Document:

Unassociated Document

    

    

    SECURITIES PURCHASE
AGREEMENT

    

    THIS
SECURITIES PURCHASE AGREEMENT (“Agreement”) is made by and between Axion
International Holdings, Inc., a Colorado corporation, having its principal
offices located at 180 South Street, Suite 104, New Providence, New Jersey 07974
(the “Company”), and ___________________________________________(the
“Purchaser”).

    

    Recitals

    

    A. 
The Purchaser has offered to subscribe and purchase, and the Company to
privately place with the Purchaser, certain securities of the Company as more
fully described in this Agreement;;

    

    B. 
The offer and sale of the securities of the Company to be sold to the Purchaser
is being consummated in reliance upon the exemption from securities registration
afforded by Section 4(2) under the Securities Act of 1933, as amended (“1933
Act”), and the provisions of Regulation D (“Regulation D”), as promulgated by
the U.S. Securities and Exchange Commission (the “SEC”) under the 1933 Act;
and

    

    C. 
By executing this Agreement, the Purchaser has agreed to purchase the securities
identified below, upon the terms and subject to the conditions stated in this
Agreement.

    

    NOW,
THEREFORE, In consideration of the mutual promises made herein and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

    

    1.
 Definitions. In
addition to those terms defined above and elsewhere in this Agreement, for the
purposes of this Agreement, the following terms shall have the meanings here set
forth:

    

    “Accredited Investor”
shall have the meaning assigned to such term in Rule 501(a) of Regulation
D.

    

    “Affiliate” means,
with respect to any Person, any other Person which directly or indirectly
controls, is controlled by, or is under common control with, such Person, where
“control” means
the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.

    

    “Agreements” means
this Agreement and any other agreement entered into, now or in the future, by
the Company and the Purchaser.

    

    “Closing” means the
consummation of the purchase and sale of the Securities.

    

    “Exercise Price” means
the exercise price for the Warrants being purchased pursuant to the terms of
this Agreement, which shall be equal to the VWAP for the three (3) consecutive
trading days immediately preceding November 13, 2009, the date the Purchase
Price is anticipated to be received by the Company via wire transfer into its
designated bank account.

    

    “Material Adverse
Effect” means a material adverse effect on the (i) condition (financial
or otherwise), business, assets or results of operations of the Company; (ii)
ability of the Company to perform any of its material obligations under the
terms of the Agreements; or (iii) material rights and remedies of a Purchaser
under the terms of the Agreements.

    

    “Person” means an
individual, corporation, partnership, limited liability company, trust, business
trust, association, joint stock company, joint venture, pool, syndicate, sole
proprietorship, unincorporated organization, governmental authority or any other
form of entity not specifically listed herein.

    

    "Purchase Price" means
the sum of Four Hundred Ten Thousand ($410,000.00) Dollars the Purchaser shall
pay for the Securities pursuant to the terms and provisions of this
Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Newbridge”
means Newbridge Securities Corp., 1451 West Cypress Creek Road,
Suite 204, Ft. Lauderdale, Florida 33309 to whom the Company shall pay
the fee described in Section 4.7.

    

    “1934 Act” means the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.

    

    “Restricted Common
Shares” means the Two Hundred Thousand (200,000) shares of the restricted
common stock of the Company, representing part of the Securities being purchased
pursuant to the terms of this Agreement.

    

    "Securities" means the
Restricted Common Shares and the common stock purchase warrant (defined below as
the “Warrant”) to purchase up to Twenty Thousand (20,000) shares of the
Company’s restricted common shares at the Exercise Price, to be purchased by the
Purchaser and sold by the Company pursuant to the terms of this
Agreement.

    

    "Securities Act" means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated hereunder.

     

    “VWAP” means, for any
date, the price determined by the first of the following clauses that applies:
(a) if the Common Stock is then listed or quoted on a Trading Market, the daily
volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed
or quoted for trading as reported by Bloomberg L.P. (based on a Trading Day from
9:30 a.m. (New York City time) to 4:02 p.m. (New York City time));
(b)  if the OTC Bulletin Board is not a Trading Market, the volume
weighted average price of the Common Stock for such date (or the nearest
preceding date) on the OTC Bulletin Board; (c) if the Common Stock is not then
quoted for trading on the OTC Bulletin Board and if prices for the Common Stock
are then reported in the “Pink Sheets” published by Pink Sheets, LLC (or a
similar organization or agency succeeding to its functions of reporting prices),
the most recent bid price per share of the Common Stock so reported; or (d) in
all other cases, the fair market value of a share of Common Stock as determined
by an independent appraiser selected in good faith by the Holder and reasonably
acceptable to the Company.

    

    "Warrant(s)" means the
common stock purchase warrants, in the form of Exhibit A attached
hereto, (A) to be sold to the Purchaser pursuant to the terms of this Agreement
and (B) to be paid to Newbridge pursuant to Section 4.7, so that each of such
parties may purchase up to Twenty Thousand (20,000) shares of the Company’s
restricted common shares at the Exercise Price, which Warrants shall be
exercisable six months after issue and have a term of exercise equal to three
years from the “Initial Exercise Date”.

    

    "Warrant Shares" means
the shares of Common Stock issuable upon exercise of the Warrants.

     

    2. 
Purchase and Sale of
Securities. Subject to the terms and conditions of this Agreement and on
the basis of the representations and warranties made herein, the Purchaser
agrees to purchase, and the Company agrees to sell and issue to the Purchaser,
the Securities for the purchase price of Four Hundred Ten Thousand ($410,000.00)
Dollars (the “Purchase Price”), payable by wire transfer to the Company’s bank
account as identified on Exhibit B attached hereto, on or before 5:00 PM,
eastern time, November 16,
2009. Purchaser and the Company hereby acknowledge and agree that in the
event the Purchase Price is not received in accordance with the preceding
sentence, this Agreement shall automatically terminate and the parties shall
have no claims against the other arising out of or in connection with this
Agreement.

    

    3.
 Subscription
Procedure. A. In order to subscribe and pay for the Securities, the
Purchaser shall deliver to the Company, via e-mail or telecopy, a fully executed
copy of this Agreement, and the Purchase Price in accordance with Section 2
above.

    

    B.
Provided that the Purchaser delivered the Purchase Price and a fully executed
copy of this Agreement as required, the Company, on or before November 24, 2009, deliver or cause to
be delivered to the Purchaser or his designee: (i) the fully executed copy of
this Agreement; (ii) a Certificate representing the Two Hundred Thousand
(200,000) shares of its restricted common stock, issued in the Purchaser’s name,
and; (iii) the
Warrant registered in the name of the Purchaser to purchase up to Twenty
Thousand shares of the Company’s restricted common shares at the Exercise Price.
For each day following November 24, 2009 that the Securities
have not been received as aforesaid, the Company shall pay to the Purchaser a
penalty in the amount of five hundred (500) shares of its restricted common
stock.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    4. 
Representations and
Warranties of the Company. Except as disclosed in the Company’s SEC
Filings (as defined below), the Company hereby represents and warrants to the
Purchaser that:

    

    4.1. 
Organization, Good
Standing and Qualification. The Company is a corporation validly existing
and in good standing under the laws of Colorado and has all requisite corporate
power and authority to carry on its business as now conducted and own its
properties.  The Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property makes such qualification or
licensing necessary unless the failure to so qualify would not result in a
Material Adverse Effect.

    

    4.2. 
Authorization. The
Company has full corporate power and authority and has taken all requisite
action on the part of the Company necessary for (i) the authorization, execution
and delivery of the Agreements, (ii) authorization of the performance of all
obligations of the Company hereunder and thereunder, and (iii) the
authorization, issuance (or reservation for issuance) and delivery of the
Securities. The Agreements constitute the legal, valid and binding obligations
of the Company, enforceable against the Company in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability, relating to or affecting
creditors’ rights generally and general principles of equity that restrict the
availability of equitable or legal remedies.

    

    4.3. 
Valid
Issuance. As of the Closing, the Company has reserved a sufficient
number of shares of Common Stock for the issuance of the Restricted Common
Shares and the Warrant Shares which, when issued in accordance with the terms of
this Agreement and Warrants, will be validly issued, fully paid, non-assessable
and free and clear of all encumbrances and restrictions imposed by or through
the Company, except for restrictions on transfer imposed by applicable
securities laws.

    

    4.4. 
Consents. The
execution, delivery and performance by the Company of the Agreements and,
subject to the truth and accuracy of the representations made by the Purchaser
in this Agreement, the offer, issuance and sale of the Securities to the
Purchaser, require no consent of, action by or in respect of, or filing with,
any Person, agency, or official and filings that have been made pursuant to
applicable state securities laws and post-sale filings pursuant to applicable
state and federal securities laws.

    

    4.5. 
SEC Filings;
Business. The Company has filed all reports, schedules, forms, statements
and other documents required to be filed by it with the SEC pursuant to the
reporting requirements of the 1934 Act (all of the foregoing filed prior to or
on the date hereof and all registration statements and exhibits included therein
and financial statements and schedules thereto and documents incorporated by
reference therein being hereinafter referred to as the "SEC
Filings").  As of the date of filing of such SEC Filings, each
such SEC Filing, as it may have been subsequently amended by filings made by the
Company with the SEC prior to the date hereof, complied in all material respects
with the requirements of the 1934 Act and the rules and regulations of the SEC
promulgated thereunder applicable to such SEC Filing. None of the SEC Filings,
as of the date filed and as they may have been subsequently amended by filings
made by the Company with the SEC prior to the date hereof, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. As of
their respective dates, the financial statements of the Company included in the
SEC Filings complied as to form in all material respects with applicable
accounting requirements and published rules and regulations of the SEC with
respect thereto.  Such financial statements have been prepared in
accordance with generally accepted accounting principles, consistently applied,
during the periods involved (except (i) as may be otherwise indicated in such
financial statements or the notes thereto, or (ii) in the case of unaudited
interim statements, to the extent they may exclude footnotes or may be condensed
or summary statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    4.6. 
No Conflict, Breach,
Violation or Default; Compliance with Law. The execution, delivery and
performance of the Agreements by the Company and the issuance and sale of the
Securities will not conflict with or result in a breach or violation of any of
the terms and provisions of, constitute a default under, require any consent,
approval or filing under, result in or require the creation or imposition of any
lien or encumbrance upon or with respect to the Company’s property under (i) the
Company’s Articles of Incorporation (including any certificates of designation)
or the Company’s Bylaws, both as in effect on the date hereof,  (ii)
any statute, rule, regulation or order of any governmental agency or body or any
court, domestic or foreign, having jurisdiction over the Company or any of its
properties; or (iii) any contract, loan or instrument by which the company or
its property is bound.  The Company (i) is not to its knowledge in
violation of any statute, rule or regulation applicable to the Company or its
assets or its activities, (ii) is not in violation of any judgment, order or
decree applicable to the Company or its assets; and (iii) has not received
notice from any Person of any claim, investigation or inquiry, that, if
adversely determined, would render the preceding sentence untrue or incomplete
and the Company is aware of no facts or circumstances which could give rise to
such a claim, investigation or inquiry.

    

    4.7. 
Brokers and
Finders. The Purchaser acknowledges that Newbridge will receive (i) a
cash fee equal to two (2%) percent of the Purchase Price to be paid by the Company within no
more than three (3) business days following the Closing and (ii) a
Warrant substantially in the form attached hereto as Exhibit A. Subject to the
foregoing, neither the Purchaser nor the Company shall have any liability or
responsibility for the payment of any commission or finder’s fee to any third
party in connection with or resulting from this Agreement or the transactions
contemplated by this Agreement by reason of any agreement of or action taken by
the Company.

    

    5. 
Representations and
Warranties of the Purchaser. The Purchaser hereby represents and
warrants to the Company that:

    

    5.1. 
Organization, Good
Standing, Authorization. If Purchaser is an entity, it is a
corporation, limited liability company, trust or partnership or other similar
entity duly organized, validly existing and in good standing under the laws of
its jurisdiction.  Purchaser has full power and authority (corporate
or otherwise) to execute, deliver and enter into this Agreement.  The
execution, delivery and performance by the Purchaser of this Agreement have been
duly authorized and this Agreement constitutes the valid and legally binding
obligation of the Purchaser, enforceable against the Purchaser in accordance
with their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability, relating
to or affecting creditors’ rights generally and general principles of equity
that restrict the availability of equitable or legal remedies.

    

    5.2. 
Purchase Entirely for
Own Account. The Securities to be received by the Purchaser
hereunder will be acquired for the Purchaser’s own account, not as nominee or
agent, and not with a view to the resale or distribution of any part thereof and
the Purchaser has no present intention of selling, granting any participation
in, or otherwise distributing the same.  The Purchaser is not a
registered broker dealer or an entity engaged in the business of being a broker
dealer.

    

    5.3. 
Investment
Experience. The Purchaser acknowledges that he can bear the economic
risk and complete loss of his investment in the Securities and has such
knowledge and experience in financial or business matters and in private
placement transactions of companies similar to the Company so that he is capable
of evaluating the merits and risks of the purchase contemplated
hereby.

    

    5.4. 
Disclosure of
Information. The Purchaser has had an opportunity to receive
documents related to the Company and to ask questions of and receive answers
from the Company regarding the Company, its business and the terms and
conditions of the offering of the Securities and has received and read the SEC
Filings filed via EDGAR.  Neither such inquiries nor any other due
diligence investigation conducted by the Purchaser shall modify, amend or affect
the Purchaser’s right to rely on the Company’s representations and warranties
contained in this Agreement or made pursuant to this Agreement.

    

    5.5. 
Restricted
Securities. The Purchaser understands that the Securities are
characterized as “restricted securities” under the U.S. federal securities laws
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable state laws
and regulations such securities may be resold without registration under the
1933 Act only in certain limited circumstances.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    5.6. 
Legends. It is
understood that the certificates evidencing the Securities shall bear a legend
substantially similar to the following:

    

    NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE OR
CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY

     

    5.7 
Accredited
Investor. The Purchaser is an Accredited Investor.

    

    5.8 
No General
Solicitation. The Purchaser did not learn of the investment in the
Shares as a result of any public advertising or general
solicitation.

    

    6. 
Miscellaneous.

    

    6.1. 
Successors and
Assigns. This Agreement may not be assigned by the Company or the
Purchaser. The terms and conditions of this Agreement shall inure to the benefit
of and be binding upon the respective parties.  Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto any rights, remedies, obligations, or liabilities under or by
reason of this Agreement, except as expressly provided in this
Agreement.

    

    6.2. 
Counterparts.
This Agreement may be executed in two or more counterparts, by original or
facsimile signature, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

    

    6.3. 
Titles and
Subtitles. The titles and subtitles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.

    

    6.4. 
Notices. Unless
otherwise provided, any notice required or permitted under this Agreement shall
be given in writing and shall be deemed effectively given only upon delivery to
each party to be notified by (i) personal delivery, (ii) facsimile, with
electronic confirmation of transmittal, (iii) certified mail, return receipt
requested, or (iv) an internationally recognized overnight air courier,
addressed to the party to be notified at the address as follows, or at such
other address as such party may designate by ten days’ advance written notice to
the other party:

    

    If to the
Company:

    

    Axion
International Holdings, Inc.

    180 South
Street, Suite 104

    New
Providence, New Jersey  07974

    Facsimile:
(908) 542-0999

    E-Mail:
MGreen@AxionIntl.com

    Att:  Marc
Green, President

    

    With a
copy to:

    Joseph J.
Tomasek, Esq.

    77 North
Bridge Street

    Somerville,
New Jersey 08876

    Facsimile:
(908) 429-0040

    E-Mail:
JToma4368@aol.com

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    If to the
Purchaser, to the address set forth on the signature page hereto.

    

    6.5.  Amendments and
Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Purchaser.

    

    6.6. 
Severability. If
one or more provisions of this Agreement are held to be unenforceable under
applicable law, such provision shall be excluded from this Agreement and the
balance of this Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.

    

    6.7.  Entire
Agreement. This Agreement, including the exhibits and schedules
hereto, and the other documents contemplated hereby constitute the entire
agreement among the parties hereof with respect to the subject matter hereof and
thereof and supersede all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter hereof and
thereof.

    

    6.8. 
Further
Assurances. The parties shall execute and deliver all such further
instruments and documents and take all such other actions as may reasonably be
required to carry out the transactions contemplated hereby and to evidence the
fulfillment of the agreements herein contained.

    

    6.9. 
Applicable
Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New Jersey without regard to
principles of conflicts of laws.

    

    6.10.  No Strict
Construction. The parties hereto have
participated jointly in the negotiation and drafting of this Agreement and the
other Agreements.  In the event an ambiguity or question of intent or
interpretation arises, this Agreement and the other Agreements shall be
construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement or any of the other
Agreements.

    

    

    [Signature
Pages Follow]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    IN WITNESS WHEREOF, the
parties have executed this Agreement as of the ___ day of November,
2009.

     

    
      	
              The
      Company:

            	
              AXION
      INTERNATIONAL HOLDINGS, INC.

            
	 
      	 
      
	 
      	 
      
	 
      	
              By:
      ______________

            
	 
      	
              Name:
      Marc Green

            
	 
      	
              Title:
      President

            
	 
      	 
      
	 
      	
              Purchaser:

            
	 
      	 
      
	 
      	
              ________________________________

               

            	 
      
	
              Social
      Security/Tax Identification Number:

            	 
      	 
      
	 
      	 
      	 
      
	
              Principal
      jurisdiction in which business is conducted:

            	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Exhibit
A Form of Warrants

    

    NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY
AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH
SECURITIES.

    

    COMMON
STOCK PURCHASE WARRANT

    

    AXION
INTERNATIONAL HOLDINGS, INC.

    

    $2.91
EXERCISE PRICE

    

    Warrant
Shares: 20,000; Initial Exercise Date: May 24, 2010; Issue Date: November
24, 2009

    

    THIS
COMMON STOCK PURCHASE WARRANT (the "Warrant") certifies
that, for value received, __________________________. (the "Holder"), is
entitled, upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after the six month
anniversary of the date hereof (the "Initial Exercise
Date") and on or prior to the close of business on the three (3) year
anniversary date of the Initial Exercise Date (the "Termination Date")
but not thereafter, to subscribe for and purchase from Axion International
Holdings, Inc., a Colorado corporation (the "Company"), up to
Twenty Thousand (20,000) shares (the "Warrant Shares") of
common stock, no par value per share, of the Company (the "Common Stock"). The
purchase price of one share of Common Stock under this Warrant shall be equal to
the Exercise Price, as defined in Section 2(b).

    

    Section 1. Definitions.
Capitalized terms shall have the meanings set forth in this
Warrant.

    

    Section 2. Exercise.

     

    
      
        	
              	
                a.

              	
                Exercise of
      Warrant. Exercise of the purchase rights represented by this
      Warrant may be made, in whole or in part, at any time or times on or after
      the Initial Exercise Date on or before the Termination Date by delivery to
      the Company of a duly executed facsimile copy of the Notice of Exercise
      Form annexed hereto (or such other office or agency of the Company as it
      may designate by notice in writing to the registered Holder at the address
      of such Holder appearing on the books of the Company); and, within 3
      Trading Days of the date said Notice of Exercise is delivered to the
      Company, the Company shall have received payment of the aggregate Exercise
      Price of the shares thereby purchased by wire transfer or cashier's check
      drawn on a United States bank. Notwithstanding anything herein to the
      contrary, the Holder shall not be required to physically surrender this
      Warrant to the Company until the Holder has purchased all of the Warrant
      Shares available hereunder and the Warrant has been exercised in full, in
      which case, the Holder shall surrender this Warrant to the Company for
      cancellation within 3 Trading Days of the date the final Notice of
      Exercise is delivered to the Company. Partial exercises of this Warrant
      resulting in purchases of a portion of the total number of Warrant Shares
      available hereunder shall have the effect of lowering the outstanding
      number of Warrant Shares purchasable hereunder in an amount equal to the
      applicable number of Warrant Shares purchased. The Holder and the Company
      shall maintain records showing the number of Warrant Shares purchased and
      the date of such purchases, which records shall be reconciled by the
      Company and the Holder in writing after each such purchase. The Company
      shall deliver any objection to any Notice of Exercise Form within one
      Business Day of receipt of such notice. In the event of any dispute or
      discrepancy, the records of the Holder shall be controlling and
      determinative in the absence of manifest error. The Holder and any
      assignee, by acceptance of this Warrant, acknowledge and agree that, by
      reason of the provisions of this paragraph, following the purchase of a
      portion of the Warrant Shares hereunder, the number of Warrant Shares
      available for purchase hereunder at any given time may be less than the
      amount stated on the face
hereof.

              

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exercise Price and Exercise
Conditions . The exercise price per share of
the Common Stock under this Warrant shall be $2.91, subject
to adjustment hereunder (the "Exercise
Price")

    

    Cashless Exercise. At
any time after one year from the date of issuance this Warrant may also be
exercised at such time by means of a "cashless exercise" in which the Holder
shall be entitled to receive a certificate for the number of Warrant Shares
equal to the quotient obtained by dividing [(A-B) (X)] by (A),
where:

    

    (A) = the
VWAP on the Trading Day immediately preceding the date of such
election;

    

    (B) = the
Exercise Price of this Warrant, as adjusted; and

    

    (X) = the
number of Warrant Shares issuable upon exercise of this Warrant in accordance
with the terms of this Warrant by means of a cash exercise rather than a
cashless exercise.

    

    Notwithstanding
anything herein to the contrary, on the Termination Date, this Warrant shall be
automatically exercised via cashless exercise pursuant to this Section
2(c).

    

    
      	
               
      

            	
              b.

            	
              Holder's
      Restrictions. The Company shall not effect any exercise of this
      Warrant, and a Holder shall not have the right to exercise any portion of
      this Warrant, pursuant to Section 2(c) or otherwise, to the extent that
      after giving effect to such issuance after exercise as set forth on the
      applicable Notice of Exercise, such Holder (together with such Holder's
      Affiliates, and any other person or entity acting as a group together with
      such Holder or any of such Holder's Affiliates), as set forth on the
      applicable Notice of Exercise, would beneficially own in excess of the
      Beneficial Ownership Limitation (as defined below).  For
      purposes of the foregoing sentence, the number of shares of Common Stock
      beneficially owned by such Holder and its Affiliates shall include the
      number of shares of Common Stock issuable upon exercise of this Warrant
      with respect to which such determination is being made, but shall exclude
      the number of shares of Common Stock which would be issuable upon (A)
      exercise of the remaining, nonexercised portion of this Warrant
      beneficially owned by such Holder or any of its Affiliates and (B)
      exercise or conversion of the unexercised or nonconverted portion of any
      other securities of the Company (including, without limitation, any other
      Debentures or Warrants) subject to a limitation on conversion or exercise
      analogous to the limitation contained herein beneficially owned by such
      Holder or any of its Affiliates.  Except as set forth in the
      preceding sentence, for purposes of this Section 2(d)(i), beneficial
      ownership shall be calculated in accordance with Section 13(d) of the
      Exchange Act, it being acknowledged by a Holder that the Company is not
      representing to such Holder that such calculation is in compliance with
      Section 13(d) of the Exchange Act and such Holder is solely responsible
      for any schedules required to be filed in accordance therewith. To the
      extent that the limitation contained in this Section 2(d) applies, the
      determination of whether this Warrant is exercisable (in relation to other
      securities owned by such Holder together with any Affiliates) and of which
      a portion of this Warrant is exercisable shall be in the sole discretion
      of a Holder, and the submission of a Notice of Exercise shall be deemed to
      be each Holder's determination of whether this Warrant is exercisable (in
      relation to other securities owned by such Holder together with any
      Affiliates) and of which portion of this Warrant is exercisable, in each
      case subject to such aggregate percentage limitation, and the Company
      shall have no obligation to verify or confirm the accuracy of such
      determination. In addition, a determination as to any group status as
      contemplated above shall be determined in accordance with Section 13(d) of
      the Exchange Act. For purposes of this Section 2(d), in determining the
      number of outstanding shares of Common Stock, a Holder may rely on the
      number of outstanding shares of Common Stock as reflected in (x) the
      Company's most recent Form 10-Q or Form 10-K, as the case may be, (y) a
      more recent public announcement by the Company or (z) any other notice by
      the Company or the Company's Transfer Agent setting forth the number of
      shares of Common Stock outstanding.  Upon the written or oral
      request of a Holder, the Company shall within two Trading Days confirm
      orally and in writing to such Holder the number of shares of Common Stock
      then outstanding.  In any case, the number of outstanding shares
      of Common Stock shall be determined after giving effect to the conversion
      or exercise of securities of the Company, including this Warrant, by such
      Holder or its Affiliates since the date as of which such number of
      outstanding shares of Common Stock was reported. The "Beneficial Ownership
      Limitation" shall be 4.99% of the number of shares of the Common
      Stock outstanding immediately after giving effect to the issuance of
      shares of Common Stock issuable upon exercise of this Warrant. The
      Beneficial Ownership Limitation provisions of this Section 2(d)(i) may be
      waived by such Holder, at the election of such Holder, upon not less than
      61 days' prior notice to the Company to change the Beneficial Ownership
      Limitation to 9.99% of the number of shares of the Common Stock
      outstanding immediately after giving effect to the issuance of shares of
      Common Stock upon exercise of this Warrant, and the provisions of this
      Section 2(d) shall continue to apply. Upon such a change by a Holder of
      the Beneficial Ownership Limitation from such 4.99% limitation to such
      9.99% limitation, the Beneficial Ownership Limitation may not be further
      waived by such Holder. The provisions of this paragraph shall be construed
      and implemented in a manner otherwise than in strict conformity with the
      terms of this Section 2(d)(i) to correct this paragraph (or any portion
      hereof) which may be defective or inconsistent with the intended
      Beneficial Ownership Limitation herein contained or to make changes or
      supplements necessary or desirable to properly give effect to such
      limitation. The limitations contained in this paragraph shall apply to a
      successor holder of this Warrant.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              c.

            	
              Mechanics of
      Exercise.

            

    

    

    
      
        	
              	
                i.

              	
                Authorization of
      Warrant Shares. The Company covenants that all Warrant Shares which
      may be issued upon the exercise of the purchase rights represented by this
      Warrant will, upon exercise of the purchase rights represented by this
      Warrant, be duly authorized, validly issued, fully paid and nonassessable
      and free from all taxes, liens and charges created by the Company in
      respect of the issue thereof (other than taxes in respect of any transfer
      occurring contemporaneously with such
issue).

              

      

    

    

    
      	
               
      

            	
              ii.

            	
              Delivery of
      Certificates Upon Exercise. Certificates for shares purchased
      hereunder shall be transmitted by the transfer agent of the Company to the
      Holder by crediting the account of the Holder's prime broker with the
      Depository Trust Company through its Deposit Withdrawal Agent Commission
      ("DWAC")
      system if the Company is a participant in such system, and otherwise by
      physical delivery to the address specified by the Holder in the Notice of
      Exercise within 3 Trading Days from the delivery to the Company of the
      Notice of Exercise Form, surrender of this Warrant (if required) and
      payment of the aggregate Exercise Price as set forth above ("Warrant Share Delivery
      Date"). This Warrant shall be deemed to have been exercised on the
      date the Exercise Price is received by the Company. The Warrant Shares
      shall be deemed to have been issued, and Holder or any other person so
      designated to be named therein shall be deemed to have become a holder of
      record of such shares for all purposes, as of the date the Warrant has
      been exercised by payment to the Company of the Exercise Price (or by
      cashless exercise, if permitted) and all taxes required to be paid by the
      Holder, if any, pursuant to Section 2(e)(vii) prior to the issuance of
      such shares, have been paid.

            

    

    

    
      	
               
      

            	
              iii.

            	
              Delivery of New
      Warrants Upon Exercise. If this Warrant shall have been exercised
      in part, the Company shall, at the request of a Holder and upon surrender
      of this Warrant certificate, at the time of delivery of the certificate or
      certificates representing Warrant Shares, deliver to Holder a new Warrant
      evidencing the rights of Holder to purchase the unpurchased Warrant Shares
      called for by this Warrant, which new Warrant shall in all other respects
      be identical with this Warrant.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              iv.

            	
              Rescission
      Rights. If the Company fails to cause its transfer agent to
      transmit to the Holder a certificate or certificates representing the
      Warrant Shares pursuant to this Section 2(e)(iv) by the Warrant Share
      Delivery Date, then the Holder will have the right to rescind such
      exercise.

            

    

    

    
      	
               
      

            	
              v.

            	
              Compensation for
      Buy-In on Failure to Timely Deliver Certificates Upon Exercise. In
      addition to any other rights available to the Holder, if the Company fails
      to cause its transfer agent to transmit to the Holder a certificate or
      certificates representing the Warrant Shares pursuant to an exercise on or
      before the Warrant Share Delivery Date, and if after such date the Holder
      is required by its broker to purchase (in an open market transaction or
      otherwise) or the Holder's brokerage firm otherwise purchases, shares of
      Common Stock to deliver in satisfaction of a sale by the Holder of the
      Warrant Shares which the Holder anticipated receiving upon such exercise
      (a "Buy-In"), then
      the Company shall (1) pay in cash to the Holder the amount by which (x)
      the Holder's total purchase price (including brokerage commissions, if
      any) for the shares of Common Stock so purchased exceeds (y) the amount
      obtained by multiplying (A) the number of Warrant Shares that the Company
      was required to deliver to the Holder in connection with the exercise at
      issue times (B) the price at which the sell order giving rise to such
      purchase obligation was executed, and (2) at the option of the Holder,
      either reinstate the portion of the Warrant and equivalent number of
      Warrant Shares for which such exercise was not honored or deliver to the
      Holder the number of shares of Common Stock that would have been issued
      had the Company timely complied with its exercise and delivery obligations
      hereunder. For example, if the Holder purchases Common Stock having a
      total purchase price of $11,000 to cover a Buy-In with respect to an
      attempted exercise of shares of Common Stock with an aggregate sale price
      giving rise to such purchase obligation of $10,000, under clause (1) of
      the immediately preceding sentence the Company shall be required to pay
      the Holder $1,000. The Holder shall provide the Company written notice
      indicating the amounts payable to the Holder in respect of the Buy-In and,
      upon request of the Company, evidence of the amount of such loss. Nothing
      herein shall limit a Holder's right to pursue any other remedies available
      to it hereunder, at law or in equity including, without limitation, a
      decree of specific performance and/or injunctive relief with respect to
      the Company's failure to timely deliver certificates representing shares
      of Common Stock upon exercise of the Warrant as required pursuant to the
      terms hereof.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              vi.

            	
              No Fractional Shares
      or Scrip. No fractional shares or scrip representing fractional
      shares shall be issued upon the exercise of this Warrant. As to any
      fraction of a share which Holder would otherwise be entitled to purchase
      upon such exercise, the Company shall at its election, either pay a cash
      adjustment in respect of such final fraction in an amount equal to such
      fraction multiplied by the Exercise Price or round up to the next whole
      share.

            

    

    

    
      	
               
      

            	
              vii.

            	
              Charges, Taxes and
      Expenses. Issuance of certificates for Warrant Shares shall be made
      without charge to the Holder for any issue or transfer tax or other
      incidental expense in respect of the issuance of such certificate, all of
      which taxes and expenses shall be paid by the Company, and such
      certificates shall be issued in the name of the Holder or in such name or
      names as may be directed by the Holder; provided, however, that
      in the event certificates for Warrant Shares are to be issued in a name
      other than the name of the Holder, this Warrant when surrendered for
      exercise shall be accompanied by the Assignment Form attached hereto duly
      executed by the Holder; and the Company may require, as a condition
      thereto, the payment of a sum sufficient to reimburse it for any transfer
      tax incidental thereto.

            

    

    

    
      	
               
      

            	
              viii.

            	
              Closing of
      Books. The Company will not close its stockholder books or records
      in any manner which prevents the timely exercise of this Warrant, pursuant
      to the terms hereof.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section 3. Certain Adjustments.

    

    
      	
               
      

            	
              a.

            	
              Stock Dividends and
      Splits. If the Company, at any time while this Warrant is
      outstanding: (A) pays a stock dividend or otherwise make a distribution or
      distributions on shares of its Common Stock or any other equity or equity
      equivalent securities payable in shares of Common Stock (which, for
      avoidance of doubt, shall not include any shares of Common Stock issued by
      the Company upon exercise of this Warrant), (B) subdivides outstanding
      shares of Common Stock into a larger number of shares, (C) combines
      (including by way of reverse stock split) outstanding shares of Common
      Stock into a smaller number of shares, or (D) issues by reclassification
      of shares of the Common Stock any shares of capital stock of the Company,
      then in each case the Exercise Price shall be multiplied by a fraction of
      which the numerator shall be the number of shares of Common Stock
      (excluding treasury shares, if any) outstanding immediately before such
      event and of which the denominator shall be the number of shares of Common
      Stock outstanding immediately after such event and the number of shares
      issuable upon exercise of this Warrant shall be proportionately adjusted.
      Any adjustment made pursuant to this Section 3(a) shall become effective
      immediately after the record date for the determination of stockholders
      entitled to receive such dividend or distribution and shall become
      effective immediately after the effective date in the case of a
      subdivision, combination or
re-classification.

            

    

    

    
      	
               
      

            	
              b.

            	
              [INTENTIONALLY
      DELETED]

            

    

    

    
      	
               
      

            	
              c.

            	
              [INTENTIONALLY
      DELETED]

            

    

    

    
      	
               
      

            	
              d.

            	
              [INTENTIONALLY
      DELETED]

            

    

    

    
      	
               
      

            	
              e.

            	
              Fundamental
      Transaction. If, at any time while this Warrant is outstanding, (A)
      the Company effects any merger or consolidation of the Company with or
      into another Person, (B) the Company effects any sale of all or
      substantially all of its assets in one or a series of related
      transactions, (C) any tender offer or exchange offer (whether by the
      Company or another Person) is completed pursuant to which holders of
      Common Stock are permitted to tender or exchange their shares for other
      securities, cash or property, or (D) the Company effects any
      reclassification of the Common Stock or any compulsory share exchange
      pursuant to which the Common Stock is effectively converted into or
      exchanged for other securities, cash or property (in any such case, a
      "Fundamental
      Transaction"), then, upon any subsequent exercise of this Warrant,
      the Holder shall have the right to receive, for each Warrant Share that
      would have been issuable upon such exercise immediately prior to the
      occurrence of such Fundamental Transaction, at the option of the Holder,
      (a) upon exercise of this Warrant, the number of shares of Common Stock of
      the successor or acquiring corporation or of the Company, if it is the
      surviving corporation, and any additional consideration (the "Alternate
      Consideration") receivable upon or as a result of such
      reorganization, reclassification, merger, consolidation or disposition of
      assets by a Holder of the number of shares of Common Stock for which this
      Warrant is exercisable immediately prior to such event or (b) if the
      Company is acquired in an all cash transaction, cash equal to the value of
      this Warrant as determined in accordance with the Black-Scholes option
      pricing formula. For purposes of any such exercise, the determination of
      the Exercise Price shall be appropriately adjusted to apply to such
      Alternate Consideration based on the amount of Alternate Consideration
      issuable in respect of one share of Common Stock in such Fundamental
      Transaction, and the Company shall apportion the Exercise Price among the
      Alternate Consideration in a reasonable manner reflecting the relative
      value of any different components of the Alternate Consideration. If
      holders of Common Stock are given any choice as to the securities, cash or
      property to be received in a Fundamental Transaction, then the Holder
      shall be given the same choice as to the Alternate Consideration it
      receives upon any exercise of this Warrant following such Fundamental
      Transaction. To the extent necessary to effectuate the foregoing
      provisions, any successor to the Company or surviving entity in such
      Fundamental Transaction shall issue to the Holder a new warrant consistent
      with the foregoing provisions and evidencing the Holder's right to
      exercise such warrant into Alternate Consideration. The terms of any
      agreement pursuant to which a Fundamental Transaction is effected shall
      include terms requiring any such successor or surviving entity to comply
      with the provisions of this Section 3(e) and insuring that this Warrant
      (or any such replacement security) will be similarly adjusted upon any
      subsequent transaction analogous to a Fundamental
    Transaction.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              f.

            	
              Calculations.
      All calculations under this Section 3 shall be made to the nearest cent or
      the nearest 1/100th of a share, as the case may be. For purposes of this
      Section 3, the number of shares of Common Stock deemed to be issued and
      outstanding as of a given date shall be the sum of the number of shares of
      Common Stock (excluding treasury shares, if any) issued and
      outstanding.

            

    

    

    
      	
               
      

            	
              g.

            	
              Voluntary Adjustment
      By Company. The Company may at any time during the term of this
      Warrant reduce the then current Exercise Price to any amount and for any
      period of time deemed appropriate by the Board of Directors of the
      Company.

            

    

    

    
      	
               
      

            	
              h.

            	
              Notice to
      Holder.

            

    

    
       

      
        	
              	
                i.

              	
                Adjustment to Exercise
      Price. Whenever the Exercise Price is adjusted pursuant to any
      provision of this Section 3, the Company shall promptly mail to the Holder
      a notice setting forth the Exercise Price after such adjustment and
      setting forth a brief statement of the facts requiring such adjustment.
      Notice to Allow
      Exercise by Holder. If (A) the Company shall declare a dividend (or
      any other distribution in whatever form) on the Common Stock; (B) the
      Company shall declare a special nonrecurring cash dividend on or a
      redemption of the Common Stock; (C) the Company shall authorize the
      granting to all holders of the Common Stock rights or warrants to
      subscribe for or purchase any shares of capital stock of any class or of
      any rights; (D) the approval of any stockholders of the Company shall be
      required in connection with any reclassification of the Common Stock, any
      consolidation or merger to which the Company is a party, any sale or
      transfer of all or substantially all of the assets of the Company, of any
      compulsory share exchange whereby the Common Stock is converted into other
      securities, cash or property; (E) the Company shall authorize the
      voluntary or involuntary dissolution, liquidation or winding up of the
      affairs of the Company; then, in each case, the Company shall cause to be
      mailed to the Holder at its last address as it shall appear upon the
      Warrant Register of the Company, at least 20 calendar days prior to the
      applicable record or effective date hereinafter specified, a notice
      stating (x) the date on which a record is to be taken for the purpose of
      such dividend, distribution, redemption, rights or warrants, or if a
      record is not to be taken, the date as of which the holders of the Common
      Stock of record to be entitled to such dividend, distributions,
      redemption, rights or warrants are to be determined or (y) the date on
      which such reclassification, consolidation, merger, sale, transfer or
      share exchange is expected to become effective or close, and the date as
      of which it is expected that holders of the Common Stock of record shall
      be entitled to exchange their shares of the Common Stock for securities,
      cash or other property deliverable upon such reclassification,
      consolidation, merger, sale, transfer or share exchange; provided that
      the failure to mail such notice or any defect therein or in the mailing
      thereof shall not affect the validity of the corporate action required to
      be specified in such notice. The Holder is entitled to exercise this
      Warrant during the 20-day period commencing on the date of such notice to
      the effective date of the event triggering such
  notice.

              

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section 4. Transfer of
Warrant.

    

    
      	
               
      

            	
              a.

            	
              Transferability.
      Subject to compliance with any applicable securities laws, this Warrant
      and all rights hereunder (including, without limitation, any registration
      rights) are transferable, in whole or in part, upon surrender of this
      Warrant at the principal office of the Company or its designated agent,
      together with a written assignment of this Warrant substantially in the
      form attached hereto duly executed by the Holder or its agent or attorney
      and funds sufficient to pay any transfer taxes payable upon the making of
      such transfer. Upon such surrender and, if required, such payment, the
      Company shall execute and deliver a new Warrant or Warrants in the name of
      the assignee or assignees and in the denomination or denominations
      specified in such instrument of assignment, and shall issue to the
      assignor a new Warrant evidencing the portion of this Warrant not so
      assigned, and this Warrant shall promptly be cancelled. A Warrant, if
      properly assigned, may be exercised by a new holder for the purchase of
      Warrant Shares without having a new Warrant
  issued.

            

    

    

    
      	
               
      

            	
              b.

            	
              New Warrants.
      This Warrant may be divided or combined with other Warrants upon
      presentation hereof at the aforesaid office of the Company, together with
      a written notice specifying the names and denominations in which new
      Warrants are to be issued, signed by the Holder or its agent or attorney.
      Subject to compliance with Section 4(a), as to any transfer which may be
      involved in such division or combination, the Company shall execute and
      deliver a new Warrant or Warrants in exchange for the Warrant or Warrants
      to be divided or combined in accordance with such
  notice.

            

    

    

    
      	
               
      

            	
              c.

            	
              Warrant
      Register. The Company shall register this Warrant, upon records to
      be maintained by the Company for that purpose (the "Warrant
      Register"), in the name of the record Holder hereof from time to
      time. The Company may deem and treat the registered Holder of this Warrant
      as the absolute owner hereof for the purpose of any exercise hereof or any
      distribution to the Holder, and for all other purposes, absent actual
      notice to the contrary.

            

    

    

    
      	
               
      

            	
              d.

            	
              Transfer
      Restrictions. If, at the time of the surrender of this Warrant in
      connection with any transfer of this Warrant, the Company shall require,
      as a condition of allowing such transfer, that (i) the Holder or
      transferee of this Warrant, as the case may be, furnish to the Company a
      written opinion of counsel (which opinion shall be in form, substance and
      scope customary for opinions of counsel in comparable transactions) to the
      effect that such transfer may be made without registration under the
      Securities Act and under applicable state securities or blue sky laws, and
      (ii) the Holder or transferee execute and deliver to the Company an
      investment letter in form and substance acceptable to the Company, and
      (iii) the transferee be an "accredited investor" as defined in Rule
      501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8) promulgated under the
      Securities Act or a "qualified institutional buyer" as defined in Rule
      144A(a) promulgated under the Securities
Act.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section 5. Miscellaneous.

