Exhibit 10.24**THIRD AMENDED AND RESTATED PLEDGE AGREEMENT**     THIS THIRD AMENDED AND RESTATED PLEDGE AGREEMENT (this “Pledge Agreement”), dated as ofDecember 23, 2005, is between **PARALLEL, L.L.C.**(the “Pledgor”), a Delaware limited liabilitycompany whose address is 2215-B Renaissance Dr., Suite 5, Las Vegas, Nevada 89119, and **CITIBANKTEXAS, N.A.**, a national banking association whose address is 1004 N. Big Spring, Suite 121,Midland, Texas 79701, as Administrative Agent (in such capacity, the “Agent”), for the banks andother financial institutions (the “Lenders”) from time to time parties to that certain ThirdAmended and Restated Credit Agreement dated of even date herewith, among Parallel PetroleumCorporation and Parallel, L.P. (collectively, “Borrowers”), Pledgor, as Guarantor, Citibank Texas,N.A., as Joint Lead Arranger and Administrative Agent, BNP Paribas, as Joint Lead Arranger andSyndication Agent, and the Lenders (as the same may be amended, restated, supplemented or otherwisemodified from time to time, the “Credit Agreement”).WITNESSETH:     WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to make loans tothe Borrowers upon the terms and subject to the conditions set forth therein, to be evidenced bythe Notes issued by the Borrowers thereunder; and     WHEREAS, it is a condition precedent to the Agent and Lenders executing the Credit Agreementthat the Pledgor execute this Pledge Agreement to amend and restate that certain Second Amended andRestated Pledge Agreement dated September 27, 2004 by and between Agent and Pledgor (the“Original Pledge Agreement”).     NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, thePledgor hereby agrees with the Agent, for the ratable benefit of the Lenders, as follows:     1. Defined Terms. Unless otherwise defined herein, terms which are defined in theCredit Agreement and used herein are so used as so defined, and the following terms shall have thefollowing meanings:     “Code” means the Uniform Commercial Code from time to time in effect in theState of Texas.     “Obligations” means the unpaid principal of and interest on (including, withoutlimitation, interest accruing after the maturity of the Loans and interest on or after thefiling of any petition in bankruptcy, or the commencement of any insolvency, reorganizationor like proceeding, relating to the Borrowers or the Pledgor, whether or not a claim forpost-filing or post-petition interest is allowed in such proceeding) the Notes, theobligations of the Pledgor to the Agent and Lenders pursuant to that certain Guaranty datedof even date herewith executed by the Pledgor in favor of the Agent for the benefit of theLenders, and all other obligations and liabilities of any of the Borrowers or the Pledgor tothe Agent, to any Lender, or to any Affiliate
 

 
of any Lender, whether direct or indirect, joint or several, absolute or contingent,due or to become due, or now existing or hereafter incurred, which may arise under, out of,or in connection with the Credit Agreement, the Notes, any other Loan Document, any otherdocument made, delivered or given in connection herewith or therewith or any Rate ManagementTransaction, including all renewals, restatements, extensions, substitutions andrearrangements of any of the aforementioned, whether on account of principal, interest,reimbursement obligations, fees, indemnities, costs, expenses (including, withoutlimitation, all fees and disbursements of counsel to the Agent or to the Lenders that arerequired to be paid by the Borrowers or the Pledgor pursuant to the terms of the CreditAgreement) or otherwise.     “Partnership” means Parallel, L.P., a Texas limited partnership.     “Pledge Agreement” means this Pledge Agreement, as amended, supplemented orotherwise modified from time to time.     “Pledged Property” means all (i) partnership interests now owned or hereafteracquired by the Pledgor in the Partnership, including, without limitation, the partnershipinterest evidenced by Certificate No. LP-1, (ii) all rights to receive from time to timePledgor’s share of profits, income, surplus, compensation, return of capital, distributionsand other reimbursements and payments from the Partnership (including, without limitation,specific properties of the Partnership upon dissolution, merger or otherwise) and (iii) allProceeds of and from any and all of the foregoing.     “Proceeds” means all “proceeds” as such term is defined in Section 9.102(a)(65)of the Code and, in any event, shall include, without limitation, all dividends,distributions or other income from the Pledged Property, and collections thereon ordistributions with respect thereto.     2. Pledge, Grant of Security Interest. The Pledgor hereby delivers to the Agent, forthe ratable benefit of the Lenders, all the Pledged Property and hereby grants to the Agent, forthe ratable benefit of the Lenders, a first and prior security interest and Lien in the PledgedProperty, as collateral security for the prompt and complete payment and performance when due(whether at the stated maturity, by acceleration or otherwise) of the Obligations.     3. Stock/Partnership Powers. Concurrently with the delivery to the Agent of eachcertificate representing the Pledged Property, the Pledgor shall deliver an undated stock/partnership power or assignment in blank covering such certificate, duly executed in blank by thePledgor with, if the Agent so requests, signature guaranteed.     4. Representations and Warranties. The Pledgor represents and warrants that:     (a) the Pledged Property constitutes 99% of the total issued and outstandingpartnership interests of the Partnership;     (b) the Pledgor is the record and beneficial owner of, and has good and marketabletitle to, the Pledged Property, free of any and all Liens or options in favor of, or claimsof, any other person, except Permitted Liens;
