue Code of 1986, as amended (including any corresponding
provisions of succeeding Law).

       

      “Confidential
Information” means any proprietary or confidential information of or relating to
the Company or, with respect to each Member, the other Member, including any
business information, intellectual property, trade secrets or other information
relating to the respective businesses, operations, assets or liabilities of the
Company or the Members; provided, however, that any information
that is generally available to the public (other than through a breach by the
party disclosing the same of its obligations under this Agreement) shall not be
deemed “Confidential Information”; and provided further that use of
the name “Lime Rock” shall be treated by PDC as Confidential
Information.

       

      “Continuing
Director” means, as of any date of determination, any member of the Board of
Directors of PDC who (a) was a member of such Board of Directors on the Closing
Date or (b) was nominated for election or elected to such Board of Directors
with the approval of a majority of the Continuing Directors who were members of
such Board of Directors at the time of such nomination or election.

       

      “Contributed
Assets” means PDC’s interest in the properties and rights, together with
associated liabilities, obligations and encumbrances, excluding the Retained
Assets, to be contributed to the Company pursuant to the Contribution Agreement,
as more specifically described and provided therein.

       

      “Contribution
Agreement” means the Contribution Agreement, dated as of the date hereof, by and
between the Company and PDC.

       

      “Control,”
“Controlling” and “Controlled by” mean the ability (directly or indirectly
through one or more intermediaries) to direct or cause the direction of the
management or affairs of a Person, whether through the ownership of voting
interests, by contract or otherwise.

       

      “Controlled
Affiliate” means, (a) with respect to PDC or any other Person, all of the
Affiliates Controlled by PDC or such Person, as the case may be, and (b) with
respect to Investor or any Permitted Investor Transferee, any Affiliate
Controlled by any of Investor, Lime Rock Partners V, L.P., Lime Rock Partners GP
V, L.P., LRP GP V, Inc. or Lime Rock Management LP; provided, that no Lime Rock
Resources Entity shall be a Controlled Affiliate of any of the foregoing
entities.

       

      “Covered
Losses” means any and all losses, assessments, fines, penalties, administrative
orders, obligations, judgments, amounts paid in settlement, costs, expenses,
liabilities and damages (whether actual, consequential or punitive), including
interest, penalties, reasonable court costs and attorney’s fees, disbursements
and costs of investigations, deficiencies, levies, duties and
imposts.

       

      “Covered
Person” means (i) any Member, any Affiliate of a Member or any shareholder,
partner, member, manager, director, officer, employee, representative or agent
of a Member or any of its Affiliates, (ii) any officer of the Company and (iii)
any member of the Board of Managers, in each case to the extent any such Person
is acting in such capacity in connection with the business of the
Company.

       

      “Development
Plan and Budget” shall have the meaning provided in Section 2.4(c); provided, however, that for
first period after the Closing Date shall mean the Initial Development Plan and
Budget attached hereto as Exhibit A.

       

      “Distributions”
means any distributions from the Company made pursuant to Section 5.5 or
7.3(d), whether
from operations or a sale or other disposition of assets and whether prior to or
in connection with a liquidation of the Company.

       

      “Drilling
Partnerships” means the partnerships referred to in Schedule 1.3 of the
Contribution Agreement.

       

      “Eastern
OpCo” has the meaning given to such term in the Services Agreement.

       

      “Electronic
Transmission” means a form of communication that (i) does not directly involve
the physical transmission of paper, (ii) creates a record that may be retained,
retrieved, and reviewed by the recipient, and (iii) may be directly reproduced
in paper form by the recipient through an automated process.

       

      “Fair
Market Value” means (a), if such offered consideration is a common equity
security traded on the New York Stock Exchange or NASDAQ Stock Exchange, the
average closing price of such security on such exchange for the 10 trading days
ending on the last trading day preceding the date of the Offer Notice or (b),
for all other non-cash consideration, the value determined by a nationally
recognized investment banking firm selected by the Offered Member from a list of
three such firms provided by Non-Offered Member.  Each Member will
bear half of the fees and costs of such investment banking firm.

       

      “Final
Exit Event” means the earliest to occur of a merger, consolidation, sale of all
or substantially all of the assets of the Company (or, if the Company is a
holding company, then of the Company’s subsidiaries) in one or a series of
related transactions or sale of all the Interests in the Company to a Third
Party Purchaser or a Third Party Offeror.

       

      “Fiscal
Quarter” means any three-month period commencing on January 1, April 1,
July 1 and October 1 and ending on the last date before the next such
date.

       

      “GAAP”
means those generally accepted accounting principles and practices consistently
applied that are recognized in the United States of America as such by the
Financial Accounting Standards Board (or any generally recognized successor
thereto).