    

    
      	
               
      

            	
              a.

            	
              No Rights as
      Shareholder Until Exercise. This Warrant does not entitle the
      Holder to any voting rights or other rights as a shareholder of the
      Company prior to the exercise hereof as set forth in Section
      2(e)(ii).

            

    

    

    
      	
               
      

            	
              b.

            	
              Loss, Theft,
      Destruction or Mutilation of Warrant. The Company covenants that
      upon receipt by the Company of evidence reasonably satisfactory to it of
      the loss, theft, destruction or mutilation of this Warrant or any stock
      certificate relating to the Warrant Shares, and in case of loss, theft or
      destruction, of indemnity or security reasonably satisfactory to it
      (which, in the case of the Warrant, shall not include the posting of any
      bond), and upon surrender and cancellation of such Warrant or stock
      certificate, if mutilated, the Company will make and deliver a new Warrant
      or stock certificate of like tenor and dated as of such cancellation, in
      lieu of such Warrant or stock
certificate.

            

    

    

    
      	
               
      

            	
              c.

            	
              Saturdays, Sundays,
      Holidays, etc. If the last or appointed day for the taking of any
      action or the expiration of any right required or granted herein shall not
      be a Business Day, then such action may be taken or such right may be
      exercised on the next succeeding Business
Day.

            

    

    

    
      	
               
      

            	
              d.

            	
              Authorized
      Shares. The Company covenants that during the period the Warrant is
      outstanding, it will reserve from its authorized and unissued Common Stock
      a sufficient number of shares to provide for the issuance of the Warrant
      Shares upon the exercise of any purchase rights under this Warrant. The
      Company further covenants that its issuance of this Warrant shall
      constitute full authority to its officers who are charged with the duty of
      executing stock certificates to execute and issue the necessary
      certificates for the Warrant Shares upon the exercise of the purchase
      rights under this Warrant. The Company will take all such reasonable
      action as may be necessary to assure that such Warrant Shares may be
      issued as provided herein without violation of any applicable law or
      regulation, or of any requirements of the Trading Market upon which the
      Common Stock may be listed.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Except
and to the extent as waived or consented to by the Holder, the Company shall not
by any action, including, without limitation, amending its certificate of
incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of Holder as set forth in this Warrant against
impairment. Without limiting the generality of the foregoing, the Company will
(a) not increase the par value of any Warrant Shares above the amount payable
therefor upon such exercise immediately prior to such increase in par value, (b)
take all such action as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable Warrant
Shares upon the exercise of this Warrant, and (c) use commercially reasonable
efforts to obtain all such authorizations, exemptions or consents from any
public regulatory body having jurisdiction thereof as may be necessary to enable
the Company to perform its obligations under this Warrant.

    

    Before
taking any action which would result in an adjustment in the number of Warrant
Shares for which this Warrant is exercisable or in the Exercise Price, the
Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.

    

    
      	
               
      

            	
              e.

            	
              Jurisdiction.
      All questions concerning the construction, validity, enforcement and
      interpretation of this Warrant shall be determined in accordance with the
      laws of the State of New Jersey.

            

    

    

    
      	
               
      

            	
              f.

            	
              Restrictions.
      The Holder acknowledges that the Warrant Shares acquired upon the exercise
      of this Warrant will have restrictions upon resale imposed by state and
      federal securities laws.

            

    

    

    
      	
               
      

            	
              g.

            	
              Nonwaiver and
      Expenses. No course of dealing or any delay or failure to exercise
      any right hereunder on the part of Holder shall operate as a waiver of
      such right or otherwise prejudice Holder's rights, powers or remedies,
      notwithstanding the fact that all rights hereunder terminate on the
      Termination Date. If the Company willfully and knowingly fails to comply
      with any provision of this Warrant, which results in any material damages
      to the Holder, the Company shall pay to Holder such amounts as shall be
      sufficient to cover any costs and expenses including, but not limited to,
      reasonable attorneys' fees, including those of appellate proceedings,
      incurred by Holder in collecting any amounts due pursuant hereto or in
      otherwise enforcing any of its rights, powers or remedies
      hereunder.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              h.

            	
              Notices. Any
      notice, request or other document required or permitted to be given or
      delivered to the Holder by the Company shall be delivered in accordance
      with the notice provisions of the Securities Purchase
      Agreement.

            

    

    

    
      	
               
      

            	
              i.

            	
              Limitation of
      Liability. No provision hereof, in the absence of any affirmative
      action by Holder to exercise this Warrant to purchase Warrant Shares, and
      no enumeration herein of the rights or privileges of Holder, shall give
      rise to any liability of Holder for the purchase price of any Common Stock
      or as a stockholder of the Company, whether such liability is asserted by
      the Company or by creditors of the
Company.

            

    

    

    
      	
               
      

            	
              j.

            	
              Remedies.
      Holder, in addition to being entitled to exercise all rights granted by
      law, including recovery of damages, will be entitled to specific
      performance of its rights under this Warrant. The Company agrees that
      monetary damages would not be adequate compensation for any loss incurred
      by reason of a breach by it of the provisions of this Warrant and hereby
      agrees to waive and not to assert the defense in any action for specific
      performance that a remedy at law would be
  adequate.

            

    

    

    
      	
               
      

            	
              k.

            	
              Successors and
      Assigns. Subject to applicable securities laws, this Warrant and
      the rights and obligations evidenced hereby shall inure to the benefit of
      and be binding upon the successors of the Company and the successors and
      permitted assigns of Holder. The provisions of this Warrant are intended
      to be for the benefit of all Holders from time to time of this Warrant and
      shall be enforceable by any such Holder or holder of Warrant
      Shares.

            

    

    

    
      	
               
      

            	
              l.

            	
              Amendment. This
      Warrant may be modified or amended or the provisions hereof waived with
      the written consent of the Company and the
  Holder.

            

    

    

    
      	
               
      

            	
              m.

            	
              Severability.
      Wherever possible, each provision of this Warrant shall be interpreted in
      such manner as to be effective and valid under applicable law, but if any
      provision of this Warrant shall be prohibited by or invalid under
      applicable law, such provision shall be ineffective to the extent of such
      prohibition or invalidity, without invalidating the remainder of such
      provisions or the remaining provisions of this
  Warrant.

            

    

    

    
      	
               
      

            	
              n.

            	
              Headings. The
      headings used in this Warrant are for the convenience of reference only
      and shall not, for any purpose, be deemed a part of this
      Warrant.

            

    

    

    ********************

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized as of the date first above
indicated.

    

    

    AXION
INTERNATIONAL HOLDINGS, INC.

     

    
      
        	
                By:

              	
                 

              	 
      
	 
      	 
      	 
      
	 
      	
                Marc
      Y. Green, President

              	 
      

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

        
          EXERCISE
NOTICE

          

          TO
BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

          WARRANT
TO PURCHASE COMMON STOCK

          

          AXION
INTERNATIONAL HOLDINGS, INC.

          

          The
undersigned holder hereby exercises the right to purchase ________
of  the shares of Common Stock (“Warrant Shares”) of AXION  INTERNATIONAL
HOLDINGS, INC, a Colorado corporation (the “Company”), evidenced by the
attached Warrant to Purchase Common Stock (the “Warrant”). Capitalized terms
used herein and not otherwise defined shall have the respective meanings set
forth in the Warrant.

           

          1. Form
of Exercise Price. The Holder intends that payment of the Exercise Price shall
be made as:

           

          ____a
“Cashless Exercise” with respect to ________ Warrant
Shares

           

          ____b
Cash Exercise, at $2.91 per Common Share with respect to ________ Warrant
Shares

          

          2.
Delivery of Warrant Shares. The Company shall deliver to the Holder  Warrant Shares
in accordance with the terms of the Warrant.

           

          Date:
______ __, ______

           

          
 

          
            	 
      	 	 
      
	
                    Name
      of Registered Holder

                  	 	 
      
	 
      	 
      	 	 
      
	
                    By:

                  	 
      	 	 
      
	 
      	
                    Name:

                  	 	 
      
	 
      	
                    Title:Exhibit
10.1

     

    EXECUTION
FORM

    
      
        
          	
                   

                	
                   

                

        

      

    

    

    CREDIT
AGREEMENT

    

    dated
as of

    

    November
18, 2009

    

    among

    

    PENN
VIRGINIA HOLDING CORP.,

    as
Borrower

    

    PENN
VIRGINIA CORPORATION,

    as
Parent

    

    The
Lenders Party Hereto

    

    and

    

    JPMORGAN
CHASE BANK, NATIONAL ASSOCIATION,

    as
Administrative Agent and Issuing Bank

    

    and

    

    WELLS
FARGO BANK, N.A., and BANK OF AMERICA, N.A.,

    as
Co-Syndication Agents

    

    And

    

    ROYAL
BANK OF CANADA and BNP PARIBAS,

    as
Co-Documentation Agents,

     

    
      
        

      

       

      J.P.
MORGAN SECURITIES INC.,

    

    as
Sole Bookrunner and Sole Arranger

    
      
        
          	
                   

                	
                   

                

        

      

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    CONTENTS

     

    
      
        
          
            
              
                
                  
                    
                      
                        	Clause	
                                Subject
      Matter

                              	 	
                                Page

                              
	 	 
      	 
      	 	 	 
	ARTICLE
      I	
                                Definitions

                              	 	 	1	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      1.01.

                              	
                                Defined
      Terms

                              	 	 	1	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      1.02.

                              	
                                Classification
      of Loans and Borrowings

                              	 	 	24	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      1.03.

                              	
                                Terms
      Generally

                              	 	 	25	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      1.04.

                              	
                                Accounting
      Terms; GAAP

                              	 	 	25	 
	 	 
      	 
      	 	 	 	 
	ARTICLE
      II	
                                The
      Credits

                              	 	 	25	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      2.01.

                              	
                                Commitments

                              	 	 	25	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      2.02.

                              	
                                Loans
      and Borrowings

                              	 	 	25	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      2.03.

                              	
                                Requests
      for Borrowings

                              	 	 	26	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      2.04.

                              	
                                Borrowing
      Base

                              	 	 	27	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      2.05.

                              	
                                Increase
      in Aggregate Commitment Amount

                              	 	 	28	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      2.06.

                              	
                                Letters
      of Credit

                              	 	 	30	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      2.07.

                              	
                                Funding
      of Borrowings

                              	 	 	34	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      2.08.

                              	
                                Interest
      Elections

                              	 	 	35	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      2.09.

                              	
                                Termination
      and Reduction of Commitments

                              	 	 	36	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      2.10.

                              	
                                Repayment
      of Loans; Evidence of Debt

                              	 	 	36	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      2.11.

                              	
                                Prepayment
      of Loans

                              	 	 	37	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      2.12.

                              	
                                Fees

                              	 	 	38	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      2.13.

                              	
                                Interest

                              	 	 	39	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      2.14.

                              	
                                Alternate
      Rate of Interest

                              	 	 	40	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      2.15.

                              	
                                Increased
      Costs

                              	 	 	41	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      2.16.

                              	
                                Break
      Funding Payments

                              	 	 	42	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      2.17.

                              	
                                Taxes

                              	 	 	42	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      2.18.

                              	
                                Payments
      Generally; Pro Rata Treatment; Sharing of Set-offs

                              	 	 	43	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      2.19.

                              	
                                Mitigation
      Obligations; Replacement of Lenders

                              	 	 	45	 

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        -i-

        
          

        

      

      
         

      

    

    

    CONTENTS

     

    
      
        
          
            
              
                
                  	Clause	
                          Subject
      Matter

                        	 	
                          Page

                        
	 	 
      	 
      	 	 	 
	 	
                          Section
      2.20.

                        	
                          Defaulting
      Lenders

                        	 	 	46	 
	 	 
      	 
      	 	 	 	 
	ARTICLE
      III	
                          Representations
      and Warranties

                        	 	 	47	 
	 	 
      	 
      	 	 	 	 
	 	
                          Section
      3.01.

                        	
                          Existence;
      Organization; Powers

                        	 	 	47	 
	 	 
      	 
      	 	 	 	 
	 	
                          Section
      3.02.

                        	
                          Authorization;
      Enforceability

                        	 	 	47	 
	 	 
      	 
      	 	 	 	 
	 	
                          Section
      3.03.

                        	
                          Governmental
      Approvals; No Conflicts

                        	 	 	48	 
	 	 
      	 
      	 	 	 	 
	 	
                          Section
      3.04.

                        	
                          Financial
      Condition; No Material Adverse Change

                        	 	 	48	 
	 	 
      	 
      	 	 	 	 
	 	
                          Section
      3.05.

                        	
                          Properties.

                        	 	 	49	 
	 	 
      	 
      	 	 	 	 
	 	
                          Section
      3.06.

                        	
                          Litigation
      and Environmental Matters

                        	 	 	49	 
	 	 
      	 
      	 	 	 	 
	 	
                          Section
      3.07.

                        	
                          Compliance
      with Laws and Agreements

                        	 	 	51	 
	 	 
      	 
      	 	 	 	 
	 	
                          Section
      3.08.

                        	
                          Investment
      Company Status

                        	 	 	51	 
	 	 
      	 
      	 	 	 	 
	 	
                          Section
      3.09.

                        	
                          Taxes

                        	 	 	51	 
	 	 
      	 
      	 	 	 	 
	 	
                          Section
      3.10.

                        	
                          ERISA

                        	 	 	51	 
	 	 
      	 
      	 	 	 	 
	 	
                          Section
      3.11.

                        	
                          Disclosure

                        	 	 	52	 
	 	 
      	 
      	 	 	 	 
	 	
                          Section
      3.12.

                        	
                          Use
      of Loans and Letters of Credit

                        	 	 	52	 
	 	 
      	 
      	 	 	 	 
	 	
                          Section
      3.13.

                        	
                          Subsidiaries

                        	 	 	52	 
	 	 
      	 
      	 	 	 	 
	 	
                          Section
      3.14.

                        	
                          Jurisdiction
      of Incorporation or Organization

                        	 	 	52	 
	 	 
      	 
      	 	 	 	 
	 	
                          Section
      3.15.

                        	
                          Maintenance
      of Properties

                        	 	 	53	 
	 	 
      	 
      	 	 	 	 
	 	
                          Section
      3.16.

                        	
                          Insurance

                        	 	 	53	 
	 	 
      	 
      	 	 	 	 
	 	
                          Section
      3.17.

                        	
                          Gas
      Imbalances, Prepayments

                        	 	 	53	 
	 	 
      	 
      	 	 	 	 
	 	
                          Section
      3.18.

                        	
                          Marketing
      of Production

                        	 	 	53	 
	 	 
      	 
      	 	 	 	 
	 	
                          Section
      3.19.

                        	
                          Hedging
      Transactions

                        	 	 	54	 
	 	 
      	 
      	 	 	 	 
	 	
                          Section
      3.20.

                        	
                          Restriction
      on Liens

                        	 	 	54	 
	 	 
      	 
      	 	 	 	 
	 	
                          Section
      3.21.

                        	
                          Intellectual
      Property

                        	 	 	54	 
	 	 
      	 
      	 	 	 	 
	 	
                          Section
      3.22.

                        	
                          Material
      Personal Property

                        	 	 	54	 
	 	 
      	 
      	 	 	 	 
	 	
                          Section
      3.23.

                        	
                          Business

                        	 	 	54	 

                

              

            

          

        

      

    

    
      
         

      

      
        -ii-

        
          

        

      

      
         

      

    

    

    CONTENTS

     

    
      
        
          
            
              
                
                  
                    
                      	Clause	
                              Subject
      Matter

                            	 	
                              Page

                            
	 	 
      	 
      	 	 	 
	 	
                              Section
      3.24.

                            	
                              Solvency

                            	 	 	54	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      3.25.

                            	
                              Licenses,
      Permits, Etc

                            	 	 	55	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      3.26.

                            	
                              Fiscal
      Year

                            	 	 	55	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      3.27.

                            	
                              Seniority
      Designation

                            	 	 	55	 
	 	 
      	 
      	 	 	 	 
	ARTICLE
      IV	
                              Conditions

                            	 	 	55	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      4.01.

                            	
                              Effective
      Date

                            	 	 	55	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      4.02.

                            	
                              Each
      Credit Event

                            	 	 	58	 
	 	 
      	 
      	 	 	 	 
	ARTICLE
      V	
                              Affirmative
      Covenants

                            	 	 	59	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      5.01.

                            	
                              Financial
      Statements; Other Information

                            	 	 	59	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      5.02.

                            	
                              Notices
      of Material Events

                            	 	 	61	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      5.03.

                            	
                              Existence;
      Conduct of Business

                            	 	 	62	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      5.04.

                            	
                              Payment
      of Obligations, Taxes and Material Claims

                            	 	 	63	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      5.05.

                            	
                              Maintenance
      of Properties; Insurance.

                            	 	 	63	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      5.06.

                            	
                              Books
      and Records; Inspection Rights

                            	 	 	64	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      5.07.

                            	
                              Compliance
      with Laws

                            	 	 	64	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      5.08.

                            	
                              Use
      of Proceeds and Letters of Credit

                            	 	 	64	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      5.09.

                            	
                              Environmental
      Matters

                            	 	 	65	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      5.10.

                            	
                              Further
      Assurances

                            	 	 	65	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      5.11.

                            	
                              Reserve
      Reports

                            	 	 	66	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      5.12.

                            	
                              Title
      Information

                            	 	 	66	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      5.13.

                            	
                              Additional
      Collateral; Additional Guarantors

                            	 	 	67	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      5.14.

                            	
                              ERISA
      Information and Compliance

                            	 	 	68	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      5.15.

                            	
                              Business
      of the Borrower

                            	 	 	68	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      5.16.

                            	
                              Permits,
      Licenses

                            	 	 	69	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      5.17.

                            	
                              Swap
      Agreement Termination

                            	 	 	69	 

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        -iii-

        
          

        

      

      
         

      

    

    CONTENTS

     

    
      
        
          
            
              
                
                  
                    
                      	Clause	
                              Subject
      Matter

                            	 	
                              Page

                            
	 	 
      	 
      	 	 	 
	 	
                              Section
      5.18.

                            	
                              Restricted
      Subsidiaries

                            	 	 	69	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      5.19.

                            	
                              Agreements
      Respecting Unrestricted Subsidiaries

                            	 	 	69	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      5.20.

                            	
                              Additional
      Covenants Upon Issuance of Unsecured Notes

                            	 	 	69	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      5.21.

                            	
                              Certain
      Post-Effective Date Matters

                            	 	 	70	 
	 	 
      	 
      	 	 	 	 
	ARTICLE
      VI	
                              Negative
      Covenants

                            	 	 	70	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      6.01.

                            	
                              Indebtedness

                            	 	 	71	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      6.02.

                            	
                              Liens

                            	 	 	72	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      6.03.

                            	
                              Fundamental
      Changes

                            	 	 	73	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      6.04.

                            	
                              Investments,
      Loans and Advances

                            	 	 	73	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      6.05.

                            	
                              Hedging
      Transactions

                            	 	 	74	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      6.06.

                            	
                              Restricted
      Payments

                            	 	 	75	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      6.07.

                            	
                              Transactions
      with Affiliates

                            	 	 	75	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      6.08.

                            	
                              Restrictive
      Agreements

                            	 	 	75	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      6.09.

                            	
                              Financial
      Covenants

                            	 	 	76	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      6.10.

                            	
                              Designation
      and Conversion of Restricted and Unrestricted Subsidiaries; Indebtedness
      of Unrestricted Subsidiaries

                            	 	 	76	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      6.11.

                            	
                              Proceeds
      of Loans

                            	 	 	77	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      6.12.

                            	
                              ERISA
      Compliance

                            	 	 	77	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      6.13.

                            	
                              Sale
      of Properties

                            	 	 	78	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      6.14.

                            	
                              Environmental
      Matters

                            	 	 	78	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      6.15.

                            	
                              Subsidiaries

                            	 	 	78	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      6.16.

                            	
                              Gas
      Imbalances, Take-or-Pay or Other Prepayments

                            	 	 	79	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      6.17.

                            	
                              Fiscal
      Year; Fiscal Quarter

                            	 	 	79	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      6.18.

                            	
                              Repayment
      of Unsecured Notes; Amendment of Unsecured Notes Documents

                            	 	 	79	 
	 	 
      	 
      	 	 	 	 
	 	
                              Section
      6.19.

                            	
                              Marketing
      Activities

                            	 	 	80	 

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        -iv-

        
          

        

      

      
         

      

    

    CONTENTS

     

    
      
        
          
            
              
                
                  
                    
                      
                        	Clause	
                                Subject
      Matter

                              	 	
                                Page

                              
	 	 
      	 
      	 	 	 
	 	
                                Section
      6.20.

                              	
                                Sale
      or Discount of Receivables

                              	 	 	80	 
	 	 
      	 
      	 	 	 	 
	ARTICLE
      VII	
                                Events
      of Default; Remedies; Application of Proceeds

                              	 	 	80	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      7.01.

                              	
                                If
      any of the following events (“Events of Default”) shall
    occur:

                              	 	 	80	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      7.02.

                              	
                                Application
      of Payments

                              	 	 	82	 
	 	 
      	 
      	 	 	 	 
	ARTICLE
      VIII	
                                The
      Administrative Agent

                              	 	 	83	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      8.01.

                              	
                                Appointment;
      Powers

                              	 	 	83	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      8.02.

                              	
                                Agents
      as Lenders

                              	 	 	83	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      8.03.

                              	
                                Duties
      and Obligations of Administrative Agent

                              	 	 	84	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      8.04.

                              	
                                Reliance
      by Administrative Agent

                              	 	 	84	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      8.05.

                              	
                                Subagents

                              	 	 	84	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      8.06.

                              	
                                Resignation
      or Removal of Administrative Agent

                              	 	 	85	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      8.07.

                              	
                                No
      Reliance

                              	 	 	85	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      8.08.

                              	
                                Administrative
      Agent May File Proofs of Claim

                              	 	 	85	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      8.09.

                              	
                                Authority
      of Administrative Agent to Execute Collateral Documents and Release
      Collateral and Liens

                              	 	 	86	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      8.10.

                              	
                                The
      Arranger, the Co-Syndication Agents and the Co-Documentation
      Agents

                              	 	 	86	 
	 	 
      	 
      	 	 	 	 
	ARTICLE
      IX	
                                Miscellaneous

                              	 	 	87	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      9.01.

                              	
                                Notices

                              	 	 	87	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      9.02.

                              	
                                Waivers;
      Amendments

                              	 	 	88	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      9.03.

                              	
                                Expenses;
      Indemnity; Damage Waiver

                              	 	 	89	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      9.04.

                              	
                                Successors
      and Assigns

                              	 	 	90	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      9.05.

                              	
                                Survival

                              	 	 	93	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      9.06.

                              	
                                Counterparts;
      Integration; Effectiveness

                              	 	 	94	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      9.07.

                              	
                                Severability

                              	 	 	94	 
	 	 
      	 
      	 	 	 	 
	 	
                                Section
      9.08.

                              	
                                Right
      of Setoff

                              	 	 	94	 

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        -v-

        
          

        

      

      
         

      

    

    CONTENTS

     

    
      
        
          
            
              
                
                  	Clause	
                          Subject
      Matter

                        	 	
                          Page

                        
	 	 
      	 
      	 	 	 
	 	
                          Section
      9.09.

                        	
                          Governing
      Law; Jurisdiction; Consent to Service of Process

                        	 	 	94	 
	 	 
      	 
      	 	 	 	 
	 	
                          Section
      9.10.

                        	
                          WAIVER
      OF JURY TRIAL

                        	 	 	95	 
	 	 
      	 
      	 	 	 	 
	 	
                          Section
      9.11.

                        	
                          Headings

                        	 	 	95	 
	 	 
      	 
      	 	 	 	 
	 	
                          Section
      9.12.

                        	
                          Confidentiality

                        	 	 	95	 
	 	 
      	 
      	 	 	 	 
	 	
                          Section
      9.13.

                        	
                          Interest
      Rate Limitation

                        	 	 	97	 
	 	 
      	 
      	 	 	 	 
	 	
                          Section
      9.14.

                        	
                          Collateral
      Matters; Lender Party Swap Agreements and Lender Party Financial Service
      Products

                        	 	 	97	 
	 	 
      	 
      	 	 	 	 
	 	
                          Section
      9.15.

                        	
                          No
      Third Party Beneficiaries

                        	 	 	98	 
	 	 
      	 
      	 	 	 	 
	 	
                          Section
      9.16.

                        	
                          USA
      PATRIOT Act

                        	 	 	98	 
	 	 
      	 
      	 	 	 	 
	 	
                          Section
      9.17.

                        	
                          NO
      ORAL AGREEMENTS

                        	 	 	98	 

                

              

            

          

        

      

    

    
      
         

      

      
        -vi-

        
          

        

      

      
         

      

    

    SCHEDULES:

     

    Schedule
2.01 – Commitments

    Schedule
2.06(k) – Existing Letters of Credit

    Schedule
3.06 – Litigation

    Schedule
3.13 – Subsidiaries

    Schedule
3.17 – Gas Imbalances

    Schedule
3.18 –Marketing Contracts

    Schedule
3.19 – Swap Agreements

    Schedule
4.01(m) – Certain Unrestricted Subsidiaries

    Schedule
6.01(b) – Outstanding Unsecured Notes

    Schedule
6.01(c) – Existing Indebtedness

    Schedule
6.02 – Existing Liens

    Schedule
6.04 – Investments

    Schedule
6.08 – Existing Restrictions

    

    EXHIBITS:

     

    Exhibit A
– Form of Assignment and Assumption

    Exhibit B
– Additional Lender Agreement

    Exhibit C
– Compliance Certificate

    Exhibit D
– Form of Subordination Agreement

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    This
CREDIT AGREEMENT dated as of November 18, 2009, among PENN VIRGINIA
HOLDING CORP., as Borrower, PENN VIRGINIA CORPORATION, as Parent, LENDERS
party hereto, and JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as Administrative
Agent.

     

    The
parties hereto agree as follows:

     

    ARTICLE
I

     

    Definitions

     

    SECTION
1.01.  Defined
Terms.  As used in this Agreement, the following terms have the
meanings specified below:

     

    “2007 Convertible
Notes” means those certain 41⁄2% convertible senior subordinated notes due
November 15, 2012, issued by the Parent in an aggregate principal
amount of $230,000,000 on the date of issuance thereof.

     

    “2007 Convertible Notes
Indenture” means collectively, that certain indenture dated as of
December 5, 2007, by and among the Parent, as issuer, and Wells Fargo
Bank, National Association, as trustee, and certain of its affiliates, that
certain first supplemental indenture dated as of December 5, 2007,
between the Parent and Wells Fargo Bank, National Association, as trustee, and
related documentation entered into in connection therewith, pursuant to which
the 2007 Convertible Notes have been issued, as the same may be amended,
restated, modified or supplemented from time to time.

     

    “ABR”, when used in
reference to any Loan or Borrowing, refers to whether such Loan, or the Loans
comprising such Borrowing, are bearing interest at a rate determined by
reference to the Alternate Base Rate.

     

    “Additional Lender
Agreement” shall have the meaning assigned to such term in
Section 2.05(b).

     

    “Adjusted LIBO Rate”
means, with respect to any Eurodollar Borrowing for any Interest Period, an
interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%)
equal to (a) the LIBO Rate for such Interest Period multiplied by
(b) the Statutory Reserve Rate.

     

    “Administrative Agent”
means JPMorgan Chase Bank, N.A., in its capacity as administrative agent for the
Lenders hereunder, pursuant to Article VIII (and not in its individual
capacity as a Lender), together with any successor agent appointed pursuant to
Article VIII.

     

    “Administrative
Questionnaire” means an Administrative Questionnaire in a form supplied
by the Administrative Agent.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    “Advance Payment
Contract” means (a) any production payment (whether volumetric or
dollar denominated) granted or sold by any Credit Party payable from a specified
share of proceeds received from production from specified Oil and Gas
Properties, together with all undertakings and obligations in connection
therewith, or (b) any contract whereby any Credit Party receives or becomes
entitled to receive (either directly or indirectly) any payment (an “Advance Payment”) as
consideration for (i) Hydrocarbons produced or to be produced from Oil and
Gas Properties owned by any Credit Party in advance of the delivery of such
Hydrocarbons (and regardless of whether such Hydrocarbons are actually produced
or actual delivery is required) to or for the account of the purchaser thereof
or (ii) a right or option to receive such Hydrocarbons (or a cash payment
in lieu of such Hydrocarbons); provided that inclusion of customary
and standard “take or pay” provisions in any gas sales or purchase contract or
any other similar contract shall not, in and of itself, cause such gas sales or
purchase contract to constitute an Advance Payment Contract for the purposes of
this definition.

     

    “Affiliate” means,
with respect to a specified Person, another Person that directly, or indirectly
through one or more intermediaries, Controls or is Controlled by or is under
common Control with the Person specified.

     

    “Aggregate Commitment
Amount” means the aggregate of the Commitment Amounts of all the Lenders,
as increased or reduced from time to time pursuant to the terms hereof; provided that the
Aggregate Commitment Amount shall not at any time exceed the Maximum Facility
Amount.

     

    “Agreement” means this
Credit Agreement, as it may be amended, restated, supplemented or otherwise
modified and in effect from time to time.

     

    “Alternate Base Rate”
means, for any day, a rate per annum equal to the greatest of (a) the Prime
Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on
such day plus 1⁄2 of 1% and (c) the Adjusted LIBO Rate for a one month Interest
Period on such day (or if such day is not a Business Day, the immediately
preceding Business Day) plus 1%, provided that, for
the avoidance of doubt, the Adjusted LIBO Rate for any day shall be based on the
rate appearing on the Reuters Screen LIBOR01 Page (or on any successor or
substitute page) at approximately 11:00 a.m. London time on such day (without
any rounding).  Any change in the Alternate Base Rate due to a change
in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate
shall be effective from and including the effective date of such change in the
Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate,
respectively.

     

    “Applicable
Percentage” means, with respect to any Lender, the percentage of the
Aggregate Commitment Amount represented by such Lender’s Commitment Amount;
provided that
for purposes of Section 2.20 when a Defaulting Lender shall exist,
“Applicable Percentage” shall mean the percentage of the Aggregate Commitment
Amount (disregarding any Defaulting Lender’s Commitment Amount) represented by
such Lender’s Commitment Amount.  If the Commitments have terminated
or expired, the Applicable Percentages shall be determined based upon the
Commitment Amounts most recently in effect, giving effect to any assignments and
to any Lender’s status as a Defaulting Lender at the time of
determination.

     

    “Applicable Rate”
means, for any day, with respect to any ABR Loan or Eurodollar Loan, or with
respect to the Unused Commitment Fees payable hereunder, as the case may be, the
applicable rate per annum set forth below under the caption “ABR Spread”,
“Eurodollar Spread” or “Unused Commitment Fee Rate”, as the case may be, based
upon the Borrowing Base Usage applicable on such date:

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  Borrowing Base Usage:

                                	 	
                                  ABR

                                  Spread

                                	 	 	
                                  Eurodollar

                                  Spread

                                	 	 	
                                  Unused

                                  Commitment Fee

                                  Rate

                                	 
	
                                  Equal
      to or greater than 90%

                                	 	 	2.000	%	 	 	3.000	%	 	 	0.500	%
	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                  Equal
      to or greater than 75%, but less than 90%

                                	 	 	1.750	%	 	 	2.750	%	 	 	0.500	%
	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                  Equal
      to or greater than 50%, but less than 75%

                                	 	 	1.500	%	 	 	2.500	%	 	 	0.500	%
	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                  Equal
      to or greater than 25% but less than 50%

                                	 	 	1.250	%	 	 	2.250	%	 	 	0.500	%
	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                                  Less
      than 25%

                                	 	 	1.000	%	 	 	2.000	%	 	 	0.500	%

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    Each
change in the Applicable Rate shall apply during the period commencing on the
effective date of such change and ending on the date immediately preceding the
effective date of the next such change.

     

    “Approved
Counterparty” means, at any time and from time to time, (i) any Person
engaged in the business of entering into Swap Agreements for commodity, interest
rate or currency risk that has (or the credit support provider of such Person
has), at the time the Parent, the Borrower or any Restricted Subsidiary enters
into a Swap Agreement with such Person, a long term senior unsecured debt credit
rating of “A-” or better from S&P, (ii) any Lender or Affiliate of a Lender
or (iii) any other Person designated by the Parent or the Borrower that is
acceptable to the Administrative Agent.

     

    “Approved Fund” means
any Person (other than a natural person) that is engaged in making, purchasing,
holding or investing in bank loans and similar extensions of credit in the
ordinary course of its business and that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.

     

    “Approved Petroleum
Engineers” means any of Wright & Company, Inc., Ryder Scott Company,
Netherland Sewell & Associates, Inc., and Miller and Lentz, Ltd., or such
other reputable firm(s) of independent petroleum engineers as shall be approved
by the Majority Lenders.

     

    “Assignment and
Assumption” means an assignment and assumption entered into by a Lender
and an assignee (with the consent of any party whose consent is required by
Section 9.04), and accepted by the Administrative Agent, in the form of
Exhibit A or any other form approved by the Administrative
Agent.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    “Authorized Officer”
means, as to any Person, the chief executive officer, the president, the chief
financial officer, or any vice president of such Person.  Unless
otherwise specified, all references to an Authorized Officer herein shall mean
an Authorized Officer of the Parent.

     

    “Availability Period”
means the period from and including the Effective Date to but excluding the
earlier of the Maturity Date and the date of termination of the
Commitments.

     

    “Board” means the
Board of Governors of the Federal Reserve System of the United States of
America.

     

    “Borrower” means Penn
Virginia Holding Corp., a Delaware corporation.

     

    “Borrowing” means
Loans of the same Type, made, converted or continued on the same date and, in
the case of Eurodollar Loans, as to which a single Interest Period is in
effect.

     

    “Borrowing Base” means
at any time an amount equal to the amount determined in accordance with
Section 2.04.

     

    “Borrowing Base
Deficiency” means, as of any date, the amount, if any, by which the
Credit Exposure on such date exceeds the Borrowing Base in effect on such date;
provided that,
for purposes of determining the existence and amount of any Borrowing Base
Deficiency, obligations under any Letter of Credit will not be deemed to be
outstanding to the extent such obligations are secured by cash in the manner
contemplated by Section 2.06(j).

     

    “Borrowing Base
Properties” means all proved Oil and Gas Properties of the Borrower and
the Guarantors located in the United States included in the most recently
delivered Reserve Report and evaluated by the Administrative Agent and the
Lenders for purposes of establishing the Borrowing Base.

     

    “Borrowing Base Usage”
means, as of any date and for all purposes, the quotient, expressed as a
percentage, of (i) the Credit Exposure as of such date, divided by (ii) the
lesser of (A) the Aggregate Commitment Amount as of such date and (B) the
Borrowing Base in effect on such date.

     

    “Borrowing Request”
means a request by the Borrower for a Borrowing in accordance with
Section 2.03.

     

    “Business Day” means
any day that is not a Saturday, Sunday or other day on which commercial banks in
Chicago, Illinois or New York, New York are authorized or required by law to
remain closed; provided that, when
used in connection with a Eurodollar Loan, the term “Business Day” shall
also exclude any day on which banks are not open for dealings in dollar deposits
in the London interbank market.

     

    “Call Spread
Transaction” means, collectively, that certain transaction entered into
by the Parent in connection with the issuance of the 2007 Convertible Notes
pursuant to which (i) the Parent purchased for cash one or more call
options from one or more Persons (including one or more Lenders or Affiliates of
Lenders) with respect to a specified number of shares of the Parent’s issued and
outstanding capital stock determined based on the aggregate principal amount of
the 2007 Convertible Notes at a strike price approximately equal to the
conversion price of the 2007 Convertible Notes and (ii) the Parent
concurrently sold one or more warrants to one or more Person (including one or
more Lenders or Affiliates of Lenders) with respect to a specified number of
shares of the Parent’s issued and outstanding capital stock determined based on
the aggregate principal amount of the 2007 Convertible Notes at a strike price
in excess of the conversion price.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    “Capital Lease” of any
Person means any lease of Property by such Person, as lessee, that would be
capitalized on a balance sheet of such Person prepared in accordance with
GAAP.

     

    “Capital Lease
Obligations” of any Person means the amount of the obligations of such
Person under any Capital Lease, which obligations are required to be classified
and accounted for as capital leases on a balance sheet of such Person under
GAAP, and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.

     

    “Casualty Event” means
any loss, casualty or other insured damage to, or any taking under power of
eminent domain or by condemnation or similar proceeding of, any Property or
asset of the Parent, the Borrower or any Restricted Subsidiary that was included
in the most recent Reserve Report having a Fair Market Value in excess of
$10,000,000.

     

    “Change in Control”
means (a) any Person or two or more Persons acting as a group (as defined
in Section 13(d)(3) of the Securities Exchange Act of 1934) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 of the SEC under
the Securities Exchange Act of 1934) of 35% or more of the outstanding shares of
voting stock of the Parent; (b) individuals who, as of the Effective Date,
constitute the Board of Directors of the Parent (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board of Directors
of the Parent; provided, however, that any
individual becoming a director of the Parent subsequent to the date hereof whose
election, or nomination for election by the Parent’s shareholders, was approved
by a vote of at least a majority of the directors then comprising the Incumbent
Board, shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Securities Exchange Act of 1934) or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board of Directors of the Parent; or (c) less than 100% of the Equity
Interests of the Borrower are owned directly or indirectly by the
Parent.

     

    “Change in Law” means
(a) the adoption of any law, rule or regulation after the date of this
Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement or (c) compliance by any Lender or the Issuing Bank
(or, for purposes of Section 2.15, by any lending office of such Lender or
by such Lender’s or the Issuing Bank’s holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this
Agreement.

     

    “Charges” has the
meaning assigned to such term in Section 9.13.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    “Code” means the
Internal Revenue Code of 1986, as amended from time to time.

     

    “Collateral” means any
and all “Mortgaged Property” and “Collateral”, as defined in any Collateral
Document.

     

    “Collateral Documents”
means the Guaranty, the Pledge Agreement, the Mortgages, and any and all other
agreements, documents or instruments now or hereafter executed and delivered by
the Parent, the Borrower or any other Person (including participation or similar
agreements between any Lender and any other lender or creditor with respect to
any Secured Obligation pursuant to this Agreement) in connection with, or as
security for the payment or performance of the Secured Obligations, as such
agreements, documents or instruments may be amended, supplemented or restated
from time to time.

     

    “Commitment” means,
with respect to each Lender, the commitment of such Lender to make Loans and to
acquire participations in Letters of Credit hereunder, expressed as an amount
representing the maximum aggregate amount of such Lender’s Credit Exposure
hereunder; provided that such
Lender’s Commitment (and such Lender’s Credit Exposure) shall never exceed the
least of (x) such Lender’s Commitment Amount, (y) such Lender’s Applicable
Percentage of the Borrowing Base then in effect and (z) such Lender’s Applicable
Percentage of the Aggregate Commitment Amount, in each case, as such amounts may
be adjusted from time to time in accordance with this Agreement.

     

    “Commitment Amount”
means, with respect to each Lender, as applicable, the amount set forth opposite
such Lender’s name on Schedule 2.01 (including any revision thereof in
accordance with Section 2.05) or in the Assignment and Assumption pursuant
to which such Lender shall have assumed its Commitment (or as set forth opposite
such Lender’s name on Schedule 2.01, plus (minus) any amounts assumed
(assigned) pursuant to an Assignment and Assumption).  The initial
amount of each Lender’s Commitment Amount as of the Effective Date is set forth
on Schedule 2.01.

     

    “Consolidated Current
Assets” means with respect to the Parent and the Restricted Subsidiaries,
for any period, the consolidated current assets of the Parent and the Restricted
Subsidiaries; provided that
Consolidated Current Assets shall (i) include the unused amount of the total
Commitments and (ii) exclude any non-cash assets in respect of any Swap
Agreement.