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     (c) upon delivery to the Agent of the certificates evidencing the Pledged Property, theLien granted pursuant to this Pledge Agreement will constitute a valid, perfected firstpriority Lien on the Pledged Property, enforceable as such against all creditors of thePledgor and any Person purporting to purchase any Pledged Property from the Pledgor;     (d) with respect to the Pledged Property, the Pledgor has obtained from the Partnershipand has delivered to the Agent an Acknowledgment and Consent, substantially in the formattached hereto as Annex 1, executed by the Partnership;     (e) no consent or authorization of, filing with or other act by or in respect of anyPerson is required in connection with the execution, delivery or validity of this PledgeAgreement.     5. Covenants. The Pledgor covenants and agrees with the Agent and the Lenders that,from and after the date of this Pledge Agreement until the Obligations are paid in full and theCommitments are terminated:     (a) If the Pledgor shall, as a result of its ownership of the Pledged Property, becomeentitled to receive or shall receive any partnership interest or other security, whethercertificated or uncertificated, (including, without limitation, any certificate representinga dividend or a distribution in connection with any reclassification, increase or reductionof capital or any certificate issued in connection with any reorganization), option orrights, whether in addition to, in substitution of, as a conversion of, or in exchange forany portion of the Pledged Property, or otherwise in respect thereof, the Pledgor shallaccept the same as the agent of the Agent and the Lenders, hold the same in trust for theAgent and the Lenders, and deliver the same forthwith to the Agent in the exact formreceived, duly indorsed by the Pledgor to the Agent, if required, together with an undatedstock/ partnership power or assignment in blank covering such certificate duly executed inblank by the Pledgor and with, if the Agent so requests, signature guaranteed, to be held bythe Agent, subject to the terms hereof, as additional collateral security for theObligations. Any sums paid upon or in respect of the Pledged Property upon the liquidationor dissolution of the Partnership shall be paid over to the Agent to be held by it hereunderas additional collateral security for the Obligations, and in case any distribution ofcapital shall be made on or in respect of the Pledged Property or any property shall bedistributed upon or with respect to the Pledged Property pursuant to the recapitalization orreclassification of the capital of the Partnership, or pursuant to the reorganizationthereof, the property so distributed shall be delivered to the Agent to be held by ithereunder as additional collateral security for the Obligations. If any sums of money orproperty so paid or distributed in respect of the Pledged Property shall be received by thePledgor, the Pledgor shall, until such money or property is paid or delivered to the Agent,hold such money or property in trust for the Lenders, segregated from other funds of thePledgor, as additional collateral security for the Obligations.     (b) Without the prior written consent of the Agent, the Pledgor will not (i) vote toenable, or take any other action to permit, the Partnership to issue any partnershipinterests or other securities of any nature or to issue any other securities convertibleinto or granting the right to purchase or exchange for any partnership interest, or othersecurities of any nature of the Partnership, (ii) sell, assign, transfer, exchange, orotherwise dispose of, or grant any option with
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respect to, the Pledged Property, or (iii) create, incur or permit to exist any Lien oroption in favor of, or any claim of any Person with respect to, any of the Pledged Property,or any interest therein, except for Permitted Liens. The Pledgor will defend the right,title and interest of the Agent and the Lenders in and to the Pledged Property against theclaims and demands of all Persons whomsoever.     (c) At any time and from time to time, upon the written request of the Agent, and atthe sole expense of the Pledgor, the Pledgor will promptly and duly execute and deliver suchfurther instruments and documents and take such further actions as the Agent may reasonablyrequest for the purposes of obtaining or preserving the full benefits of this PledgeAgreement and of the rights and powers herein granted. If any amount payable under or inconnection with any of the Pledged Property shall be or become evidenced by any promissorynote, other instrument or chattel paper, such note, instrument or chattel paper shall beimmediately delivered to the Agent, duly endorsed in a manner satisfactory to the Agent, tobe held as Pledged Property pursuant to this Pledge Agreement.     (d) The Pledgor agrees to pay, and to save the Agent and the Lenders harmless from, anyand all liabilities with respect to, or resulting from any delay in paying, any and allstamp, excise, sales or other taxes which may be payable or determined to be payable withrespect to any of the Pledged Property or in connection with any of the transactionscontemplated by this Pledge Agreement.     (e) The Agent shall have the right, without the consent or joinder of the Pledgor, toexecute and file with any governmental authority such financing statements, financingstatement amendments and continuation statements as may, in the sole discretion of theAgent, be necessary or advisable to maintain, perfect or otherwise evidence the Lien of theLenders in and to any of the Pledged Property. The Pledgor hereby expressly authorizes theAgent to file any such financing statement without the signature of the Pledgor to theextent permitted by applicable law. A carbon, photographic or other reproduction of thisPledge Agreement shall be sufficient as a financing statement for filing in anyjurisdiction. In addition, and without limiting the foregoing, this Pledge Agreement may beattached to and made a part of any financing statement filed by the Agent.     6. Cash Dividends and Distributions, Voting Rights. Unless an Event of Default shallhave occurred and be continuing and the Agent shall have given notice to the Pledgor of the Agent’sintent to exercise its corresponding rights pursuant to paragraph 7 below, the Pledgor shall bepermitted to receive all cash dividends and distributions paid in the normal course of business ofthe Partnership, to the extent permitted in the Credit Agreement and the other Loan Documents, inrespect of the Pledged Property and to exercise all voting and partnership rights with respect tothe Pledged Property; provided, however, that no vote shall be cast or partnership right exercisedor other action taken which, in the Agent’s reasonable judgment, would impair the Pledged Propertyor which would be inconsistent with or result in any violation of any provision of the CreditAgreement, the Notes, the Security Instruments, this Pledge Agreement or the other Loan Documents.
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     7. Rights of the Lenders and the Agent.     (a) If an Event of Default shall occur and be continuing and the Agent shall givenotice of its intent to exercise such rights to the Pledgor, (i) the Agent shall have theright to receive any and all dividends and distributions paid in respect of the PledgedProperty and make application thereof to the Obligations in such order as the Agent maydetermine and (ii) the Pledged Property or portion thereof designated by the Agent shall beregistered in the name of the Agent or its nominee, and the Agent or its nominee maythereafter exercise (A) all voting, partnership and other rights pertaining to the PledgedProperty at any meeting of partners of the Partnership or otherwise and (B) any and allrights of conversion, exchange, subscription and any other rights, privileges or optionspertaining to the Pledged Property as if it were the absolute owner thereof (including,without limitation, the right to exchange at its discretion any and all of the PledgedProperty upon the merger, conversion, consolidation, reorganization, recapitalization orother fundamental change in the entity structure of the Partnership , or upon the exerciseby the Pledgor or the Agent of any rights, privileges or options pertaining to the PledgedProperty, and in connection therewith, the right to deposit and deliver any and all of thePledged Property with any committee, depositary, transfer agent, registrar or otherdesignated agency upon such terms and conditions as it may determine) all without liabilityexcept to account for property actually received by it, but the Agent shall have no duty tothe Pledgor to exercise any such right, privilege or option and shall not be responsible forany failure to do so or delay in so doing.     (b) The rights of the Agent and the Lenders hereunder shall not be conditioned orcontingent upon the pursuit by the Agent or any Lender of any right or remedy against theBorrowers, any Guarantor or any other Person which may be or become liable in respect of allor any part of the Obligations or against any collateral security or guarantee therefor orright of offset with respect thereto. Neither the Agent nor any Lender shall be liable forany failure to demand, collect or realize upon all or any part of the Pledged Property orfor any delay in doing so, nor shall the Agent or any Lender be under any obligation to sellor otherwise dispose of any Pledged Property upon the request of the Pledgor or any otherPerson or to take any other action whatsoever with regard to the Pledged Property or anypart thereof.     