       

      “Governmental
Authority” means any nation or government, any state, city, municipality or
political subdivision thereof, any federal or state court and any other agency,
body, authority or entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to
government.

       

      “IDCs”
shall have the meaning assigned to the term “intangible drilling and development
costs” in Section 263(c) of the Code.

       

      “Indebtedness”
means, with respect to any Person, any indebtedness of such Person in respect of
borrowed money or evidenced by bonds, notes, debentures or similar instruments
or letters of credit (or reimbursement agreement in respect thereof) or
representing capital lease obligations or the balance deferred and unpaid of the
purchase price of any property (except any such balance that constitutes an
accrued expense or trade payable arising in the ordinary course of business), if
and to the extent any of the foregoing indebtedness would appear as a liability
upon a balance sheet of such Person prepared in accordance with GAAP, as well as
all indebtedness of others secured by a lien, security interest or other
encumbrance on any asset of such Person (whether or not such indebtedness is
assumed by such Person) and, to the extent not otherwise included, the guarantee
by such Person of any indebtedness of any other Person.

       

      “Indenture”
means the Indenture, dated as of February 8, 2008, between PDC and The Bank of
New York, as supplemented.

       

      “Interest”
means, with respect to any Member, the entire interest of such Member in the
Company, including (i) the right of such Member to share in the profits of the
Company, (ii) the right of such Member to Distributions, (iii) the right to vote
under this Agreement pursuant to the terms hereof and (iv) the right to
designate Managers pursuant to the terms hereof.

       

      “Investor
Preference Amount” means (a) Investor’s aggregate Capital Contributions to
the Company, but not more than the sum of the Minimum Funding Obligation and, if
any, the amount of any Capital Contribution by Investor made pursuant to Section 4.3(f), minus
(b) the amount of any uncured Investor Default if the Distribution of cash is
being made in connection with a liquidation of the Company initiated by PDC
pursuant to Section 4.3(d).

       

      “JV OpCo”
has the meaning given such term in the Services Agreement.

       

      “Law”
means any applicable constitutional provision, statute, act, code (including the
Code), law, regulation, rule, ordinance, order, decree, ruling, proclamation,
resolution, judgment, decision, declaration, or interpretative or advisory
opinion or letter of a Governmental Authority having valid
jurisdiction.

       

      “Lime
Rock Resources Entity” means Lime Rock Resources II-A, L.P., Lime Rock Resources
II-C, L.P., Lime Rock Resources A, L.P., Lime Rock Resources B, L.P., Lime Rock
Resources C, L.P., any future entity Controlled by the same Persons who control
the foregoing entities, and any subsidiary or portfolio company of such
entities.

       

      “Liquidator”
means a Person appointed as liquidator by the Board of Managers or a Member
pursuant to the provisions hereof.

       

      “Members”
means any Person admitted as a member of the Company as of the date hereof or at
any time hereafter in accordance with this Agreement (but such term does not
include any Person who has ceased to be a member of the Company).

       

      “Minimum
Funding Obligation” means (a) $158,500,000, plus (b) any Additional PDC
Contribution, minus (c) the Special PDC Withdrawal; provided, that in no event
shall the total exceed $102,000,000 without Investor’s consent.  For
the avoidance of doubt, the definition of “Minimum Funding Obligations” excludes
any amount that Investor contributes pursuant to Section
4.3(f).

       

      “Net
Income” and “Net Loss” means, the taxable income or loss of the Company, as the
case may be, as determined in accordance with Section 703(a) of the Code (but
including in taxable income or loss, for this purpose, all items of income,
gain, loss or deduction required to be stated separately pursuant to Section
702(a) of the Code), for federal income tax purposes as of the close of each of
the Allocation Years of the Company, computed with the following
adjustments:

       

      (a) tax-exempt
income received by the Company will be included in gross income;

       

      (b) expenditures
described in Section 705(a)(2)(B) of the Code will be treated as deductible
expenses;

       

      (c) in lieu
of the depreciation, amortization and other cost recovery deductions taken into
account in computing such taxable income or loss, there shall be taken into
account Book Depreciation for such Allocation Year;

       

      (d) gain or
loss from the disposition of any Company asset that, because of the application
of the provisions of Treasury Regulations §§ 1.704-1(b)(2)(iv)(d) or (f), has a Book Basis that
differs from the asset’s adjusted tax basis, will be computed based upon the
Book Basis (rather than the adjusted tax basis) of such asset in accordance with
the provisions of Treasury Regulations §§ 1.704(b)(2)(iv)(g) and 1.704-1(b)(4)(i);

       