     

    “Consolidated Current
Liabilities” means with respect to the Parent and the Restricted
Subsidiaries, for any period, the consolidated current liabilities of the Parent
and the Restricted Subsidiaries; provided that
Consolidated Current Liabilities shall exclude (i) any non-cash liabilities or
obligations in respect of any Swap Agreement and (ii) current maturities under
this Agreement and the 2007 Convertible Notes.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    “Consolidated Net
Income” means with respect to the Parent and the Restricted Subsidiaries,
for any period, the aggregate of the net income (or loss) of the Parent and the
Restricted Subsidiaries after allowances for taxes for such period determined on
a consolidated basis in accordance with GAAP; provided that there
shall be excluded from such net income (to the extent otherwise included
therein) the following:  (i) the net income of any Person in which the
Parent or any Restricted Subsidiary has an interest (which interest does not
cause the net income of such other Person to be consolidated with the net income
of the Parent and the Restricted Subsidiaries in accordance with GAAP), except
to the extent of the amount of dividends or distributions actually paid in such
period by such other Person to the Parent or to a Restricted Subsidiary, as the
case may be; (ii) the net income (but not loss) during such period of any
Restricted Subsidiary to the extent that the declaration or payment of dividends
or similar distributions or transfers or loans by such Restricted Subsidiary is
not at the time permitted by operation of the terms of its charter or any
agreement, instrument or Governmental Requirement applicable to such Restricted
Subsidiary or is otherwise restricted or prohibited, in each case determined in
accordance with GAAP; (iii) the net income (or loss) of any Person acquired in a
pooling-of-interests transaction for any period prior to the date of such
transaction; (iv) any extraordinary gains or losses during such period,
including gains or losses attributable to (A) Property sales and (B) stock
or other equity purchases or divestitures; (v) any non-cash charges or
losses and any non-cash income or gains in respect of any Swap Agreement; and
(vi) the cumulative effect of a change in accounting principles and any
gains or losses attributable to writeups or writedowns of assets; and provided that if the
Parent or any Restricted Subsidiary shall acquire or dispose of any Property or
stock or other equity interests during such period or a Subsidiary shall be
redesignated pursuant to the terms of this Agreement as either an Unrestricted
Subsidiary or a Restricted Subsidiary, then, upon delivery to the Administrative
Agent of audited or reviewed financial statements or other financial statements
acceptable to the Administrative Agent that support a recalculation,
Consolidated Net Income shall be calculated after giving pro forma effect to
such acquisition, disposition or redesignation, as if such acquisition,
disposition or redesignation had occurred on the first day of such
period.

     

    “Control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ability
to exercise voting power, by contract or otherwise.  “Controlling” and
“Controlled”
have meanings correlative thereto.

     

    “Credit Exposure”
means, at any time, the sum of the outstanding principal amount of the Loans of
all Lenders as of such date,
plus the aggregate LC Exposure of all Lenders as of such
date.

     

    “Credit Party” means
any of the Borrower, the Parent or any other Guarantor; “Credit Parties”
means, collectively, all of the Borrower, the Parent and each other
Guarantor.

     

    “Default” means any
event or condition that constitutes an Event of Default or which upon notice,
lapse of time or both would, unless cured or waived, become an Event of
Default.

     

    “Default Rate” has the
meaning assigned to such term in Section 2.13(c).

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    “Defaulting Lender”
means any Lender that has, as determined by the Administrative Agent, (a) failed
to fund any portion of its Loans or participations in Letters of Credit within
three Business Days of the date required to be funded by it hereunder, (b)
notified the Parent, the Borrower, the Administrative Agent, the Issuing Bank or
any Lender in writing that it does not intend to comply with any of its funding
obligations under this Agreement or has made a public statement to the effect
that it does not intend to comply with its funding obligations under this
Agreement or under other agreements in which it commits to extend credit, (c)
failed, within three Business Days after request by the Administrative Agent, to
confirm that it will comply with the terms of this Agreement relating to its
obligations to fund prospective Loans and participations in then outstanding
Letters of Credit, (d) otherwise failed to pay over to the Administrative Agent
or any other Lender any other amount required to be paid by it hereunder within
three Business Days of the date when due, unless the subject of a good faith
dispute, or (e) (i) become or is insolvent or has a parent company that has
become or is insolvent or (ii) become the subject of a bankruptcy or insolvency
proceeding, or has had a receiver, conservator, trustee, administrator, assignee
for the benefit of creditors or similar Person charged with reorganization or
liquidation of its business or custodian, appointed for it, or has taken any
action in furtherance of, or indicating its consent to, approval of or
acquiescence in any such proceeding or appointment or has a parent company that
has become the subject of a bankruptcy or insolvency proceeding, or has had a
receiver, conservator, trustee, administrator, assignee for the benefit of
creditors or similar Person charged with reorganization or liquidation of its
business or custodian appointed for it, or has taken any action in furtherance
of, or indicating its consent to, approval of or acquiescence in any such
proceeding or appointment.

     

    “Disqualified Stock”
means any Equity Interest that, by its terms (or by the terms of any security
into which it is convertible or for which it is exchangeable) or upon the
happening of any event, matures or is mandatorily redeemable (other than in
connection with a change of control or an asset sale (provided that such
maturity or mandatory redemption resulting from such asset sale is subject to
any mandatory prepayments and commitment reductions required hereunder or in
accordance herewith)) for any consideration other than Equity Interests (other
than Disqualified Stock), pursuant to a sinking fund obligation or otherwise, or
is convertible or exchangeable for Indebtedness or redeemable (other than in
connection with a change of control or an asset sale (provided that such
maturity or mandatory redemption resulting from such asset sale is subject to
any mandatory prepayments and commitment reductions required hereunder or in
accordance herewith)) for any consideration other than Equity Interests (other
than Disqualified Stock) at the option of the holder thereof, in whole or in
part, on or prior to the date that is 91 days after the earlier of (a) the
Maturity Date and (b) the date on which there are no Loans, LC Exposure or other
obligations hereunder outstanding and all of the Commitments are
terminated.

     

    “dollars” or “$” refers to lawful
money of the United States of America.

     

    “Domestic Subsidiary”
means any Restricted Subsidiary organized under the laws of any jurisdiction
within the United States of America (including territories
thereof).

     

    “EBITDAX” means, for
any period, the sum of Consolidated Net Income for such period, plus, to the extent deducted
from Consolidated Net Income in such period, the sum (determined without
duplication) of the aggregate amount of interest expense paid (or payable) in
cash during such period on Indebtedness of the Parent and the Restricted
Subsidiaries (including the interest portion of payments under Capital Leases
and Synthetic Leases), taxes, depreciation, depletion, amortization expenses,
exploration expenses, impairments, other noncash charges or losses and the
amount of cash dividends and distributions paid by the MLPs (directly or
indirectly through any Unrestricted Subsidiaries) to the Parent, the Borrower or
any Restricted Subsidiary, minus, to the extent included
in Consolidated Net Income in such period, any noncash income included in
Consolidated Net Income.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    “Effective Date” means
the date on which the conditions specified in Section 4.01 are satisfied
(or waived in accordance with Section 9.02).

     

    “Environmental Laws”
means all laws, rules, regulations, codes, ordinances, orders, decrees,
judgments, injunctions, notices or binding agreements issued, promulgated or
entered into by any Governmental Authority, relating in any way to the
environment, preservation or reclamation of natural resources, the management,
release or threatened release of any Hazardous Material or health and safety
matters.

     

    “Environmental
Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or
indemnities), of the Parent or any of its Subsidiaries directly or indirectly
resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous Materials
into the environment or (e) any contract, agreement or other consensual
arrangement pursuant to which liability is assumed or imposed with respect to
any of the foregoing.

     

    “Equity Interests”
means shares of capital stock, partnership interests, membership interests in a
limited liability company, beneficial interests in a trust or other equity
ownership interests in a Person, and any warrants, options or other rights
entitling the holder thereof to purchase or acquire any such equity
interest.

     

    “ERISA” means the
Employee Retirement Income Security Act of 1974, as amended from time to
time.

     

    “ERISA Affiliate”
means any trade or business (whether or not incorporated) that, together with
the Borrower, the Parent or any other Guarantor, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section
302 of ERISA and Section 412 of the Code, is treated as a single employer
under Section 414 of the Code.

     

    “ERISA Event” means
(a) any “reportable event”, as defined in Section 4043 of ERISA or the
regulations issued thereunder with respect to a Plan (other than an event for
which the 30-day notice period is waived); (b) the existence with respect
to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum
funding standard with respect to any Plan; (d) the incurrence by the Parent
or any ERISA Affiliate of any liability under Title IV of ERISA with
respect to the termination of any Plan; (e) the receipt by the Parent or
any ERISA Affiliate from the PBGC or a plan administrator of any notice relating
to an intention to terminate any Plan or Plans or to appoint a trustee to
administer any Plan; (f) the incurrence by the Parent or any ERISA Affiliate of
any liability with respect to the withdrawal or partial withdrawal from any Plan
or Multiemployer Plan; or (g) the receipt by the Parent or any ERISA
Affiliate of any notice, or the receipt by any Multiemployer Plan from the
Parent or any ERISA Affiliate of any notice, concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of
Title IV of ERISA.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    “Eurodollar”, when
used in reference to any Loan or Borrowing, refers to whether such Loan, or the
Loans comprising such Borrowing, are bearing interest at a rate determined by
reference to the Adjusted LIBO Rate.

     

    “Event of Default” has
the meaning assigned to such term in Section 7.01.

     

    “Excluded Taxes”
means, with respect to the Administrative Agent, any Lender, the Issuing Bank or
any other recipient of any payment to be made by or on account of any obligation
of the Borrower or any other Credit Party hereunder or under any Loan Document,
(a) income or franchise taxes imposed on (or measured by) its net income by
the United States of America, or by the jurisdiction under the laws of which
such recipient is organized or in which its principal office is located or, in
the case of any Lender, in which its applicable lending office is located, (b)
any branch profits taxes imposed by the United States of America or any similar
tax imposed by any other jurisdiction in which the Borrower is located and (c)
in the case of a Foreign Lender (other than an assignee pursuant to a request by
the Borrower under Section 2.19(b)), any withholding tax that is imposed on
amounts payable to such Foreign Lender at the time such Foreign Lender becomes a
party to this Agreement (or designates a new lending office) or is attributable
to such Foreign Lender’s failure to comply with Section 2.17(e), except to
the extent that such Foreign Lender (or its assignor, if any) was entitled, at
the time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to such withholding tax
pursuant to Section 2.17(a).

     

    “Existing Credit
Facility” means that certain Amended and Restated Credit Agreement dated
as of December 4, 2003, among Parent, as borrower, JPMorgan Chase Bank, N.A.,
successor by merger to Bank One, N.A. (Main Office Chicago), as administrative
agent, and lenders party thereto, as amended, supplemented, restated or
otherwise modified.

     

    “Existing Letters of
Credit” means each letter of credit issued and outstanding on the
Effective Date set forth on Schedule 2.06(k).

     

    “Fair Market Value”
means, with respect to any Property, the cash value that a Person that is not an
Affiliate of the Parent would pay in an arms-length transaction to purchase the
specified Property.

     

    “Federal Funds Effective
Rate” means, for any day, the weighted average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day
that is a Business Day, the average (rounded upwards, if necessary, to the next
1/100 of 1%) of the quotations for such day for such transactions received by
the Administrative Agent from three Federal funds brokers of recognized standing
selected by it.

     

    “Foreign Lender” means
any Lender that is organized under the laws of a jurisdiction other than that in
which the Borrower is located.  For purposes of this definition, the
United States of America, each State thereof and the District of Columbia shall
be deemed to constitute a single jurisdiction.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    “GAAP” means generally
accepted accounting principles in the United States of America.

     

    “Governmental
Authority” means the government of the United States of America, any
other nation or any political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.

     

    “Governmental
Requirement” means any law, statute, code, ordinance, order,
determination, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate, license, authorization or other directive or requirement,
including, without limitation, Environmental Laws, energy regulations and
occupational, safety and health standards or controls, of any Governmental
Authority.

     

    “Guarantee” of or by
any Person (the “guarantor”) means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the “primary obligor”) in
any manner, whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or other obligation or
to purchase (or to advance or supply funds for the purchase of) any security for
the payment thereof, (b) to purchase or lease property, securities or
services for the purpose of assuring the owner of such Indebtedness or other
obligation of the payment thereof, (c) to maintain working capital, equity
capital or any other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Indebtedness or other
obligation or (d) as an account party in respect of any letter of credit or
letter of guaranty issued to support such Indebtedness or obligation; provided, that the
term Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business.

     

    “Guarantor” means each
of the Parent, PVA Oil & Gas, PVA Texas, PVMC and each other Restricted
Subsidiary that executes the Guaranty or otherwise guarantees the Secured
Obligations as of the Effective Date or thereafter, and its successors and
assigns.

     

    “Guaranty” means each
Guaranty made pursuant to this Agreement in favor of the Administrative Agent,
as amended, supplemented, restated or otherwise modified from time to time in
accordance with the terms of this Agreement and the other Loan
Documents.

     

    “Hazardous
Materials”  means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.

     

    “Highest Lawful Rate”
means, on any day, the maximum nonusurious rate of interest permitted for that
day by applicable law.  On each day, if any, that Chapter 303 of the
Texas Finance Code, as amended establishes the Highest Lawful Rate, such rate
shall be the “indicated (weekly) rate ceiling” (as defined in Chapter 303 of the
Texas Finance Code, as amended) for that day.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    “Hydrocarbon
Interests” means all rights, titles, interests and estates now or
hereafter acquired in and to oil and gas leases, oil, gas and mineral leases, or
other liquid or gaseous hydrocarbon leases, mineral fee interests, overriding
royalty and royalty interests, net profit interests and production payment
interests, including any reserved or residual interests of whatever
nature.

     

    “Hydrocarbons” means
oil, gas, casinghead gas, drip gasoline, natural gasoline, condensate,
distillate, liquid hydrocarbons, gaseous hydrocarbons and all products refined
or separated therefrom.

     

    “Increase Effective
Date” has the meaning assigned to such term in Section
2.05(b).

     

    “Indebtedness” means,
for any Person (without duplication): (i) all obligations of such Person for
borrowed money or evidenced by bonds, bankers’ acceptances, debentures, notes or
other similar instruments, other than surety or other bonds; (ii) all
obligations of such Person (whether contingent or otherwise) in respect of
letters of credit, surety or other bonds and similar instruments; (iii) all
obligations of such Person (other than for borrowed money) to pay the deferred
purchase price of Property or services (but excluding accounts payable incurred
in the ordinary course of business that are not more than 90 days past due
unless contested in good faith by appropriate proceedings and for which adequate
reserves under GAAP have been established therefor, and any guaranties by the
Parent, the Borrower or any Restricted Subsidiary of such accounts payable);
(iv) all Capital Lease Obligations; (v) all obligations under Synthetic Leases;
(vi) all Indebtedness (as described in the other clauses of this
definition) of others secured by a Lien on any asset of such Person, whether or
not such Indebtedness is assumed by such Person; (vii) all Indebtedness (as
described in the other clauses of this definition) of others guaranteed by such
Person or in which such Person otherwise assures a creditor against loss of the
debtor to the extent of the lesser of the amount of such Indebtedness and the
maximum stated amount of such guarantee or assurance against loss; (viii) all
obligations or undertakings of such Person to maintain or cause to be maintained
the financial position or covenants of others or to purchase the Indebtedness or
Property of others; (ix) all obligations to deliver Hydrocarbons in
consideration of advance payments (other than customary and standard “take or
pay” provisions in any gas sales or purchase contract or any other similar
contract), including, without limitation, obligations under Advance Payment
Contracts; and (x) any Indebtedness of a partnership for which such Person
is liable either by agreement or because of a Governmental Requirement but only
to the extent of such liability.

     

    “Indemnified Taxes”
means Taxes other than Excluded Taxes.

     

    “Indemnitee” has the
meaning assigned to such term in Section 9.03(b).

     

    “Information” has the
meaning assigned to such term in Section 9.12(a).

     

    “Initial Reserve
Report” has the meaning assigned to such term in Section
4.01(k).

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    “Interest Election
Request” means a request by the Borrower to convert or continue a
Borrowing in accordance with Section 2.08.

     

    “Interest Payment
Date” means (a) with respect to any ABR Loan, the last day of each
March, June, September and December, and (b) with respect to any Eurodollar
Loan, the last day of the Interest Period applicable to the Borrowing of which
such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest
Period of more than three months’ duration, each day prior to the last day of
such Interest Period that occurs at intervals of three months’ duration after
the first day of such Interest Period.

     

    “Interest Period”
means, with respect to any Eurodollar Borrowing, the period commencing on the
date of such Borrowing and ending on the numerically corresponding day in the
calendar month that is one, two, three or six months (or, with the consent
of each Lender, nine or twelve months) thereafter, as the Borrower may elect;
provided, that
(i) if any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless, in
the case of a Eurodollar Borrowing only, such next succeeding Business Day would
fall in the next calendar month, in which case such Interest Period shall end on
the next preceding Business Day and (ii) any Interest Period pertaining to a
Eurodollar Borrowing that commences on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period.  For purposes hereof,
the date of a Eurodollar Borrowing initially shall be the date on which such
Eurodollar Borrowing is made and thereafter shall be the effective date of the
most recent conversion or continuation of such Eurodollar
Borrowing.

     

    “Investment” means,
for any Person: (i) the acquisition (whether for cash, Property, services or
securities or otherwise) of Equity Interests of any other Person (including,
without limitation, any “short sale” or any sale of any securities at a time
when such securities are not owned by the Person entering into such short sale),
(ii) the making of any advance, loan or other extension of credit to, any other
Person (including the purchase of Property from another Person subject to an
understanding or agreement, contingent or otherwise, to resell such Property to
such Person, but excluding any such advance, loan or extension of credit having
a term not exceeding 90 days representing the purchase price of inventory or
supplies sold by such Person in the ordinary course of business) or (iii) the
entering into of any guarantee of, or other contingent obligation with respect
to, Indebtedness or other liability of any other Person and (without
duplication) any amount committed to be advanced, lent or extended to such
Person.

     

    “Issuing Bank” means
JPMorgan Chase Bank, N.A., in its capacity as the issuer of Letters of Credit
hereunder (including the Existing Letters of Credit), and its successors in such
capacity as provided in Section 2.06(i).  The Issuing Bank may,
in its discretion, arrange for one or more Letters of Credit to be issued by
Affiliates of the Issuing Bank, in which case the term “Issuing Bank” shall
include any such Affiliate with respect to Letters of Credit issued by such
Affiliate.

     

    “LC Disbursement”
means a payment made by the Issuing Bank pursuant to a Letter of
Credit.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    “LC Exposure” means,
at any time, the sum of (a) the aggregate undrawn amount of all outstanding
Letters of Credit at such time, plus (b) the aggregate amount
of all LC Disbursements that have not yet been reimbursed by or on behalf of the
Borrower at such time.  The LC Exposure of any Lender at any time
shall be its Applicable Percentage of the total LC Exposure at such time (as
modified or re-allocated pursuant to Section 2.20, as
applicable).

     

    “Lender Party Financial
Service Product” means agreements or other arrangements under which any
Person who is or was a Lender or Affiliate of a Lender at the time such
agreement or other arrangement was entered into provides any of the following
products or services to the Parent, the Borrower or any Restricted Subsidiary:
(a) credit cards, (b) credit card processing services, (c) debit
cards, (d) purchase cards, (e) ACH transactions, (f) cash management,
including controlled disbursement, accounts or services, or (g) foreign
currency exchange.

     

    “Lender Party Swap
Agreement” means (i) any Swap Agreement between or among any Credit
Party and any Person who is or was a Lender or Affiliate of a Lender at the time
such Swap Agreement was entered into and (ii) any Swap Agreement that is
listed on Schedule 3.19 and is between or among any Credit Party and a
Lender or Affiliate of a Lender.

     

    “Lenders” means the
Persons listed on Schedule 2.01 and any other Person that shall have become
a party hereto pursuant to an Assignment and Assumption, other than any such
Person that ceases to be a party hereto pursuant to an Assignment and
Assumption.

     

    “Letter of Credit”
means any letter of credit issued pursuant to this Agreement (including any
Existing Letter of Credit).

     

    “LIBO Rate” means,
with respect to any Eurodollar Borrowing for any Interest Period, the rate
appearing on Reuters Screen LIBOR01 Page1 (or on any successor or substitute
page of such Service, or any successor to or substitute for such Service,
providing rate quotations comparable to those currently provided on such page of
such Service, as determined by the Administrative Agent from time to time for
purposes of providing quotations of interest rates applicable to dollar deposits
in the London interbank market) at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period, as the rate for
dollar deposits with a maturity comparable to such Interest
Period.  In the event that such rate is not available at such time for
any reason, then the “LIBO Rate” with
respect to such Eurodollar Borrowing for such Interest Period shall be the rate
at which dollar deposits of $5,000,000 and for a maturity comparable to such
Interest Period are offered by the principal London office of the Administrative
Agent in immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.

     

    “Lien” means, with
respect to any Property, (a) any mortgage, deed of trust, lien, pledge,
hypothecation, encumbrance, charge or security interest in, on or of such
Property (including but not limited to any production payments and the like
payable out of Oil and Gas Properties), (b) the interest of a vendor or a
lessor under any conditional sale agreement, capital lease or title retention
agreement (or any financing lease having substantially the same economic effect
as any of the foregoing) relating to such Property and (c) in the case of
securities, any purchase option, call or similar right of a third party with
respect to such securities.

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    “Loan Documents” means
this Agreement, each Borrowing Request, each application for a Letter of Credit,
each Letter of Credit, each Collateral Document, any promissory notes issued
pursuant to Section 2.10, each Subordination Agreement, all applications,
all instruments, certificates and agreements now or hereafter executed or
delivered to the Administrative Agent or any Lender pursuant to any of the
foregoing, and all amendments, modifications, renewals, extensions, increases
and rearrangements of, and substitutions for, any of the foregoing; provided that “Loan
Documents” shall not include any Swap Agreement or any Lender Party Financial
Service Product.

     

    “Loans” means the
loans made by the Lenders to the Borrower pursuant to Section 2.03.

     

    “Majority Lenders”
means, at any time, Lenders having in the aggregate more than 50% of the
Aggregate Commitment Amount, or, if the Commitments to make Loans and the
obligation of the Issuing Bank to issue Letters of Credit have been terminated
pursuant to Article VII, Lenders holding more than 50% of the aggregate
unpaid principal amount of the outstanding Credit Exposure; provided that the
Commitment of, and the portion of the Credit Exposure held or deemed held by,
any Defaulting Lender shall be excluded for purposes of making a determination
of the Majority Lenders.

     

    “material adverse
change” mean any event, development or circumstance that has had or could
reasonably be expected to have a Material Adverse Effect.

     

    “Material Adverse
Effect” means a material adverse effect on (i) the business, Property,
condition (financial or otherwise) or results of operations of the Parent, the
Borrower and the Restricted Subsidiaries taken as a whole, (ii) the ability of
the Parent, the Borrower and the Restricted Subsidiaries taken as a whole to
timely perform their obligations under the Loan Documents to which each is a
party, or (iii) the legality, validity or enforceability of any of the Loan
Documents or the rights, benefits or remedies of the Administrative Agent, the
Issuing Bank or the Lenders thereunder.

     

    “Material Domestic
Subsidiary” means, as of any date, any Restricted Subsidiary organized
under the laws of any jurisdiction within the United States of America
(including territories thereof) that (i) is a wholly-owned Restricted Subsidiary
and (ii) together with its Restricted Subsidiaries, owns Property having a Fair
Market Value of $10,000,000 or more.

     

    “Material
Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit) of any one or more of the Parent, the Borrower or any Restricted
Subsidiary in an aggregate principal amount exceeding $25,000,000.

     

    “Material Swap
Obligations” means obligations in respect of one or more Swap Agreements
of any one or more of the Parent, the Borrower or any Restricted Subsidiary in
an aggregate amount exceeding $25,000,000.  For purposes of
determining Material Swap Obligations, the obligations of the Parent, the
Borrower or any Restricted Subsidiary in respect of any Swap Agreement at any
time shall be the maximum aggregate amount (giving effect to any netting
agreements) that the Parent, the Borrower or such Restricted Subsidiary would be
required to pay if such Swap Agreement were terminated on the date of
determination.

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    “Maturity Date” means
November 19, 2012; provided that if any
of the 2007 Convertible Notes remains outstanding on September 14, 2012, then
the Maturity Date shall be October 15, 2012.

     

    “Maximum Facility
Amount” means $525,000,000.

     

    “Maximum Rate” has the
meaning assigned to such term in Section 9.13.

     

    “MLP” or “MLPs” means,
individually or collectively, Penn Virginia Resource Partners, L.P., a
Delaware limited partnership, and Penn Virginia GP Holdings, L.P., a Delaware
limited partnership.

     

    “Moody’s” means
Moody’s Investors Service, Inc.

     

    “Mortgage” means each
mortgage or deed of trust executed and delivered by any Credit Party, including
pursuant to Section 5.13, and each mortgage supplement after execution and
delivery of such mortgage supplement, in each case, as amended, supplemented,
restated or otherwise modified from time to time in accordance with the terms of
this Agreement and the other Loan Documents.

     

    “Multiemployer Plan”
means a multiemployer plan as defined in Section 4001(a)(3) of
ERISA.

     

    “Net Cash Proceeds”
means, with respect to any of the transactions or events described in
Sections 5.17, 6.01(j) or 6.13 that results in a reduction in the Borrowing
Base, the positive difference, if any, of (a) the sum of cash and cash
equivalents received in connection with such transaction, but only as and when
so received, minus
(b) the sum of (i) if applicable, the principal amount of any
Indebtedness that is secured by such asset (if any) and that is required to be
repaid in connection with the sale thereof (other than the Loans), (ii) the
out-of-pocket expenses incurred by the Parent, the Borrower or such Restricted
Subsidiary in connection with such transaction and (iii) if applicable,
income taxes reasonably estimated to be actually payable within two years of the
date of the relevant asset sale as a result of any gain recognized in connection
therewith.

     

    “Non-Recourse
Obligation” means Indebtedness as to which (a) none of the Parent, the
Borrower, any Restricted Subsidiary or any Assets of the Parent, the Borrower or
any Restricted Subsidiary (i) is obligated to provide credit support in any form
or (ii) is directly or indirectly liable and (b) no default with respect to
which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any Indebtedness of the Parent, the
Borrower or any Restricted Subsidiary to declare a default on such Indebtedness
of the Parent, the Borrower or such Restricted Subsidiary or cause the payment
of any such Indebtedness to be accelerated or payable prior to its stated
maturity or cause any Guarantee in respect of such Indebtedness to become
payable, in the case of (a) and (b) above, except for obligations that arise
solely as a result of such Person’s status as a general partner of a
partnership.

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    “Obligations” means
all obligations or liabilities of every nature of any Credit Party from time to
time owed to the Administrative Agent, the Issuing Bank, the Lenders or any of
them under any Loan Document, in each case, whether for principal, interest,
reimbursement of amounts drawn under any Letter of Credit, funding
indemnification amounts, fees, expenses, indemnification or
otherwise.

     

    “Oil and Gas
Properties” means Hydrocarbon Interests; the Properties now or hereafter
pooled or unitized with Hydrocarbon Interests; all presently existing or future
unitization, pooling agreements and declarations of pooled units and the units
created thereby (including without limitation all units created under orders,
regulations and rules of any Governmental Authority) that may affect all or any
portion of the Hydrocarbon Interests; all operating agreements, contracts and
other agreements, including production sharing contracts and agreements that
relate to any of the Hydrocarbon Interests or the production, sale, purchase,
exchange or processing of Hydrocarbons from or attributable to such Hydrocarbon
Interests; all Hydrocarbons in and under and that may be produced and saved or
attributable to the Hydrocarbon Interests, including all oil in tanks, the lands
covered thereby and all rents, issues, profits, proceeds, products, revenues and
other incomes from or attributable to the Hydrocarbon Interests; all tenements,
hereditaments, appurtenances and Properties in any manner appertaining,
belonging, affixed or incidental to the Hydrocarbon Interests; and all
Properties, rights, titles, interests and estates described or referred to
above, including any and all Property, real or personal, now owned or
hereinafter acquired and situated upon, used, held for use or useful in
connection with the operating, working or development of any of such Hydrocarbon
Interests or Property (excluding drilling rigs, automotive equipment, rental
equipment or other personal Property which may be on such premises for the
purpose of drilling a well or for other similar temporary uses) and including
any and all oil wells, gas wells, injection wells or other wells, buildings,
structures, fuel separators, liquid extraction plants, plant compressors, pumps,
pumping units, field gathering systems, tanks and tank batteries, fixtures,
valves, fittings, machinery and parts, engines, boilers, meters, apparatus,
equipment, appliances, tools, implements, cables, wires, towers, casing, tubing
and rods, surface leases, rights-of-way, easements and servitudes together with
all additions, substitutions, replacements, accessions and attachments to any
and all of the foregoing.

     

    “Organizational
Documents” means (a) with respect to any corporation, its certificate or
articles of incorporation or organization, as amended, and its by-laws, as
amended, (b) with respect to any limited partnership, its certificate of limited
partnership, as amended, and its partnership agreement, as amended, (c) with
respect to any general partnership, its partnership agreement, as amended, (d)
with respect to any limited liability company, its certificate of formation or
articles of organization, as amended, and its limited liability company
agreement or operating agreement, as amended, and (e) with respect to any other
type of Person, any certificate, document or agreement comparable to any of the
foregoing.

     

    “Other Taxes” means
any and all present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies arising from any payment made
hereunder or from the execution, delivery or enforcement of, or otherwise with
respect to, this Agreement.

     

    “Parent” means Penn
Virginia Corporation, a Virginia corporation.

     

    “Participant” has the
meaning set forth in Section 9.04(c)(i).

    
      
         

      

      
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    “Patriot Act” has the
meaning set forth in Section 9.16.

     

    “PBGC” means the
Pension Benefit Guaranty Corporation referred to and defined in ERISA and any
successor entity performing similar functions.

     

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

    
      
         

      

      
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    “Permitted
Investments” means: (a) direct obligations of the United States or any
agency thereof, or obligations guaranteed by the United States or any agency
thereof, in each case maturing within one year from the date of creation
thereof; (b) commercial paper maturing within one year from the date of creation
thereof rated in the investment grade by S&P or Moody’s; (c) deposits
maturing within one year from the date of creation thereof with, including
certificates of deposit issued by, any Lender or any office located in the
United States of any other bank or trust company which is organized under the
laws of the United States or any state thereof, has capital, surplus and
undivided profits aggregating at least $100,000,000 (as of the date of such
Lender’s or bank or trust company’s most recent financial reports) and has a
short term deposit rating of no lower than A2 or P2, as such rating is set forth
from time to time, by S&P or Moody’s, respectively; (d) fully collateralized
repurchase agreements with a term of not more than seven days for securities
described in clause (a) above and entered into with a Lender, an Affiliate of a
Lender or a financial institution satisfying the criteria described in
clause (c) above; and (e) deposits in money market funds investing
exclusively in Investments described in the foregoing clauses (a), (b), (c) and
(d).

     

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

    
      
         

      

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

    
      
         

      

      
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     “Person” means any
natural person, corporation, limited liability company, trust, joint venture,
association, company, partnership, Governmental Authority or other
entity.

     

    “Plan” means any
employee pension benefit plan (other than a Multiemployer Plan) subject to the
provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which the Parent or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of
ERISA.

     

    “Pledge Agreement”
means the Pledge Agreement and Irrevocable Proxy of even date herewith made by
the Pledgors in favor of the Administrative Agent, as amended, supplemented,
restated or otherwise modified from time to time in accordance with the terms of
this Agreement and the other Loan Documents.

     

    “Pledgor” means each
of the Parent, the Borrower and each Guarantor other than Parent that executes
and delivers the Pledge Agreement, and its successors and assigns.

     

    “Prime Rate” means the
rate of interest per annum publicly announced from time to time by JPMorgan
Chase Bank as its prime rate in effect at its office located at 270 Park Avenue,
New York, New York; each change in the Prime Rate shall be effective from and
including the date such change is publicly announced as being
effective.

     

    “Property” of a Person
means any and all property, whether real, personal, tangible, intangible or
mixed, of such Person, or other assets owned, leased or operated by such
Person.

     

    “PVA Oil & Gas”
means Penn Virginia Oil & Gas Corporation, a Virginia
corporation.

     

    “PVA Texas” means Penn
Virginia Oil & Gas, L.P., a Texas limited partnership.

     

    “PVMC” means Penn
Virginia MC Corporation, a Delaware corporation.

     

    “Redemption” means the
repurchase, redemption, prepayment, repayment or defeasance (or the segregation
of funds with respect to any of the foregoing) of the Unsecured
Notes.  “Redeem” has the
correlative meaning thereto.

     

    “Redetermination Date”
means the date that the redetermined Borrowing Base becomes effective subject to
the notice requirements specified in Section 2.04 both for scheduled
redeterminations and unscheduled redeterminations.

     

    “Register” has the
meaning set forth in Section 9.04(b)(iv).

    
      
         

      

      
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    “Related Parties”
means, with respect to any specified Person, such Person’s Affiliates and the
respective directors, officers, employees, agents and advisors of such Person
and such Person’s Affiliates.

     

    “Required Lenders”
means, at any time, Lenders having in the aggregate at least 66-2/3% of the
Aggregate Commitment Amount, or, if the Commitments to make Loans and the
obligation of the Issuing Bank to issue Letters of Credit have been terminated
pursuant to Article VII, Lenders holding at least 66-2/3% of the aggregate
unpaid principal amount of the outstanding Credit Exposure; provided that the
Commitment of, and the portion of the Credit Exposure held or deemed held by,
any Defaulting Lender shall be excluded for purposes of making a determination
of the Required Lenders.

     

    “Reserve Report” means
a report, in form and substance satisfactory to the Administrative Agent,
setting forth, as of each December 31 or June 30 (or such other date
in the event of an unscheduled redetermination) the oil and gas reserves
attributable to the Oil and Gas Properties of the Borrower and the Guarantors,
together with a projection of the rate of production and future net income,
taxes, operating expenses and capital expenditures with respect thereto as of
such date, based upon the pricing assumptions consistent with SEC reporting
requirements at the time.

     

    “Restricted Payment”
means any dividend or other distribution (whether in cash, securities or other
property) with respect to any Equity Interests in any Credit Party, or any
payment (whether in cash, securities or other Property), including any sinking
fund or similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such Equity Interests in any
Credit Party, or any option, warrant or other right to acquire any such Equity
Interests in any Credit Party.

     

    “Restricted
Subsidiary” means, as of any date, each Subsidiary of the Parent, other
than Unrestricted Subsidiaries.  As of the Effective Date, the
Restricted Subsidiaries are designated on Schedule 3.13 as such.

     

    “S&P” means
Standard & Poor’s Ratings Group, a division of The McGraw Hill
Corporation.

     

    “SEC” means the
Securities and Exchange Commission or any successor Governmental
Authority.

     

    “Secured Obligations”
means, collectively, (i) all Obligations, (ii) all liabilities and
obligations of the Parent, the Borrower or any Restricted Subsidiaries arising
under any Lender Party Swap Agreement now or hereafter existing between or among
the Parent, the Borrower or any Restricted Subsidiary and any Lender or any
Affiliate of any Lender, as applicable, and (iii) all liabilities and
obligations of the Parent, the Borrower or any Restricted Subsidiaries arising
under any Lender Party Financial Service Product now or hereafter existing
between or among the Parent, the Borrower or any Restricted Subsidiary and any
Lender or any Affiliate of any Lender, as applicable.

     

    “Stated Rate” has the
meaning assigned to such term in Section 9.13.

    
      
         

      

      
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    “Statutory Reserve
Rate” means a fraction (expressed as a decimal), the numerator of which
is the number one and the denominator of which is the number one, minus the aggregate of the
maximum reserve percentages (including any marginal, special, emergency or
supplemental reserves), expressed as a decimal established by the Board to which
the Administrative Agent is subject, with respect to the Adjusted LIBO
Rate, for eurocurrency funding (currently referred to as “Eurocurrency
Liabilities” in Regulation D of the Board).  Such reserve
percentages shall include those imposed pursuant to such
Regulation D.  Eurodollar Loans shall be deemed to constitute
eurocurrency funding and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under such Regulation D or any comparable
regulation.  The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.

     

    “Subordination
Agreement” means each Subordination Agreement made pursuant to
Section 4.01(m) or Section 6.01(g) by one or more Unrestricted
Subsidiaries of the Parent in favor of the Administrative Agent, the Issuing
Bank and the Lenders, substantially in the form of Exhibit D, as each may
be amended, supplemented, restated or otherwise modified from time to time in
accordance with the terms of this Agreement and the other Loan
Documents.

     

    “Subsidiary” means,
with respect to any Person (the “parent”) at any date,
any corporation, limited liability company, partnership, association or other
entity of which securities or other ownership interests representing more than
50% of the equity or more than 50% of the ordinary voting power or, in the case
of a partnership, more than 50% of the general partnership interests are, as of
such date, owned, controlled or held by the parent or one or more Subsidiaries
of the parent or by the parent and one or more Subsidiaries of the
parent.  Unless otherwise expressly provided, all references herein to
a “Subsidiary” shall mean a Subsidiary of the Parent.

     

    “Swap Agreement” means
any agreement with respect to any swap, forward, future or derivative
transaction or option or similar agreement involving, or settled by reference
to, one or more rates, currencies, commodities, equity or debt instruments or
securities, or economic, financial or pricing indices or measures of economic,
financial or pricing risk or value or any similar transaction or any combination
of these transactions; provided that no
phantom stock or similar plan providing for payments only on account of services
provided by current or former directors, officers, employees or consultants of
the Parent, the Borrower or the Restricted Subsidiaries shall be a Swap
Agreement and provided, further, that none of
the options or warrants entered into by the Parent under the Call Spread
Transaction shall constitute a Swap Agreement.

     

    “Synthetic Leases”
means, in respect of any Person, all leases that shall have been, or should have
been, in accordance with GAAP, treated as operating leases on the financial
statements of the Person liable (whether contingently or otherwise) for the
payment of rent thereunder and which were properly treated as indebtedness for
borrowed money for purposes of U.S. federal income taxes, if the lessee in
respect thereof is obligated to either purchase for an amount in excess of, or
pay upon early termination an amount in excess of, 85% of the residual value of
the Property subject to such operating lease upon expiration or early
termination of such lease.

    
      
         

      

      
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    “Taxes” means any and
all present or future taxes, levies, imposts, duties, deductions, charges or
withholdings imposed by any Governmental Authority.

     

    “Total Debt” means all
Indebtedness of the Parent, the Borrower and the Restricted Subsidiaries on a
consolidated basis described under clauses (i) and (iii) through (x) of the
definition of “Indebtedness”; provided that any Indebtedness permitted by
Section 6.01(g) of this Agreement shall, in any event, be excluded from
“Total Debt”.

     

    “Type”, when used in
reference to any Loan or Borrowing, refers to whether the rate of interest on
such Loan, or on the Loans comprising such Borrowing, is determined by reference
to the Adjusted LIBO Rate or the Alternate Base.

     

    “Unused Commitment”
means, with respect to each Lender at any time, such Lender’s Commitment at such
time, minus such
Lender’s Credit Exposure at such time.

     

    “Unused Commitment
Fee” means the commitment fee described in
Section 2.12(a).

     

    “Unrestricted
Subsidiary” means (a) Penn Virginia Resource Holdings Corp., a Delaware
corporation, and each of its Subsidiaries and (b) any other Subsidiary of the
Parent that is designated as an Unrestricted Subsidiary either (i) on
Schedule 3.13 or (ii) in the manner set forth in
Section 6.10.

     

    “Unsecured Notes”
means any senior unsecured notes, senior unsecured convertible notes,
subordinated unsecured notes, subordinated unsecured convertible notes or senior
subordinated unsecured convertible notes (including the 2007 Convertible Notes),
in each case, issued by the Parent, the Borrower or a Guarantor in one or more
transactions on or after November 21, 2007.

     

    “Unsecured Notes
Documents” means, as applicable, both individually and collectively, any
Unsecured Notes and any related Unsecured Notes Indenture.

     

    “Unsecured Notes
Indenture” means, collectively, any indenture (including the 2007
Convertible Notes Indenture) by and among the Parent, the Borrower or a
Guarantor, as issuer, and a trustee, and any and all related documentation
entered into in connection therewith, pursuant to which Unsecured Notes shall
have been issued, as the same may be amended, restated, modified or supplemented
from time to time.

     

    “Withdrawal Liability”
means liability to a Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan, as such terms are defined in
Part I of Subtitle E of Title IV of ERISA.

     

    SECTION
1.02.  Classification of Loans and
Borrowings.  For purposes of this Agreement, Loans may be
classified and referred to by Type (e.g., a “Eurodollar
Loan” or “ABR Loan”).

    
      
         

      

      
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    SECTION
1.03.  Terms
Generally.  The definitions of terms herein shall apply equally
to the singular and plural forms of the terms defined.  Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms.  The words “include”, “includes” and
“including” shall be deemed to be followed by the phrase “without
limitation”.  The word “will” shall be construed to have the same
meaning and effect as the word “shall”.  Unless the context requires
otherwise (a) any definition of or reference to any agreement, instrument or
other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, restated,
supplemented or otherwise modified (subject to any restrictions on such
amendments, restatements, supplements or modifications set forth herein), (b)
any reference herein to any Person shall be construed to include such Person’s
successors and assigns, (c) the words “herein”, “hereof” and “hereunder”, and
words of similar import, shall be construed to refer to this Agreement in its
entirety and not to any particular provision hereof, (d) all references herein
to Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e)
the words “asset” and “property” shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract
rights.

     

    SECTION
1.04.  Accounting Terms;
GAAP.  Except as otherwise expressly provided herein, all terms
of an accounting or financial nature shall be construed in accordance with GAAP,
as in effect from time to time; provided that, if the
Parent or the Borrower notifies the Administrative Agent that the Parent or the
Borrower requests an amendment to any provision hereof to eliminate the effect
of any change occurring after the date hereof in GAAP or in the application
thereof on the operation of such provision (or if the Administrative Agent
notifies the Parent or the Borrower that the Majority Lenders request an
amendment to any provision hereof for such purpose), regardless of whether any
such notice is given before or after such change in GAAP or in the application
thereof, then such provision shall be interpreted on the basis of GAAP as in
effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in
accordance herewith.