8. Remedies. If an Event of Default shall occur and be continuing, the Agent, onbehalf of the Lenders, may exercise, in addition to all other rights and remedies granted in thisPledge Agreement and in any other instrument or agreement securing, evidencing or relating to theObligations, all rights and remedies of a secured party under the Code. Without limiting thegenerality of the foregoing, the Agent, without demand of performance or other demand, presentment,protest, advertisement or notice of any kind (except any notice required by law referred to below)to or upon the Pledgor, the Partnership or any other Person (all and each of which demands,defenses, advertisements and notices are hereby waived) may in such circumstances forthwithcollect, receive, appropriate and realize upon the Pledged Property, or any part thereof, and/ormay forthwith sell, assign, give option or options to purchase or otherwise dispose of and deliverthe Pledged Property or any part thereof (or contract to do any of the foregoing), in one or moreparcels at public or private sale or sales, in the over-the-counter market, at any exchange,broker’s board or office of the Agent or any Lender or elsewhere upon such terms and conditions asit may deem advisable and at such prices as it may deem best, for cash or on credit or for futuredelivery without assumption of any credit risk. The Agent or any Lender shall have the right uponany such public sale or sales, and, to the extent permitted by law, upon any such private sale orsales, to
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purchase the whole or any part of the Pledged Property so sold, free of any right or equity ofredemption in the Pledgor, which right or equity is hereby waived and released. The Agent shallapply any Proceeds from time to time held by it and the net proceeds of any such collection,recovery, receipt, appropriation, realization or sale, after deducting all reasonable costs andexpenses of every kind incurred in respect thereof or incidental to the care or safekeeping of anyof the Pledged Property or in any way relating to the Pledged Property or the rights of the Agentand the Lenders hereunder, including, without limitation, reasonable attorneys’ fees anddisbursements of counsel to the Agent, to the payment in whole or in part of the Obligations, insuch order as the Agent may elect, and only after such application and after the payment by theAgent of any other amount required by any provision of law, including, without limitation, Section9.615(a)(3) of the Code, need the Agent account for the surplus, if any, to the Pledgor. To theextent permitted by applicable law, the Pledgor waives all claims, damages and demands it mayacquire against the Agent or any Lender arising out of the exercise by them of any rightshereunder. If any notice of a proposed sale or other disposition of Pledged Property shall berequired by law, such notice shall be deemed reasonable and proper if given at least 10 days beforesuch sale or other disposition.     9. Private Sales.     (a) If the Agent shall determine to exercise its right to sell any or all of thePledged Property pursuant to paragraph 8 hereof, the Pledgor recognizes that the Agent maybe unable to effect a public sale of any or all the Pledged Property, by reason of certainprohibitions contained in the Securities Act of 1933, as amended (the “SecuritiesAct”), and applicable state securities laws or otherwise, and may be compelled to resortto one or more private sales thereof to a restricted group of purchasers which will beobliged to agree, among other things, to acquire such securities for their own account forinvestment and not with a view to the distribution or resale thereof. The Pledgoracknowledges and agrees that any such private sale may result in prices and other terms lessfavorable than if such sale were a public sale and, notwithstanding such circumstances,agrees that any such private sale shall be deemed to have been made in a commerciallyreasonable manner. The Agent shall be under no obligation to delay a sale of any of thePledged Property for the period of time necessary to permit the Partnership to register suchsecurities for public sale under the Securities Act, or under applicable state securitieslaws, even if the Partnership would agree to do so.     (b) The Pledgor further agrees to use its best efforts to do or cause to be done allsuch other acts as may be necessary to make such sale or sales of all or any portion of thePledged Property pursuant to this paragraph 9 valid and binding and in compliance with anyand all other applicable requirements of law. The Pledgor further agrees that a breach ofany of the covenants contained in this paragraph 9 will cause irreparable injury to theAgent and the Lenders, that the Agent and the Lenders have no adequate remedy at law inrespect of such breach and, as a consequence, that each and every covenant contained in thisparagraph 9 shall be specifically enforceable against the Pledgor, and the Pledgor herebywaives and agrees not to assert any defenses against an action for specific performance ofsuch covenants, except for a defense that no Event of Default has occurred under the CreditAgreement.     10. Limitation on Duties Regarding Pledged Property. The Agent’s sole duty withrespect to the custody, safekeeping and physical preservation of the Pledged Property in itspossession, under