      (e) any
increase or decrease to Book Basis resulting from a Revaluation Event or from
the distribution of any Company asset to a Member shall be taken into account as
gain or loss, respectively, in computing Net Income or Net Loss;

       

      (f) Simulated
Gain shall be added to such taxable income or loss;

       

      (g) to the
extent an adjustment to the adjusted tax basis of any Company asset pursuant to
Section 734 of the Code is required pursuant to Treasury Regulations
§ 1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital
Accounts as a result of a distribution other than in liquidation of a Member’s
Units, the amount of such adjustment shall be treated either as an item of gain
(if the adjustment increases the basis of the asset) or an item of loss (if the
adjustment decreases the basis of the asset) from the disposition of the asset
and shall be taken into account for purposes of computing Net Income and Net
Loss; and

       

      (h) Any items
of income, gain, loss, or deduction allocated pursuant to any provision of Section 5.2 will be
excluded from the computation of Net Income and Net Loss for purposes of
applying Section
5.1.

       

      “Oil and
Gas Property” shall have the meaning assigned to the term “property” in
Section 614 of the Code.

       

      “PDC
Change of Control” means (a) any “person” or “group” of related persons (as such
terms are used in Section 13(d) of the
Securities Exchange Act of 1934, as amended) is or becomes a beneficial owner
(as such term is used in Rule 13d-3 and Rule 13d-5 of the Securities Exchange
Act of 1934, as amended), directly or indirectly, of more than 50% of PDC’s
common stock or (b) the first day on which a majority of the members of the
Board of Directors of PDC are not Continuing Directors.

       

      “Permitted
Investor Transferee” means any private equity fund managed or Controlled by Lime
Rock Management LP and the same Persons that, as of the date hereof, Control
Lime Rock Management LP (which shall include any Controlled Affiliates, but
shall exclude any Lime Rock Resources Entities) and that provides to PDC, prior
to any contemplated Transfer, evidence of capitalization sufficient to cover any
remaining funding obligations of Investor hereunder.  For the
avoidance of doubt, no operating portfolio company is a Permitted Investor
Transferee.

       

      “Permitted
Pledge” means any hypothecation, pledge, mortgage or other encumbrance under or
permitted by PDC revolving commercial lending agreements or indentures; provided that any foreclosure
on a pledged Interest shall not be a Permitted Pledge.

       

      “Person”
has the meaning given to such term in the Act.

       

      “Prime
Rate” means, as of any date, the prime rate of interest most recently determined
and published in The Wall
Street Journal as the “WSJ Prime Rate.”

       

      “Records”
means all books, records and other documentation, both written and electronic,
customarily used to conduct an oil and gas exploration and development
business.

       

      “Retained
Assets” has the meaning given to such term in the Contribution
Agreement.

       

      “Revaluation
Event” means, except as otherwise agreed by the Board of Managers each of the
following events: (i) the acquisition of an additional Interest in the Company
by any new or existing Member in exchange for more than a de minimis Capital
Contribution, (ii) the Distribution by the Company to a Member of more than a
de minimis amount of
money or other property as consideration for an Interest in the Company, (iii)
the liquidation of the Company within the meaning of Treasury Regulations §
1.704-1(b)(2)(ii)(g) and (iv) the grant of an Interest as consideration for the
provision of services to or for the benefit of the Company by an existing Member
acting in a Member capacity or by a new Member acting in a Member capacity in
anticipation of becoming a Member.

       

      “Securities
Act” means the Securities Act of 1933, as amended.

       

      “Services
Agreement” means the Transition, Administrative and Marketing Services
Agreement, dated as of the date hereof, by and between the Company, Eastern
OpCo, JV OpCo, PDC and Riley.

       

      “Significant
Interest Sales” means a sale or series of related sales in which both Members
participate by selling less than all of their Interests for aggregate proceeds
in excess of 15% of the enterprise value of the Company.

       

      “Simulated
Basis” means the Book Basis of any Oil and Gas Property.

       

      “Simulated
Depletion Deductions” means the simulated depletion allowance computed by the
Company with respect to its Oil and Gas Properties pursuant to Treasury
Regulations § 1.704-1(b)(2)(iv)(k)(2). For purposes of computing Simulated
Depletion Deductions, the CEO, subject to the approval of the Board of Managers,
will apply on a property by property basis  the simulated cost
depletion method or the simulated percentage depletion method (without regard to
the limitations in Section 613A of the Code) under Treasury Regulations
§ 1.704-1(b)(2)(iv)(k)(2), as determined by the CEO, subject to the
approval of the Board of Managers.

       

      “Simulated
Gain” or “Simulated Loss” means the simulated gain or simulated loss,
respectively, computed by the Company with respect to its Oil and Gas Properties
pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(k)(2).