     

    ARTICLE
II

     

    The
Credits

     

    SECTION
2.01.  Commitments.  Subject
to the terms and conditions set forth herein, each Lender agrees to make Loans
to the Borrower from time to time during the Availability Period in an aggregate
principal amount that will not result in (a) such Lender’s Credit Exposure
exceeding such Lender’s Commitment or (b) the sum of all of the Lenders’
Credit Exposures exceeding the sum of all of the Lenders’
Commitments.  Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrower may borrow, prepay and reborrow
Loans.

     

    SECTION
2.02.  Loans
and Borrowings.  (a) Each Loan shall be made as part of a
Borrowing consisting of Loans made by the Lenders ratably in accordance with
their respective Commitments.  The failure of any Lender to make any
Loan required to be made by it shall not relieve any other Lender of its
obligations hereunder; provided that the
Commitments of the Lenders are several and no Lender shall be responsible for
any other Lender’s failure to make Loans as required.

    
      
         

      

      
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    (b)           Subject
to Section 2.14, each Borrowing shall be comprised entirely of ABR Loans or
Eurodollar Loans as the Borrower may request in accordance
herewith.  Each Lender at its option may, subject to Section 2.19(a),
make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate
of such Lender to make such Loan; provided that any
exercise of such option shall not affect the obligation of the Borrower to repay
such Loan in accordance with the terms of this Agreement.

     

    (c)           At
the commencement of each Interest Period for any Eurodollar Borrowing, such
Borrowing shall be in an aggregate amount that is an integral multiple of
$500,000 and not less than $1,000,000.  At the time that each ABR
Borrowing is made, such Borrowing shall be in an aggregate amount that is an
integral multiple of $100,000 and not less than $500,000; provided that an ABR
Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the total Commitments or that is required to finance the
reimbursement of an LC Disbursement as contemplated by
Section 2.06(e).  Borrowings of more than one Type may be
outstanding at the same time; provided that there
shall not at any time be more than a total of ten (10) Eurodollar Borrowings
outstanding.

     

    (d)          Notwithstanding
any other provision of this Agreement, the Borrower shall not be entitled to
request, or to elect to convert or continue, any Borrowing if the Interest
Period requested with respect thereto would end after the Maturity
Date.

     

    SECTION
2.03.  Requests for
Borrowings.  To request a Borrowing, the Borrower shall notify
the Administrative Agent of such request by telephone (a) in the case of a
Eurodollar Borrowing, not later than 12:00 noon, New York City time, three
Business Days before the date of the proposed Borrowing or (b) in the case
of an ABR Borrowing, not later than 12:00 noon, New York City time, on the
date of the proposed Borrowing.  Each such telephonic Borrowing
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Borrowing Request in a form
approved by the Administrative Agent and signed by the Borrower.  Each
such telephonic and written Borrowing Request shall specify the following
information in compliance with Section 2.02:

     

    (i)           the
aggregate amount of the requested Borrowing;

     

    (ii)          the
date of such Borrowing, which shall be a Business Day;

     

    (iii)         whether
such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;

     

    (iv)         in
the case of a Eurodollar Borrowing, the initial Interest Period to be applicable
thereto, which shall be a period contemplated by the definition of the term
“Interest Period”; and

     

    (v)          the
location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of
Section 2.07.

     

    If no
election as to the Type of Borrowing is specified, then the requested Borrowing
shall be an ABR Borrowing.  If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month’s duration.  Promptly
following receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender’s Loan to be made as part of the requested
Borrowing.

     

    
      
         

      

      
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    SECTION
2.04.  Borrowing
Base.

     

    (a)           Amount.  For
the period from and including the Effective Date to but not including the first
Redetermination Date, the amount of the Borrowing Base shall be
$420,000,000.  Notwithstanding the foregoing, the Borrowing Base will
be subject to interim adjustments pursuant to Sections 2.04(e), 5.12, 5.17,
6.01(j) and 6.13.

     

    (b)           Redetermination.  On
or before April 15th and October 15th of each year, the Administrative Agent
shall propose in writing to the Borrower and the Lenders a new or reaffirmed
Borrowing Base in accordance with Section 2.04(c) (assuming receipt by the
Administrative Agent of the Reserve Report in a timely and complete
manner).  After having received notice of such proposal by the
Administrative Agent, each Lender shall have 15 days to agree with such proposal
or disagree by proposing an alternate Borrowing Base.  If, at the end
of such 15 days, any Lender has not communicated to the Administrative Agent its
approval or disapproval, such silence shall be deemed to be an approval of the
new or reaffirmed Borrowing Base proposed by the Administrative
Agent.  If, however, at the end of such 15-day period, all of the
Lenders or the Required Lenders, as applicable, have not approved or deemed to
have approved, as aforesaid, the proposed Borrowing Base, then the Borrowing
Base shall be determined in accordance with
Section 2.04(d).  After such redetermined Borrowing Base is
approved by (a) all Lenders in the case of any increase in the Borrowing Base,
(b) the Required Lenders in the case of any maintenance or any decrease in the
Borrowing Base or (c) as otherwise determined as provided in
Section 2.04(d), the Administrative Agent will notify the Borrower and the
Lenders of the amount of the redetermined Borrowing Base, and such amount shall
become effective and applicable to the Borrower, the Administrative Agent, the
Issuing Bank and the Lenders on or about May 1st (with
respect to each Reserve Report prepared as of December 31) or
November 1st (with
respect to each Reserve Report prepared as of June 30), as applicable, of
each year.  Notwithstanding the foregoing, however, any increase in
the Borrowing Base shall require approval or deemed approval of all the Lenders
as set forth in this Section 2.04(b).

     

    (c)           Reserve
Reports.  Upon receipt of the Reserve Report and such other
reports, data and supplemental information, including the information provided
pursuant to Section 5.11, as may, from time to time, be reasonably
requested by the Required Lenders, the Administrative Agent will evaluate such
information.  The Administrative Agent, with the approval or deemed
approval of the Lenders as set forth in Section 2.04(b), but subject to the
terms of Section 2.04(b), shall, in good faith, redetermine the Borrowing
Base based upon such information and such other information (including, without
limitation, information described in the Reserve Report, the status of title
with respect to the Oil and Gas Properties and the existence of any other
Indebtedness) as the Administrative Agent deems appropriate in its discretion
and consistent with customary industry practices and its normal oil and gas
lending criteria as it exists at the particular time.  Such
redetermination shall be accomplished not later than and effective on or about
the first (1st) day of
each May and November of each calendar year, assuming that the Borrower shall
have furnished the Reserve Report and other reports, data and supplemental
information in a timely and complete manner as required by
Section 5.11.  In assessing whether to approve or reject a
proposed Borrowing Base, each Lender will assess, in good faith, the Reserve
Report and the other information as they deem appropriate in its discretion and
consistent with customary industry practices and its respective oil and gas
lending criteria and procedures as they exist at the particular
time.

    
      
         

      

      
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    (d)           Consensus and Failure of
Consensus.  Except as hereinafter provided, the decision of the
Lenders or the Required Lenders, as applicable, with respect to any Borrowing
Base determination shall control; provided, however, that if the
Lenders or the Required Lenders, as applicable, have not approved or are not
deemed to have approved the Borrowing Base as of the end of the 15-day period
specified in Section 2.04(b), the Borrowing Base shall be redetermined at
the highest amount approved by each Lender (if such redetermined Borrowing Base
constitutes an increase in the Borrowing Base in effect immediately prior
thereto) or the Required Lenders (if such redetermined Borrowing Base
constitutes a reaffirmation or decrease in the Borrowing Base in effect
immediately prior thereto), as applicable, and such amount shall then become the
Borrowing Base until the next scheduled redetermination pursuant to Section
2.04(b) or the next date on which an interim redetermination occurs under Section 2.04(e) or the next adjustment under
either Section 5.17, 6.01(j) or
6.13.  Notwithstanding the foregoing, however, any increase in
the Borrowing Base shall require approval or deemed approval of all the Lenders
as set forth in Section
2.04(a).

     

    (e)           Interim
Redeterminations.  The Borrower may, at its option, one time
during any 12-month period initiate an interim redetermination of the Borrowing
Base.  In addition, the Borrower may, at its option, in connection
with any acquisition (or any series of acquisitions occurring since the most
recent redetermination of the Borrowing Base) by the Parent, the Borrower or a
Restricted Subsidiary of Oil and Gas Properties having a purchase price, either
individually or in the aggregate, of $50,000,000 or more, initiate an interim
redetermination of the Borrowing Base.  The Administrative Agent (at
the direction of the Required Lenders, in their option) may one time during any
12-month period initiate an interim redetermination of the Borrowing
Base.  The Borrowing Base also may be redetermined in accordance with
this Agreement upon the occurrence of any of the events described in any of
Sections 5.12, 5.17, 6.01(j) or 6.13.

     

    SECTION
2.05.  Increase in Aggregate
Commitment Amount.

     

    (a)           Upon
prior notice to the Administrative Agent, the Borrower may from time to time,
(i) request that the Lenders increase the Aggregate Commitment Amount pro rata
among the Lenders up to an amount not exceeding the Maximum Facility Amount or
(ii) invite additional financial institutions acceptable to the Administrative
Agent and the Issuing Bank to become Lenders party to the Agreement so as to
increase the Aggregate Commitment Amount to an amount not exceeding the Maximum
Facility Amount.  At the time of sending such notice to the Lenders or
any invitee, the Borrower (in consultation with the Administrative Agent) shall
specify the time period within which each Lender or invitee, as applicable, is
requested to respond (which shall in no event be less than 10 Business Days from
the date of delivery of such notice to the Lenders).  If the Borrower
has requested that the Lenders increase their respective Commitment Amounts pro
rata hereunder, each Lender shall notify the Administrative Agent within such
time period whether or not it agrees to increase its respective Commitment
Amount and, if so, whether by an amount equal to, greater than, or less than its
Applicable Percentage of such requested increase and any Lender not responding
within such time period shall be deemed to have declined to increase its
respective Commitment Amount.  Anything herein contained to the
contrary notwithstanding, no Lender shall have any obligation whatsoever to
increase its respective Commitment Amount hereunder.  The consent of
the Lenders shall not be required in order for any financial institution
acceptable to the Administrative Agent and the Issuing Bank to become a party to
this Agreement pursuant to this Section 2.05.

     

    
      
         

      

      
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    (b)           If
the Aggregate Commitment Amount is increased in accordance with this
Section 2.05, the Administrative Agent and the Borrower shall determine the
effective date of such increase (the “Increase Effective
Date”).  The Administrative Agent and the Borrower shall
promptly notify the Lenders of the final allocation of such increase and the
Increase Effective Date.  Each existing Lender that increases its
Commitment Amount and each additional Lender, if any, and the Borrower shall
execute and deliver to the Administrative Agent (which the Administrative Agent
shall also execute to acknowledge its acceptance thereof) an agreement
substantially in the form of Exhibit B (an “Additional Lender
Agreement”).  Upon receipt by the Administrative Agent of
Additional Lender Agreements from existing Lenders or additional Lenders
(together with an Administrative Questionnaire, in the case of any additional
Lender), if any, in an amount sufficient to effectuate the increase requested by
the Borrower:  (1) the Aggregate Commitment Amount shall be
increased, (2) the Administrative Agent shall amend and distribute to the
Borrower and the Lenders a revised Schedule 2.01 of the Commitment Amounts
of each Lender adding or amending, as applicable, the Commitment Amount of any
Lender executing the Additional Lender Agreement and the revised Applicable
Percentages of the Lenders (which shall be deemed incorporated into this
Agreement), (3) any additional Lender shall be deemed to be a party in all
respects to this Agreement and the other Loan Documents to which the Lenders are
party as of the Increase Effective Date and (4) upon the Increase Effective
Date, any increasing or additional Lender party to the Additional Lender
Agreement shall purchase from each of the (other) Lenders party to the Agreement
immediately prior to the Increase Effective Date a pro rata portion of the
outstanding Loans (and participation interests in Letters of Credit) of each
such (other) Lender such that each Lender (including any additional Lender, if
any) shall hold its respective Applicable Percentage of the outstanding Loans
(and participation interests in Letters of Credit) as reflected on the revised
Schedule 2.01 required by this Section 2.05, provided that the
Borrower shall pay any amounts due under Section 2.16 to the extent that
any such purchase gives rise to the costs indemnified thereby.

     

    (c)           As
a condition precedent to such increase, the Borrower shall deliver to the
Administrative Agent a certificate dated as of the Increase Effective Date (in
sufficient copies for each Lender) signed by a Authorized Officer of the
Borrower (i) certifying and attaching the resolutions adopted by the Borrower
approving or consenting to such increase, (ii) including a certificate of the
type described in Section 5.01(c) demonstrating pro forma compliance with
Section 6.09 after giving effect to such increase and (iii) certifying
that, before and after giving effect to such increase, the representations and
warranties contained in Article III are true and correct on and as of the
Increase Effective Date and no Default or Event of Default exists.

     

    (d)           This
Section shall supersede any provision in Section 9.02 to the
contrary.

    
      
         

      

      
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    SECTION
2.06.  Letters of
Credit.  (a) General.  Subject
to the terms and conditions set forth herein, the Borrower may request the
issuance of Letters of Credit for its own account, or the account of any other
Credit Party, in a form reasonably acceptable to the Administrative Agent and
the Issuing Bank, at any time and from time to time during the Availability
Period.  In the event of any inconsistency between the terms and
conditions of this Agreement and the terms and conditions of any form of letter
of credit application or other agreement submitted by the Borrower to, or
entered into by the Borrower with, the Issuing Bank relating to any Letter of
Credit, the terms and conditions of this Agreement shall control.

     

    (b)           Notice of Issuance,
Amendment, Renewal, Extension; Certain Conditions.  To request
the issuance of a Letter of Credit (or the amendment, renewal or extension of an
outstanding Letter of Credit), the Borrower shall hand deliver or telecopy (or
transmit by electronic communication, if arrangements for doing so have been
approved by the Issuing Bank) to the Issuing Bank and the Administrative Agent
(reasonably in advance of the requested date of issuance, amendment, renewal or
extension) a notice requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or extended, and
specifying the date of issuance, amendment, renewal or extension (which shall be
a Business Day), the date on which such Letter of Credit is to expire (which
shall comply with paragraph (c) of this Section), the amount of such Letter
of Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit.  If requested by the Issuing Bank, the Borrower also shall
submit a letter of credit application on the Issuing Bank’s standard form in
connection with any request for a Letter of Credit.  A Letter of
Credit shall be issued, amended, renewed or extended only if (and upon issuance,
amendment, renewal or extension of each Letter of Credit the Borrower shall be
deemed to represent and warrant that), after giving effect to such issuance,
amendment, renewal or extension, (i) the LC Exposure shall not exceed
$20,000,000 and (ii) the aggregate Credit Exposure shall not exceed the lesser
of (x) the Aggregate Commitment Amount and (y) the Borrowing Base then in
effect, in each case, as such amounts may be adjusted from time to time in
accordance with this Agreement.

     

    (c)           Expiration
Date.  Each Letter of Credit shall expire at or prior to the
earlier of (i) the close of business on the date that is five Business Days
prior to the Maturity Date and (ii) one year after its issuance, provided,
however, that any Letter of Credit with a one-year term may provide for the
renewal thereof for additional one-year periods (which shall in no event extend
beyond the fifth business day prior to the Maturity Date) unless the Issuing
Bank provides prior notice of non-renewal to the beneficiary
thereof.

     

    (d)           Participations.  By
the issuance of a Letter of Credit (or an amendment to a Letter of Credit
increasing the amount thereof) and without any further action on the part of the
Issuing Bank or the Lenders, the Issuing Bank hereby grants to each Lender, and
each Lender hereby acquires from the Issuing Bank, a participation in such
Letter of Credit equal to such Lender’s Applicable Percentage of the aggregate
amount available to be drawn under such Letter of Credit.  In
consideration and in furtherance of the foregoing, each Lender hereby absolutely
and unconditionally agrees to pay to the Administrative Agent, for the account
of the Issuing Bank, such Lender’s Applicable Percentage of each LC Disbursement
made by the Issuing Bank and not reimbursed by the Borrower on the date due as
provided in paragraph (e) of this Section, or of any reimbursement payment
required to be refunded to the Borrower for any reason.  Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including any
amendment, renewal or extension of any Letter of Credit or the occurrence and
continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever.

     

    
      
         

      

      
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    (e)           Reimbursement.  If
the Issuing Bank shall make any LC Disbursement in respect of a Letter of
Credit, the Borrower shall reimburse such LC Disbursement by paying to the
Administrative Agent an amount equal to such LC Disbursement not later than
12:00 noon, New York City time, on (i) the Business Day that the Borrower
receives such notice, if such notice is received prior to 10:00 a.m., New York
City time, on the day of receipt, or (ii) the Business Day immediately following
the day that the Borrower receives such notice, if such notice is not received
prior to such time on the day of receipt; provided that the
Borrower shall, subject to the conditions to borrowing set forth herein,
automatically be deemed to have requested in accordance with Section 2.03
that such payment be financed with an ABR Borrowing in an equivalent amount and,
to the extent so financed, the Borrower’s obligation to make such payment shall
be discharged and replaced by the resulting ABR Borrowing.  If the
Borrower fails to make such payment when due, the Administrative Agent shall
notify each Lender of the applicable LC Disbursement, the payment then due from
the Borrower in respect thereof and such Lender’s Applicable Percentage
thereof.  Promptly following receipt of such notice, each Lender shall
pay to the Administrative Agent its Applicable Percentage of the payment then
due from the Borrower, in the same manner as provided in Section 2.07 with
respect to Loans made by such Lender (and Section 2.07 shall apply, mutatis mutandis, to the
payment obligations of the Lenders), and the Administrative Agent shall promptly
pay to the Issuing Bank the amounts so received by it from the
Lenders.  Promptly following receipt by the Administrative Agent of
any payment from the Borrower pursuant to this paragraph, the Administrative
Agent shall distribute such payment to the Issuing Bank or, to the extent that
Lenders have made payments pursuant to this paragraph to reimburse the Issuing
Bank, then to such Lenders and the Issuing Bank as their interests may
appear.  Any payment made by a Lender pursuant to this paragraph to
reimburse the Issuing Bank for any LC Disbursement (other than the funding of
ABR Loans as contemplated above) shall not constitute a Loan and shall not
relieve the Borrower of its obligation to reimburse such LC
Disbursement.

     

    
      
         

      

      
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    (f)           Obligations
Absolute.  The Borrower’s obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be
absolute, unconditional and irrevocable and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement, or any term or provision therein, (ii) any
draft or other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not strictly
comply with the terms of such Letter of Credit or (iv) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section, constitute a legal or equitable
discharge of, or provide a right of setoff against, the Borrower’s obligations
hereunder.  Except as set forth herein, neither the Administrative
Agent, the Lenders nor the Issuing Bank, nor any of their Related Parties, shall
have any liability or responsibility by reason of or in connection with the
issuance or transfer of any Letter of Credit or any payment or failure to make
any payment thereunder (irrespective of any of the circumstances referred to in
the preceding sentence), or any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or other communication under or
relating to any Letter of Credit (including any document required to make a
drawing thereunder), any error in interpretation of technical terms or any
consequence arising from causes beyond the control of the Issuing Bank; provided that the
foregoing shall not be construed to excuse the Issuing Bank from liability to
the Borrower to the extent of any damages (other than consequential damages,
claims in respect of which are hereby waived by the Borrower to the extent
permitted by applicable law) suffered by the Borrower that are caused by the
Issuing Bank’s failure to exercise care when determining whether drafts and
other documents presented under a Letter of Credit comply with the terms
thereof.  The parties hereto expressly agree that, in the absence of
gross negligence or willful misconduct on the part of the Issuing Bank (as
finally determined by a court of competent jurisdiction), the Issuing Bank shall
be deemed to have exercised care in each such determination (AND THE PARTIES HERETO ACKNOWLEDGE
AND AGREE THAT IT IS THE INTENTION OF THE PARTIES HERETO THAT THE ISSUING BANK
BE EXCUSED FOR ITS OWN NEGLIGENCE (OTHER THAN GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT), REGARDLESS OF WHETHER SUCH NEGLIGENCE IS SOLE OR CONTRIBUTORY,
ACTIVE OR PASSIVE, IMPUTED, JOINT OR TECHNICAL).  In
furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented that appear on their
face to be in substantial compliance with the terms of a Letter of Credit, the
Issuing Bank may, in its sole discretion, either accept and make payment upon
such documents without responsibility for further investigation, regardless of
any notice or information to the contrary, or refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the
terms of such Letter of Credit.

     

    (g)           Disbursement
Procedures.  The Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit.  The Issuing Bank shall promptly
notify the Administrative Agent and the Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any
failure to give or delay in giving such notice shall not relieve the Borrower of
its obligation to reimburse the Issuing Bank and the Lenders with respect to any
such LC Disbursement.

     

    (h)           Interim
Interest.  If the Issuing Bank shall make any LC Disbursement,
then, unless the Borrower shall reimburse such LC Disbursement in full on the
date such LC Disbursement is made, the unpaid amount thereof shall bear
interest, for each day from and including the date such LC Disbursement is made
to but excluding the date that the Borrower reimburses such LC Disbursement, at
the rate per annum then applicable to ABR Loans; provided that, if the
Borrower fails to reimburse such LC Disbursement when due pursuant to
paragraph (e) of this Section, then Section 2.13(c) shall
apply.  Interest accrued pursuant to this paragraph shall be for the
account of the Issuing Bank, except that interest accrued on and after the date
of payment by any Lender pursuant to paragraph (e) of this Section to reimburse
the Issuing Bank shall be for the account of such Lender to the extent of such
payment.

     

    
      
         

      

      
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    (i)    
       Replacement of the Issuing
Bank.  The Issuing Bank may be replaced at any time by written
agreement among the Borrower, the Administrative Agent and the successor Issuing
Bank, with the consent of the replaced Issuing Bank, such consent not to be
unreasonably withheld or delayed.  The Administrative Agent shall
notify the Lenders of any such replacement of the Issuing Bank.  At
the time any such replacement shall become effective, the Borrower shall pay all
unpaid fees accrued for the account of the replaced Issuing Bank pursuant to
Section 2.12(b).  From and after the effective date of any such
replacement, (i) the successor Issuing Bank shall have all the rights and
obligations of the Issuing Bank under this Agreement with respect to Letters of
Credit to be issued thereafter and (ii) references herein to the term “Issuing
Bank” shall be deemed to refer to such successor or to any previous Issuing
Bank, or to such successor and all previous Issuing Banks, as the context shall
require.  After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.

     

    (j)   
        Cash
Collateralization.  If any Event of Default shall occur and be
continuing or if required pursuant to Section 2.11, on the Business Day
that the Borrower receives notice from the Administrative Agent or the Majority
Lenders demanding the deposit of cash collateral pursuant to this paragraph, the
Borrower shall deposit in an account with the Administrative Agent, in the name
of the Administrative Agent and for the benefit of the Lenders, an amount in
cash equal to the LC Exposure as of such date, plus any accrued and unpaid
interest thereon; provided that the
obligation to deposit such cash collateral shall become effective immediately,
and such deposit shall become immediately due and payable, without demand or
other notice of any kind, upon the occurrence of any Event of Default with
respect to the Borrower described in clause (h) or (i) of
Section 7.01.  The Borrower hereby grants to the Administrative
Agent, for the benefit of the Issuing Bank and the Lenders, an exclusive first
priority and continuing perfected security interest in and Lien on such account
and all cash, checks, drafts, certificates and instruments, if any, from time to
time deposited or held in such account, all deposits or wire transfers made
thereto, any and all investments purchased with funds deposited in such account,
all interest, dividends, cash, instruments, financial assets and other Property
from time to time received, receivable or otherwise payable in respect of, or in
exchange for, any or all of the foregoing, and all proceeds, products,
accessions, rents, profits, income and benefits therefrom, and any substitutions
and replacements therefor.  Such deposit shall be held by the
Administrative Agent as collateral for the payment and performance of the
obligations of the Borrower under this Agreement.  The Administrative
Agent shall have exclusive dominion and control, including the exclusive right
of withdrawal, over such account.  Other than any interest earned on
the investment of such deposits, which investments shall be made at the option
and sole discretion of the Administrative Agent and at the Borrower’s risk and
expense, such deposits shall not bear interest.  Interest or profits,
if any, on such investments shall accumulate in such account.  Moneys
in such account shall be applied by the Administrative Agent to reimburse the
Issuing Bank for LC Disbursements for which it has not been reimbursed and, to
the extent not so applied, shall be held for the satisfaction of the
reimbursement obligations of the Borrower for the LC Exposure at such time or,
if the maturity of the Loans has been accelerated (but subject to the consent of
Majority Lenders), be applied to satisfy other obligations of the Borrower under
this Agreement.  If at any time the amount of cash collateral held by
the Administrative Agent pursuant hereto shall exceed the LC Exposure as of such
date, Administrative Agent shall return such excess to the Borrower within two
Business Days thereafter.  If the Borrower is required to provide an
amount of cash collateral hereunder as a result of the occurrence of an Event of
Default, such amount (to the extent not applied as aforesaid) shall be returned
to the Borrower within two Business Days after all Events of Default have been
cured or waived.

    
      
         

      

      
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    (k)           Existing Letters of
Credit.  All Existing Letters of Credit shall be deemed to be
issued under this Agreement as of the Effective Date and shall constitute
Letters of Credit hereunder for all purposes (including Section 2.06(b)),
and no notice requesting issuance thereof shall be required
hereunder.  Each reference herein to the issuance of a Letter of
Credit shall include any such deemed issuance.  All fees accrued on
the Existing Letters of Credit to but excluding the Effective Date shall be for
the account of the Issuing Bank and the lenders under the Existing Credit
Facility, and all fees accruing on the Existing Letters of Credit on and after
the Effective Date shall be for the account of the Issuing Bank and the Banks as
provided herein.

     

    SECTION
2.07.  Funding of
Borrowings.  (a) Each Lender shall make each Loan to be made by
it hereunder on the proposed date thereof by wire transfer of immediately
available funds by 1:00 p.m., New York City time, to the account of the
Administrative Agent most recently designated by it for such purpose by notice
to the Lenders.  The Administrative Agent will make such Loans
available to the Borrower by promptly crediting the amounts so received, in like
funds, to an account of the Borrower maintained with the Administrative Agent
designated by the Borrower in the applicable Borrowing Request; provided that ABR
Loans made to finance the reimbursement of an LC Disbursement as provided in
Section 2.06(e) shall be remitted by the Administrative Agent to the
Issuing Bank.

     

    (b)           Unless
the Administrative Agent shall have received written notice from a Lender prior
to the proposed date of any Eurodollar Borrowing or prior to 1:00 p.m., New
York City time, on the date any proposed ABR Borrowing, as applicable, that such
Lender will not make available to the Administrative Agent such Lender’s share
of such Borrowing, the Administrative Agent may assume that such Lender has made
such share available on such date in accordance with paragraph (a) of this
Section and may, in reliance upon such assumption, make available to the
Borrower a corresponding amount.  In such event, if a Lender has not
in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith within two Business Days
after demand therefor such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to the Borrower to
but excluding the date of payment to the Administrative Agent, at (i) in the
case of such Lender, the greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation or (ii) in the case of the Borrower, the interest rate
applicable to ABR Loans.  If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender’s Loan
included in such Borrowing.

     

    
      
         

      

      
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    SECTION
2.08.  Interest
Elections.  (a) Each Borrowing initially shall be of the Type
specified in the applicable Borrowing Request and, in the case of a Eurodollar
Borrowing, shall have an initial Interest Period as specified in such Borrowing
Request.  Thereafter, the Borrower may elect to convert such Borrowing
to a different Type or to continue such Borrowing and, in the case of a
Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in
this Section.  The Borrower may elect different options with respect
to different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing.

     

    (b)           To
make an election pursuant to this Section, the Borrower shall notify the
Administrative Agent of such election by telephone by the time that a Borrowing
Request would be required under Section 2.03 if the Borrower were
requesting a Borrowing of the Type resulting from such election to be made on
the effective date of such election.  Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by the
Borrower.

     

    (c)           Each
telephonic and written Interest Election Request shall specify the following
information in compliance with Section 2.02:

     

    (i)           the
Borrowing to which such Interest Election Request applies and, if different
options are being elected with respect to different portions thereof, the
portions thereof to be allocated to each resulting Borrowing (in which case the
information to be specified pursuant to clauses (iii) and (iv) below shall be
specified for each resulting Borrowing);

     

    (ii)         the
effective date of the election made pursuant to such Interest Election Request,
which shall be a Business Day;

     

    (iii)         with
respect to any Borrowing, whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing; and

     

    (iv)        if
the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be
applicable thereto after giving effect to such election, which shall be a period
contemplated by the definition of the term “Interest Period”.

     

    If any
such Interest Election Request requests a Eurodollar Borrowing but does not
specify an Interest Period, then the Borrower shall be deemed to have selected
an Interest Period of one month’s duration.

     

    (d)          Promptly
following receipt of an Interest Election Request, the Administrative Agent
shall advise each Lender of the details thereof and of such Lender’s portion of
each resulting Borrowing.

     

    (e)           If
the Borrower fails to deliver a timely Interest Election Request with respect to
a Eurodollar Borrowing prior to the end of the Interest Period applicable
thereto, then, unless such Borrowing is repaid as provided herein, at the end of
such Interest Period such Borrowing shall be converted to an ABR
Borrowing.  Notwithstanding any contrary provision hereof, if an Event
of Default has occurred and is continuing and the Administrative Agent, at the
request of the Majority Lenders, so notifies the Borrower, then, so long as an
Event of Default is continuing (i) no outstanding Borrowing may be
converted to or continued as a Eurodollar Borrowing and (ii) unless repaid,
each Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of
the Interest Period applicable thereto.

    
      
         

      

      
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    SECTION
2.09.  Termination and Reduction of
Commitments.  (a) Unless previously terminated, each Lender’s
Commitment and the Commitments shall terminate on the Maturity
Date.

     

    (b)           The
Borrower may at any time terminate, or from time to time reduce, the
Commitments; provided that (i)
each reduction of the Commitments shall be in an amount that is an integral
multiple of $5,000,000 and not less than $5,000,000 and (ii) the Borrower shall
not terminate or reduce the Commitments if, after giving effect to any
concurrent prepayment of the Loans in accordance with Section 2.11, the
Credit Exposure would exceed the total Commitments, as so reduced.

     

    (c)           The
Borrower shall notify the Administrative Agent of any election to terminate or
reduce the Commitments under paragraph (b) of this Section at least three
Business Days prior to the effective date of such termination or reduction,
specifying such election and the effective date thereof.  Promptly
following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof.  Each notice delivered by the
Borrower pursuant to this Section shall be irrevocable; provided that a
notice of termination of the Commitments delivered by the Borrower may state
that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrower (by notice
to the Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied.  Any termination or reduction of the
Commitments shall be permanent.  Each reduction of the Commitments
shall be made ratably among the Lenders in accordance with their respective
Commitment.

     

    SECTION
2.10.  Repayment of Loans;
Evidence of Debt.  (a) The Borrower hereby unconditionally
promises to pay to the Administrative Agent for the account of each Lender the
then unpaid principal amount of each Loan on the Maturity Date.

     

    (b)           Each
Lender shall maintain in accordance with its usual practice an account or
accounts evidencing the indebtedness of the Borrower to such Lender resulting
from each Loan made by such Lender, including the amounts of principal and
interest payable and paid to such Lender from time to time
hereunder.

     

    (c)           The
Administrative Agent shall maintain accounts in which it shall record
(i) the amount of each Loan made hereunder, the Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the
Administrative Agent hereunder for the account of the Lenders and each Lender’s
share thereof.

     

    (d)           The
entries made in the accounts maintained pursuant to paragraphs (b)
or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein absent manifest error;
provided that
the failure of any Lender or the Administrative Agent to maintain such accounts
or any error therein shall not in any manner affect the obligation of the
Borrower to repay the Loans in accordance with the terms of this
Agreement.

    
      
         

      

      
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    (e)           Any
Lender may request that Loans made by it be evidenced by a promissory
note.  In such event, the Borrower shall prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) and in a
form approved by the Administrative Agent; provided that any
promissory note issued to evidence any Lender’s Loans shall be in a stated
amount equal to such Lender’s Commitment Amount.  Thereafter, the
Loans evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 9.04) be represented by one
or more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and its
registered assigns).

     

    SECTION
2.11.  Prepayment of
Loans.

     

    (a)           Mandatory
Prepayments.  At any time that a Borrowing Base Deficiency
shall occur, the Borrower shall:

     

    (i)           If
such Borrowing Base Deficiency results from a redetermination of the Borrowing
Base pursuant to Sections 2.04(b), 2.04(e) or 5.12, at the Borrower’s
election, take any either or both of the following actions to eliminate the
Borrowing Base Deficiency: (A) prepay the Loans in an aggregate principal amount
equal to such Borrowing Base Deficiency, together with interest on the principal
amount paid accrued to the date of such prepayment and any funding
indemnification amounts required by Section 2.16, and, if a Borrowing Base
Deficiency remains after prepaying all of the Loans as a result of LC Exposure,
pay to the Administrative Agent on behalf of the Lenders an amount equal to such
remaining Borrowing Base Deficiency to be held as cash collateral in a special
collateral account as provided in Section 2.06(j), or (B) provide
additional Collateral acceptable to the Administrative Agent with a fair market
value greater than or equal to the amount of such Borrowing Base
Deficiency.  The Borrower shall be obligated to make such prepayment,
deposit of cash collateral or provide additional Collateral within 60 days
following its receipt of written notice from the Administrative Agent of the
existence of the Borrowing Base Deficiency.

     

    (ii)          If
such Borrowing Base Deficiency results from a reduction of the Borrowing Base in
accordance with Sections 5.17, 6.01(j) or 6.13, use the Net Cash Proceeds
of the transaction giving rise to the reduction of the Borrowing Base pursuant
to any such Section, promptly, but in any event within two (2) Business Days of
receipt of such Net Cash Proceeds, to prepay the Loans in an aggregate principal
amount equal to such Borrowing Base Deficiency, together with interest on the
principal amount paid accrued to the date of such prepayment and any funding
indemnification amounts required by Section 2.16, and, if a Borrowing Base
Deficiency remains after prepaying all of the Loans as a result of LC Exposure,
pay to the Administrative Agent on behalf of the Lenders an amount equal to such
remaining Borrowing Base Deficiency to be held as cash collateral in a special
collateral account as provided in Section 2.06(j); provided that if,
after application of such Net Cash Proceeds in accordance with the foregoing,
any Borrowing Base Deficiency shall remain, then the Borrower shall eliminate
such remaining Borrowing Base Deficiency in accordance with the foregoing clause
(i).

     

    
      
         

      

      
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    (iii)         Amounts
applied to the prepayment of Loans pursuant to this Section shall be first
applied ratably to ABR Loans then outstanding and, upon payment in full of all
outstanding ABR Loans, second, to Eurodollar Loans then outstanding, and if more
than one Eurodollar Loan is then outstanding, to each such Eurodollar Loan
beginning with the Eurodollar Loan with the fewest number of days remaining in
the Interest Period applicable thereto until paid in full, and then to the
Eurodollar Loan with the next fewest number of days remaining in the Interest
Period applicable thereto until paid in full, and continuing in a similar
fashion until the Borrowing Base Deficiency has been eliminated or, in the case
of any prepayment pursuant to the foregoing clause (ii), until such Net Cash
Proceeds have been exhausted.

     

    (b)           Optional Prepayment of
Loans.  The Borrower shall have the right at any time and from
time to time to prepay any Borrowing in whole or in part, without premium or
penalty, but subject to the requirements of Sections 2.09(b) and
2.16.  The Borrower shall notify the Administrative Agent by telephone
(confirmed by telecopy) of any optional prepayment (i) in the case of a
Eurodollar Borrowings, not later than 12:00 noon, New York City time, three
Business Days before the date of prepayment or (ii) in the case of prepayment of
any ABR Borrowings, not later than 12:00 noon New York City time, on the date of
such prepayment.  Such notice shall be irrevocable and shall specify
the prepayment date and the principal amount of the Borrowings or portion
thereof to be prepaid; provided that, if a
notice of prepayment is given in connection with a conditional notice of
termination of the Commitments as contemplated by Section 2.09, then such
notice of prepayment may be revoked if such notice of termination is revoked in
accordance with Section 2.09.  Promptly following receipt of any
such notice of prepayment, the Administrative Agent shall advise the Lenders of
the contents thereof.  Each partial prepayment of any Borrowings shall
be in an amount that would be permitted in the case of an advance of a Borrowing
of the same Type as provided in Section 2.02.  Each prepayment of
a Borrowing shall be applied ratably to the Loans included in the prepaid
Borrowing.  Prepayments shall be accompanied by accrued interest to
the extent required by Section 2.13 and any amount payable under
Section 2.16.

     

    SECTION
2.12.  Fees.  (a)
Subject to the provisions of Section 2.20, the Borrower agrees to pay to
the Administrative Agent, for the account of each Lender (excluding any
Defaulting Lenders), an unused commitment fee (the “Unused Commitment
Fee”) equal to the Applicable Rate set forth under the heading Unused
Commitment Fee Rate multiplied by the daily average of each such Lender’s Unused
Commitment.  Such Unused Commitment Fee shall be calculated on the
basis of a year consisting of 360 days and shall be payable in arrears on the
last day of each March, June, September and December and on the Maturity Date
for any period then ending for which the Unused Commitment Fee shall not have
been previously paid.  In the event the Commitments terminate on any
date other than the last day of March, June, September or December, the Borrower
agrees to pay to the Administrative Agent, for the account of each Lender
(excluding any Defaulting Lenders), on the date of such termination, each such
Lender’s Unused Commitment Fee due for the period from the last day of the
immediately preceding March, June, September or December, as the case may be, to
the date such termination occurs.

     

    
      
         

      

      
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    (b)           Subject
to the provisions of Section 2.20, the Borrower agrees to pay (i) to the
Administrative Agent for the account of each Lender (excluding any Defaulting
Lenders) a participation fee with respect to its participations in Letters of
Credit, which shall accrue at the same Applicable Rate used to determine the
interest rate applicable to Eurodollar Loans on the average daily amount of such
Lender’s LC Exposure (excluding any portion thereof attributable to unreimbursed
LC Disbursements) during the period from and including the Effective Date to but
excluding the later of the date on which such Lender’s Commitment terminates and
the date on which such Lender ceases to have any LC Exposure, and (ii) to the
Issuing Bank a fronting fee equal to the greater of (x) $500 or
(y) 1/8 of 1% per annum on the average daily amount of the LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the Effective Date to but excluding the
later of the date of termination of the Commitments and the date on which there
ceases to be any LC Exposure, as well as the Issuing Bank’s standard fees with
respect to the issuance, amendment, renewal or extension of any Letter of Credit
or processing of drawings thereunder.  Participation fees and fronting
fees accrued through and including the last day of March, June, September and
December of each year shall be payable on the third Business Day following such
last day, commencing on the first such date to occur after the Effective Date;
provided that
all such fees shall be payable on the date on which the Commitments terminate
and any such fees accruing after the date on which the Commitments terminate
shall be payable on demand.  Any other fees payable to the Issuing
Bank pursuant to this paragraph shall be payable within 10 days after
demand.  All participation fees and fronting fees shall be computed on
the basis of a year of 360 days and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day).

     

    (c)           The
Borrower agrees to pay to the Administrative Agent, for its own account, fees
payable in the amounts and at the times separately agreed upon between the
Borrower and the Administrative Agent.

     

    (d)          All
fees payable hereunder shall be paid on the dates due, in immediately available
funds, to the Administrative Agent (or to the Issuing Bank, in the case of fees
payable to it) for distribution, in the case of Unused Commitment Fees and
participation fees, to the Lenders.  Fees paid shall not be refundable
under any circumstances, except in the case of any overpayment due to erroneous
calculation or invoicing thereof.

     

    SECTION
2.13.  Interest.  (a)
The Loans comprising each ABR Borrowing shall bear interest at the
Alternate Base Rate plus the Applicable Rate.

     

    (b)          Eurodollar
Loans shall bear interest at the Adjusted LIBO Rate for the Interest Period in
effect for such Borrowing plus the Applicable Rate.

     

    (c)           Notwithstanding
the foregoing, (i) if a Default or an Event of Default has occurred and is
continuing, the Majority Lenders may, at their option, by notice to the Borrower
declare that no Borrowing may be made as, converted into or continued as a
Eurodollar Borrowing, (ii) during the continuance of an Event of Default the
Majority Lenders may, at their option, by notice to the Borrower, declare that
(A) each Eurodollar Borrowing shall bear interest for the remainder of the
applicable Interest Period plus 2% per annum, (B) each ABR Borrowing shall bear
interest at a rate per annum equal to the Alternate Base Rate in effect from
time to time plus 2% per annum and (C) the fees described in Section 2.12(b)
shall be increased by 2% per annum, provided that, during
the continuance of an Event of Default under clauses (h) or (i) of
Section 7.01, the interest rates forth in clauses (A) and (B) above and the
increase in the Letter of Credit fee set forth in clause (C) above shall be
applicable to all Borrowings without any election or action on the part of the
Administrative Agent or any Lender (as applicable, the “Default
Rate”).