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Section 9.207 of the Code or otherwise, shall be to deal with it in the same manner as theAgent deals with similar securities and property for its own account. Neither the Agent, any Lendernor any of their respective directors, officers, employees or agents shall be liable for failure todemand, collect or realize upon any of the Pledged Property or for any delay in doing so or shallbe under any obligation to sell or otherwise dispose of any Pledged Property upon the request ofthe Pledgor or otherwise.     11. Powers Coupled with an Interest. All authorizations and agencies herein containedwith respect to the Pledged Property are irrevocable and powers coupled with an interest.     12. Severability. Any provision of this Pledge Agreement which is prohibited orunenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent ofsuch prohibition or unenforceability without invalidating the remaining provisions hereof, and anysuch prohibition or unenforceability in any jurisdiction shall not invalidate or renderunenforceable such provision in any other jurisdiction.     13. Paragraph Headings. The paragraph headings used in this Pledge Agreement are forconvenience of reference only and are not to affect the construction hereof or be taken intoconsideration in the interpretation hereof.     14. No Waiver, Cumulative Remedies. Neither the Agent nor any Lender shall by any act(except by a written instrument pursuant to paragraph 15 hereof) be deemed to have waived any rightor remedy hereunder or to have acquiesced in any Default or Event of Default under the CreditAgreement or in any breach of any of the terms and conditions hereof. No failure to exercise, norany delay in exercising, on the part of the Agent or any Lender, any right, power or privilegehereunder shall operate as a waiver thereof. No single or partial exercise of any right, power orprivilege hereunder shall preclude any other or further exercise thereof or the exercise of anyother right, power or privilege. A waiver by the Agent or any Lender of any right or remedyhereunder on any one occasion shall not be construed as a bar to any right or remedy which theAgent or such Lender would otherwise have on any future occasion. The rights and remedies hereinprovided are cumulative, may be exercised singly or concurrently and are not exclusive of any otherrights or remedies provided by law.     15. Waivers and Amendments: Successors and Assigns: Governing Law. None of the termsor provisions of this Pledge Agreement may be amended, supplemented or otherwise modified, exceptby a written instrument executed by the Pledgor and the Agent, provided that any provision of thisPledge Agreement may be waived by the Agent in a letter or agreement executed by the Agent or bytelex or facsimile transmission from the Agent. This Pledge Agreement shall be binding upon thepermitted successors and assigns of the Pledgor and shall inure to the benefit of the Agent and theLenders and their respective successors and assigns.     THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,THE LAWS OF THE STATE OF TEXAS.     16. Notices. Notices by the Agent to the Pledgor or the Partnership may be given bymail, by telegraph or by facsimile transmission, addressed or transmitted to the appropriate partyat the Pledgor’s address set forth in the preamble of this Pledge Agreement and shall be effective(a) in the case of mail, three days after deposit in the postal system, postage prepaid, (b) in thecase of facsimile notices, when
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sent and (c) in the case of telegraphic notice, when delivered to the telegraph company. ThePledgor and the Partnership may change their respective addresses and transmission numbers bywritten notice to the Agent.     17. Irrevocable Authorization and Instruction to Partnership. The Pledgor herebyauthorizes and instructs the Partnership to comply with any instruction received by it from theAgent in writing that (a) states that an Event of Default has occurred and (b) is otherwise inaccordance with the terms of this Pledge Agreement, without any other or further instructions fromthe Pledgor, and the Pledgor agrees that the Partnership shall be fully protected in so complying.     18. Authority of Agent. The Pledgor acknowledges that the rights and responsibilitiesof the Agent under this Pledge Agreement with respect to any action taken by the Agent or theexercise or non-exercise by the Agent of any option, voting right, request, judgment or other rightor remedy provided for herein or resulting or arising out of this Pledge Agreement shall, asbetween the Agent and the Lenders, be governed by the Credit Agreement and by such other agreementswith respect thereto as may exist from time to time among them, but, as between the Agent and thePledgor, the Agent shall be conclusively presumed to be acting as agent for the Lenders with fulland valid authority so to act or refrain from acting, and neither the Pledgor nor the Partnershipshall be under any obligation, or entitlement, to make any inquiry respecting such authority.
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     19. Amendment and Restatement of Original Pledge Agreement. This Pledge Agreementconstitutes an amendment and restatement, but not a replacement, of the Original Pledge Agreementin its entirety, and renews and extends all liens, rights and security interests existing by virtueof the Original Pledge Agreement without interruption or lapse.     [THE REMAINDER OF THIS PAGE INTENTINALLY LEFT BLANK]
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     IN WITNESS WHEREOF, the undersigned has caused this Pledge Agreement to be duly executed anddelivered as of the date first above written.      PARALLEL, L.L.C.