       

      “Super
Majority Vote” means the affirmative vote of Members whose aggregate Sharing
Percentages exceed 60%.

       

      “Termination
Event” means either of the following events: (i) the good faith determination by
another Member’s Board of Managers Designees that a material breach or violation
by a Member of its obligations under this Agreement has occurred, which breach
or violation shall not have been cured within 30 days or waived by the
Non-Defaulting Member(s) after notice thereof shall have been given to the
Defaulting Member or (ii) the occurrence of a Bankruptcy Event.

       

      “Transfer”
means any sale, transfer, assignment, distribution, conveyance, gift,
abandonment, hypothecation, encumbrance, pledge, mortgage or any other
disposition whether voluntary, involuntarily or by operation of law, and whether
effected directly or indirectly; and “Transferring” means the act of making a
Transfer; and  “Transferred” means the condition of a Transfer having
occurred.  For so long as PDC’s securities are listed on a stock
exchange, Transfers of PDC’s securities that do not constitute a PDC Change of
Control shall not be deemed to be Transfers of PDC’s Interest.

       

      “Treasury
Regulations” means temporary and final regulations promulgated under the Code by
the United States Department of the Treasury, as amended (including any
corresponding provisions of succeeding regulations).

       

      SECTION
11.2. Other
Defined Terms

       

      .  Each
of the terms is defined in the provision of the Agreement identified opposite
such term in the following table:

       

      
        	
                Term

              	
                Provision

              
	
                Additional
      PDC Contribution

              	
                Section
      4.3(d)(ii)

              
	
                Agreement

              	
                Preamble

              
	
                Area

              	
                Section 1.6(a)

              
	
                Baker
      Botts

              	
                Section
      12.15

              
	
                Board

              	
                Section
      2.1(a)

              
	
                Board
      of Managers

              	
                Section
      2.1(a)

              
	
                Board
      of Managers Designee

              	
                Section
      2.2(e)

              
	
                Capital
      Calls

              	
                Section
      4.3(c)

              
	
                CEO

              	
                Section
      2.4(c)

              
	
                Certificate
      of Formation

              	
                Section
      1.1

              
	
                Company

              	
                Recitals

              
	
                COO

              	
                Section
      2.6(b)

              
	
                Deadlock

              	
                Section
      2.5(a)

              
	
                Defaulting
      Member

              	
                Section
      4.3(e)

              
	
                Designating
      Party

              	
                Section
      2.2(e)

              
	
                Dispute

              	
                Section
      12.11(a)

              
	
                Dissolution
      Events

              	
                Section
      7.1

              
	
                Drag-Along
      Notice

              	
                Section 6.5(c)

              
	
                Drag-Along
      Sale

              	
                Section 6.5(c)

              
	
                Equity
      Incentives

              	
                Section 4.7

              
	
                First
      Resort Indemnitors

              	
                Section 8.7

              
	
                Fiscal
      Year

              	
                Section
      10.4

              
	
                Fulbright

              	
                Section 12.15

              
	
                Initial
      Capital Contributions

              	
                Section
      4.3(a)

              
	
                Initial
      Deadlock Period

              	
                Section
      2.5(a)(i)

              
	
                Initial
      Development Plan and Budget

              	
                Section
      2.4(c)

              
	
                Initial
      Special Withdrawal

              	
                Section
      5.7

              
	
                Investor

              	
                Preamble

              
	
                Investor
      Default

              	
                Section
      4.3(d)

              
	
                Investor
      Designee

              	
                Section
      2.2(c)

              
	
                Investor
      Group

              	
                Section
      9.6

              
	
                Investor
      Related Party

              	
                Section
      3.3(c)

              
	
                Investor
      Sideways Loan

              	
                Section
      4.3(d)

              
	
                Last
      Resort Indemnitors

              	
                Section 8.7

              
	
                Listed
      Securities

              	
                Section
      12.4

              
	
                Manager

              	
                Section
      2.1(a)

              
	
                Member
      Related Party

              	
                Section
      3.3(b)

              
	
                Minimum
      Tax Distributions

              	
                Section
      5.6

              
	
                Non-Defaulting
      Member

              	
                Section
      4.3(e)

              
	
                Non-Offered
      Interest

              	
                Section
      6.6(a)

              
	
                Non-Offered
      Member

              	
                Section
      6.6(a)

              
	
                Non-Offered
      Tag-Along Sale

              	
                Section 6.6(a)

              
	
                Non-Seller
      Tag-Along Sale

              	
                Section 6.5(b)

              
	
                Non-Selling
      Interest

              	
                Section
      6.5(b)

              
	
                Non-Selling
      Member

              	
                Section
      6.5(a)