     

    
      
         

      

      
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    (d)           Accrued
interest on each Loan shall be payable in arrears on each Interest Payment Date
for such Loan and upon termination of the Commitments; provided that (i)
interest accrued pursuant to paragraph (c) of this Section shall be payable on
demand, (ii) in the event of any repayment or prepayment of any Loan (other than
a prepayment of an ABR Loan prior to the end of the Availability Period unless
such prepayment is made to reduce a Borrowing Base Deficiency), accrued interest
on the principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment and (iii) in the event of any conversion of any
Eurodollar Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such
conversion.

     

    (e)           All
interest hereunder shall be computed on the basis of a year of 360 days, except
that interest computed by reference to the Alternate Base Rate at times when the
Alternate Base Rate is based on the Prime Rate shall be computed on the basis of
a year of 365 days (or 366 days in a leap year), and in each case shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).  The applicable Alternate Base Rate, Adjusted
LIBO Rate or LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.

     

    SECTION
2.14.  Alternate Rate of
Interest.  If prior to the commencement of any Interest Period
for a Eurodollar Borrowing:

     

    (a)           the
Administrative Agent determines (which determination shall be conclusive absent
manifest error) that adequate and reasonable means do not exist for ascertaining
the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest
Period; or

     

    (b)           the
Administrative Agent is advised by the Required Lenders that the Adjusted LIBO
Rate or the LIBO Rate, as applicable, for such Interest Period will not
adequately and fairly reflect the cost to such Lenders (or Lender) of making or
maintaining their Loans (or its Loan) included in such Borrowing for such
Interest Period;

     

    then the
Administrative Agent shall give notice thereof to the Borrower and the Lenders
by telephone or telecopy as promptly as practicable thereafter and, until the
Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective,
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.

     

    
      
         

      

      
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    SECTION
2.15.  Increased
Costs.  (a) If any Change in Law shall:

     

    (i)           impose,
modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended by,
any Lender (except any such reserve requirement reflected in the Adjusted LIBO
Rate) or the Issuing Bank; or

     

    (ii)          impose
on any Lender or the Issuing Bank or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender or
any Letter of Credit or participation therein;

     

    and the
result of any of the foregoing shall be to increase the cost to such Lender of
making or maintaining any Eurodollar Loan (or of maintaining its obligation to
make any such Loan) or to increase the cost to such Lender or the Issuing Bank
of participating in, issuing or maintaining any Letter of Credit or to reduce
the amount of any sum received or receivable by such Lender or the Issuing Bank
hereunder (whether of principal, interest or otherwise), then the Borrower will
pay to such Lender or the Issuing Bank, as the case may be, such additional
amount or amounts as will compensate such Lender or the Issuing Bank, as the
case may be, for such additional costs incurred or reduction
suffered.

     

    (b)          If
any Lender or the Issuing Bank determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of return
on such Lender’s or the Issuing Bank’s capital or on the capital of such
Lender’s or the Issuing Bank’s holding company, if any, as a consequence of this
Agreement or the Loans made by, or participations in Letters of Credit held by,
such Lender, or the Letters of Credit issued by the Issuing Bank, to a level
below that which such Lender or the Issuing Bank or such Lender’s or the Issuing
Bank’s holding company could have achieved but for such Change in Law (taking
into consideration such Lender’s or the Issuing Bank’s policies and the policies
of such Lender’s or the Issuing Bank’s holding company with respect to capital
adequacy), then from time to time the Borrower will pay to such Lender or the
Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank or such Lender’s or the Issuing
Bank’s holding company for any such reduction suffered.

     

    (c)           A
certificate of a Lender or the Issuing Bank setting forth the amount or amounts
necessary to compensate such Lender or the Issuing Bank or its holding company,
as the case may be, as specified in paragraph (a) or (b) of this Section
shall be delivered to the Borrower and shall be conclusive absent manifest
error.  The Borrower shall pay such Lender or the Issuing Bank, as the
case may be, the amount shown as due on any such certificate within
10 Business Days after receipt thereof.

     

    (d)          Failure
or delay on the part of any Lender or the Issuing Bank to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender’s or the
Issuing Bank’s right to demand such compensation; provided that the
Borrower shall not be required to compensate a Lender or the Issuing Bank
pursuant to this Section for any increased costs or reductions incurred more
than 270 days prior to the date that such Lender or the Issuing Bank, as the
case may be, notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender’s or the Issuing Bank’s
intention to claim compensation therefor; provided further that, if the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the 270-day period referred to above shall be extended to include the
period of retroactive effect thereof.

     

    
      
         

      

      
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    SECTION
2.16.  Break
Funding Payments.  In the event of (a) the payment of any
principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto, (c) the failure to borrow, convert, continue or
prepay any Eurodollar Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice may be revoked under Section
2.11(b) and is revoked in accordance therewith) or (d) the assignment of
any Eurodollar Loan other than on the last day of the Interest Period applicable
thereto as a result of a request by the Borrower pursuant to Section 2.05
or Section 2.19, then, in any such event, the Borrower shall compensate
each Lender for the loss, cost and expense attributable to such
event.  In the case of a Eurodollar Loan, such loss, cost or expense
to any Lender shall be deemed to include an amount determined by such Lender to
be the excess, if any, of (i) the amount of interest which would have accrued on
the principal amount of such Loan had such event not occurred, at the Adjusted
LIBO Rate that would have been applicable to such Loan, for the period from the
date of such event to the last day of the then current Interest Period therefor
(or, in the case of a failure to borrow, convert or continue, for the period
that would have been the Interest Period for such Loan), over (ii) the amount of
interest that would accrue on such principal amount for such period at the
interest rate which such Lender would bid were it to bid, at the commencement of
such period, for dollar deposits of a comparable amount and period from other
banks in the eurodollar market.  A certificate of any Lender setting
forth any amount or amounts that such Lender is entitled to receive pursuant to
this Section shall be delivered to the Borrower and shall be conclusive absent
manifest error.  The Borrower shall pay such Lender the amount shown
as due on any such certificate within 10 days after receipt
thereof.

     

    SECTION
2.17.  Taxes.  (a)
Any and all payments by or on account of any obligation of the Borrower
hereunder shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided that if the
Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent, Lender or
Issuing Bank (as the case may be) receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower shall
make such deductions and (iii) the Borrower shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law.

     

    (b)           In
addition, the Borrower shall pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable law.

    
      
         

      

      
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    (c)           The
Borrower shall indemnify the Administrative Agent, each Lender and the Issuing
Bank, within 10 Business Days after written demand therefor, for the full amount
of any Indemnified Taxes or Other Taxes paid by the Administrative Agent, such
Lender or the Issuing Bank, as the case may be, on or with respect to any
payment by or on account of any obligation of the Borrower hereunder (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section) and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority.  A certificate as to the
amount of such payment or liability delivered to the Borrower by a Lender or the
Issuing Bank, or by the Administrative Agent on its own behalf or on behalf of a
Lender or the Issuing Bank, shall be conclusive absent manifest
error.

     

    (d)           As
soon as practicable after any payment of Indemnified Taxes or Other Taxes by the
Borrower to a Governmental Authority, the Borrower shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.

     

    (e)           Any
Foreign Lender that is entitled to an exemption from or reduction of withholding
tax under the law of the jurisdiction in which the Borrower is located, or any
treaty to which such jurisdiction is a party, with respect to payments under
this Agreement shall deliver to the Borrower (with a copy to the Administrative
Agent), at the time or times prescribed by applicable law, such properly
completed and executed documentation prescribed by applicable law or reasonably
requested by the Borrower as will permit such payments to be made without
withholding or at a reduced rate.

     

    (f)           If
the Administrative Agent or a Lender determines, in its sole discretion, that it
has received a refund of any Taxes or Other Taxes as to which it has been
indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts pursuant to this Section 2.17, it shall pay over such
refund to the Borrower (but only to the extent of indemnity payments made, or
additional amounts paid, by the Borrower under this Section 2.17 with
respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Administrative Agent or such Lender and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided, that the
Borrower, upon the request of the Administrative Agent or such Lender, agrees to
repay the amount paid over to the Borrower (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to the
Administrative Agent or such Lender in the event the Administrative Agent or
such Lender is required to repay such refund to such Governmental
Authority.  This Section shall not be construed to require the
Administrative Agent or any Lender to make available its tax returns (or any
other information relating to its taxes which it deems confidential) to the
Borrower or any other Person.

     

    SECTION
2.18.  Payments Generally; Pro Rata
Treatment; Sharing of Set-offs.  (a) The Borrower shall
make each payment required to be made by it hereunder (whether of principal,
interest, fees or reimbursement of LC Disbursements, or of amounts payable under
Section 2.15, 2.16 or 2.17, or otherwise) prior to 12:00 noon, New York
City time, on the date when due, in immediately available funds, without set-off
or counterclaim.  Any amounts received after such time on any date
may, in the discretion of the Administrative Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon.  All such payments shall be made to the
Administrative Agent at its offices at 270 Park Avenue, New York, New York,
except payments to be made directly to the Issuing Bank as expressly provided
herein and except that payments pursuant to Sections 2.15, 2.16, 2.17 and
9.03 shall be made directly to the Persons entitled thereto.  The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof.  If any payment hereunder shall be due on a day that
is not a Business Day, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such
extension.  All payments hereunder shall be made in
dollars.

    
      
         

      

      
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    (b)           If
at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
(i) first, towards payment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal
and unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.

     

    (c)           If
any Lender shall, by exercising any right of set-off or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Loans or participations in LC Disbursements resulting in such Lender
receiving payment of a greater proportion of the aggregate amount of its Loans
and participations in LC Disbursements and accrued interest thereon than the
proportion received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in the Loans
and participations in LC Disbursements of other Lenders to the extent necessary
so that the benefit of all such payments shall be shared by the Lenders ratably
in accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and participations in LC Disbursements; provided that (i) if
any such participations are purchased and all or any portion of the payment
giving rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans or
participations in LC Disbursements to any assignee or participant, other than to
the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions
of this paragraph shall apply).  The Borrower consents to the
foregoing and agrees, to the extent it may effectively do so under applicable
law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such
participation.

     

    (d)           Unless
the Administrative Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Administrative Agent for the account
of the Lenders or the Issuing Bank hereunder that the Borrower will not make
such payment, the Administrative Agent may assume that the Borrower has made
such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders or the Issuing Bank, as the case may be,
the amount due.  In such event, if the Borrower has not in fact made
such payment, then each of the Lenders or the Issuing Bank, as the case may be,
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender or Issuing Bank with interest thereon, for
each day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank
compensation.

     

    
      
         

      

      
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    (e)           If
any Lender shall fail to make any payment required to be made by it pursuant to
Section 2.06(d) or (e), 2.07(b), 2.18(d) or 9.03(c), then the Administrative
Agent may, in its discretion and notwithstanding any contrary provision hereof,
(i) apply any amounts thereafter received by the Administrative Agent for the
account of such Lender and for the benefit of the Administrative Agent or the
Issuing Bank to satisfy such Lender’s obligations under such Sections until all
such unsatisfied obligations are fully paid and/or (ii) hold any such amounts in
a segregated account as cash collateral for, and application to, any future
funding obligations of such Lender under such Sections; in the case of each of
(i) and (ii) above, in any order as determined by the Administrative Agent in
its discretion.

     

    SECTION
2.19.  Mitigation Obligations;
Replacement of Lenders.  (a) If any Lender requests
compensation under Section 2.15, or if the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 2.17, then such Lender shall use reasonable
efforts to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 2.15 or 2.17, as the case may be, in the future and (ii)
would not subject such Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to such Lender.  The Borrower hereby
agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.

     

    (b)          If
any Lender requests compensation under Section 2.15, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17, or if any
Lender becomes a Defaulting Lender, or if any Lender fails to execute an
amendment or waiver with respect to the Loan Documents that is executed by the
Required Lenders, then the Borrower may, at its sole expense and effort, upon
notice to such Lender and the Administrative Agent, require such Lender to
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in Section 9.04), all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) the
Borrower shall have received the prior written consent of the Administrative
Agent (and if a Commitment is being assigned, the Issuing Bank), which consent
shall not unreasonably be withheld, (ii) such Lender shall have received payment
of an amount equal to the outstanding principal of its Loans and participations
in LC Disbursements, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder, from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Borrower (in the
case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under Section 2.15 or payments
required to be made pursuant to Section 2.17, such assignment will result
in a reduction in such compensation or payments.  A Lender shall not
be required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment and delegation cease to apply.

     

    
      
         

      

      
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    SECTION
2.20.  Defaulting
Lenders.  Notwithstanding any provision of this Agreement to
the contrary, if any Lender becomes a Defaulting Lender, then the following
provisions shall apply for so long as such Lender is a Defaulting
Lender:

     

    (a)           fees
shall cease to accrue on the unfunded portion of the Commitment of such
Defaulting Lender pursuant to Section 2.12(a);

     

    (b)           the
Commitment and Credit Exposure of such Defaulting Lender shall not be included
in determining whether all Lenders, the Majority Lenders or the Required Lenders
have taken or may take any action hereunder (including any consent to any
amendment or waiver pursuant to Section 9.02); provided that any
waiver, amendment or modification requiring the consent of all Lenders or each
affected Lender that affects such Defaulting Lender differently from other
affected Lenders shall require the consent of such Defaulting
Lender;

     

    (c)           if
any LC Exposure exists at the time a Lender becomes a Defaulting Lender
then:

     

    (i)           all
or any part of such LC Exposure shall be reallocated among the non-Defaulting
Lenders in accordance with their respective Applicable Percentages but only to
the extent (x) the sum of all non-Defaulting Lenders’ Credit Exposures plus such
Defaulting Lender’s LC Exposure does not exceed the total of all non-Defaulting
Lenders’ Commitments and (y) the conditions set forth in Section 4.02 are
satisfied at such time; and

     

    (ii)          if
the reallocation described in clause (i) above cannot, or can only partially, be
effected, the Borrower shall within one Business Day following notice by the
Administrative Agent cash collateralize such Defaulting Lender’s LC Exposure
(after giving effect to any partial reallocation pursuant to clause (i) above)
in accordance with the procedures set forth in Section 2.06(j) for so long
as such LC Exposure is outstanding;

     

    (iii)         if
the Borrower cash collateralizes any portion of such Defaulting Lender’s LC
Exposure pursuant to Section 2.20(c), the Borrower shall not be required to pay
any fees to such Defaulting Lender pursuant to Section 2.12(b) with respect to
such Defaulting Lender’s LC Exposure during the period such Defaulting Lender’s
LC Exposure is cash collateralized;

     

    (iv)         if
the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to Section
2.20(c), then the fees payable to the Lenders pursuant to Section 2.12(a) and
Section 2.12(b) shall be adjusted in accordance with such non-Defaulting
Lenders’ Applicable Percentages; or

     

    (v)          if
any Defaulting Lender’s LC Exposure is neither cash collateralized nor
reallocated pursuant to Section 2.20(c), then, without prejudice to any rights
or remedies of the Issuing Bank or any Lender hereunder, all letter of credit
fees payable under Section 2.12(b) with respect to such Defaulting Lender’s
LC Exposure shall be payable to the Issuing Bank until such LC Exposure is cash
collateralized and/or reallocated; and

     

    
      
         

      

      
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    (d)           so
long as any Lender is a Defaulting Lender the Issuing Bank shall not be required
to issue, amend or increase any Letter of Credit, unless it is satisfied that
the related exposure will be 100% covered by the Commitments of the
non-Defaulting Lenders and/or cash collateral will be provided by the Borrower
in accordance with Section 2.20(c), and participating interests in any such
newly issued or increased Letter of Credit shall be allocated among
non-Defaulting Lenders in a manner consistent with Section 2.20(c)(i) (and
Defaulting Lenders shall not participate therein).

     

    In the
event that the Administrative Agent, the Borrower and the Issuing Bank each
agrees that a Defaulting Lender has adequately remedied all matters that caused
such Lender to be a Defaulting Lender, then the LC Exposure of the Lenders shall
be readjusted to reflect the inclusion of such Lender’s Commitment and on such
date such Lender shall purchase at par such of the Loans of the other Lenders as
the Administrative shall determine may be necessary in order for such Lender to
hold such Loans in accordance with its Applicable Percentage.

     

    ARTICLE
III

     

    Representations and
Warranties

     

    Each of
the Parent and the Borrower represents and warrants to the Lenders
that:

     

    SECTION
3.01.  Existence; Organization;
Powers.  The Parent, the Borrower and each Restricted
Subsidiary: (a) is duly organized or formed, legally existing and in good
standing, if applicable, under the laws of the jurisdiction of its formation,
except as to any Restricted Subsidiary where the failure to so exist or remain
in good standing could not reasonably be expected to have a Material Adverse
Effect, (b) has all requisite power, and has all material governmental
licenses, authorizations, consents and approvals necessary to own its assets and
carry on its business as now being or as proposed to be conducted, except where
failure to have such power could not reasonably be expected to have a Material
Adverse Effect, and (c) is qualified to do business in all jurisdictions in
which the nature of the business conducted by it makes such qualification
necessary and where failure so to qualify could reasonably be expected to have a
Material Adverse Effect.

     

    SECTION
3.02.  Authorization;
Enforceability.  The Parent, the Borrower and each Restricted
Subsidiary have all necessary power and authority to execute, deliver and
perform its obligations under this Agreement and the Loan Documents to which it
is a party.  The execution, delivery and performance by the Parent,
the Borrower and each Restricted Subsidiary of this Agreement and the Loan
Documents to which it is a party have been duly authorized by all necessary
corporate or partnership action, and this Agreement and the Loan Documents
constitute the legal, valid and binding obligations of the Parent, the Borrower
and each Restricted Subsidiary party thereto, enforceable in accordance with
their terms, except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of creditors
generally and general principles of equity, regardless of whether considered in
a proceeding in equity or at law.

     

    
      
         

      

      
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    SECTION
3.03.  Governmental Approvals; No
Conflicts.  No authorizations, approvals or consents of, and no
filings or registrations with, any Governmental Authority or any third Person
are necessary for the execution, delivery or performance by the Parent, the
Borrower or any Restricted Subsidiary of this Agreement or the Loan Documents or
for the validity or enforceability thereof, except for (i) the recording and
filing of the Collateral Documents as required by this Agreement and (ii) those
third party approvals or consents which, if not made or obtained, would not
cause a Default or Event of Default hereunder, could not reasonably be expected
to have a Material Adverse Effect and do not have an adverse effect on the
enforceability of the Loan Documents.  Neither the execution and
delivery of this Agreement or any Loan Document, nor compliance with the terms
and provisions hereof or thereof, will conflict with or result in a breach of,
or require any consent that has not been obtained as of the Effective Date
under, the respective Organizational Documents of the Parent, the Borrower or
any Restricted Subsidiary, any Governmental Requirement, any Unsecured Notes
Document or any other material agreement or instrument to which the Parent, the
Borrower or any Restricted Subsidiary is a party or by which it is bound or to
which it or its Properties are subject, or constitute a default under any
Unsecured Notes Document or any such agreement or instrument, or result in the
creation or imposition of any Lien upon any of the revenues or assets of the
Parent, the Borrower or any Restricted Subsidiary pursuant to the terms of any
Unsecured Notes Documents or any such agreement or instrument, other than the
Liens created by the Loan Documents.

     

    SECTION
3.04.  Financial Condition; No
Material Adverse Change.

     

    (a)           The
Parent has heretofore furnished to the Administrative Agent and the Lenders its
consolidated balance sheet, and the related consolidated statements of income,
cash flows and shareholders’ equity of the Parent and its Subsidiaries (a) as of
and for the fiscal year ended December 31, 2008, audited by and accompanied by
the unqualified opinion of KPMG LLP, independent certified public accountants,
and (b) as of and for the fiscal quarter ended June 30, 2009,
certified by an Authorized Officer that such financial statements present fairly
in all material respects, the financial condition and results of operations of
the Parent and its Subsidiaries as of such dates and for such
periods.  Such financial statements were prepared in accordance with
GAAP applied on a consistent basis.  Since the date of the audited
financial statements of the Parent that have most recently been delivered
pursuant to Section 5.01(a), there has been no material adverse
change.

     

    (b)           Except
as disclosed to the Administrative Agent in writing, none of the Parent, the
Borrower or any Restricted Subsidiary has any material contingent liabilities,
material liabilities for taxes, unusual and material forward or long-term
commitments or material unrealized or anticipated losses from any unfavorable
commitments, except as referred to or reflected or provided for in the
consolidated balance sheets of the Parent or as otherwise disclosed to the
Lenders in writing.

     

    (c)           The
Parent and the Borrower have disclosed to the Lenders in writing any and all
facts that, in the reasonable good faith judgment of the Parent and the
Borrower, could reasonably be expected to result in a Material Adverse
Effect.

     

    
      
         

      

      
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    SECTION
3.05.  Properties.

     

    (a)           Each
of the Parent, the Borrower and the Restricted Subsidiaries has good and
defensible title to its material Oil and Gas Properties and good title to its
material personal Properties, in each case, free and clear of all Liens except
Liens permitted by Section 6.02.  After giving full effect to
Liens permitted by Section 6.02, the Parent, the Borrower or the Restricted
Subsidiary, as applicable, specified as the owner owns the net interests in
production attributable to the Hydrocarbon Interests as reflected in the most
recently delivered Reserve Report, and the ownership of such Properties shall
not in any material respect obligate the Parent, the Borrower or such Restricted
Subsidiary to bear the costs and expenses relating to the maintenance,
development and operations of each such Property in an amount in excess of the
working interest of each Property set forth in the most recently delivered
Reserve Report that is not offset by a corresponding proportionate increase in
the Parent’s, the Borrower’s or such Restricted Subsidiary’s net revenue
interest in such Property.

     

    (b)           All
material leases and agreements necessary for the conduct of the business of the
Parent, the Borrower and the Restricted Subsidiaries are valid and subsisting,
in full force and effect, and there exists no default or event or circumstance
that with the giving of notice or the passage of time or both would give rise to
a default under any such lease or leases, except as could not reasonably be
expected to have a Material Adverse Effect.

     

    (c)           The
rights, Properties and other assets presently owned, leased or licensed by the
Parent, the Borrower and the Restricted Subsidiaries, including, without
limitation, all easements and rights of way, include all rights, Properties and
other assets necessary to permit the Parent, the Borrower and the Restricted
Subsidiaries to conduct their business in all material respects in the same
manner as such business has been conducted prior to the Effective
Date.

     

    (d)           All
of the assets and Properties of the Parent, the Borrower and the Restricted
Subsidiaries that are reasonably necessary for the operation of their business
are in good working condition and are maintained in accordance with prudent
business standards.

     

    SECTION
3.06.  Litigation and Environmental
Matters.  (a) Except as set forth on Schedule 3.06, there
are no actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Parent or the Borrower,
threatened against or affecting the Parent, the Borrower or any of the
Restricted Subsidiaries (i) as to which there is a reasonable possibility
of an adverse determination and that, if adversely determined, could reasonably
be expected, individually or in the aggregate, to result in a Material Adverse
Effect or (ii) that involve this Agreement or the other Loan
Documents.

     

    (b)           Except
as could not be reasonably expected to have a Material Adverse Effect (or with
respect to (iii), (iv) and (v) below, where the failure to take such actions
could not be reasonably expected to have a Material Adverse
Effect):

     

    (i)           neither
any Property of the Parent, the Borrower or any Restricted Subsidiary, nor the
operations conducted thereon, violate any order or requirement of any court or
Governmental Authority or any Environmental Laws;

    
      
         

      

      
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    (ii)           no
Property of the Parent, the Borrower or any Restricted Subsidiary nor the
operations currently conducted thereon or, to the knowledge of the Parent or the
Borrower, by any prior owner or operator of such Property or operation, are in
violation of or subject to any existing, pending or threatened action, suit,
investigation, inquiry or proceeding by or before any court or Governmental
Authority or to any remedial obligations under Environmental Laws;

     

    (iii)           all
notices, permits, licenses or similar authorizations, if any, required to be
obtained or filed in connection with the operation or use of any and all
Property of the Parent, the Borrower and each Restricted Subsidiary, including,
without limitation, past or present treatment, storage, disposal or release of a
hazardous substance or solid waste into the environment, have been duly obtained
or filed, and the Parent, the Borrower and each Restricted Subsidiary are in
compliance with the terms and conditions of all such notices, permits, licenses
and similar authorizations;

     

    (iv)           all
hazardous substances, solid waste and oil and gas exploration and production
wastes, if any, generated at any and all Property of the Parent, the Borrower or
any Restricted Subsidiary have in the past been transported, treated and
disposed of in accordance with Environmental Laws and so as not to pose an
imminent and substantial endangerment to public health or welfare or the
environment, and, to the knowledge of the Parent or the Borrower, all such
transport carriers and treatment and disposal facilities have been and are
operating in compliance with Environmental Laws and so as not to pose an
imminent and substantial endangerment to public health or welfare or the
environment, and are not the subject of any existing, pending or threatened
action, investigation or inquiry by any Governmental Authority in connection
with any Environmental Laws;

     

    (v)           the
Parent and the Borrower have taken all steps reasonably necessary to determine
and have determined that no hazardous substances, solid waste or oil and gas
exploration and production wastes, have been disposed of or otherwise released,
and there has been no threatened release of any hazardous substances on or to
any Property of the Parent, the Borrower or any Restricted Subsidiary, except in
compliance with Environmental Laws and so as not to pose an imminent and
substantial endangerment to public health or welfare or the
environment;

     

    (vi)           to
the extent applicable, all Property of the Parent, the Borrower and each
Restricted Subsidiary currently satisfies all design, operation and equipment
requirements imposed by the Oil Pollution Act of 1990 and neither the Parent nor
the Borrower has any reason to believe that such Property, to the extent subject
thereto, will not be able to maintain compliance with the requirements thereof
during the term of this Agreement; and

     

    (c)           none
of the Parent, the Borrower or any Restricted Subsidiary has any known material
contingent liability in connection with any release or threatened release of any
oil, hazardous substance or solid waste into the environment.

    
      
         

      

      
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    SECTION
3.07.  Compliance with Laws and
Agreements.  None of the Parent, the Borrower or any Restricted
Subsidiary has violated any applicable Governmental Requirement binding upon it
or its Properties or failed to obtain any license, permit, franchise or other
governmental authorization necessary for the ownership of any of its Properties
or the conduct of its business, which violation or failure would have (in the
event such violation or failure were asserted by any Person through appropriate
action) a Material Adverse Effect.  None of the Parent, the Borrower
or any Restricted Subsidiary is in default nor has any event or circumstance
occurred that, but for the expiration of any applicable grace period or the
giving of notice, or both, would constitute a default under any Unsecured Notes
Documents or any other material agreement or instrument to which the Borrower or
any Restricted Subsidiary is a party or by which the Borrower or any Restricted
Subsidiary is bound which default could reasonably be expected to have a
Material Adverse Effect.  No Default hereunder has occurred and is
continuing.

     

    SECTION
3.08.  Investment Company
Status.  None of the Parent, the Borrower or any Restricted
Subsidiary is an “investment company” or a company “controlled” by an
“investment company,” within the meaning of the Investment Company Act of 1940,
as amended.

     

    SECTION
3.09.  Taxes.  Each
of the Parent, the Borrower and the Restricted Subsidiaries has filed all United
States Federal income tax returns and all other tax returns that are required to
be filed by it and has paid all material taxes due pursuant to such returns or
pursuant to any assessment received by the Parent, the Borrower or any
Restricted Subsidiary, except any such taxes that are being contested in good
faith by appropriate proceedings diligently conducted and for which adequate
reserves are being maintained in accordance with GAAP.  The charges,
accruals and reserves on the books of the Parent, the Borrower and the
Restricted Subsidiaries in respect of taxes and other governmental charges are,
in the opinion of the Parent, adequate.  No tax lien has been filed
and, to the knowledge of the Parent or the Borrower, no claim is being asserted
with respect to any such tax or other such governmental charge.

     

    SECTION
3.10.  ERISA.  No
ERISA Event has occurred or is reasonably expected to occur that, when taken
together with all other such ERISA Events for which liability is reasonably
expected to occur, could reasonably be expected to result in a Material Adverse
Effect.  The present value of all accumulated benefit obligations
under each Plan (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed by more than
$2,000,000 the fair market value of the assets of such Plan, and the present
value of all accumulated benefit obligations of all underfunded Plans (based on
the assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed by more than $2,000,000 the fair market value of
the assets of all such underfunded Plans.

    
      
         

      

      
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    SECTION
3.11.  Disclosure.  The
Parent and the Borrower have disclosed to the Lenders all agreements,
instruments and corporate or other restrictions to which either of them or any
of the Restricted Subsidiaries is subject, and all other matters known to it,
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect.  No reports, financial statements,
certificates or other information furnished by or on behalf of the Parent or the
Borrower to the Administrative Agent or any Lender in connection with the
negotiation of this Agreement or delivered hereunder (as modified or
supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with
respect to projected financial information, the Parent represents only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time.  There is no fact peculiar to the Parent, the
Borrower or any Restricted Subsidiary that has a Material Adverse Effect or in
the future is reasonably likely to have (so far as the Parent or the Borrower
can now foresee) a Material Adverse Effect and that has not been set forth in
this Agreement or the other documents, certificates and statements furnished to
the Administrative Agent by or on behalf of the Parent, the Borrower or any
Restricted Subsidiary prior to, or on, the Effective Date in connection with the
transactions contemplated hereby.  There are no statements or
conclusions in any Reserve Report which are based upon or include misleading
information or fail to take into account material information regarding the
matters reported therein, it being understood that each Reserve Report is
necessarily based upon professional opinions, estimates and projections and that
neither the Parent nor the Borrower warrants that such opinions, estimates and
projections will ultimately prove to have been accurate.  No
representation or warranty is made with respect to any Oil and Gas Properties to
which no proved Hydrocarbon Interests are properly attributed.

     

    SECTION
3.12.  Use
of Loans and Letters of Credit.  The proceeds of the Loans and
the Letters of Credit shall be used (a) to provide working capital to the
Parent, the Borrower and the Restricted Subsidiaries and for other general
corporate purposes, (b) to finance capital expenditures and acquisitions
(including acquisitions of the Equity Interests in Persons owning Oil and Gas
Properties) by the Parent, the Borrower and the Restricted Subsidiaries, (c) to
provide for letters of credit for the account of the Parent, the Borrower and
the Restricted Subsidiaries and (d) to purchase, refinance, restructure,
rearrange, renew, extend and continue the Indebtedness outstanding under the
Existing Credit Facility.  Neither the Parent nor the Borrower is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose, whether immediate, incidental or ultimate, of
buying or carrying margin stock (within the meaning of Regulation U or X of the
Board).  No part of the proceeds of any Loan or Letter of Credit will
be used for any purpose which violation the provisions of Regulations T, U or X
of the Board.

     

    SECTION
3.13.  Subsidiaries.  Except
as set forth on Schedule 3.13 or as disclosed in writing to the Administrative
Agent (which shall promptly furnish a copy to the Lenders) that shall be a
supplement to Schedule 3.13, the Borrower has no Subsidiaries other than
Penn Virginia Resource Holdings Corp. and its
Subsidiaries.  Schedule 3.13 identifies each Subsidiary (other
than Penn Virginia Resource Holdings Corp. and its Subsidiaries) as either
Restricted or Unrestricted, and each Restricted Subsidiary on such schedule is a
wholly-owned Subsidiary.

     

    SECTION
3.14.  Jurisdiction of
Incorporation or Organization.  The jurisdiction of
organization, name as listed in the public records of its jurisdiction of
organization and location of the principal place of business or, if it has more
than one place of business, the chief executive office of the Parent, the
Borrower and each Restricted Subsidiary is set forth on Schedule 3.13 (or,
in each case, as set forth in a notice delivered to the Administrative Agent
pursuant to Section 5.01(k) in accordance with
Section 9.01).

    
      
         

      

      
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    SECTION
3.15.  Maintenance of
Properties.  Except for such acts or failures to act as could
not be reasonably expected to have a Material Adverse Effect, the Oil and Gas
Properties (and properties unitized therewith) have been maintained, operated
and developed in a good and workmanlike manner and in conformity with all
applicable laws and all rules, regulations and orders of all duly constituted
authorities having jurisdiction and in conformity with the provisions of all
leases, subleases or other contracts comprising a part of the Hydrocarbon
Interests and other contracts and agreements forming a part of the Oil and Gas
Properties; specifically in this connection, except for those as could not be
reasonably expected to have a Material Adverse Effect, (i) after the Effective
Date, no Oil and Gas Property is subject to having allowable production reduced
below the full and regular allowable (including the maximum permissible
tolerance) because of any overproduction (whether or not the same was
permissible at the time) prior to the Effective Date and (ii) none of the wells
comprising a part of the Oil and Gas Properties (or properties unitized
therewith) owned by the Parent, the Borrower or any of the Restricted
Subsidiaries is deviated from the vertical more than the maximum permitted by
applicable laws, regulations, rules and orders, and such wells are, in fact,
bottomed under and are producing from, and the well bores are wholly within, the
Oil and Gas Properties (or in the case of wells located on properties unitized
therewith, such unitized properties) owned by the Parent, the Borrower or any of
the Restricted Subsidiaries.

     

    SECTION
3.16.  Insurance.  The
Parent or the Borrower has, and has caused all of the Restricted Subsidiaries to
have, (i) all insurance policies sufficient for the compliance by each of them
with all material Governmental Requirements and all material agreements and (ii)
insurance coverage in at least amounts and against such risk (including, without
limitation, public liability) that are usually insured against by companies
similarly situated and engaged in the same or a similar business for the assets
and operations of the Parent, the Borrower and the Restricted
Subsidiaries.  The Administrative Agent and the Lenders have been
named as additional insureds in respect of such liability insurance
policies.

     

    SECTION
3.17.  Gas
Imbalances, Prepayments.  Except as set forth on
Schedule 3.17 or as disclosed in writing to the Administrative Agent and
the Lenders in connection with the most recently delivered Reserve Report, on a
net basis there are no gas imbalances, take or pay or other prepayments that
would require the Parent, the Borrower or any of the Restricted Subsidiaries to
deliver Hydrocarbons produced from their respective Oil and Gas Properties at
some future time without then or thereafter receiving full payment therefor
exceeding two Bcf of gas (or its equivalent) of gas in the aggregate on a net
basis.

     

    SECTION
3.18.  Marketing of
Production.  Except for contracts listed and in effect on the
date hereof on Schedule 3.18, and thereafter either disclosed in writing to
the Administrative Agent or included in the most recently delivered Reserve
Report (with respect to all of which contracts the Parent and the Borrower
represent that they or the Restricted Subsidiaries are receiving a price for all
production sold thereunder that is computed substantially in accordance with the
terms of the relevant contract and are not having deliveries curtailed
substantially below the subject Property’s delivery capacity), no material
agreements exist that are not cancelable on 60 days notice or less without
penalty or detriment for the sale of production from the Parent’s, the
Borrower’s or the Restricted Subsidiaries’ Hydrocarbons (including, without
limitation, calls on or other rights to purchase, production, whether or not the
same are currently being exercised) and that (a) pertain to the sale of
production at a fixed price and (b) have a maturity or expiry date of longer
than six (6) months from the date hereof.

    
      
         

      

      
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    SECTION
3.19.  Hedging
Transactions.  Schedule 3.19 sets forth, as of the
Effective Date, a true and complete list of all Swap Agreements (including
commodity price swap agreements, forward agreements or contracts of sale which
provide for prepayment for deferred shipment or delivery of oil, gas or other
commodities) of the Parent, the Borrower and each Restricted Subsidiary, the
material terms thereof (including the type, term, effective date, termination
date and notional amounts or volumes), the net mark to market value thereof, all
credit support agreements relating thereto (including any margin required or
supplied) and the counterparty to each such agreement.

     

    SECTION
3.20.  Restriction on
Liens.  None of the Parent, the Borrower or any of the
Restricted Subsidiaries is a party to any material agreement or arrangement
(other than instruments creating Liens permitted by Sections 6.02, but then only
on the Property subject of such Lien), or subject to any order, judgment, writ
or decree, that either restricts or purports to restrict its ability to grant
Liens to the Administrative Agent and the Lenders on or in respect of their
respective assets or Properties to secure the Secured Obligations and the Loan
Documents.

     

    SECTION
3.21.  Intellectual
Property.  The Parent, the Borrower and the Restricted
Subsidiaries either own or have valid licenses or other rights to use all
databases, geological data, geophysical data, engineering data, maps,
interpretations and other technical information used in their business as
presently conducted, subject to the limitations contained in the agreements
governing the use of the same, which limitations are customary for companies
engaged in the business of the exploration and production of Hydrocarbons, with
such exceptions as could not reasonably be expected to have a Material Adverse
Effect.

     

    SECTION
3.22.  Material Personal
Property.  All pipelines, wells, gas processing plants,
platforms and other material improvements, fixtures and equipment owned in whole
or in part by the Parent, the Borrower or any of the Restricted Subsidiaries
that are necessary to conduct normal operations are being maintained in a state
adequate to conduct normal operations, and with respect to such of the foregoing
which are operated by the Parent, the Borrower or any of the Restricted
Subsidiaries, in a manner consistent with the Parent’s, the Borrower’s or the
Restricted Subsidiaries’ past practices (other than those the failure of which
to maintain in accordance with this Section 3.22 could not reasonably be
expect to have a Material Adverse Effect).

     

    SECTION
3.23.  Business.  The
Parent, the Borrower and the Restricted Subsidiaries have not conducted and are
not conducting any business other than businesses relating to the acquisition,
exploration, development, financing, ownership, operation, production,
maintenance, storage, transportation, gathering, processing and marketing of
Hydrocarbons, Hydrocarbon Interests and the Oil and Gas Properties and related
activities.

    
      
         

      

      
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    SECTION
3.24.  Solvency.  None
of the Parent, the Borrower or any Restricted Subsidiary (i) is “insolvent”
(within the meaning of Section 101(32) of the Bankruptcy Code, Section 2 of the
Uniform Fraudulent Conveyance Act or Section 2 of the Uniform Fraudulent
Transfer Act) or will become insolvent as a result of the incurrence of any
obligation under this Agreement or any other Loan Document to which it is a
party; or (ii) has unreasonably small capital (after giving effect to the
transactions contemplated in this Agreement or any other Loan Document to which
it is a party) for the conduct of its existing and contemplated
business.  Each of the Parent, the Borrower and the Restricted
Subsidiaries is able to perform its contingent obligations and other commitments
as they mature in the normal course of business.

     

    SECTION
3.25.  Licenses, Permits,
Etc.  The Borrower and each of the Restricted Subsidiaries
possess such valid franchises, certificates of convenience and necessity,
operating rights, licenses, permits, consents, authorizations, exemptions and
orders of Governmental Authorities, as are necessary to carry on their business
as now conducted and as proposed to be conducted, except to the extent a failure
to obtain any such item could not reasonably be expected to result in a Material
adverse Effect.

     

    SECTION
3.26.  Fiscal
Year.  The fiscal year of the Parent and the Borrower is
January 1 through December 31.

     

    SECTION
3.27.  Seniority
Designation.  For the purposes of the Unsecured Notes Documents
or any Permitted Refinancing Indebtedness, the Secured Obligations have been
irrevocably designated as “senior indebtedness” (or such other applicable term
denoting seniority) ranking, as applicable, equally in right of payment with any
senior unsecured notes (including any such notes that are convertible) issued
under such Unsecured Notes Documents and senior in right of payment to any
subordinated unsecured notes or senior subordinated unsecured notes (including
any such notes that are convertible) issued under such Unsecured Notes Documents
without giving effect to rights in the Collateral of the Administrative Agent,
the Issuing Bank, the Lenders and the other beneficiaries thereof.

     

    ARTICLE
IV

     

    Conditions

     

    SECTION
4.01.  Effective
Date.  The obligations of the Lenders to make Loans and of the
Issuing Bank to issue Letters of Credit hereunder shall not become effective
until the date on which each of the following conditions is satisfied (or waived
in accordance with Section 9.02):

     

    (a)           Credit
Agreement.  The Administrative Agent shall have received from
each party hereto either (i) a counterpart of this Agreement signed on
behalf of such party or (ii) written evidence satisfactory to the
Administrative Agent (which may include telecopy transmission of a signed
signature page of this Agreement) that such party has signed a counterpart of
this Agreement.

    
      
         

      

      
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    (b)           Collateral
Documents.  The Administrative Agent (or its counsel) shall
have received the following documents:  (A) the Guaranty duly
completed and executed by the Parent and each Material Domestic Subsidiary that
exists on the Effective Date; (B) the Mortgages and all documents and
instruments duly completed and executed, including Uniform Commercial Code
financing statements, required by law or reasonably requested by the
Administrative Agent with respect to such Mortgages; (C) any promissory
notes requested by a Lender pursuant to Section 2.10 payable to the order
of each such requesting Lender duly executed and completed by the Borrower; and
(D) the other Collateral Documents duly completed and executed in a
sufficient number of counterparts for recording, if necessary; provided that, to
the extent that Administrative Agent receives any such documents in a form other
than original counterparts thereof, the Administrative Agent shall be reasonably
satisfied that duly completed and executed counterparts thereof, in a sufficient
number for recording, if necessary, have been executed by the applicable Credit
Party and appropriate arrangements have been made for the prompt delivery
thereof to the Administrative Agent or its counsel.  In connection
with the execution and delivery of the Collateral Documents, the Administrative
Agent shall be reasonably satisfied that, upon the filing or recordation
thereof, the Collateral Documents create or continue, as applicable, first
priority, perfected Liens (subject only to Liens permitted pursuant to
Section 6.02) on at least 70% of the total value of the Oil and Gas
Properties evaluated in the Initial Reserve Report.