              
	
                Non-Selling
      Member Offer

              	
                Section
      6.5(a)

              
	
                Non-Selling
      Member Offer Period

              	
                Section
      6.5(a)

              
	
                Observer

              	
                Section
      2.1(l)

              
	
                Offer
      Notice

              	
                Section
      6.6(a)

              
	
                Offer
      Notice Period

              	
                Section
      6.6(a)

              
	
                Offered
      Interest

              	
                Section
      6.6(a)

              
	
                Offered
      Member

              	
                Section
      6.6(a)

              
	
                Payment
      Default

              	
                Section
      4.3(e)

              
	
                PDC

              	
                Preamble

              
	
                PDC
      Designee

              	
                Section
      2.2(d)

              
	
                PDC
      Group

              	
                Section
      9.6

              
	
                PDC
      Related Party

              	
                Section
      3.3(c)

              
	
                Permitted
      Transfers

              	
                Section
      6.1(b)

              
	
                Pro
      Rata Offered Share

              	
                Section
      6.6(a)

              
	
                Pro
      Rata Sale Share

              	
                Section 6.5(b)

              
	
                Restricted
      Period

              	
                Section
      6.1(b)

              
	
                Riley

              	
                Recitals

              
	
                Sale
      Interest

              	
                Section
      6.5(a)

              
	
                Selling
      Member

              	
                Section
      6.5(a)

              
	
                Selling
      Member Notice

              	
                Section
      6.5(a)

              
	
                Selling
      Member Notice Period

              	
                Section
      6.5(a)

              
	
                Sharing
      Percentage

              	
                Section
      4.2

              
	
                Sideways
      Loan

              	
                Section
      4.3(e)

              
	
                Special
      PDC Withdrawal

              	
                Section
      5.7

              
	
                Subsequent
      Special Withdrawal

              	
                Section
      5.7

              
	
                Substitute
      Contribution

              	
                Section
      4.3(d)

              
	
                Suspension

              	
                Section
      2.5(a)(i)

              
	
                Tag-Along
      Sale

              	
                Section
      6.6(a)

              
	
                Third
      Party Offer

              	
                Section
      6.5(b)

              
	
                Third
      Party Offer Period

              	
                Section
      6.5(b)

              
	
                Third
      Party Offeror

              	
                Section
      6.6(a)

              
	
                Third
      Party Purchaser

              	
                Section
      6.5(b)

              
	
                Transaction
      Agreements

              	
                Section
      1.7(c)

              
	
                Transaction
      Expenses

              	
                Section
      12.3(a)

              
	
                Units

              	
                Section
      4.1(a)

              
	
                Unsolicited
      Third Party Offer

              	
                Section
      6.6(a)

              


      

      


      SECTION
11.3. Construction

       

      .

       

      (a) When
required by the context, the gender of words in this Agreement includes the
masculine, feminine and neuter genders, and the singular includes the plural
(and vice versa).  Unless otherwise specified, references in this
Agreement to (a) Articles and Sections are to Articles and Sections of this
Agreement, (b) Schedules, Exhibits or Annexes are to those attached hereto, each
of which is incorporated herein and made a part hereof for all purposes, (c)
Article and Section headings are for convenience only and shall not affect the
interpretation of this Agreement, (d) the terms “herein,” “hereof,”
“hereinafter” or similar derivations are to this Agreement as a whole and not to
any particular Article or Section, and (e) the terms “include,” “including” or
similar derivations are without limitation.

       

      (b) Each of
the parties acknowledges that it has been represented, or has been advised of
its right to be represented, by independent counsel of its choice throughout all
negotiations that have preceded the execution of this Agreement. Each party and
its counsel cooperated in the drafting and preparation of this Agreement and the
documents referred to herein, and any and all drafts relating thereto shall be
deemed the work product of the parties and may not be construed against any
party by reason of its preparation.  Accordingly, any rule of Law or
any legal decision that would require interpretation of any ambiguities in this
Agreement against any party that draft it is of no application and is hereby
expressly waived.

       

      ARTICLE
XII

       

      MISCELLANEOUS

       

      SECTION
12.1. Notices

       

      .  All
notices and other communications under this Agreement or in connection herewith
shall be in writing and shall be given by delivery in person or by overnight
courier, by registered or certified mail (return receipt requested and with
postage prepaid thereon) or by facsimile or Electronic Transmission to the
parties at the respective addresses set forth in Exhibit C (or at
such other address as any party shall have furnished to the others in accordance
with the terms of this Section
12.1).  All notices and other communications that are addressed
as provided in or pursuant to this Section 12.1 shall be
deemed duly and validly given (a) if delivered in person or by overnight
courier, upon delivery, (b) if delivered by registered or certified mail (return
receipt requested and with postage paid thereon), 72 hours after being placed in
a depository of the United States mails and (c) if delivered by facsimile or
Electronic Transmission, upon transmission thereof and receipt of the
appropriate answerback; provided, however, if such assumed date
of notice falls within a time which is not within the usual business hours of
the recipient, such notice shall be deemed to have been given upon the opening
for business on the next business day by the recipient.

       

      SECTION
12.2. Confidentiality

       

      .  Each
Member hereby agrees that:

       

      (a) Such
Member has maintained and shall maintain the Confidential Information strictly
confidential and has not and will not, without the prior written Approval of the
Board of Managers, or the Member to which the Confidential Information relates,
as the case may be, disclose such Confidential Information in any manner
whatsoever, in whole or in part. Moreover, such Member shall take any and all
reasonable steps necessary to prevent general disclosure of the Confidential
Information and to transmit the Confidential Information only to its
representatives who need to know the Confidential Information and, in the case
of Investor, to its direct or indirect investors in its ordinary course fund
reporting process, who are informed of the confidential nature of the
Confidential Information and who agree to be bound by the terms of this Section 12.2.
Without limiting the foregoing, such Member shall use at least the same degree
of care to avoid unauthorized disclosure or use of the Confidential Information
as it employs with respect to its own Confidential Information of like
kind.  Disclosure of Confidential Information by a Member’s
representatives shall constitute a breach of this Section 12.2 by
such Member.

       

      (b) To the
extent legal counsel advises that disclosure is required by Law or the rules or
regulations of any stock exchange (and then only) such Member will disclose only
that portion of the Confidential Information which is required by Law; provided, however, that in
any such event the disclosing Member will provide the Board of Managers, or the
Member to which the Confidential Information relates, as the case may be, with
reasonably prompt written notice prior to any such disclosure so that the Company or the other
Member may seek to obtain а protective order or other confidential treatment for
the Confidential Information, and if a protective order or other remedy is not
obtained, the disclosing Member will furnish only that portion of the
information which is required to be furnished and the disclosing Member
may conclusively rely on its legal counsel to determine the information that it
is required to disclose.

       

      (c) The
agreements contained in this Section 12.2 shall
survive the withdrawal of any Member and the dissolution of the Company for a
period of one year after the date of such withdrawal (for the then-withdrawing
Member) or dissolution (for all Members who are Members at the time of such
termination).

       

      SECTION
12.3. Expenses

       

      .

       

      (a) At and
after Closing, the Company shall pay directly or reimburse Investor for the
out-of-pocket fees and expenses Investor incurred prior to or within six months
after the Closing in connection with the transactions contemplated by and
negotiation and preparation of this Agreement and the other Transaction
Agreements (“Transaction
Expenses”) and shall pay directly or reimburse PDC’s Transaction Expenses
up to the amount of Investor’s Transaction Expenses.  Transaction
Expenses shall include all fees, costs, and expenses of legal counsel,
accountants and all other third party consultants and advisors engaged by such
Member to assist with the transactions contemplated by this Agreement and the
other Transaction Agreements, the due diligence reviews conducted by it and the
negotiation or preparation of this Agreement and the other Transaction
Agreements and all direct out-of-pocket expenses for travel and similar
matters.

       

      (b) Investor
shall not charge the Company any on-going management fees or similar
fees.

       

      (c) The Board
of Managers shall be entitled to reimbursement from the Company of reasonable
out-of-pocket expenses in connection with attending meetings of the Board of
Managers and fulfilling Board duties, subject to such limitations as may be
established by the Board.

       

      SECTION
12.4. Standstill

       

      .  Each
Member other than PDC acknowledges and agrees, for a period from the Closing
Date and until six months after such Member ceases to hold any Units, that
neither it nor any of its Controlled Affiliates shall, directly or indirectly,
without the prior written consent of PDC:  (a) acquire or agree
to acquire or make any proposal to acquire, in any manner, any of PDC’s
securities that are listed or quoted on an exchange (“Listed Securities”);
(b) act jointly or in concert with any third party to acquire, in any
manner, any Listed Securities of PDC or its Affiliates or (c) solicit
proxies of PDC’s securityholders, or form, join or in any way participate in a
proxy group which is doing so. The expiration of the standstill period shall not
in any way relieve a Member from any prohibitions under federal securities laws
on trading PDC’s securities, to the extent such Member knows material non-public
information about PDC and each Member other than PDC agrees to comply with such
federal securities laws. For avoidance of doubt, except to the extent portfolio
companies in which a Member other than PDC holds investments have received
Confidential Information from such Member, its Controlled Affiliates or any Lime
Rock Resources Entity, this Section 12.4
shall not apply to such portfolio companies as Affiliates under this Section 12.4.