     

    (c)           Pledge
Agreements.  The Administrative Agent shall have received the
Pledge Agreement, dated as of the Effective Date, duly executed and delivered by
the Parent, the Borrower and each other Guarantor that owns Equity Interests in
any Restricted Subsidiary, together with (as applicable) stock certificates
representing 100% of such outstanding Equity Interests, and stock powers and
instruments of transfer, endorsed in blank, with respect to such stock
certificates, and all documents and instruments, including Uniform Commercial
Code Financing Statements (Form UCC-1), required by law or reasonably requested
by the Administrative Agent to be filed, registered or recorded to create or
perfect the Liens intended to be created under the Pledge
Agreement.

     

    (d)           Organizational
Documents.  The Administrative Agent shall have received a
certificate of the Secretary or an Assistant Secretary of each Credit Party
dated as of the Effective Date, on which the Administrative Agent and the
Lenders may conclusively rely until the Administrative Agent receives notice in
writing from the Parent or the Borrower to the contrary,
certifying:

     

    (i)           that
attached to each such certificate are (1) a true and complete copy of the
Organizational Documents of such Credit Party, as the case may be, as in effect
on the date of such certificate and (2) a true and complete copy of a
certificate from the Governmental Authority of the state of such entity’s
organization certifying that such entity is duly organized and validly existing
in such jurisdiction;

     

    (ii)          that
attached to such certificate is a true and complete copy of resolutions duly
adopted by the board of directors of such Credit Party, as applicable,
authorizing the execution, delivery and performance of each of the Loan
Documents to which such Credit Party is or is intended to be a party;
and

     

    (iii)         as
to the incumbency and specimen signature of each officer of such Credit Party
(1) who is authorized to execute the Loan Documents to which such Credit Party
is or is intended to be a party and (2) who will, until replaced by another
officer or officers duly authorized for that purpose, act as its representative
for the purposes of signing documents and giving notices and other
communications in connection with this Agreement and the transactions
contemplated hereby.

    
      
         

      

      
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    (e)         
 Qualification
and Good Standing.  The Administrative Agent shall have
received certificates of the appropriate state agencies with respect to the
existence and good standing of the Parent, the Borrower and each Guarantor in
the jurisdiction of its organization and the qualification as a foreign entity
and good standing of the Parent, the Borrower and each Guarantor in each other
jurisdiction with respect to which a Mortgage is being delivered by the Parent,
the Borrower or such Guarantor, as applicable, pursuant to this
Section 4.01.

     

    (f)         
Legal
Opinions.  The Administrative Agent shall have received a
written legal opinion addressed to the Administrative Agent, the Issuing Bank
and the Lenders in form and substance satisfactory to the Administrative Agent
from (i) Nancy M. Snyder, Esq., as general counsel to the Parent, the
Borrower and the Guarantors, (ii) Thompson Knight LLP, special Texas counsel to
the Parent and the Borrower, and (iii) local counsel in each of the following
states:  Mississippi, Oklahoma and West Virginia.  The
Parent and the Borrower hereby request such counsel to deliver such
opinion.

     

    (g)          UCC and Lien
Searches.  The Administrative Agent shall have received
appropriate UCC search certificates for the Parent, the Borrower and each
Guarantor in its jurisdiction of organization, and any other jurisdiction
reasonably requested by the Administrative Agent, reflecting no prior liens or
security interests encumbering the Collateral other than those being assigned or
released on or prior to the Effective Date and those permitted by Section
6.02.

     

    (h)          
Insurance.  The
Administrative Agent and the Lenders shall have received certificates, dated
within 15 days of the Effective Date, from the Parent’s insurers reflecting (a)
compliance with all of the insurance required by Section 5.05 and by the
Collateral Documents and (b) that such insurance is in full force and
effect.

     

    (i)           
Compliance
Certificate.  The Administrative Agent shall have received from
the Parent and the Borrower a compliance certificate substantially in the form
of Exhibit C.

     

    (j)           
Financial
Statements.  The Administrative Agent shall have received the
financial statements described in Section 3.04(a).

     

    (k)           Initial Reserve
Report.  The Administrative Agent shall have received a reserve
engineering report as of December 31, 2008, prepared by one or more Approved
Petroleum Engineers, as supplemented by a reserve report as of June 30, 2009
prepared by or under the supervision of the chief engineer of the Parent (which
supplemental reserve report shall be certified by the chief engineer of the
Parent as being true and accurate and having been prepared in accordance the
procedures used to prepare the December 31, 2008 engineering report)
(collectively, the “Initial Reserve
Report”) with respect to the value of the Oil and Gas Properties of the
Parent, the Borrower and the Restricted Subsidiaries acceptable to the
Administrative Agent using such reasonable assumptions as the Administrative
Agent shall specify (including such discount rates and projected hydrocarbon
price assumptions) and such other reserve, engineering, geological and title
information as may be requested by the Administrative Agent.

     

    (l)           
Existing Credit
Agreement.  The Administrative Agent shall have received
satisfactory evidence that the Existing Credit Facility and the other “Loan
Documents” defined therein shall have been repaid in full and terminated and all
Liens related thereto shall be fully released.

    
      
         

      

      
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    (m)         Subordination
Agreement.  The Administrative Agent shall have received the
Subordination Agreement from each Unrestricted Subsidiary designated as on
Schedule 4.01(m) duly executed by each such Unrestricted
Subsidiary.

     

    (n)          Satisfactory Legal
Form.  All documents executed or submitted pursuant hereto by
and on behalf of the Parent, the Borrower or any other Credit Party shall be in
form and substance reasonably satisfactory to the Administrative Agent and its
counsel.  The Administrative Agent and its counsel shall have received
all information, approvals, documents or instruments as the Administrative Agent
or its counsel may reasonably request.

     

    (o)          Fees and
Expenses.  The Administrative Agent and the Lenders shall have
received all fees and other amounts due and payable pursuant to this Agreement
or any other Loan Document on or prior to the date hereof, including, to the
extent invoiced, reimbursement or payment of all reasonable out-of-pocket
expenses (including reasonable fees, charges and disbursements of counsel)
required to be reimbursed or paid by any Credit Party hereunder or under any
other Loan Document.

     

    The
Administrative Agent shall notify the Borrower and the Lenders of the Effective
Date, and such notice shall be conclusive and binding.

     

    SECTION
4.02.  Each
Credit Event.  The obligation of each Lender to make a Loan on
the occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew or
extend any Letter of Credit, is subject to the satisfaction of the following
conditions:

     

    (a)           The
representations and warranties of the Parent, the Borrower and the Guarantors
set forth in this Agreement and in the other Loan Documents shall be true and
correct in all material respects, or, to the extent that a particular
representation or warranty is qualified as to materiality, such representation
or warranty shall be true and correct, in each case, on and as of the date of
such Borrowing or the date of issuance, amendment, renewal or extension of such
Letter of Credit, as applicable, except to the extent any such representations
and warranties are expressly limited to an earlier date, in which case, on and
as of the date of such Borrowing or the date of issuance, amendment, renewal or
extension of such Letter of Credit, as applicable, such representations and
warranties shall continue to be true and correct as of such specified earlier
date.

     

    (b)           At
the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default shall have occurred and be continuing.

     

    (c)           At
the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no event, development or circumstance has occurred or shall then
exist that has resulted in, or could reasonably be expected to have, a Material
Adverse Effect.

    
      
         

      

      
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    (d)           The
making of such Loan or the issuance, amendment, renewal or extension of such
Letter of Credit, as applicable, would not conflict with, or cause any Lender or
the Issuing Bank to violate or exceed, any applicable Governmental Requirement,
and no Change in Law shall have occurred, and no litigation shall be pending or
threatened, which does or, with respect to any threatened litigation, seeks to,
enjoin, prohibit or restrain the making or repayment of any Loan, the issuance,
amendment, renewal, extension or repayment of any Letter of Credit or any
participations therein or the consummation of the transactions contemplated by
this Agreement or any other Loan Document.

     

    (e)           The
receipt by the Administrative Agent of a Borrowing Request in accordance with
Section 2.03 or a request for a Letter of Credit in accordance with
Section 2.06(b), as applicable.

     

    Each
Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a) and
(b) of this Section.

     

    ARTICLE
V

     

    Affirmative
Covenants

     

    Until the
Commitments have expired or been terminated and the principal of and interest on
each Loan and all fees payable hereunder shall have been paid in full and all
Letters of Credit shall have expired or terminated and all LC Disbursements
shall have been reimbursed, the Parent and the Borrower covenant and agree with
the Lenders that:

     

    SECTION
5.01.  Financial Statements; Other
Information.  The Parent or the Borrower, as applicable, will
furnish to the Administrative Agent and each Lender:

     

    (a)           as
soon as available and in any event within 120 days after the end of each fiscal
year of the Parent, the audited consolidated statements of income, shareholders’
equity, changes in financial position and cash flow of the Parent and its
Subsidiaries, and the related audited consolidated balance sheets of the Parent
and its Subsidiaries as at the end of such fiscal year, setting forth in each
case in comparative form the corresponding figures for the preceding fiscal
year, and accompanied by either (x) with respect to any audited financial
statements, the related opinion of independent public accountants of recognized
national standing acceptable to the Administrative Agent which opinion shall
state that such financial statements fairly present, in all material respects,
the consolidated financial condition and results of operations of the Parent and
its Subsidiaries as at the end of, and for, such fiscal year and that such
financial statements have been prepared in accordance with GAAP except for such
changes in such principles with which the independent public accountants shall
have concurred and such opinion shall not contain a “going concern” or like
qualification or exception, or (y) with respect to any unaudited financial
statements, the certificate of an Authorized Officer, which certificate shall
state that such financial statements fairly present, in all material respects,
the consolidated financial condition and results of operations of the Parent and
its Subsidiaries in accordance with GAAP, as at the end of, and for, such
period;

    
      
         

      

      
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    (b)           as
soon as available and in any event within 60 days after the end of each of the
first three fiscal quarters of each fiscal year of the Parent, consolidated
statements of income, shareholders’ equity, changes in financial position and
cash flow of the Parent and its Subsidiaries for such period and for the period
from the beginning of the respective fiscal year to the end of such period, and
the related consolidated balance sheets as at the end of such period, setting
forth in each case in comparative form the corresponding figures for the
corresponding period in the preceding fiscal year, accompanied by the
certificate of an Authorized Officer, which certificate shall state that such
financial statements fairly present, in all material respects, the consolidated
financial condition and results of operations of the Parent and its Subsidiaries
in accordance with GAAP, as at the end of, and for, such period (subject to
normal year-end audit adjustments);

     

    (c)           at
the time it furnishes each set of financial statements under
Sections 5.01(a) and (b) above, a certificate substantially in the form of
Exhibit C executed by an Authorized
Officer (A) certifying as to the matters set forth therein and stating that no
Event of Default has occurred and is continuing (or, if any Event of Default has
occurred and is continuing, describing the same in reasonable detail) and (B)
setting forth in reasonable detail the computations necessary to determine
whether the Parent, the Borrower and the Restricted Subsidiaries are in
compliance with Section 6.09 as of the end of the respective fiscal quarter
or fiscal year;

     

    (d)           promptly
upon receipt thereof, a copy of each other report or letter submitted to the
Parent, the Borrower or any of the Restricted Subsidiaries by independent
accountants in connection with any annual, interim or special audit made by them
of the books of the Parent, the Borrower or any Restricted Subsidiary, and a
copy of any response by the Parent, the Borrower or any such Restricted
Subsidiary, or the Board of Directors of the Parent, the Borrower or any such
Restricted Subsidiary, to such letter or report;

     

    (e)           promptly
upon its becoming available, each financial statement, report, notice or proxy
statement sent by the Parent to shareholders generally and each Form 10-K, Form
10-Q, registration statement or prospectus filed by the Parent with any
securities exchange or the SEC;

     

    (f)           promptly
after the furnishing thereof, copies of any financial statement, report or
notice (other than ministerial notices) furnished to any Person pursuant to the
terms of any preferred stock designation, indenture (including any Unsecured
Notes Indenture), loan or credit or other similar agreement in respect of
Indebtedness in excess of $10,000,000, other than this Agreement and not
otherwise required to be furnished to the Lenders pursuant to any other
provision of this Section 5.01;

     

    (g)           promptly
following the written request from the Administrative Agent thereof, a list of
all Persons purchasing Hydrocarbons from the Parent, the Borrower or any
Restricted Subsidiary accounting for at least 80% in the aggregate of the
revenues resulting from the sale of all Hydrocarbons in the six-month period
prior to the “as of” date of the most recently delivered Reserve
Report;

    
      
         

      

      
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    (h)           together
with the delivery of the financial information to be supplied under
Sections 5.01(a) and (b), a report, in form and substance satisfactory to
the Administrative Agent, setting forth as of the last Business Day of such
fiscal quarter or fiscal year, a true and complete list of all Swap Agreements
(including commodity price swap agreements, forward agreements or contracts of
sale which provide for prepayment for deferred shipment or delivery of oil, gas
or other commodities) of the Parent, the Borrower and each Restricted
Subsidiary, the material terms thereof (including the type, term, effective
date, termination date and notional amounts or volumes), the net mark to market
value therefor, any new credit support agreements relating thereto not listed on
Schedule 3.19, any margin required or supplied under any credit support
document, and the counterparty to each such agreement;

     

    (i)           concurrently
with any delivery of financial statements under Section 5.01(a), a
certificate of insurance coverage from each insurer or its authorized agent or
broker with respect to the insurance required by Section 5.05, in form and
substance satisfactory to the Administrative Agent, and, if requested by the
Administrative Agent or any Lender, all copies of the applicable
policies;

     

    (j)           prompt
written notice (and in any event within 30 days prior thereto) of any change in
(i) any Credit Party’s corporate name, (ii) the location of any Credit Party’s
chief executive office or principal place of business, (iii) the Credit Party’s
identity or corporate structure or in the jurisdiction in which such Person is
incorporated or formed, (iv) any Credit Party’s jurisdiction of organization or
such Credit Party’s organizational identification number in such jurisdiction of
organization and (v) any Credit Party’s federal taxpayer identification
number;

     

    (k)           promptly,
but in any event, by the time specified in any of Sections 5.17, 5.20 or
6.13, as applicable, written notice of the transactions, events or circumstances
described in such Section for which notice is required to be given;

     

    (l)           at
the time it furnishes each set of financial statements under
Sections 5.01(a) or (b) above, a certificate executed by an Authorized
Officer of the Parent certifying as to the aggregate amount of all outstanding
intercompany Indebtedness permitted pursuant to Section 6.01(g) as of the
end of the respective fiscal year or fiscal quarter and setting forth in
reasonable detail the Unrestricted Subsidiary payor and the recipient with
respect thereto, whether a Subordination Agreement from such payor has been
provided to the Administrative Agent (which Subordination Agreement shall remain
in full force and effect as of the date of such certificate) and such additional
information related thereto as the Administrative Agent may request;
and

     

    (m)           promptly
following any request therefor, such other information regarding the operations,
business affairs and financial condition of the Parent, the Borrower or any
Restricted Subsidiary, or compliance with the terms of this Agreement, as the
Administrative Agent or any Lender may reasonably request.

     

    Documents
required to be delivered pursuant to Section 5.01(a), (b) or (e) (to the extent
any such documents are included in materials otherwise filed with the SEC) shall
be deemed to be delivered hereunder upon such filing with the SEC on the date of
such filing.

     

    
      
        
        

      

      
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    SECTION
5.02.  Notices of Material
Events.  The Parent or the Borrower, as applicable, will
furnish to the Administrative Agent and each Lender prompt written notice of the
following:

     

    (a)           the
occurrence of any Default;

     

    (b)           the
commencement of any legal or arbitral proceedings, and of all proceedings before
any Governmental Authority filed against the Parent, the Borrower or any
Restricted Subsidiary, except proceedings that, if adversely determined, could
not reasonably be expected to result in liability not fully covered by
insurance, subject to normal deductibles, in excess of $10,000,000 (whether
individually or in the aggregate);

     

    (c)           in
the event the amount of contested taxes or claims not previously disclosed in
the financial statements delivered under Section 5.01(a) and Section
5.01(b) above exceeds $10,000,000 in the aggregate at any one time, prompt
written notice from an Authorized Officer describing such circumstances, in
detail satisfactory to the Administrative Agent;

     

    (d)           prompt
written notice, and in any event within three Business Days, of the occurrence
of any Casualty Event to Oil and Gas Properties subject to any Mortgage or the
commencement of any action or proceeding for the taking of any Oil and Gas
Properties subject to any Mortgage with a value exceeding $10,000,000 under
power of eminent domain or by condemnation, nationalization or similar
proceeding;

     

    (e)           the
occurrence of any ERISA Event that, alone or together with any other ERISA
Events that have occurred, could reasonably be expected to result in liability
of the Parent, the Borrower and the Restricted Subsidiaries in an aggregate
amount exceeding $10,000,000; and

     

    (f)           any
other development that results in, or could reasonably be expected to result in,
a Material Adverse Effect.

     

    Each
notice delivered under this Section shall be accompanied by a statement of an
Authorized Officer of the Parent (or the Borrower, if applicable) setting forth
the details of the event or development requiring such notice and any action
taken or proposed to be taken with respect thereto.

     

    SECTION
5.03.  Existence; Conduct of
Business.  Each of the Parent and the Borrower will, and will
cause each of the Restricted Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of their business, except where the failure to so preserve, renew
or keep could not reasonably be expected to have a Material Adverse Effect;
provided that
the foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 6.03.

    
      
         

      

      
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    SECTION
5.04.  Payment of Obligations,
Taxes and Material Claims.  Each of the Parent and the Borrower
will, and will cause each of the Restricted Subsidiaries to, pay the Obligations
according to the terms set forth in this Agreement and the Loan Documents and do
and perform every act and discharge all of the obligations to be performed and
discharged by them under this Agreement and the Loan Documents, at the time or
times and in the manner specified.  The Parent and the Borrower will,
and will cause each of the Restricted Subsidiaries to, pay (a) all taxes imposed
upon it or any of its assets or with respect to any of its franchises, business,
income or profits before any material penalty or interest accrues thereon and
(b) all material claims (including, without limitation, claims for labor,
services, materials and supplies) for sums that have become due and payable and
that by law have or might become a Lien (other than Liens permitted pursuant to
Section 6.02) on any of its assets; provided, however, that no
payment of taxes or claims shall be required if (i) the amount,
applicability or validity thereof is currently being contested in good faith by
appropriate action promptly initiated and diligently conducted in accordance
with good business practices and no Oil and Gas Property subject to any Mortgage
with a value in excess of $10,000,0000 is subject to levy or execution, (ii) the
Parent, as and to the extent required in accordance with GAAP, shall have set
aside on its books reserves (segregated to the extent required by GAAP) deemed
by it to be adequate with respect thereto and (iii) the failure to make
payment pending such contest could not reasonably be expected to result in a
Material Adverse Effect.

     

    SECTION
5.05.  Maintenance of Properties;
Insurance.

     

    (a)           Each
of the Parent and the Borrower will, and will cause each of the Restricted
Subsidiaries to: (i) except as permitted in Section 6.03, preserve and
maintain its existence and all of its material rights, privileges and franchises
and maintain, if necessary, its qualification to do business in each other
jurisdiction in which its Oil and Gas Properties is located or the ownership of
its Properties requires such qualification, except where the failure to so
qualify could not reasonably be expected to have a Material Adverse Effect; (ii)
keep books of record and account in accordance with GAAP; (iii) comply with
all Governmental Requirements if failure to comply with such requirements could
reasonably be expected to have a Material Adverse Effect; and (iv) keep, or
cause to be kept, insured by financially sound and reputable insurers all
Property of a character usually insured by Persons engaged in the same or
similar business similarly situated against loss or damage of the kinds and in
the amounts customarily insured against by such Persons and carry such other
insurance against risks as is usually carried by such Persons.  The
loss payable clauses or provisions in such insurance policy or policies insuring
any of the Collateral shall be endorsed in favor of and made payable to the
Administrative Agent as its interests may appear and naming the Administrative
Agent and the Lenders as “additional insureds” and shall provide that the
insurer will endeavor to give at least 10 days’ prior notice of any cancellation
to the Administrative Agent.

     

    (b)           Each
of the Parent and the Borrower will, and will cause each of the Restricted
Subsidiaries to, operate its Properties or cause such Properties to be operated
in a careful and efficient manner in accordance with the practices of the
industry and in compliance with all applicable contracts and agreements and in
compliance with all Governmental Requirements, including, without limitation,
applicable Environmental Laws and all applicable laws, rules and regulations of
every other Governmental Authority from time to time constituted to regulate the
development and operation of its Oil and Gas Properties and the production and
sale of Hydrocarbons and other minerals therefrom, except, in each case, where
the failure to comply could not reasonably be expected to have a Material
Adverse Effect.

    
      
         

      

      
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    (c)           Each
of the Parent and the Borrower will, and will cause each of the Restricted
Subsidiaries to, at its own respective expense, do or cause to be done all
things reasonably necessary to preserve and keep in good repair, working order
and efficiency (ordinary wear and tear excepted) all of its material Oil and Gas
Properties and other material Properties, including, without limitation, all
equipment, machinery and facilities, and from time to time will make all the
reasonably necessary repairs, renewals and replacements so that at all times the
state and condition of its material Oil and Gas Properties and other material
Properties will be preserved and maintained, except to the extent such failure
to so preserve and keep could not reasonably be expected to have a Material
Adverse Effect.  Each of the Parent and the Borrower will, and will
cause each of the Restricted Subsidiaries to, promptly:  (a) pay and
discharge, or make reasonable and customary efforts to cause to be paid and
discharged, all delay rentals, royalties, expenses and indebtedness accruing
under the leases or other agreements affecting or pertaining to its Oil and Gas
Properties and will do all other things necessary to keep unimpaired their
rights with respect thereto and prevent any forfeiture thereof or default
thereunder, and (b) perform or make reasonable and customary efforts to
cause to be performed, in accordance with industry standards, the obligations
required by each and all of the assignments, deeds, leases, sub-leases,
contracts and agreements affecting its interests in its Oil and Gas Properties
and other material Properties, except in each case of clauses (a) and (b) to the
extent such failure could not reasonably be expected to have a Material Adverse
Effect and except for dispositions permitted by Section 6.13.  Each of
the Parent and the Borrower will, and will cause each of the Restricted
Subsidiaries to, operate its Oil and Gas Properties and other material
Properties or cause or make reasonable and customary efforts to cause such Oil
and Gas Properties and other material Properties to be operated in accordance
with the practices of the industry and in material compliance with all
applicable contracts and agreements and in compliance in all material respects
with all Governmental Requirements, except where the failure to do so could not
reasonably be expected to result in a Material Adverse Effect.  To the
extent that none of the Parent, the Borrower or any Restricted Subsidiary is the
operator of such Property, the Parent and the Borrower shall use reasonable
efforts to cause the operator to comply with this
Section 5.05(c).

     

    SECTION
5.06.  Books
and Records; Inspection Rights.  Each of the Parent and the
Borrower will, and will cause each of the Restricted Subsidiaries to, keep
proper books of record and account in which full, true and correct entries are
made of all dealings and transactions in relation to its business and
activities.  Each of the Parent and the Borrower will, and will cause
each of the Restricted Subsidiaries to, permit any representatives designated by
the Administrative Agent or any Lender, upon reasonable prior notice, to visit
and inspect its properties, to examine and make extracts from its books and
records and to discuss its affairs, finances and condition with its officers and
independent accountants, all at such reasonable times and as often as reasonably
requested.

     

    SECTION
5.07.  Compliance with
Laws.  Each of the Parent and the Borrower will, and will cause
each of the Restricted Subsidiaries to, comply with all laws, rules, regulations
and orders of any Governmental Authority applicable to it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.

     

    SECTION
5.08.  Use
of Proceeds and Letters of Credit.  The proceeds of the Loans
and Letters of Credit will be used only for (i) providing working capital for
the Parent, the Borrower and the Restricted Subsidiaries and for other general
corporate purposes, (ii) financing capital expenditures and acquisitions (other
than acquisitions of “margin stock”) of the Parent, the Borrower and the
Restricted Subsidiaries, (iii) providing for letters of credit for the account
of the Parent, the Borrower and the Restricted Subsidiaries and
(iv) purchasing, refinancing, restructuring, rearranging, renewing,
extending and continuing the outstanding Indebtedness under the Existing Credit
Facility.  No part of the proceeds of any Loan will be used, whether
directly or indirectly, for any purpose that entails a violation of any of the
Regulations of the Board, including Regulations T, U and
X.  Letters of Credit will be issued only to support general corporate
purposes of the Parent, the Borrower and the Restricted
Subsidiaries.

    
      
         

      

      
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    SECTION
5.09.  Environmental
Matters.

     

    (a)           Each
of the Parent and the Borrower will, and will cause each Restricted Subsidiary
to, establish and implement such procedures as may be reasonably necessary to
continuously determine and assure that any failure of the following could not
reasonably be expected to have a Material Adverse Effect: (a) all Property of
the Parent, the Borrower and the Restricted Subsidiaries and the operations
conducted thereon and other activities of the Parent, the Borrower and the
Restricted Subsidiaries are in compliance with and do not violate the
requirements of any Environmental Laws, (b) no oil, oil and gas production or
exploration wastes, hazardous substances or solid wastes are disposed of or
otherwise released on or to any Property owned by any such party except in
compliance with Environmental Laws, (c) no hazardous substance will be
released on or to any such Property in a quantity equal to or exceeding that
quantity which requires reporting pursuant to Section 103 of the Comprehensive
Environmental, Response, Compensation, and Liability Act of 1980, as amended,
and (d) no oil, oil and gas exploration and production wastes or hazardous
substances or solid wastes are released on or to any such Property so as to pose
an imminent and substantial endangerment to public health or welfare or the
environment.

     

    (b)           The
Parent or the Borrower will promptly notify the Administrative Agent and the
Lenders in writing of any threatened action, investigation or inquiry by any
Governmental Authority against the Parent, the Borrower or any of the Restricted
Subsidiaries or their Properties of which the Parent or the Borrower has
knowledge in connection with any Environmental Laws (excluding routine testing
and corrective action) if the Parent or the Borrower reasonably anticipates that
such action will result in liability, not fully covered by insurance, subject to
normal deductibles (whether individually or in the aggregate) in excess of
$10,000,000.

     

    SECTION
5.10.  Further
Assurances.  The Parent and the Borrower will, at their
expense, and will cause each Restricted Subsidiary to, promptly execute and
deliver to the Administrative Agent all such other documents, agreements and
instruments reasonably requested by the Administrative Agent to comply with,
cure any defects or accomplish the covenants and agreements of the Parent, the
Borrower or any Restricted Subsidiary, as the case may be, in this Agreement or
any other Loan Document, or to further evidence and more fully describe the
Collateral, or to correct any omissions in this Agreement or any other Loan
Document, or to state more fully the security obligations set out herein or in
any of the Collateral Documents, or to perfect, protect or preserve any Liens
created pursuant to any of the Collateral Documents or the priority thereof, or
to make any recordings, file any notices or obtain any consents, all as may be
reasonably necessary or appropriate in connection therewith.

    
      
         

      

      
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    SECTION
5.11.  Reserve
Reports.

     

    (a)           On
or before April 1 and October 1 of each year, the Parent or the Borrower shall
furnish to the Administrative Agent and the Lenders a Reserve
Report.  The Reserve Report as of December 31 of each year shall
be prepared (x) by one or more Approved Petroleum Engineers or (y) by or under
the supervision of the chief engineer of the Parent (who shall certify such
Reserve Report to be true and accurate and to have been prepared in accordance
with the procedures used in the immediately preceding December 31 Reserve
Report) and audited by one or more Approved Petroleum Engineers.  The
June 30 Reserve Report of each year shall be prepared by or under the
supervision of the chief engineer of the Parent, who shall certify such Reserve
Report to be true and accurate and to have been prepared in accordance with the
procedures used in the immediately preceding December 31 Reserve
Report.

     

    (b)           In
the event of an unscheduled redetermination of the Borrowing Base, the Parent or
the Borrower shall furnish to the Administrative Agent and the Lenders a Reserve
Report prepared by or under the supervision of the chief engineer of the Parent
who shall certify such Reserve Report to be true and accurate and to have been
prepared in accordance with the procedures used in the immediately preceding
Reserve Report.  For any unscheduled redetermination requested by the
Required Lenders or the Parent or the Borrower pursuant to Section 2.04(e),
the Parent or the Borrower shall provide such Reserve Report with an “as of”
date as required by the Administrative Agent as soon as possible, but in any
event no later than 30 days following the receipt of such request.

     

    (c)           With
the delivery of each Reserve Report, the Parent or the Borrower shall provide to
the Administrative Agent and the Lenders, a certificate from an Authorized
Officer certifying that, to his knowledge (after reasonable inquiry) and in all
material respects:  (i) the information contained in the Reserve
Report and any other information delivered in connection therewith is true and
correct, (ii) the Parent, the Borrower or the Restricted Subsidiaries owns good
and defensible title to the Oil and Gas Properties evaluated in such Reserve
Report and such Properties are free of all Liens except for Liens permitted by
Section 6.02, (c) except as set forth on an exhibit to the certificate, on
a net basis there are no gas imbalances, take or pay or other prepayments with
respect to the Oil and Gas Properties evaluated in such Reserve Report which
would require the Parent, the Borrower or any Restricted Subsidiary to deliver
Hydrocarbons produced from such Oil and Gas Properties at some future time
without then or thereafter receiving full payment therefor, (d) none of
such Oil and Gas Properties have been sold since the date of the last Borrowing
Base determination except as set forth on an exhibit to the certificate, which
certificate shall list the Oil and Gas Properties sold and in such detail as
reasonably required by the Majority Lenders, and (e) attached thereto is a
schedule of the Oil and Gas Properties evaluated by such Reserve Report that are
subject to Mortgages.

     

    SECTION
5.12.  Title
Information.

     

    (a)           On
or before the delivery to the Administrative Agent and the Lenders of each
Reserve Report required by Section 5.11, the Parent or the Borrower will
deliver title information in form and substance reasonably acceptable to the
Administrative Agent covering enough of the Oil and Gas Properties evaluated by
such Reserve Report so that the Administrative Agent shall have received
together with title information previously delivered to the Administrative
Agent, satisfactory title information on at least 75% of the total value of the
proved Oil and Gas Properties evaluated by such Reserve Report.

    
      
         

      

      
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    (b)           If
the Parent and the Borrower have provided title information for additional
Properties under Section 5.12(a), the Parent and the Borrower shall, within
60 days of notice from the Administrative Agent that title defects or exceptions
exist with respect to such additional Properties, either (i) cure any such title
defects or exceptions (including defects or exceptions as to priority) that are
not permitted by Section 6.02 raised by such information,
(ii) substitute acceptable proved Oil and Gas Properties with no title
defects or exceptions (except for Liens permitted pursuant to Section 6.02)
having an equivalent value or (iii) deliver title information in form and
substance acceptable to the Administrative Agent so that the Administrative
Agent shall have received, together with title information previously delivered
to the Administrative Agent, satisfactory title information on at least 75% of
the total value of the proved Oil and Gas Properties evaluated by such Reserve
Report.

     

    (c)           If
the Parent and the Borrower are unable to cure any title defect requested by the
Administrative Agent or the Lenders to be cured within the 60-day period or if
neither the Parent nor the Borrower complies with the requirements to provide
acceptable title information covering 75% of the total value of the proved Oil
and Gas Properties evaluated in the most recent Reserve Report, such default
shall not be a Default or an Event of Default, but instead the Administrative
Agent and the Lenders shall have the right to exercise the following remedy in
their sole discretion from time to time, and any failure to so exercise this
remedy at any time shall not be a waiver as to future exercise of the remedy by
the Administrative Agent or the Lenders.  To the extent that the
Administrative Agent or the Lenders are not satisfied with title to any such Oil
and Gas Property after the 60-day period has elapsed and the value attributed to
all such unacceptable Oil and Gas Property during any period between two
successive regularly scheduled Redetermination Dates, when aggregated with
(A) the net reduction (determined in accordance with Section 5.17) in
the value attributable to the Credit Party’s Swap Agreements during such period
and (B) the Fair Market Value assigned to any Oil and Gas Properties (or
Restricted Subsidiaries owning Oil and Gas Properties) sold, transferred,
assigned or conveyed pursuant to Section 6.13 during such period by the
Required Lenders in good faith in determining the Borrowing Base then in effect,
exceeds five percent (5%) of the Borrowing Base then in effect, the
Administrative Agent and the Required Lenders shall have the right to reduce the
Borrowing Base in accordance with Section 2.04.

     

    SECTION
5.13.  Additional Collateral;
Additional Guarantors.

     

    (a)           In
connection with each redetermination of the Borrowing Base, the Borrower shall
review the Reserve Report and the list of current Oil and Gas Properties subject
to Mortgages to ascertain whether such Oil and Gas Properties represent at least
75% of the total value of the proved Oil and Gas Properties evaluated in the
most recent Reserve Report and included in the Borrowing Base after giving
effect to exploration and production activities, acquisitions, dispositions and
production.  In the event that the Oil and Gas Properties subject to
Mortgages do not represent at least 75% of such total value, then the Parent or
the Borrower shall, and shall cause the Restricted Subsidiaries to, grant to the
Administrative Agent as security for the Secured Obligations a first-priority
Lien interest (subject only to Liens permitted pursuant to Section 6.02) on
additional Oil and Gas Properties not already subject to a Lien of the
Collateral Documents such that after giving effect thereto, the Oil and Gas
Properties subject to Mortgages will represent at least 75% of such total
value.  All such Liens will be created and perfected by and in
accordance with the provisions of mortgages, deeds of trust, security agreements
and financing statements or other Collateral Documents, all in form and
substance reasonably satisfactory to the Administrative Agent and in sufficient
executed (and acknowledged where necessary or appropriate) counterparts for
recording purposes.  In order to comply with the foregoing, if any
Restricted Subsidiary places a Lien on its Oil and Gas Properties and such
Restricted Subsidiary is not a Guarantor, then it shall become a Guarantor and
comply with Section 5.13(b).

    
      
         

      

      
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    (b)           The
Parent and the Borrower shall promptly cause each Restricted Subsidiary that
either (x) is or becomes a Material Domestic Subsidiary or (y) has
guaranteed the Unsecured Notes or other Material Indebtedness, in each case, to
guarantee the Secured Obligations pursuant to a Guaranty.  In
connection with any such guaranty, the Parent and the Borrower shall, or shall
cause (i) such Restricted Subsidiary to execute and deliver a Guaranty,
(ii) the parent of such Restricted Subsidiary to pledge all of the capital stock
of such Restricted Subsidiary (including, without limitation, delivery of
original stock certificates evidencing the capital stock of such Restricted
Subsidiary, together with an appropriate undated stock powers for each
certificate duly executed in blank by the registered owner thereof) and
(iii) execute and deliver such other additional closing documents,
certificates and legal opinions as shall reasonably be requested by the
Administrative Agent.

     

    SECTION
5.14.  ERISA
Information and Compliance.  As soon as available, and in any
event, within 10 days after the Parent or the Borrower obtains knowledge of any
of the following, the Parent or the Borrower will furnish and will cause each
ERISA Affiliate to promptly furnish to the Administrative Agent with sufficient
copies to the Lenders (a) a written notice signed by an Authorized Officer
describing the occurrence of any ERISA Event or of any material “prohibited
transaction,” as described in section 406 of ERISA or in section 4975 of the
Code, in connection with any Plan or any trust created thereunder, and
specifying what action the Parent, the Borrower or the ERISA Affiliate is taking
or proposes to take with respect thereto, and, when known, any action taken or
proposed by the Internal Revenue Service, the Department of Labor or the PBGC
with respect thereto, (b) copies of any notice of the PBGC’s intention to
terminate or to have a trustee appointed to administer any Plan and (c) a
written notice of the Parent’s, the Borrower’s or an ERISA Affiliate’s
participation in a Multiemployer Plan.  With respect to each Plan
(other than a Multiemployer Plan), the Parent or the Borrower will, and will
cause each ERISA Affiliate to, (i) satisfy in full and in a timely manner,
without incurring any material late payment or underpayment charge or penalty
and without giving rise to any Lien, all of the contribution and funding
requirements of section 412 of the Code (determined without regard to
subsections (d), (e), (f) and (k) thereof) and of section 302 of ERISA
(determined without regard to sections 303, 304 and 306 of ERISA), and (ii) pay,
or cause to be paid, to the PBGC in a timely manner, without incurring any
material late payment or underpayment charge or penalty, all premiums required
pursuant to sections 4006 and 4007 of ERISA.

     

    SECTION
5.15.  Business of the
Borrower.  The primary business of the Parent, the Borrower and
the Restricted Subsidiaries is and will continue to be the acquisition,
exploration, development, financing, ownership, operation, production,
maintenance, storage, transportation, gathering, processing and marketing of
Hydrocarbons, Hydrocarbon Interests and Oil and Gas Properties and related
activities.

    
      
         

      

      
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    SECTION
5.16.  Permits,
Licenses.  Each of the Parent and the Borrower shall, and shall
cause each Restricted Subsidiary to, maintain all material patents, copyrights,
trademarks, service marks and trade names necessary to conduct its business,
including, without limitation all consents, permits, licensees and agreements
material to its Oil and Gas Properties, except as could not reasonably be
expected to have a Material Adverse Effect.

     

    SECTION
5.17.  Swap
Agreement Termination.  To the extent that, during any period
between two successive regularly scheduled Redetermination Dates, (a) the
Parent, the Borrower or any Restricted Subsidiary changes the material terms of
any commodity-price Swap Agreement, terminates any such Swap Agreement or enters
into a new commodity-price Swap Agreement that has the effect of creating an
off-setting position and the product of (i) the amount of the decrease in
the notional volumes covered by such Swap Agreement times (ii) the excess
of (x) the strike or fixed rate payor price over (y) the “price deck”
used in calculating the Borrowing Base then in effect, when aggregated with
(A) the value attributed to all title defects with respect to Borrowing
Base Properties identified during such period and (B) the Fair Market Value
assigned to any Oil and Gas Properties (or Restricted Subsidiaries owning Oil
and Gas Properties) by the Required Lenders in good faith in determining the
Borrowing Base then in effect that have been sold, transferred, assigned or
conveyed pursuant to Section 6.13 during such period, exceeds five percent
(5%) of the Borrowing Base then in effect, the Parent or the Borrower will give
the Administrative Agent and the Lenders prompt written notice of such event and
the Administrative Agent and the Required Lenders shall have the right to reduce
the Borrowing Base in accordance with Section 2.04 promptly following
receipt of such notice.

     

    SECTION
5.18.  Restricted
Subsidiaries.  Except as permitted by Sections 6.03 and
6.13, at all times, the Parent and the Borrower shall directly or indirectly
through a wholly-owned Restricted Subsidiary retain full, absolute and
unencumbered title to all of the issued and outstanding stock or other ownership
interests in each Restricted Subsidiary

     

    SECTION
5.19.  Agreements Respecting
Unrestricted Subsidiaries.  The Parent and the Borrower shall,
and shall cause each Restricted Subsidiary to, operate each Unrestricted
Subsidiary in such a manner as to make it apparent to all creditors of such
Unrestricted Subsidiary that such Unrestricted Subsidiary is a legal entity
separate and distinct from the Parent, the Borrower or any Restricted Subsidiary
and, as such, is solely responsible for its debts and other obligations
(including maintaining separate books of account).

     

    SECTION
5.20.  Additional Covenants Upon
Issuance of Unsecured Notes.  If the Parent issues any
additional Unsecured Notes permitted under Section 6.01(j) hereof, the Parent
shall:

     

    (a)           deliver,
or cause to be delivered, to the Administrative Agent not later than five
Business Days following the date on which any prospectus or offering memorandum
prepared in connection with the original issuance of any Unsecured Notes is
delivered to the prospective or actual holders of the Unsecured Notes, a final,
true and correct copy of such prospectus or offering
memorandum;

    
      
         

      

      
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    (b)           deliver
to the Administrative Agent not more than 10 Business Days after the date of
issuance of any Unsecured Notes by the Parent, a true and correct copy of the
Unsecured Notes Indenture (or any supplement (if any) to the Unsecured Notes
Indenture) entered into by the Parent in connection with the Unsecured
Notes;

     

    (c)           deliver
to the Administrative Agent concurrently with the issuance of any Unsecured
Notes, a certificate of an Authorized Officer confirming such issuance and
setting forth the aggregate principal amount of Unsecured Notes
issued;

     

    (d)           deliver
to the Administrative Agent and the Lenders promptly such other related
materials evidencing the issuance of the Unsecured Notes as the Administrative
Agent may reasonably request; and

     

    (e)           if,
after giving effect to the issuance of any Unsecured Notes and the automatic
reduction of the Borrowing Base pursuant to Section 6.01(j), the aggregate
outstanding Credit Exposure would exceed the Borrowing Base as so reduced, repay
Loan and cash collateralize Letters of Credit in accordance with Section
2.11(a).