       

      SECTION
12.5. Non-Solicitation

       

      .  Each
Member covenants and agrees with the other Member that, from the Closing Date
and until one year following the earlier of the dissolution of the Company and
the date that such Member Transfers all of its Interest to an un-Affiliated
third party, such Member will not, directly or indirectly, hire or retain or
attempt to hire or retain or influence the possible hiring or retaining by a
third party of any person who is a managerial-level employee of the other Member
the Company or Eastern OpCo, without first seeking and obtaining such Member’s
prior written authorization, which may be arbitrarily withheld; provided, however, that the
foregoing provision will not prevent either Member from employing any such
person who (a) has been terminated by the Company (provided that such
termination is not the result of any interference, solicitation or other action
by the Member seeking to hire such employee) or (b) responds to an
advertisement or other general solicitation for employment (which solicitations
are not specifically targeted at the such other Member’s employees) through the
use of media advertisements, professional search firms or
otherwise.  With respect to each Member, the Company shall not, from
the Closing Date and until one year following the earlier of the dissolution of
the Company and the date such Member Transfers all of its Interest to an
un-Affiliated third party, directly or indirectly, hire or retain or attempt to
hire or retain or influence the possible hiring or retaining by a third party of
any person who is a managerial-level employee of a Member (excluding, in the
case of PDC, employees of Eastern OpCo), without first seeking and obtaining
such Member’s prior written authorization, which may be arbitrarily withheld;
provided, however, that the foregoing provision will not prevent the Company,
upon approval of the Board of Managers, from employing any such person who (a)
has been terminated by a Member (provided that such termination is not the
result of any interference, solicitation or other action by the Company) or (b)
responds to an advertisement or other general solicitation for employment (which
solicitations are not specifically targeted at the such Member’s employees)
through the use of media advertisements, professional search firms or
otherwise.

       

      SECTION
12.6. Entire
Agreement

       

      .  This
Agreement and the Transaction Agreements constitute the entire agreement among
the parties with respect to the subject matter hereof and supersede all prior
written or oral agreements and understandings and all contemporaneous oral
agreements and understandings among the parties or any of them with respect to
the subject matter hereof. All Exhibits and Schedules hereto are expressly made
a part of this Agreement.

       

      SECTION
12.7. Waiver
or Consent

       

      .  A
waiver or consent, express or implied, to or of any breach or default by any
Person in the performance of its obligations with respect to the Company is not
a consent or waiver to or of any other breach or default in the performance by
that Person of the same or any other obligations of that Person with respect to
the Company.  Failure on the part of a Person to complain of any act
or omission of any Person or to declare any Person in breach or default with
respect to an obligation, irrespective of how long that failure continues, shall
not be construed as a waiver of the breach or default until the applicable
statute of limitations has run.  No waiver of any obligation under
this Agreement or the Act shall be effective unless in writing signed by or on
behalf of the Person or Persons to whom the obligation is owed.

       

      SECTION
12.8. Amendment

       

      .  Except
as otherwise expressly provided herein, any amendment to this Agreement shall
become effective only upon the execution of a written instrument executed by (i)
both Members, for so long as there are two Members, or (ii) a Super Majority
Vote, if there are more than two Members, provided, however, that,
except as expressly provided herein, any amendment to any of the economic terms
or provisions applicable to a Member or other rights adversely affecting a
Member, including, but not limited to, (a) decreasing a Member’s rights to
receive distributions (including rights under Section 7.3) or (b)
removing or reducing a Member’s right to (i) designate a Manager, (ii) approve
certain actions of the Company (including through any Manager designated by such
Member), including such actions with respect to its subsidiaries, and (iii) be
indemnified by the Company, shall be effective only upon the execution of a
written instrument by such Member.

       

      SECTION
12.9. Choice
of Law

       

      .

       

      (a) This Agreement shall be construed,
interpreted and enforced in accordance with, and the respective rights and
obligations of the parties shall be governed by, the laws of the State of
Delaware without regard to principles of conflicts of law.  Any right
to trial by jury with respect to any claim or proceeding relating to or arising
out of this Agreement, or any transaction or conduct in connection herewith, is
waived.

       

      (b) Each
Member hereby consents to submit to the exclusive jurisdiction and venue of the
courts of Dallas County, Texas and of the United States of America located in
Dallas County, Texas for any actions, suits or proceedings arising out of or
relating to this Agreement.

       

      (c) In no
event shall either Member be entitled to punitive damages, exemplary damages,
consequential damages, speculative damages or compensation for business
interruption, loss of profits, loss of opportunity or opportunity costs from
another Member in any action, suit or proceeding arising out of or related to
this Agreement.