     

    SECTION
5.21.  Certain Post-Effective Date
Matters.  Not later than 60 days after the Effective Date, the
Parent and the Borrower shall, or shall cause one or more of the Restricted
Subsidiaries to, deliver to the Administrative Agent (a) additional
Mortgages duly completed and executed in a sufficient number of counterparts for
recording, if necessary, and all documents and instruments, including Uniform
Commercial Code financing statements, required by law or reasonably requested by
the Administrative Agent with respect to such Mortgages to create first
priority, perfected Liens (subject only to Liens permitted pursuant to Section
6.02) on additional Oil and Gas Properties such that, when aggregated with the
total value of the Oil and Gas Properties covered by the Mortgages delivered
pursuant to Section 4.01(b)(B), at least 75% of the total value of the Oil
and Gas Properties evaluated in the Initial Reserve Report are covered by a
first priority, perfected Liens (subject only to Liens permitted pursuant to
Section 6.02), (b) such title information as the Administrative Agent
may reasonably require satisfactory to the Administrative Agent setting forth
the status of title with respect to those Oil and Gas Properties covered by a
Mortgage (including any Mortgage delivered under Section 4.01(b)) that were not
previously covered by a mortgage under the Existing Credit Facility, (c) a
written legal opinion addressed to the Administrative Agent, the Issuing Bank
and the Lenders in form and substance satisfactory to the Administrative Agent
from (i) Nancy M. Snyder, Esq., as general counsel to the mortgagors under
such additional Mortgages, and (ii) local counsel in each jurisdiction
where such additional Mortgages are to be recorded (and the Parent and the
Borrower hereby request such counsel to deliver such opinion) and (d) a
schedule of the Oil and Gas Properties evaluated in the Initial Reserve Report
that are subject to Mortgages after giving effect to the additional Mortgages
delivered pursuant to clause (a) above.

     

    ARTICLE
VI

     

    Negative
Covenants

     

    Until the
Commitments have expired or terminated and the principal of and interest on each
Loan and all fees payable hereunder have been paid in full and all Letters of
Credit have expired or terminated and all LC Disbursements shall have been
reimbursed, the Parent and the Borrower covenant and agree with the Lenders
that:

    
      
         

      

      
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    SECTION
6.01.  Indebtedness.  The
Parent and the Borrower will not, and will not permit any Restricted Subsidiary
to, create, incur, assume or permit to exist any Indebtedness,
except:

     

    (a)           the
Obligations arising under this Agreement or any other Loan Document or any
guaranty of or suretyship arrangement for the Obligations arising under any Loan
Document;

     

    (b)           Indebtedness
under the Unsecured Notes outstanding on the Effective Date listed on Schedule
6.01(b), and any Permitted Refinancing Indebtedness in respect
thereof;

     

    (c)           Indebtedness
of the Parent, the Borrower or any Restricted Subsidiary existing on the
Effective Date (other than Indebtedness under Unsecured Notes outstanding on the
Effective Date) that is listed on Schedule 6.01(c), and any refinancings,
renewals or extensions (but not increases) thereof;

     

    (d)           Indebtedness
under Capital Leases (as required to be reported on the consolidated financial
statements of the Parent pursuant to GAAP) not to exceed
$10,000,000;

     

    (e)           Indebtedness
associated with bonds or surety obligations required by Governmental
Requirements in connection with the operation of the Oil and Gas
Properties;

     

    (f)           unsecured
intercompany Indebtedness between (a) any of the Parent, the Borrower and
any Restricted Subsidiary or (b) any Restricted Subsidiaries to the extent
permitted by Section 6.04(d); provided that any
such Indebtedness is not held, assigned, transferred, negotiated or pledged to
any Person other than the Parent, the Borrower or a Restricted Subsidiary, and
provided further that any such
Indebtedness owed by the Borrower or any Guarantor to any (other) Guarantor
shall be subordinated to the Secured Obligations on terms set forth in the
Guaranty;

     

    (g)           to
the extent that it constitutes Indebtedness, unsecured intercompany Indebtedness
owed by any of the Parent, the Borrower and any Restricted Subsidiary to any
Unrestricted Subsidiary (x) existing on the Effective Date (together with
any capitalized interested with respect thereto) or (y) in respect of the
proceeds of (i) distributions or dividends from an MLP or (ii) sales of
Equity Interests of an MLP, in each case, actually paid in cash by such
Unrestricted Subsidiary to any of the Parent, the Borrower or any Restricted
Subsidiary; provided that, in
each case, any such Indebtedness (if any) is not held, assigned, transferred,
negotiated or pledged to any Person other than a wholly-owned Subsidiary of the
Parent, and provided further that any such
Indebtedness shall be subordinated to the Secured Obligations on terms set forth
in the Subordination Agreement;

     

    (h)           endorsements
of negotiable instruments for collection in the ordinary course of
business;

     

    (i)           other
Indebtedness (not included under subsections (a) through (h) of this
Section 6.01) not to exceed $25,000,000 in the aggregate at any one time
outstanding; and

    
      
         

      

      
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    (j)           unsecured
Indebtedness under (a) Unsecured Notes (other than the Unsecured Notes
outstanding on the Effective Date and any Permitted Refinancing Indebtedness in
respect thereof) and any Guarantees of any Credit Party in respect thereof, in
an aggregate principal amount not exceeding $120,000,000 at any time
outstanding, provided that (1)
such Unsecured Notes and any Unsecured Notes Indenture under which such
Unsecured Notes are issued contain customary terms and conditions for unsecured
notes of similar type and of like tenor and amount and do not contain any
covenants (other than in connection with a change of control or other
fundamental change affecting the Parent or a termination of trading with respect
to the Parent’s capital stock) that are more onerous to the Parent, the Borrower
and the Restricted Subsidiaries than those imposed by this Agreement or the
other Loan Documents, (2) the final stated maturity date of such Unsecured Notes
and the average life of such Unsecured Notes (based on the stated final maturity
date and payment schedule provided at the date of issuance of such Unsecured
Notes) shall not be earlier than 91 days after the Maturity Date (as in effect
on the date of issuance of such Unsecured Notes) and (3) at the time of and
immediately after giving effect to each incurrence of such Indebtedness, no
Default shall have occurred and be continuing, and provided further that
immediately upon any incurrence of Indebtedness permitted by this
clause (k), the Borrowing Base then in effect shall be automatically
reduced by an amount equal to 30% of the aggregate principal amount of such
Indebtedness incurred (calculated at the face amount of the Indebtedness
incurred without giving effect to any original issue discount) and (b) any
Permitted Refinancing Indebtedness in respect thereof.

     

    SECTION
6.02.  Liens.  The
Parent and the Borrower will not, and will not permit any Restricted Subsidiary
to, create, incur, assume or permit to exist any Lien on any of its Properties
(now owned or hereafter acquired), except:

     

    (a)           Liens
securing the payment of any Secured Obligations;

     

    (b)           Permitted
Liens;

     

    (c)           Liens
securing leases giving rise to Indebtedness allowed under Section 6.01(d)
but only on the Property under lease;

     

    (d)           Liens
disclosed on Schedule 6.02;

     

    (e)           any
Lien arising out of the refinancing, extension, renewal or refunding of any
Indebtedness secured by any Lien permitted by any of the foregoing clauses in
this Section 6.02; provided that any
such Indebtedness is not increased beyond the amount thereof outstanding on the
Effective Date (other than increases associated with the capitalization of
refinancing costs) and is not secured by any additional assets; and

     

    (f)           additional
Liens upon Property that does not constitute Collateral created after the date
hereof, provided that the
aggregate obligations secured thereby and incurred on or after the date hereof
shall not exceed $5,000,000 in the aggregate at any one time
outstanding.

    
      
         

      

      
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    SECTION
6.03.  Fundamental
Changes.  (a) Each of the Parent and the Borrower will not, and
will not permit any Restricted Subsidiary to, merge into or consolidate with any
other Person, or permit any other Person to merge into or consolidate with it,
or sell, transfer, lease or otherwise dispose of (in one transaction or in a
series of transactions) all or substantially all of its assets, or all or
substantially all of the stock of any of the Restricted Subsidiaries (in each
case, whether now owned or hereafter acquired), except as permitted pursuant to
Section 6.13, or liquidate or dissolve, except that, if at the time thereof and
immediately after giving effect thereto no Default shall have occurred and be
continuing, (i) any Person may merge into the Parent or the Borrower in a
transaction in which the Parent or the Borrower, respectively, is the surviving
Person, (ii) any Person may merge into any Guarantor in a transaction in
which the surviving entity is wholly-owned, directly or indirectly, by the
Borrower and such surviving entity is such Guarantor or expressly assumes in
writing (in form and substance satisfactory to the Administrative Agent) all
obligations of such Guarantor under the Loan Documents, (iii) any Person
may merge into any Restricted Subsidiary that is not a Guarantor in a
transaction in which the surviving entity is wholly-owned, directly or
indirectly, by the Borrower and, if such surviving entity constitutes a Material
Domestic Subsidiary, the Parent, the Borrower and such surviving entity comply
with the requirements of Section 5.13, (iv) any Restricted Subsidiary
may sell, transfer, lease or otherwise dispose of its assets to the Parent, the
Borrower or another Restricted Subsidiary and (v) any Restricted Subsidiary
may liquidate or dissolve if the Parent or the Borrower determines in good faith
that such liquidation or dissolution is in the best interests of the Parent and
the Borrower and is not materially disadvantageous to the Lenders; provided that any
such merger involving a Person that is not a wholly-owned Subsidiary immediately
prior to such merger shall not be permitted unless also permitted by
Section 6.04.

     

    (b)           The
Parent and the Borrower will not, and will not permit any Restricted Subsidiary
to, engage to any material extent in any business other than businesses of the
type conducted by the Parent, the Borrower and the Restricted Subsidiaries on
the date of execution of this Agreement and businesses reasonably related
thereto.  From and after the date hereof, the Parent and the Borrower
will not, and will not permit any Restricted Subsidiary to, acquire or make any
other expenditures (whether such expenditure is capital, operating or otherwise)
in or related to any Oil and Gas Properties not located within the geographical
boundaries of the United States or form or acquire any Subsidiary organized
under any jurisdiction outside of the United States.

     

    SECTION
6.04.  Investments, Loans and
Advances.  Each of the Parent and the Borrower will not, and
will not permit any Restricted Subsidiary to, make or permit to remain
outstanding any loans or advances to or Investments in any Person, except that
the foregoing restriction shall not apply to:  (a) Investments
reflected in the financial statements delivered pursuant to Section 3.04(a) or
that are disclosed to the Lenders on Schedule 6.04; (b) Permitted
Investments; (c) accounts receivable arising in the ordinary course of
business; (d) Investments made by (i) the Parent in or to the Borrower
or the Guarantors, (ii) the Borrower in or to the Guarantors, (iii) any
Restricted Subsidiary in the Borrower or any Guarantor or (iv) the Parent, the
Borrower or any Restricted Subsidiary in or to all other Domestic Subsidiaries
that are not Guarantors in an aggregate amount at any one time outstanding not
to exceed $10,000,000; (e) Investments in direct ownership interests in
additional Oil and Gas Properties and gas gathering systems related thereto or
related to farm-out, farm-in, joint operating, joint venture or area of mutual
interest agreements, gathering systems, pipelines or other similar arrangements
that are usual and customary in the oil and gas exploration and production
business; (f) Permitted Corporate Acquisitions; and (g) other
Investments, including Investments in Unrestricted Subsidiaries, not to exceed
$25,000,000 in the aggregate at any time outstanding.

    
      
         

      

      
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    SECTION
6.05.  Hedging
Transactions.  Each of the Parent and the Borrower will not,
and will not permit any Restricted Subsidiary to, enter into:

     

    (a)           any
Swap Agreement in respect of commodities except for Swap Agreements with an
Approved Counterparty the notional volumes for which (when aggregated with other
commodity Swap Agreements then in effect other than basis differential swaps on
volumes already hedged pursuant to other Swap Agreements) do not exceed, as of
the date any such Swap Agreement is executed, the lesser of:

     

    (i)           80%
of the Parent’s, the Borrower’s and the Restricted Subsidiaries’ reasonably
anticipated projected production of crude oil and condensate (with respect to
crude oil and condensate related transactions) for each month in the period
during which such Swap Agreement is in effect and 80% of the Parent’s, the
Borrower’s and the Restricted Subsidiaries’ projected production of natural gas
(with respect to natural gas related transactions) for each month in the period
during which such Swap Agreement is in effect, in each case, from proved
Hydrocarbon Interests as set forth on the most recent Reserve Report;
and

     

    (ii)          90%
of the Parent’s, the Borrower’s and the Restricted Subsidiaries’ reasonably
anticipated projected production of crude oil and condensate (with respect to
crude oil and condensate related transactions) for each month in the period
during which such Swap Agreement is in effect and 90% of the Parent’s, the
Borrower’s and the Restricted Subsidiaries’ projected production of natural gas
(with respect to natural gas related transactions) for each month in the period
during which such Swap Agreement is in effect, in each case, from proved
developed producing Hydrocarbon Interests as set forth on the most recent
Reserve Report; or

     

    (b)           any
Swap Agreement with respect to the interest rate on any Indebtedness except for
Swap Agreements with one or more Approved Counterparties and provided that the
aggregate notional principal amount of all Indebtedness that is the subject of
all such Swap Agreements does not exceed the outstanding principal amount of
Indebtedness for borrowed money.

     

    For
purposes of clause (a) of this Section 6.05, forecasts of projected
production shall equal the projections for proved Hydrocarbon Interests or
proved developed producing Hydrocarbon Interests, as applicable, set out in the
most recent Reserve Report as revised to account for any increase or decrease
therein anticipated because of information obtained by the Parent and the
Borrower subsequent to the publication of the most recent Reserve Report,
including the Parent’s or Borrower’s internal forecasts of production decline
rates for existing wells and additions to or deletions from anticipated future
production from new wells and acquisitions coming on stream or failing to come
on stream.

    
      
         

      

      
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    SECTION
6.06.  Restricted
Payments.  The Parent will not directly or indirectly declare
or pay or incur any liability to pay, and the Parent will not permit the
Borrower or any Restricted Subsidiaries to directly or indirectly declare or
pay, or incur any liability to pay any dividends or other distributions; provided that (i) the
Borrower or any Restricted Subsidiary may pay dividends or make distributions to
the Parent, the Borrower or any other Restricted Subsidiary and (ii) if no
Borrowing Base Deficiency then exists and no Event of Default or Default has
occurred and is continuing or would result therefrom, the Parent may (a) declare
and pay dividends solely in additional shares of Equity Interests of the Parent,
(b) repurchase or redeem shares of its capital stock issued to its employees,
officers or directors in an amount not to exceed $1,000,000 in any 12-month
period, (c) on or after December 31, 2009, pay cash dividends and
distributions to its shareholders from funds legally available for such purpose
during any fiscal year in an amount not in excess of $15,000,000, and
(d) make any mandatory or optional cash payments or deliveries of the
Parent’s capital stock, or any combination thereof, in settlement of its
obligations under the 2007 Convertible Notes Indenture upon conversion or
required repurchase of any 2007 Convertible Notes or the Call Spread
Transaction.

     

    SECTION
6.07.  Transactions with
Affiliates.  The Parent and the Borrower will not, and will not
permit any Restricted Subsidiaries to, sell, lease or otherwise transfer any
Property or assets to, or purchase, lease or otherwise acquire any Property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates (other than the Parent, the Borrower and the Restricted
Subsidiaries), except (a) on terms and conditions not less favorable to the
Parent, the Borrower or such Restricted Subsidiary than could be obtained on an
arm’s-length basis from unrelated third parties, (b) transactions between
or among the Parent, the Borrower and any Restricted Subsidiary not involving
any other Affiliate and (c) any payments permitted by
Section 6.06.

     

    SECTION
6.08.  Restrictive
Agreements.  The Parent and the Borrower will not, and will not
permit any Restricted Subsidiary to, directly or indirectly, enter into, incur
or permit to exist any agreement or other arrangement that prohibits, restricts
or imposes any condition upon (a) the ability of the Parent, the Borrower
or any Restricted Subsidiary to create, incur or permit to exist any Lien upon
any of its Property or assets or (b) the ability of any Restricted
Subsidiary to pay dividends or other distributions to the Borrower or the
ability of the Borrower or any Restricted Subsidiary to pay dividends or other
distributions to the Parent, in each case, with respect to any shares of its
capital stock or to make or repay loans or advances to the Parent or the
Borrower or any Restricted Subsidiary or to Guarantee Indebtedness of the
Parent, the Borrower or any Restricted Subsidiary; provided that (i) the
foregoing shall not apply to restrictions and conditions imposed by law, by this
Agreement or the Unsecured Notes Documents, (ii) the foregoing shall not apply
to restrictions and conditions existing on the date hereof identified on
Schedule 6.08 (but shall apply to any extension or renewal of, or any amendment
or modification expanding the scope of, any such restriction or condition),
(iii) the foregoing shall not apply to customary restrictions and
conditions contained in agreements relating to the sale of a subsidiary pending
such sale, provided that such
restrictions and conditions apply only to the subsidiary that is to be sold and
such sale is permitted hereunder, (iv) clause (a) of the foregoing
shall not apply to restrictions or conditions imposed by any agreement relating
to secured Indebtedness permitted by this Agreement if such restrictions or
conditions apply only to the property or assets securing such Indebtedness and
(v) clause (a) of the foregoing shall not apply to customary provisions in
leases and other contracts restricting the assignment thereof.

    
      
         

      

      
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    SECTION
6.09.  Financial
Covenants.

     

    (a)           Total Debt to EBITDAX
Ratio.  The Parent will not, at any time, permit its ratio of
Total Debt as of such time to EBITDAX (i) for any period of four
consecutive fiscal quarters ending on or prior to June 30, 2011, for which
financial statements are available to be greater than 4.0 to 1.0, and (ii) for
any period of four consecutive fiscal quarters ending on or after
September 30, 2011, for which financial statements are available to be
greater than 3.5 to 1.0.  For purposes of calculating Total Debt, at
any time that the aggregate Credit Exposure is less than $20,000,000, Total Debt
shall be reduced by the aggregate amount of all cash and Permitted Investments
held at such time by the Parent, the Borrower or any Restricted
Subsidiary.

     

    (b)           Current
Ratio.  The Parent will not permit, as of the last day of any
fiscal quarter, its ratio of (i) Consolidated Current Assets to (ii)
Consolidated Current Liabilities to be less than 1.0 to 1.0.

     

    SECTION
6.10.  Designation and Conversion
of Restricted and Unrestricted Subsidiaries; Indebtedness of Unrestricted
Subsidiaries.

     

    (a)           Unless
designated as an Unrestricted Subsidiary on Schedule 3.13 as of the
Effective Date or thereafter pursuant to Section 6.10(b), any Person that
becomes a direct or indirect Subsidiary of the Parent or any Restricted
Subsidiary shall be classified as a Restricted Subsidiary, provided that any
Person that becomes a Subsidiary of an Unrestricted Subsidiary shall be
classified as an Unrestricted Subsidiary.

     

    (b)           The
Parent or the Borrower may designate any Restricted Subsidiary as an
Unrestricted Subsidiary if (i) such designation is made by the Parent or the
Borrower in a written notice to the Administrative Agent and (ii) such
designation is approved by the Required Lenders.  The Parent or the
Borrower may designate any newly formed or newly acquired direct Subsidiary of
the Parent, the Borrower or any Restricted Subsidiary as an Unrestricted
Subsidiary if (i) such designation is made by the Parent or the Borrower in a
written notice to the Administrative Agent and (ii) no Default or Event of
Default shall then exist or would result from such
designation.  Except as provided in this Section, no Restricted
Subsidiary may be redesignated as an Unrestricted Subsidiary.

     

    (c)           The
Parent or the Borrower may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary if after giving effect to such designation, (i) the
representations and warranties of the Parent, the Borrower and the Restricted
Subsidiaries contained in this Agreement and each of the other Loan Documents
are true and correct in all material respects on and as of such date as if made
on and as of the date of such redesignation (or, if stated to have been made
expressly as of an earlier date, were true and correct as of such date), (ii) no
Event of Default or Default would exist or result therefrom and (iii) the Parent
or the Borrower complies with the requirements of
Sections 5.13.

     

    (d)           The
Parent and the Borrower shall not, and shall not permit any Unrestricted
Subsidiary to, incur any Indebtedness except as a Non-Recourse
Obligation.

    
      
         

      

      
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    SECTION
6.11.  Proceeds of
Loans.  The Parent and the Borrower will not permit the
proceeds of the Loans or any Letter of Credit to be used for any purpose other
than those permitted by Section 5.08.  None of the Parent, the
Borrower or any Person acting on behalf of the Parent or the Borrower has taken
or will take any action which might cause any of the Loan Documents to violate
Regulation T, U or X or any other regulation of the Board or to violate Section
7 of the Securities Exchange Act of 1934 or any rule or regulation thereunder,
in each case as now in effect or as the same may hereinafter be in
effect.  If requested by the Administrative Agent, the Borrower will
furnish to the Administrative Agent and each Lender a statement to the foregoing
effect in conformity with the requirements of FR Form U-1 or such other form
referred to in Regulation U, Regulation T or Regulation X of the Board, as the
case may be.

     

    SECTION
6.12.  ERISA
Compliance.  The Parent and the Borrower will not at any
time:  (a) engage in, or permit any ERISA Affiliate to engage in,
any transaction in connection with which the Parent, the Borrower or any ERISA
Affiliate could be subjected to either a material civil penalty assessed
pursuant to section 502(c), (i) or (l) of ERISA or a material tax imposed by
Chapter 43 of Subtitle D of the Code with respect to a Plan; (b) terminate, or
permit any ERISA Affiliate to terminate, any Plan in a manner, or take any other
action with respect to any Plan, that could result in any liability to the
Parent, the Borrower or any ERISA Affiliate to the PBGC that could reasonably be
expected to have a Material Adverse Effect; (c) fail to make, or permit any
ERISA Affiliate to fail to make, full payment when due of all amounts which,
under the provisions of any Plan, agreement relating thereto or applicable law,
the Parent, the Borrower or any ERISA Affiliate is required to pay as
contributions thereto if such failure could reasonably be expected to have a
Material Adverse Effect; (d) permit to exist, or allow any ERISA Affiliate to
permit to exist, any accumulated funding deficiency within the meaning of
Section 302 of ERISA or section 412 of the Code, whether or not waived, with
respect to any Plan that exceeds $2,000,000; (e) except as provided in
Section 6.12(g), permit, or allow any ERISA Affiliate to permit, the
actuarial present value of the benefit liabilities under any Plan maintained by
the Parent or any ERISA Affiliate which is regulated under Title IV of ERISA to
exceed the current value of the assets (computed on a plan termination basis in
accordance with Title IV of ERISA) of such Plan allocable to such benefit
liabilities by more than $2,000,000, with the term “actuarial present value of
the benefit liabilities” having the meaning specified in section 4041 of ERISA;
(f) contribute to or assume an obligation to contribute to, or permit any
Subsidiary or ERISA Affiliate to contribute to or assume an obligation to
contribute to, any Multiemployer Plan if such action could reasonably be
expected to have a Material Adverse Effect; (g) acquire, or permit any
ERISA Affiliate to acquire, an interest in any Person that causes such Person to
become an ERISA Affiliate with respect to the Parent or any ERISA Affiliate if
such Person sponsors, maintains or contributes to, or at any time in the
six-year period preceding such acquisition has sponsored, maintained or
contributed to, (i) any Multiemployer Plan if the funding status of such
Multiemployer Plan is such that a total or partial withdrawal from it by such
Person could reasonably be expected to have a Material Adverse Effect or
(ii) any other Plan that is subject to Title IV of ERISA under which the
actuarial present value of the benefit liabilities under such Plan exceeds the
current value of the assets (computed on a plan termination basis in accordance
with Title IV of ERISA) of such Plan allocable to such benefit liabilities by an
amount in excess of $2,000,000; (h) incur, or permit any ERISA Affiliate to
incur, a liability to or on account of a Plan under sections 515, 4062, 4063,
4064, 4201 or 4204 of ERISA in excess of $2,000,000; or (i) amend, or permit any
ERISA Affiliate to amend, a Plan resulting in an increase in current liability
such that the Borrower or any ERISA Affiliate is required to provide security to
such Plan under section 401(a)(29) of the Code.

    
      
         

      

      
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    SECTION
6.13.  Sale
of Properties.  The Parent and the Borrower will not, and will
not permit any Restricted Subsidiary to, sell, assign, farm-out, convey or
otherwise transfer any Property or any interest in any Property except for
(a) the sale of Hydrocarbons in the ordinary course of business;
(b) farmouts of undeveloped acreage and assignments in connection with such
farmouts; (c) the sale or transfer of equipment that is no longer necessary
for the business of the Parent, the Borrower or any Restricted Subsidiary or is
replaced by equipment of at least comparable value and use; (d) the sale,
transfer or other disposition of Equity Interests in Unrestricted Subsidiaries;
and (e) sales or other dispositions (including Casualty Events and
dispositions resulting from the exercise of eminent domain, condemnation or
nationalization) of Oil and Gas Properties or any interest therein or all of the
Equity Interests in Restricted Subsidiaries owning Oil and Gas Properties; provided that if such
Oil and Gas Properties (or Oil and Gas Properties of such Restricted
Subsidiaries) included in the most recently delivered Reserve Report during any
period between two successive regularly scheduled Redetermination Dates have a
Fair Market Value (individually or in the aggregate) that, when aggregated with
(i) the value attributed to all title defects with respect to Borrowing
Base Properties identified during such period and (ii) the net reduction
(determined in accordance with Section 5.17) in the value attributable to
the Credit Party’s Swap Agreements during such period, exceeds five percent (5%)
of the Borrowing Base then in effect, the Borrowing Base shall be reduced in an
amount equal to the value, if any, assigned such Property by the Required
Lenders in good faith in determining the Borrowing Base then in effect; and
provided further that if any
such sale or other disposition is of a Restricted Subsidiary owning Oil and Gas
Properties, such sale or other disposition shall include all the Equity
Interests of such Restricted Subsidiary.  To determine the amount by
which the Borrowing Base shall be adjusted, the Parent or the Borrower shall
give the Administrative Agent and the Lenders notice of the proposed sale or
other disposition not less than 10 days prior to the date of the proposed sale
or other disposition.  The Administrative Agent shall, in good faith
and utilizing the Reserve Reports and other data, reports and information
delivered in connection with the most recent redetermination of the Borrowing
Base (or the initial determination, as applicable), propose to the Lenders a
reduction to the Borrowing Base in accordance with the standards set forth in
Section 2.04.  Thereafter, the Lenders shall have five days to
approve or object to such proposed amount; and any failure to object shall be
deemed to be an approval.  In the event there is no approval or deemed
approval, the Administrative Agent shall poll the Lenders to ascertain the
smallest reduction to the Borrowing Base then acceptable to a number of Lenders
sufficient to constitute the Required Lenders for purposes of this
Section 6.13 and such amount shall then be the allocated value of the
Property subject to such sale or disposition.

     

    SECTION
6.14.  Environmental
Matters.  None of the Parent, the Borrower or any Restricted
Subsidiary will cause or permit any of its Property to be in violation of, or do
anything or permit anything to be done which will subject any such Property to
any remedial obligations under, any Environmental Laws, assuming disclosure to
the applicable Governmental Authority of all relevant facts, conditions and
circumstances, if any, pertaining to such Property where such violations or
remedial obligations could reasonably be expected to result in an Environmental
Liability to the Parent, the Borrower or the Restricted Subsidiaries in excess
of $10,000,000.

     

    SECTION
6.15.  Subsidiaries.  The
Parent and the Borrower shall not, and shall not permit any Restricted
Subsidiary to, create or acquire any additional Restricted Subsidiary or
redesignate any Unrestricted Subsidiary as a Restricted Subsidiary unless the
Parent and the Borrower comply with Section 5.13.  The Parent and
the Borrower shall not, and shall not permit any Restricted Subsidiary to, sell,
assign or otherwise dispose of any Equity Interest in any Restricted Subsidiary
except in compliance with Section 6.13.

    
      
         

      

      
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    SECTION
6.16.  Gas
Imbalances, Take-or-Pay or Other Prepayments.  The Parent and
the Borrower will not allow gas imbalances, take-or-pay or other prepayments
with respect to the Oil and Gas Properties of the Parent, the Borrower or the
Restricted Subsidiaries that would require the Parent, the Borrower or any
Restricted Subsidiary to deliver Hydrocarbons produced on Oil and Gas Properties
at some future time without then or thereafter receiving full payment therefor
in excess of two Bcf of gas (or its equivalent) in the aggregate on a net basis
for the Parent, the Borrower and the Restricted Subsidiaries.

     

    SECTION
6.17.  Fiscal Year; Fiscal
Quarter.  The Parent and the Borrower shall not, and shall not
permit any Subsidiaries to, change its fiscal year or any of its fiscal
quarters.

     

    SECTION
6.18.  Repayment of Unsecured
Notes; Amendment of Unsecured Notes Documents.  The Parent will
not, and will not permit the Borrower or any Subsidiary
to:  (i) call, make or offer to make any optional or voluntary
Redemption of, or otherwise optionally or voluntarily Redeem, any of the
Unsecured Notes or any Permitted Refinancing Indebtedness in respect thereof;
provided, however, that the
Parent may prepay the Unsecured Notes or any Permitted Refinancing Indebtedness
with the proceeds of (A) any Permitted Refinancing Indebtedness, (B) the net
cash proceeds of a sale of capital stock (other than Disqualified Stock) of the
Parent that is contemporaneous with such Permitted Refinancing Indebtedness or
(C) a combination of any Permitted Refinancing Indebtedness and the net
cash proceeds of a sale of capital stock (other than Disqualified Stock) of the
Parent that is contemporaneous with such Permitted Refinancing Indebtedness; and
provided further that so long
as (x) no Borrowing Base Deficiency then exists and (y) no Event of Default or
Default has occurred and is continuing or would result therefrom, the Parent
shall be permitted to make any optional cash payments or deliveries of the
Parent’s capital stock, or any combination thereof, in settlement of its
obligations under the 2007 Convertible Notes Indenture upon the conversion or
required repurchase of any 2007 Convertible Notes thereunder (and, for the
avoidance of doubt, nothing in this Section 6.18 shall limit the Parent’s
ability to make any scheduled payments or mandatory prepayments with respect to
any Unsecured Notes); or (ii) amend, modify, waive or otherwise change, consent
or agree to any amendment, modification, waiver or other change to, any of the
terms of any Unsecured Notes Documents or any Permitted Refinancing Indebtedness
if the effect thereof would be to shorten its maturity or average life or
increase the amount of any payment of principal thereof or increase the rate or
shorten any period for payment of interest thereon, provided that the
foregoing shall not prohibit the execution of (1) supplemental indentures
associated with the incurrence of additional Unsecured Notes to the extent
permitted by Section 6.01(j), (2) other indentures or agreements in
connection with the issuance of Permitted Refinancing Indebtedness, (3)
supplemental indentures to add guarantors if required by the terms of any
Unsecured Notes Indenture provided such Person complies with
Section 5.13(b), or (4) amendments, modifications, waivers or other
changes that are acceptable to the Administrative Agent and not materially
adverse to the Lenders.

    
      
         

      

      
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    SECTION
6.19.  Marketing
Activities.  The Parent and the Borrower will not, and will not
permit any of the Restricted Subsidiaries to, engage in marketing activities for
any Hydrocarbons or enter into any contracts related thereto other than
(a) contracts for the sale of Hydrocarbons scheduled or reasonably
estimated to be produced from their proved Oil and Gas Properties during the
period of such contract, (b) contracts for the sale of Hydrocarbons
scheduled or reasonably estimated to be produced from proved Oil and Gas
Properties of third parties during the period of such contract associated with
the Oil and Gas Properties of the Parent, the Borrower and the Restricted
Subsidiaries that the Parent, the Borrower or one of the Restricted Subsidiaries
has the right to market pursuant to joint operating agreements, unitization
agreements or other similar contracts that are usual and customary in the oil
and gas business and (c) other contracts for the purchase and/or sale of
Hydrocarbons of third parties (i) that have generally offsetting provisions
(i.e. corresponding pricing mechanics, delivery dates and points and volumes)
such that no “position” is taken and (ii) for which appropriate credit
support has been taken to alleviate the material credit risks of the
counterparty thereto.

     

    SECTION
6.20.  Sale
or Discount of Receivables.  Except for receivables obtained by
the Parent, the Borrower or any Restricted Subsidiary out of the ordinary course
of business or the settlement of joint interest billing accounts in the ordinary
course of business or discounts granted to settle collection of accounts
receivable or the sale of defaulted accounts arising in the ordinary course of
business in connection with the compromise or collection thereof and not in
connection with any financing transaction, the Parent and the Borrower will not,
and will not permit any Restricted Subsidiary to, discount or sell (with or
without recourse) any of its notes receivable or accounts
receivable.

     

    ARTICLE
VII

    

    Events of Default; Remedies;
Application of Proceeds

     

    SECTION
7.01.  If any of the following events (“Events of Default”)
shall occur:

     

    (a)           the
Borrower shall fail to pay any principal of any Loan or any reimbursement
obligation in respect of any LC Disbursement when and as the same shall become
due and payable, whether at the due date thereof or at a date fixed for
prepayment thereof or otherwise;

     

    (b)           the
Borrower shall fail to pay any interest on any Loan or any fee or any other
amount (other than an amount referred to in clause (a) of this Section)
payable under this Agreement, when and as the same shall become due and payable,
and such failure shall continue unremedied for a period of three Business
Days;

     

    (c)           any
representation or warranty made or deemed made by or on behalf of the Borrower
or any Subsidiary in or in connection with this Agreement or any amendment or
modification hereof or waiver hereunder, or in any report, certificate,
financial statement or other document furnished pursuant to or in connection
with this Agreement or any amendment or modification hereof or waiver hereunder,
shall prove to have been incorrect in any material  respect when made
or deemed made;

     

    (d)           the
Parent or the Borrower shall fail to observe or perform any covenant, condition
or agreement contained in Section 5.02(a), 5.03 (with respect to either the
Parent’s or the Borrower’s existence) or 5.08 or in
Article VI;

    
      
         

      

      
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    (e)           the
Parent or the Borrower shall fail to observe or perform any covenant, condition
or agreement contained in this Agreement (other than those specified in
clause (a), (b) or (d) of this Section), and such failure shall continue
unremedied for a period of 30 days after notice thereof from the
Administrative Agent to the Parent or the Borrower (which notice will be given
at the request of any Lender);

     

    (f)           the
Parent, the Borrower or any Restricted Subsidiary shall fail to make any payment
(whether of principal or interest and regardless of amount) in respect of any
Material Indebtedness or any Material Swap Obligation, when and as the same
shall become due and payable;

     

    (g)           (i)
any event or condition occurs that results in any Material Indebtedness becoming
due prior to its scheduled maturity or that enables or permits (with or without
the giving of notice, the lapse of time or both) the holder or holders of any
Material Indebtedness or any trustee or agent on its or their behalf to cause
any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity,
other than a conversion of the 2007 Convertible Notes pursuant to the terms of
the 2007 Convertible Notes Indenture, or (ii) a default or early termination
event shall occur and be continuing under any Swap Agreement of the Borrower or
any Restricted Subsidiary which results in Material Swap Obligations being due
by the Borrower or such Restricted Subsidiary, and such Material Swap
Obligations are not paid when due or within three Business Days thereafter;
provided that
this clause (g) shall not apply to secured Indebtedness that becomes due as
a result of the voluntary sale or transfer of the property or assets securing
such Indebtedness;

     

    (h)           an
involuntary proceeding shall be commenced or an involuntary petition shall be
filed seeking (i) liquidation, reorganization or other relief in respect of
the Parent, the Borrower or any Restricted Subsidiary or its debts, or of a
substantial part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or
(ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Parent, the Borrower or any Restricted
Subsidiary or for a substantial part of its assets, and, in any such case, such
proceeding or petition shall continue undismissed for 60 days or an order
or decree approving or ordering any of the foregoing shall be
entered;

     

    (i)           the
Parent, the Borrower or any Restricted Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation, reorganization
or other relief under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (h) of this Section,
(iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Parent, the
Borrower or any Restricted Subsidiary or for a substantial part of its assets,
(iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the
benefit of creditors or (vi) take any action for the purpose of effecting
any of the foregoing;

     

    (j)           the
Parent, the Borrower or any Restricted Subsidiary shall become unable, admit in
writing its inability or fail generally to pay its debts as they become
due;

    
      
         

      

      
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    (k)           a
judgment or judgments for the payment of money in excess of $25,000,000 (net of
any amount payable because of insurance) in the aggregate shall be rendered by a
court against the Parent, the Borrower or any Restricted Subsidiary and the same
shall not be discharged (or provision shall not be made for such discharge), or
a stay of execution thereof shall not be procured, within 30 days from the date
of entry thereof and the Parent, the Borrower or such Restricted Subsidiary, as
applicable, shall not, within such period of 30 days, or such longer period
during which execution of the same shall have been stayed, appeal in good faith
therefrom and cause the execution thereof to be stayed during such
appeal;

     

    (l)           an
ERISA Event shall have occurred that, in the opinion of the Majority Lenders,
when taken together with all other ERISA Events that have occurred, could
reasonably be expected to result in a Material Adverse Effect;

     

    (m)           the
Loan Documents after delivery thereof shall for any reason, except to the extent
permitted by the terms thereof, cease to be in full force and effect and valid,
binding and enforceable in accordance with their terms against the Parent, the
Borrower or a Guarantor party thereto, or cease to create a valid and perfected
Lien of the priority required thereby on any of the Collateral purported to be
covered thereby, except to the extent permitted by the terms of this Agreement,
or the Borrower or any Restricted Subsidiary or any of their Affiliates shall so
state in writing; or

     

    (n)           any
Change in Control occurs;

     

    then, and
in every such event (other than an event with respect to the Parent, the
Borrower or any Guarantor described in clause (h) or (i) of this Section), and
at any time thereafter during the continuance of such event, the Administrative
Agent may, and at the request of the Majority Lenders shall, by notice to the
Borrower, take either or both of the following actions, at the same or different
times:  (i) terminate the Commitments, and thereupon the
Commitments shall terminate immediately, and (ii) declare the Loans then
outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared to be
due and payable), and thereupon the principal of the Loans so declared to be due
and payable, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower; and in case of any event with
respect to the Parent, the Borrower or any Guarantor described in clause (h) or
(i) of this Section, the Commitments shall automatically terminate and the
principal of the Loans then outstanding, together with accrued interest thereon
and all fees and other obligations of the Borrower accrued hereunder, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the
Borrower.  In the case of the occurrence of an Event of Default, the
Administrative Agent, the Issuing Bank and the Lenders will have all other
rights and remedies available at law and equity.

     

    SECTION
7.02.      Application of
Payments.  Any amount received by the Administrative Agent from
the exercise of any rights or remedies hereunder or under any of the Collateral
Documents shall be applied by the Administrative Agent to payment of the Secured
Obligations in the following order unless a court of competent jurisdiction
shall otherwise direct:

    
      
         

      

      
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    (a)           FIRST,
to payment of all reasonable costs and expenses of the Administrative Agent
incurred in connection with the collection and enforcement of the Secured
Obligations or of any security interest granted to the Administrative Agent in
connection with any collateral securing the Secured Obligations;

     

    (b)           SECOND,
to payment of that portion of the Obligations constituting accrued and unpaid
interest and fees, pro rata among the Lenders and their Affiliates in accordance
with the amount of such accrued and unpaid interest and fees owing to each of
them;

     

    (c)           THIRD,
to payment of the principal of the Obligations, the net early termination
payments or other liabilities and obligations under any Lender Party Swap
Agreement and any obligations or liabilities under any Lender Party Financial
Service Product, in each case, then due and unpaid from the Borrower or any
Restricted Subsidiary to any of the Lenders or their Affiliates, pro rata among
the Lenders and their Affiliates in accordance with their respective shares of
the aggregate amount of the principal of the Obligations, the net early
termination payments or other obligations under any Lender Party Swap Agreement
and any other liabilities and obligations under any Lender Party Financial
Service Product, in each case, then due and unpaid owing to them;

     

    (d)           FOURTH,
to payment of any Secured Obligations (other than those listed above) pro rata
among those parties to whom such Secured Obligations are due in accordance with
the amounts owing to each of them;

     

    (e)           FIFTH,
to serve as cash collateral to be held by the Administrative Agent to secure the
LC Exposure; and

     

    (f)           SIXTH,
any surplus thereafter remaining shall be paid to the Borrower or its successor
or assigns as its or their interests shall appear.

     

    ARTICLE
VIII

     

    The Administrative
Agent

     

    SECTION
8.01.  Appointment;
Powers.  Each of the Lenders and the Issuing Bank hereby
irrevocably appoints the Administrative Agent as its agent and authorizes the
Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof,
together with such actions and powers as are reasonably incidental
thereto.

     

    SECTION
8.02.  Agents as
Lenders.  The bank serving as the Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the
Administrative Agent, and such bank and its Affiliates may accept deposits from,
lend money to and generally engage in any kind of business with the Parent, the
Borrower or any Subsidiary or other Affiliate thereof as if it were not the
Administrative Agent hereunder.