       

      SECTION
12.10. Public
Announcement

       

      .  No
Member or its Affiliates shall make any public announcement or filing with
respect to the Company or its affairs or the transactions provided for herein
without the prior written consent of the other Member(s), which shall not be
withheld unreasonably, except as may be required by law.  Further, any
such public announcement or filing shall not reference or otherwise identify
Investor’s Affiliates without prior written consent of Investor.

       

      SECTION
12.11. Specific
Performance

       

      .  The
Members agree that a breach of the provisions of Article VI or Section 3.3, 12.2, 12.4 or 12.5 may cause
irreparable injury to the Company or the Members for which monetary damages (or
other remedy at law) are inadequate in view of (i) the complexities and
uncertainties in measuring the actual damages that would be sustained by reason
of the failure of a person to comply with such provisions, and (ii) the
uniqueness of the Company’s business and the relationship among the
Members.  Accordingly, the Members agree that a breach of Article VI or Section 3.3, 12.2, 12.4 or 12.5 may be enforced
by specific performance, in addition to any other remedy to which they are
entitled at law or in equity.  In connection with any request for
specific performance, the other Member waives any requirement for the security
or posting of any bond in connection with such remedy.

       

      SECTION
12.12. Binding
Agreement

       

      .  This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns (it being understood and agreed
that, except as expressly provided herein, nothing contained in this Agreement
is intended to confer any rights, benefits or remedies of any kind or character
on any other Person under or by reason of this Agreement).  It is
expressly understood and agreed that any attempted or purported assignment by
any party of this Agreement in violation of the provisions of this Section 12.12 shall
be null and void.

       

      SECTION
12.13. Benefit
of Agreement

       

      .  Nothing
in this Agreement expressed or implied, shall be construed to give to any
creditor of the Company or of any Member any legal or equitable right, remedy or
claim under or in respect of this Agreement.

       

      SECTION
12.14. Further
Assurances

       

      .  In
connection with this Agreement and the transactions contemplated hereby, each
Member agrees to execute and deliver any additional documents and instruments
and to perform any additional acts necessary or appropriate to effectuate the
provisions of this Agreement and those transactions.

       

      SECTION
12.15. Legal
Counsel

       

      .  The
Members acknowledge and agree that Baker Botts L.L.P. (“Baker Botts”)
(i) has represented PDC and certain of its Affiliates in connection with
the negotiation, execution and delivery of this Agreement and all other
agreements contemplated by this Agreement, (ii) other than its
representation of the Company in certain financing matters, has not represented
the Company or any Member other than PDC, and (iii) in no event shall an
attorney-client relationship be deemed to exist between Baker Botts, on the one
hand, and the Members (other than PDC) or any of their respective Affiliates, or
the Company (other than as specified in clause (ii)), on the
other hand, in respect of Baker Botts’ representation as described in clauses (i) and
(ii)
above.

       

      The
Members acknowledge and agree that Fulbright & Jaworski L.L.P. (“Fulbright”)
(i) has represented Investor in connection with the negotiation, execution
and delivery of this Agreement and all other agreements contemplated by this
Agreement, (ii) has not represented the Company or any Member other than
Investor, and (iii) in no event shall an attorney-client relationship be
deemed to exist between Fulbright, on the one hand, and the Members (other than
Investor) or any of their respective Affiliates, or the Company, on the other
hand, in respect of Fulbright’s representation as described in clauses (i) and
(ii)
above

       

      SECTION
12.16. Counterparts

       

      .  This
Agreement may be executed in any number of counterparts or counterpart signature
pages, each of which shall constitute an original and all of which shall
constitute one and the same instrument.

       

      [Remainder
of page intentionally left blank; Signature page follows]

       


      
        
          
            HOU03:1220675.1                                                                    

          

           


        

        
           


          
            

          

        

        
           


        

      


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

       

       

      MEMBERS:

       

       

      PETROLEUM
DEVELOPMENT CORPORATION

       

       

      


       

       

      


       

       

      By: /s/ Gysle R.
Shellum                                                                           

       

       

      Gysle R. Shellum

       

       

      Chief Financial Officer

       

      LR-MOUNTAINEER
HOLDINGS, L.P.

       

      
        	
                 
      

              	
                By:

              	
                Lime
      Rock Partners GP V, L.P.,

              


      

       

      
        	
                 
      

              	
                its
      General Partner

              


      

       

      By:        LRP
GP V, Inc., its General Partner

       

      By: /s/ J. William Franklin,
Jr.                                                         

      J. William Franklin, Jr.

      Managing Director

      



      
        
          
            HOU03:1220675.1