    
      
         

      

      
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    SECTION
8.03.  Duties and Obligations of
Administrative Agent.  The Administrative Agent shall not have
any duties or obligations except those expressly set forth
herein.  Without limiting the generality of the foregoing,
(a) the Administrative Agent shall not be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is continuing,
(b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that the Administrative Agent is
required to exercise in writing as directed by the Majority Lenders (or such
other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02), and (c) except as expressly set
forth herein, the Administrative Agent shall not have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to the
Parent, the Borrower or any of its Subsidiaries that is communicated to or
obtained by the bank serving as Administrative Agent or any of its Affiliates in
any capacity.  The Administrative Agent shall not be liable for any
action taken or not taken by it with the consent or at the request of the
Majority Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 9.02) or in the
absence of its own gross negligence or willful misconduct (IT BEING THE INTENTION OF THE PARTIES
HERETO THAT THE ADMINISTRATIVE AGENT BE INDEMNIFIED IN THE CASE OF ITS OWN
NEGLIGENCE (OTHER THAN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT), REGARDLESS OF
WHETHER SUCH NEGLIGENCE IS SOLE OR CONTRIBUTORY, ACTIVE OR PASSIVE, IMPUTED,
JOINT OR TECHNICAL).  The Administrative Agent shall be deemed
not to have knowledge of any Default unless and until written notice thereof is
given to the Administrative Agent by the Parent, the Borrower or a Lender, and
the Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with this Agreement, (ii) the contents of any
certificate, report or other document delivered hereunder or in connection
herewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth herein, (iv) the
validity, enforceability, effectiveness or genuineness of this Agreement or any
other agreement, instrument or document or (v) the satisfaction of any
condition set forth in Article IV or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the
Administrative Agent.

     

    SECTION
8.04.  Reliance by Administrative
Agent.  The Administrative Agent shall be entitled to rely
upon, and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper
Person.  The Administrative Agent also may rely upon any statement
made to it orally or by telephone and believed by it to be made by the proper
Person, and shall not incur any liability for relying thereon.  The
Administrative Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.

     

    SECTION
8.05.  Subagents.  The
Administrative Agent may perform any and all its duties and exercise its rights
and powers by or through any one or more sub-agents appointed by the
Administrative Agent.  The Administrative Agent and any such sub-agent
may perform any and all its duties and exercise its rights and powers through
their respective Related Parties.  The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative
Agent.

    
      
         

      

      
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    SECTION
8.06.  Resignation or Removal of
Administrative Agent.  Subject to the appointment and
acceptance of a successor Administrative Agent as provided in this paragraph,
the Administrative Agent may resign at any time by notifying the Lenders, the
Issuing Bank and the Borrower.  Upon any such resignation, the
Majority Lenders shall have the right, in consultation with the Borrower, to
appoint a successor.  If no successor shall have been so appointed by
the Majority Lenders and shall have accepted such appointment within
30 days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may, on behalf of the
Lenders and the Issuing Bank, appoint a successor Administrative Agent which
shall be a bank with an office in New York, New York, or an Affiliate of any
such bank.  Upon the acceptance of its appointment as Administrative
Agent hereunder by a successor, such successor shall succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder.  The fees payable by the
Borrower to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor.  After the Administrative Agent’s resignation hereunder,
the provisions of this Article and Section 9.03 shall continue in effect
for the benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent.

     

    SECTION
8.07.  No
Reliance.  Each Lender acknowledges that it has, independently
and without reliance upon the Administrative Agent or any other Lender and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement.  Each
Lender also acknowledges that it will, independently and without reliance upon
the Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any related agreement or any document furnished hereunder or
thereunder.  In this regard, each Lender acknowledges that Mayer Brown
LLP is acting in this transaction as special counsel to the Administrative Agent
only.  Each other party hereto will consult with its own legal counsel
to the extent that it deems necessary in connection with this Agreement and the
other Loan Documents and the matters contemplated herein and
therein.

     

    SECTION
8.08.  Administrative Agent May
File Proofs of Claim.  In case of the pendency of any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceeding relative to the Borrower or
any of its Subsidiaries, the Administrative Agent (irrespective of whether the
principal of any Loan shall then be due and payable as herein expressed or by
declaration or otherwise and irrespective of whether the Administrative Agent
shall have made any demand on the Borrower) shall be entitled and empowered, by
intervention in such proceeding or otherwise:

    
      
         

      

      
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    (a)           to
file and prove a claim for the whole amount of the principal and interest owing
and unpaid in respect of the Loans and all other Indebtedness that are owing and
unpaid and to file such other documents as may be necessary or advisable in
order to have the claims of the Lenders and the Administrative Agent (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Lenders and the Administrative Agent and their respective agents and
counsel and all other amounts due the Lenders and the Administrative Agent under
Section 9.03) allowed in such judicial proceeding; and

     

    (b)           to
collect and receive any monies or other property payable or deliverable on any
such claims and to distribute the same;

     

    and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Lender to make such payments to the Administrative Agent and, in the event that
the Administrative Agent shall consent to the making of such payments directly
to the Lenders, to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Section 9.03.

     

    Nothing
contained herein shall be deemed to authorize the Administrative Agent to
authorize or consent to or accept or adopt on behalf of any Lender any plan of
reorganization, arrangement, adjustment or composition affecting the
Indebtedness or the rights of any Lender or to authorize the Administrative
Agent to vote in respect of the claim of any Lender in any such
proceeding.

     

    SECTION
8.09.  Authority of Administrative
Agent to Execute Collateral Documents and Release Collateral and
Liens.  Each Lender and the Issuing Bank hereby empower and
authorize the Administrative Agent to execute and deliver to the Parent, the
Borrower or the Guarantors, as applicable, on their behalf the Collateral
Documents and all related financing statements and any financing statements,
agreements, documents or instruments as shall be necessary or appropriate to
effect the purposes of the Collateral Documents.  Each Lender and the
Issuing Bank hereby authorizes the Administrative Agent to release any
collateral that is permitted to be sold or released pursuant to the terms of the
Loan Documents.  Each Lender and the Issuing Bank hereby authorizes
the Administrative Agent to execute and deliver to the Borrower, at the
Borrower’s sole cost and expense, any and all releases of Liens, termination
statements, assignments or other documents reasonably requested by the Borrower
in connection with any sale or other disposition of Property to the extent such
sale or other disposition is permitted by the terms of Section 6.13 or is
otherwise authorized by the terms of the Loan Documents.

     

    SECTION
8.10.  The
Arranger, the Co-Syndication Agents and the Co-Documentation
Agents.  The arranger, bookrunner, the co-syndication agents
and the co-documentation agents shall have no duties, responsibilities or
liabilities under this Agreement and the other Loan Documents other than their
duties, responsibilities and liabilities in their capacity as Lenders
hereunder.

    
      
         

      

      
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    ARTICLE
IX

     

    Miscellaneous

     

    SECTION
9.01.  Notices.  (a)
Except in the case of notices and other communications expressly permitted to be
given by telephone (and subject to paragraph (b) below), all notices and other
communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or
sent by telecopy, as follows:

     

    (i)           if
to the Parent, to it at Penn Virginia Corporation, Three Radnor Corporate
Center, Suite 300, 100 Matsonford Road, Radnor, Pennsylvania 19087, Attention of
Steven A. Hartman (Telecopy No. (610) 687-3688), with a copy to Penn
Virginia Corporation, Three Radnor Corporate Center, Suite 300, 100 Matsonford
Road, Radnor, Pennsylvania 19087, Attention of Nancy M. Snyder (Telecopy
No. (610) 687-3688);

     

    (ii)           if
to the Borrower, to it at Penn Virginia Holding Corp., 300 Delaware Avenue,
Suite 550, Wilmington, Delaware 19801, Attention of Steven A. Hartman (Telecopy
No. (302) 225-0625), with a copy to (A) Penn Virginia Corporation, Three
Radnor Corporate Center, Suite 300, 100 Matsonford Road, Radnor, Pennsylvania
19087, Attention of Steven A. Hartman (Telecopy No. (610) 687-3688) and (B)
Penn Virginia Corporation, Three Radnor Corporate Center, Suite 300, 100
Matsonford Road, Radnor, Pennsylvania 19087, Attention of Nancy M. Snyder
(Telecopy No. (610) 687-3688);

     

    (iii)           if
to the Administrative Agent, to JPMorgan Chase Bank, Loan and Agency Services
Group, 10 South Dearborn, Floor 07, Chicago, IL 60603-2003,
Attention of Leonida G. Mischke, (Telecopy No. 312-385-7096);

     

    (iv)           if
to the Issuing Bank, to it at 10 South Dearborn, Floor 07, Chicago,
IL  60603-2003, Attention of Phyllis Huggins (Telecopy No.
312-732-2729); and

     

    (v)           if
to any other Lender, to it at its address (or telecopy number) set forth in its
Administrative Questionnaire.

     

    (b)           Notices
and other communications to the Lenders hereunder may be delivered or furnished
by electronic communications pursuant to procedures approved by the
Administrative Agent; provided that the
foregoing shall not apply to notices pursuant to Article II unless otherwise
agreed by the Administrative Agent and the applicable Lender.  The
Administrative Agent or the Borrower may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or
communications.

     

    (c)           Any
party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto.  All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.

    
      
         

      

      
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    SECTION
9.02.  Waivers;
Amendments.  (a) No failure or delay by the Administrative
Agent, the Issuing Bank or any Lender in exercising any right or power hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power.  The rights and remedies of
the Administrative Agent, the Issuing Bank and the Lenders hereunder are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have.  No waiver of any provision of this Agreement or
consent to any departure by the Borrower therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given.  Without limiting the
generality of the foregoing, the making of a Loan or issuance of a Letter of
Credit shall not be construed as a waiver of any Default, regardless of whether
the Administrative Agent, any Lender or the Issuing Bank may have had notice or
knowledge of such Default at the time.

     

    (b)           Neither
this Agreement nor any provision hereof may be waived, amended or modified
except pursuant to an agreement or agreements in writing entered into by the
Borrower and the Majority Lenders or by the Borrower and the Administrative
Agent with the consent of the Majority Lenders; provided that no such
agreement shall (i) increase the Commitment of any Lender without the written
consent of such Lender, increase the Borrowing Base or amend the specified
approval standards set forth in Section 2.04 without the written consent of
each Lender or maintain or decrease the Borrowing Base without the written
consent of the Required Lenders, (ii) reduce the principal amount of any
Loan or LC Disbursement or reduce the rate of interest thereon, or reduce any
fees payable hereunder, without the written consent of each Lender affected
thereby, (iii) postpone the scheduled date of payment of the principal amount of
any Loan or LC Disbursement, or any interest thereon, or any fees payable
hereunder, or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date of expiration of any Commitment, without the written
consent of each Lender affected thereby, (iv) change Section 2.18(b) or (c)
or Section 7.02 in a manner that would alter the pro rata sharing of
payments required thereby, without the written consent of each Lender,
(v) change any of the provisions of this Section or the definition of
“Majority Lenders” or “Required Lenders” or any other provision hereof
specifying the number or percentage of Lenders required to waive, amend or
modify any rights hereunder or make any determination or grant any consent
hereunder, without the written consent of each Lender, or (vi) release any
Credit Party from its obligations under the Loan Documents or release all or
substantially all of the Collateral for the Obligations arising under this
Agreement, except in connection with any sales, transfers, leases, dispositions
or other transactions permitted by Section 6.03 or Section 6.13, without the
prior written consent of each Lender; provided further that no such
agreement shall (x) amend, modify or otherwise affect the rights or duties
of the Administrative Agent or the Issuing Bank hereunder without the prior
written consent of the Administrative Agent or the Issuing Bank, as the case may
be, or (y) release any of the Collateral, except in connection with any
sales, transfers, leases, dispositions or other transactions permitted by
Section 6.03 or Section 6.13, without the written consent of the
Administrative Agent (it being acknowledged by the Credit Parties that the
Administrative Agent may condition such consent on the Credit Parties having
assigned, novated, terminated, unwound or otherwise obtained a release from any
obligations or liabilities under Swap Agreements (or with respect to projected
production of Hydrocarbons hedged thereunder) attributable to the Collateral to
be released.  Notwithstanding anything to the contrary herein, no
Defaulting Lender shall have any right to approve or disapprove any amendment,
waiver or consent hereunder, except that the Commitment of such Lender may not
be increased or extended without the consent of such Lender.

    
      
         

      

      
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    SECTION
9.03.  Expenses; Indemnity; Damage
Waiver.  (a) The Borrower shall pay (i) all reasonable
out-of-pocket expenses incurred by the Administrative Agent and its Affiliates,
including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent, in connection with the syndication of the credit
facilities provided for herein, the preparation and administration of this
Agreement or any amendments, modifications or waivers of the provisions hereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing
Bank in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder and (iii) all
out-of-pocket expenses incurred by the Administrative Agent, the Issuing Bank or
any Lender, including the fees, charges and disbursements of any counsel for the
Administrative Agent, the Issuing Bank or any Lender, in connection with the
enforcement or protection of its rights in connection with this Agreement,
including its rights under this Section, or in connection with the Loans made or
Letters of Credit issued hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
Loans or Letters of Credit.

     

    (b)           THE
PARENT AND THE BORROWER SHALL INDEMNIFY THE ADMINISTRATIVE AGENT, THE ISSUING
BANK AND EACH LENDER, AND EACH RELATED PARTY OF ANY OF THE FOREGOING PERSONS
(EACH SUCH PERSON BEING CALLED AN “INDEMNITEE”),
AGAINST, AND HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS,
DAMAGES, LIABILITIES AND RELATED EXPENSES, INCLUDING THE FEES, CHARGES AND
DISBURSEMENTS OF ANY COUNSEL FOR ANY INDEMNITEE, INCURRED BY OR ASSERTED AGAINST
ANY INDEMNITEE ARISING OUT OF, IN CONNECTION WITH OR AS A RESULT OF (I) THE
EXECUTION OR DELIVERY OF THIS AGREEMENT OR ANY AGREEMENT OR INSTRUMENT
CONTEMPLATED HEREBY, THE PERFORMANCE BY THE PARTIES HERETO OF THEIR RESPECTIVE
OBLIGATIONS HEREUNDER OR THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED
HEREBY, (II) ANY LOAN OR LETTER OF CREDIT OR THE USE OF THE PROCEEDS
THEREFROM (INCLUDING ANY REFUSAL BY THE ISSUING BANK TO HONOR A DEMAND FOR
PAYMENT UNDER A LETTER OF CREDIT IF THE DOCUMENTS PRESENTED IN CONNECTION WITH
SUCH DEMAND DO NOT STRICTLY COMPLY WITH THE TERMS OF SUCH LETTER OF CREDIT),
(III) ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS MATERIALS ON
OR FROM ANY PROPERTY OWNED OR OPERATED BY THE PARENT, THE BORROWER OR ANY OF THE
RESTRICTED SUBSIDIARIES, OR ANY ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO
THE PARENT, THE BORROWER OR ANY OF THE RESTRICTED SUBSIDIARIES, OR (IV) ANY
ACTUAL OR PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO
ANY OF THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY AND
REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO; PROVIDED THAT SUCH
INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH
LOSSES, CLAIMS, DAMAGES, LIABILITIES OR RELATED EXPENSES ARE DETERMINED BY A
COURT OF COMPETENT JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE
RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE
(IT BEING ACKNOWLEDGED AND
AGREED THAT IT IS THE INTENTION OF THE PARTIES HERETO THAT THE INDEMNITEES BE
INDEMNIFIED IN THE CASE OF THEIR OWN NEGLIGENCE (OTHER THAN GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT), REGARDLESS OF WHETHER SUCH NEGLIGENCE IS SOLE OR
CONTRIBUTORY, ACTIVE OR PASSIVE, IMPUTED, JOINT OR
TECHNICAL).

    
      
         

      

      
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    (c)      To
the extent that the Parent or the Borrower fails to pay any amount required to
be paid by it to the Administrative Agent or the Issuing Bank under paragraph
(a) or (b) of this Section, each Lender severally agrees to pay to the
Administrative Agent or the Issuing Bank, as the case may be, such Lender’s
Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that
the unreimbursed expense or indemnified loss, claim, damage, liability or
related expense, as the case may be, was incurred by or asserted against the
Administrative Agent or the Issuing Bank in its capacity as such.

     

    (d)     To
the extent permitted by applicable law, neither the Parent nor the Borrower
shall assert, and each hereby waives, any claim against any Indemnitee, on any
theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with or
as a result of this Agreement or any agreement or instrument contemplated
hereby, any Loan or Letter of Credit or the use of the proceeds
thereof.

     

    (e)     All
amounts due under this Section shall be payable promptly after written demand
therefor.

     

    SECTION
9.04.  Successors and
Assigns.  (a) The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby (including any Affiliate of the Issuing
Bank that issues any Letter of Credit), except that (i) neither the Parent nor
the Borrower may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of the Issuing Bank and each Lender
(and any attempted assignment or transfer by the Parent or the Borrower without
such consent shall be null and void) and (ii) no Lender may assign or otherwise
transfer its rights or obligations hereunder except in accordance with this
Section.  Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit), Participants (to the extent
provided in paragraph (c) of this Section) and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.

     

    (b)(i)  Subject
to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to
one or more assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans at the
time owing to it) with the prior written consent (such consent not to be
unreasonably withheld) of:

    
      
         

      

      
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    (A)           the
Borrower, provided that no
consent of the Borrower shall be required for an assignment to a Lender, an
Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred
and is continuing, any other assignee;

     

    (B)           the
Administrative Agent, provided that no
consent of the Administrative Agent shall be required for an assignment of any
Commitment to an assignee that is a Lender with a Commitment immediately prior
to giving effect to such assignment; and

     

    (C)           the
Issuing Bank, provided that no
consent of the Issuing Bank shall be required for an assignment of any
Commitment to an assignee that is a Lender with a Commitment immediately prior
to giving effect to such assignment;

     

    provided, however, that no
Lender may assign all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans at the
time owing to it) to the Parent or any Affiliate of the Parent without the
consent of all of the Lenders.

     

    (ii)           Assignments
shall be subject to the following additional conditions:

     

    (A)           except
in the case of an assignment to a Lender or an Affiliate of a Lender, the amount
of the Commitment Amount of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$5,000,000 unless each of the Borrower and the Administrative Agent otherwise
consent, provided that no such
consent of the Borrower shall be required if an Event of Default has occurred
and is continuing;

     

    (B)           each
partial assignment shall be made as an assignment of a proportionate part of all
the assigning Lender’s rights and obligations under this Agreement;

     

    (C)           the
parties to each assignment shall execute and deliver to the Administrative Agent
an Assignment and Assumption, together with a processing and recordation fee of
$3,500; and

     

    (D)           the
assignee, if it shall not be a Lender, shall deliver to the Administrative Agent
an Administrative Questionnaire in which the assignee designates one or more
individuals to whom all syndicate-level information (which may contain material
non-public information about the Credit Parties and their related parties or
their respective securities) will be made available and who may receive such
information in accordance with the assignee’s compliance procedures and
applicable laws, including Federal and state securities laws.

    
      
         

      

      
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    (iii)           Subject
to acceptance and recording thereof pursuant to paragraph (b)(iv) of this
Section, from and after the effective date specified in each Assignment and
Assumption the assignee thereunder shall be a party hereto and, to the extent of
the interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of
Sections 2.15, 2.16 and 2.17 (with respect to amounts accruing during the
period such Lender was a party hereto and for which such Lender was entitled to
reimbursement or indemnity) and Section 9.03).  Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not
comply with this Section 9.04 shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (c) of this Section.

     

    (iv)           The
Administrative Agent, acting for this purpose as an agent of the Borrower, shall
maintain at one of its offices a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses of
the Lenders, and the Commitment of, and principal amount of the Loans and LC
Disbursements owing to, each Lender pursuant to the terms hereof from time to
time (the “Register”).  The
entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent, the Issuing Bank and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary.  The Register shall be available for inspection by the
Borrower, the Issuing Bank and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.

     

    (v)           Upon
its receipt of a duly completed Assignment and Assumption executed by an
assigning Lender and an assignee, the assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section
and any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Assumption
and record the information contained therein in the Register; provided that if
either the assigning Lender or the assignee shall have failed to make any
payment required to be made by it pursuant to Section 2.06(d) or (e), 2.07(b),
2.18(d) or 9.03(c), the Administrative Agent shall have no obligation to accept
such Assignment and Assumption and record the information therein in the
Register unless and until such payment shall have been made in full, together
with all accrued interest thereon.  No assignment shall be effective
for purposes of this Agreement unless it has been recorded in the Register as
provided in this paragraph.

    
      
         

      

      
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    (c)(i)
Any Lender may, without the consent of the Borrower, the Administrative Agent or
the Issuing Bank, sell participations to one or more banks or other entities (a
“Participant”)
in all or a portion of such Lender’s rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it); provided that
(A) such Lender’s obligations under this Agreement shall remain unchanged,
(B) such Lender shall remain solely responsible to the other parties hereto
for the performance of such obligations and (C) the Borrower, the
Administrative Agent, the Issuing Bank and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement.  Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.02(b) that affects such
Participant.  Subject to paragraph (c)(ii) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.15, 2.16 and 2.17 to the same extent as if it were a Lender and
had acquired its interest by assignment pursuant to paragraph (b) of this
Section.  To the extent permitted by law, each Participant also shall
be entitled to the benefits of Section 9.08 as though it were a Lender,
provided that
such Participant agrees to be subject to Section 2.18(c) as though it were a
Lender.

     

    (ii)           A
Participant shall not be entitled to receive any greater payment under
Section 2.15 or 2.17 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Borrower’s prior
written consent.  A Participant that would be a Foreign Lender if it
were a Lender shall not be entitled to the benefits of Section 2.17 unless
the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with
Section 2.17(e) as though it were a Lender.

     

    (d)           Any
Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement to secure obligations of such Lender,
including without limitation any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such
pledge or assignment of a security interest shall release a Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.

     

    SECTION
9.05.  Survival.  All
covenants, agreements, representations and warranties made by the Parent or the
Borrower herein and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of this Agreement and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Administrative Agent, the Issuing
Bank or any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated.  The
provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII
shall survive and remain in full force and effect regardless of the consummation
of the transactions contemplated hereby, the repayment of the Loans, the
expiration or termination of the Letters of Credit and the Commitments or the
termination of this Agreement or any provision hereof.

    
      
         

      

      
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    SECTION
9.06.  Counterparts; Integration;
Effectiveness.  This Agreement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract.  This Agreement, the other Loan Documents and any
separate letter agreements with respect to fees payable to the Administrative
Agent constitute the entire contract among the parties relating to the subject
matter hereof and supersede any and all previous agreements and understandings,
oral or written, relating to the subject matter hereof.  Except as
provided in Section 4.01, this Agreement shall become effective when it
shall have been executed by the Administrative Agent and when the Administrative
Agent shall have received counterparts hereof which, when taken together, bear
the signatures of each of the other parties hereto, and thereafter shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.  Delivery of an executed counterpart of a
signature page of this Agreement by telecopy or other electronic transmission
shall be effective as delivery of a manually executed counterpart of this
Agreement.

     

    SECTION
9.07.  Severability.  Any
provision of this Agreement held to be invalid, illegal or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without affecting the validity,
legality and enforceability of the remaining provisions hereof; and the
invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction.

     

    SECTION
9.08.  Right
of Setoff.  If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other obligations at any time owing by such
Lender or Affiliate to or for the credit or the account of the Parent or the
Borrower against any of and all the obligations of the Parent or the Borrower
now or hereafter existing under this Agreement held by such Lender, irrespective
of whether or not such Lender shall have made any demand under this Agreement
and although such obligations may be unmatured.  The rights of each
Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) that such Lender may have.

     

    SECTION
9.09.  Governing Law; Jurisdiction;
Consent to Service of Process.  (a) THIS AGREEMENT SHALL
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF
TEXAS.

     

    (b)           EACH
OF THE PARENT AND THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE NON EXCLUSIVE
JURISDICTION OF ANY UNITED STATES FEDERAL OR TEXAS STATE COURT SITTING IN HARRIS
COUNTY, TEXAS, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY
LOAN DOCUMENTS, AND EACH OF THE PARENT AND THE BORROWER HEREBY IRREVOCABLY
AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.  NOTHING
HEREIN SHALL LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT, THE ISSUING BANK OR
ANY LENDER TO BRING PROCEEDINGS AGAINST THE PARENT OR THE BORROWER IN THE COURTS
OF ANY OTHER JURISDICTION.

    
      
         

      

      
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    (c)           The
Parent and the Borrower hereby irrevocably and unconditionally waive, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any court referred to in
paragraph (b) of this Section.  Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

     

    (d)           Each
party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 9.01.  Nothing in this Agreement
will affect the right of any party to this Agreement to serve process in any
other manner permitted by law.

     

    SECTION
9.10.WAIVER OF JURY
TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT
NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT
IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

     

    SECTION
9.11.  Headings.  Article
and Section headings and the Table of Contents used herein are for convenience
of reference only, are not part of this Agreement and shall not affect the
construction of, or be taken into consideration in interpreting, this
Agreement.

     

    SECTION
9.12.  Confidentiality.  (a)  Each
of the Administrative Agent, the Issuing Bank and the Lenders agrees to maintain
the confidentiality of the Information (as defined below), except that
Information may be disclosed (i) to its and its Affiliates’ directors,
officers, employees and agents, including accountants, legal counsel and other
advisors (it being understood that (A) the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential and (B) in any event, it
shall be responsible for any subsequent disclosure by such Person in violation
hereof), (ii) to the extent requested by any regulatory or self-regulatory
authority, (iii) to the extent required by applicable laws or regulations
or by any subpoena or similar legal process, (iv) to any other party to
this Agreement, (v) in connection with the exercise of any remedies hereunder or
any suit, action or proceeding relating to this Agreement or the enforcement of
rights hereunder, (vi) subject to an agreement containing provisions
substantially the same as those of this Section, to (x) any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement or (y) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Parent or the Borrower and its obligations, (vii) with the consent of the
Borrower or (viii) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or
(ii) becomes available to the Administrative Agent, the Issuing Bank or any
Lender on a nonconfidential basis from a source other than the Parent or the
Borrower.  For the purposes of this Section, “Information” means
all information received from the Parent or the Borrower relating to the Parent,
the Borrower or their respective businesses, other than any such information
that is available to the Administrative Agent, the Issuing Bank or any Lender on
a nonconfidential basis prior to disclosure by the Parent or the
Borrower.  Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information.

    
      
         

      

      
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    (b)           EACH LENDER ACKNOWLEDGES THAT
INFORMATION AS DEFINED IN SECTION 9.12(a) FURNISHED TO IT PURSUANT TO THIS
AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION CONCERNING THE PARENT, THE
BORROWER AND ITS RELATED PARTIES OR THEIR RESPECTIVE SECURITIES AND CONFIRMS
THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL
NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC
INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING
FEDERAL AND STATE SECURITIES LAWS.

     

    (c)           ALL INFORMATION, INCLUDING REQUESTS
FOR WAIVERS AND AMENDMENTS, FURNISHED BY THE PARENT, THE BORROWER OR THE
ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF ADMINISTERING, THIS
AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY CONTAIN MATERIAL
NON-PUBLIC INFORMATION ABOUT THE PARENT, THE BORROWER, THE CREDIT PARTIES AND
THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES.  ACCORDINGLY,
EACH LENDER REPRESENTS TO THE BORROWER AND THE ADMINISTRATIVE AGENT THAT IT HAS
IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE
INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH
ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW.

    
      
         

      

      
        96

        
          

        

      

      
         

      

    

    SECTION
9.13.  Interest Rate
Limitation.  The Parent, the Borrower, the Administrative Agent
and the Lenders intend to strictly comply with all applicable laws, including
applicable usury laws.  Accordingly, the provisions of this
Section 9.13 shall govern and control over every other provision of this
Agreement or any other Loan Document that conflicts or is inconsistent with this
Section 9.13, even if such provision declares that it
controls.  As used in this Section 9.13, the term “interest”
includes the aggregate of all charges, fees, benefits or other compensation
which constitute interest under applicable law, provided that, to the maximum
extent permitted by applicable law, (a) any non-principal payment shall be
characterized as an expense or as compensation for something other than the use,
forbearance or detention of money and not as interest, and (b) all interest at
any time contracted for, reserved, charged or received shall be amortized,
prorated, allocated and spread, in equal parts during the full term of the
Obligations.  In no event shall the Parent, the Borrower or any other
Person be obligated to pay, or any Lender have any right or privilege to
reserve, receive or retain, (i) any interest in excess of the maximum amount of
nonusurious interest permitted under the applicable laws (if any) of the United
States or of any other applicable state or (ii) total interest in excess of the
amount which such Lender could lawfully have contracted for, reserved, received,
retained or charged had the interest been calculated for the full term of the
Obligations at the Highest Lawful Rate.  On each day, if any, that the
interest rate (the “Stated Rate”) called for under this Agreement or any other
Loan Document exceeds the Highest Lawful Rate, the rate at which interest shall
accrue shall automatically be fixed by operation of this sentence at the Highest
Lawful Rate for that day, and shall remain fixed at the Highest Lawful Rate for
each day thereafter until the total amount of interest accrued equals the total
amount of interest which would have accrued if there were no such ceiling rate
as is imposed by this sentence.  Thereafter, interest shall accrue at
the Stated Rate unless and until the Stated Rate again exceeds the Highest
Lawful Rate when the provisions of the immediately preceding sentence shall
again automatically operate to limit the interest accrual rate.  The
daily interest rates to be used in calculating interest at the Highest Lawful
Rate shall be determined by dividing the applicable Highest Lawful Rate per
annum by the number of days in the calendar year for which such calculation is
being made.  None of the terms and provisions contained in this
Agreement or in any other Loan Document that directly or indirectly relate to
interest shall ever be construed without reference to this Section 9.13, or be
construed to create a contract to pay for the use, forbearance or detention of
money at an interest rate in excess of the Highest Lawful Rate.  If
the term of any Obligation is shortened by reason of acceleration of maturity as
a result of any Event of Default or by any other cause, or by reason of any
required or permitted prepayment, and if for that (or any other) reason any
Lender at any time, including but not limited to, the stated maturity, is owed
or receives (and/or has received) interest in excess of interest calculated at
the Highest Lawful Rate, then and in any such event all of any such excess
interest shall be canceled automatically as of the date of such acceleration,
prepayment or other event which produces the excess, and, if such excess
interest has been paid to such Lender, it shall be credited pro tanto against
the then-outstanding principal balance of the Borrower’s obligations to such
Lender, effective as of the date or dates when the event occurs which causes it
to be excess interest, until such excess is exhausted or all of such principal
has been fully paid and satisfied, whichever occurs first, and any remaining
balance of such excess shall be promptly refunded to its
payor.  Chapter 346 of the Texas Finance Code (which regulates certain
revolving credit accounts) shall not apply to this Agreement or to any Loan, nor
shall this Agreement or any Loan be governed by or be subject to the provisions
of such Chapter 346 in any manner whatsoever.

     

    SECTION
9.14.  Collateral Matters; Lender
Party Swap Agreements and Lender Party Financial Service
Products.  The benefit of the Collateral Documents and of the
provisions of this Agreement relating to the Collateral shall also extend to,
secure and be available on a pro rata basis (as set forth in Section 7.03
of this Agreement) to each Lender or Affiliate of a Lender that is (i) a
counterparty to a Lender Party Swap Agreement (including any Lender Party Swap
Agreement in existence prior to the date hereof) or (ii) a provider under a
Lender Party Financial Service Product (including any Lender Party Financial
Service Product in existence prior to the date hereof), in each case, with
respect to any obligations of the Parent, the Borrower or any Restricted
Subsidiary arising under such Lender Party Swap Agreement or Lender Party
Financial Service Product, as applicable, but only with respect to any Lender
Party Swap Agreement or Lender Party Financial Service Product, and the
transactions thereunder, that were entered into while such Person or its
Affiliate was a Lender or prior to such time until such obligations are paid in
full or otherwise expire or are terminated (and notwithstanding that the
outstanding Obligations have been repaid in full and the Commitments have
terminated); provided that with respect to any Lender Party Swap Agreement or
Lender Party Financial Service Product that remains secured after the
counterparty thereto or provider of Financial Service Product thereunder is no
longer a Lender or an Affiliate of a Lender or the outstanding Obligations have
been repaid in full and the Commitments have terminated, the provisions of
Article VIII shall also continue to apply to such counterparty or provider
in consideration of its benefits hereunder and each such counterparty or
provider shall, if requested by the Administrative Agent, promptly execute and
deliver to the Administrative Agent all such other documents, agreements and
instruments reasonably requested by the Administrative Agent to evidence the
continued applicability of the provisions of
Article VIII.  Notwithstanding the foregoing, no Lender or
Affiliate of a Lender (or former Lender or Affiliate of a former Lender) shall
have any voting or consent right under this Agreement or any Collateral Document
as a result of the existence of obligations owed to it under a Lender Party Swap
Agreement or Lender Party Financial Service Product that is secured any
Collateral Document.

    
      
         

      

      
        97

        
          

        

      

      
         

      

    

    SECTION
9.15.  No
Third Party Beneficiaries.  This Agreement, the other Loan
Documents, and the agreement of the Lenders to make Loans and the Issuing Bank
to issue, amend, renew or extend Letters of Credit hereunder are solely for the
benefit of the Parent and the Borrower, and no other Person (including, without
limitation, any Subsidiary of the Borrower, any obligor, contractor,
subcontractor, supplier or materialman) shall have any rights, claims, remedies
or privileges hereunder or under any other Loan Document against the
Administrative Agent, any other Agent, the Issuing Bank or any Lender for any
reason whatsoever.  There are no third party
beneficiaries.

     

    SECTION
9.16.  USA
PATRIOT Act.  Each Lender that is subject to the requirements
of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Patriot
Act”) hereby notifies the Parent and the Borrower that pursuant to the
requirements of the Patriot Act, it is required to obtain, verify and record
information that identifies the Parent and the Borrower, which information
includes the name and address of the Parent and the Borrower and other
information that will allow such Lender to identify the Parent and the Borrower
in accordance with the Patriot Act.

     

    SECTION
9.17.  NO
ORAL AGREEMENTS.  THE LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE
ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

    
      
         

      

      
        98

        
          

        

      

      
         

      

    

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

     

    
      
        	
                PENN
      VIRGINIA HOLDING CORP., as Borrower

              
	 
      	 
      
	 
      	 
      
	
                By 

              	
                /s/ Steven A.
      Hartman

              
	 
      	
                Name:  Steven
      A. Hartman

              
	 
      	
                Title:  Vice
      President and Treasurer

              
	 
      
	
                PENN
      VIRGINIA CORPORATION, as Parent

              
	 
      	 
      
	
                By

              	
                /s/ Steven A.
      Hartman

              
	 
      	
                Name:  Steven
      A. Hartman

              
	 
      	
                Title:  Vice
      President and Treasurer

              

      

    

    
      
         

      

      
        S -
1

        
          

        

      

      
         

      

    

     

    
      
        	
                JPMORGAN
      CHASE BANK, N.A., as

                Administrative
      Agent, Issuing Bank and a Lender

              
	 
      	 
      
	
                By 

              	
                /s/ Jo Linda
      Papadakis

              
	 
      	
                Name:  Jo
      Linda Papadakis

              
	 
      	
                Title:  Vice
      President

              

      

    

    
      
         

      

      
        S -
2

        
          

        

      

      
         

      

    

    

    
      
        	
                BANK
      OF AMERICA, N.A., as a Lender

              
	 
      	 
      
	
                By 

              	
                /s/ Adam H.
      Fey

              
	 
      	
                Name:  Adam
      H. Fey

              
	 
      	
                Title:  Vice
      President

              

      

    

    
      
         

      

      
        S -
3

        
          

        

      

      
         

      

    

    

    
      
        	
                WELLS
      FARGO BANK, N.A., as a Lender

              
	 
      	 
      
	
                By 

              	
                /s/ Thomas E. Stelmar,
      Jr.

              
	 
      	
                Name:  Thomas
      E. Stelmar, Jr.

              
	 
      	
                Title:  AVP/Portfolio
      Manager

              

      

    

    
      
         

      

      
        S -
4

        
          

        

      

      
         

      

    

     

     

    
      
        
          	 
      	
                  BNP
      PARIBAS, as a Lender

                
	 
      	 
      	 
      
	 
      	
                  By

                	
                  /s/ Betsy
      Jocher

                
	 
      	 
      	
                  Name:  Betsy
      Jocher

                
	 
      	 
      	
                  Title:  Director

                
	 
      	 
      	 
      
	 
      	
                  By

                	
                  /s/ Edward
      Pak

                
	 
      	 
      	
                  Name:  Edward
      Pak

                
	 
      	 
      	
                  Title:  Vice
      President

                

        

      

    

    

    
      
        
           

        

        
          S -
5

          
            

          

        

        
           

        

      

    

     

    
      
        	 
      	
                ROYAL
      BANK OF CANADA, as a Lender

              
	 
      	 
      	 
      
	 
      	
                By

              	
                /s/ Don J.
      McKinnerney

              
	 
      	 
      	
                Name:  Don
      J. McKinnerney

              
	 
      	 
      	
                Title:  Authorized
      Signatory

              

      

    

    

    
      
        
           

        

        
          S -
6

          
            

          

        

        
           

        

      

    

     

    
      
        	 
      	
                BANK
      OF MONTREAL, as a Lender

              
	 
      	 
      	 
      
	 
      	
                By

              	
                /s/ Gumaro
      Tijerina

              
	 
      	 
      	
                Name:  Gumaro
      Tijerina

              
	 
      	 
      	
                Title:  Director

              

      

    

    

    
      
        
           

        

        
          S -
7

          
            

          

        

        
           

        

      

    

     

    
      
        	 
      	
                CAPITAL
      ONE, N.A., as a Lender

              
	 
      	 
      	 
      
	 
      	
                By

              	
                /s/ Matthew L.
      Molero

              
	 
      	 
      	
                Name:  Matthew
      L. Molero

              
	 
      	 
      	
                Title:  Asst.
      Vice President

              

      

    

    

    
      
        
           

        

        
          S -
8

          
            

          

        

        
           

        

      

    

     

    
      
        	 
      	
                THE
      BANK OF NOVA SCOTIA, as a Lender

              
	 
      	 
      	 
      
	 
      	
                By

              	
                /s/ David G.
      Mills

              
	 
      	 
      	
                Name:  David
      G. Mills

              
	 
      	 
      	
                Title:  Managing
      Director

              

      

    

    

    
      
        
           

        

        
          S -
9

          
            

          

        

        
           

        

      

    

     

    
      
        	 
      	
                BANK
      OF OKLAHOMA, N.A., as a Lender

              
	 
      	 
      	 
      
	 
      	
                By

              	
                /s/ Jason B.
      Webb

              
	 
      	 
      	
                Name:  Jason
      B. Webb

              
	 
      	 
      	
                Title:  Vice
      President

              

      

    

    

    
      
        
           

        

        
          S -
10

          
            

          

        

        
           

        

      

    

     

    
      
        	 
      	
                BARCLAYS
      BANK PLC, as a Lender

              
	 
      	 
      	 
      
	 
      	
                By

              	
                /s/ Ritam
      Bhalla

              
	 
      	 
      	
                Name:  Ritam
      Bhalla

              
	 
      	 
      	
                Title:  Vice
      President

              

      

    

    

    
      
        
           

        

        
          S -
11

          
            

          

        

        
           

        

      

    

     

    
      
        	 
      	
                COMERICA
      BANK, as a Lender

              
	 
      	 
      	 
      
	 
      	
                By

              	
                /s/ Peter L.
      Sefzik

              
	 
      	 
      	
                Name:  Peter
      L. Sefzik

              
	 
      	 
      	
                Title:  Senior
      Vice President

              

      

    

    

    
      
        
           

        

        
          S -
12

          
            

          

        

        
           

        

      

    

     

    
      
        	 
      	
                PNC
      BANK, NATIONAL ASSOCIATION, as a Lender

              
	 
      	 
      	 
      
	 
      	
                By

              	
                /s/ Richard C.
      Munsick

              
	 
      	 
      	
                Name:  Richard
      C. Munsick

              
	 
      	 
      	
                Title:  Senior
      Vice President

              

      

    

    

    
      
        
           

        

        
          S -
13

          
            

          

        

        
           

        

      

    

    

    Schedule
2.01

    COMMITMENT
AMOUNTS

     

    
      
        
          	
                  Lender

                	 	
                  Commitment Amount

                	 	 	
                  Percentage

                	 
	
                  JPMorgan
      Chase Bank, N.A.

                	 	$	30,000,000.00	 	 	 	10.000000000	%
	
                  Bank
      of America, N.A.

                	 	$	30,000,000.00	 	 	 	10.000000000	%
	
                  Wells
      Fargo Bank, N.A.

                	 	$	30,000,000.00	 	 	 	10.000000000	%
	
                  BNP
      Paribas

                	 	$	30,000,000.00	 	 	 	10.000000000	%
	
                  Royal
      Bank of Canada

                	 	$	30,000,000.00	 	 	 	10.000000000	%
	
                  Bank
      of Montreal

                	 	$	24,000,000.00	 	 	 	8.000000000	%
	
                  Capital
      One, N.A.

                	 	$	24,000,000.00	 	 	 	8.000000000	%
	
                  The
      Bank of Nova Scotia

                	 	$	24,000,000.00	 	 	 	8.000000000	%
	
                  Bank
      of Oklahoma, N.A.

                	 	$	19,500,000.00	 	 	 	6.500000000	%
	
                  Barclays
      Bank PLC

                	 	$	19,500,000.00	 	 	 	6.500000000	%
	
                  Comerica
      Bank

                	 	$	19,500,000.00	 	 	 	6.500000000	%
	
                  PNC
      Bank, National Association

                	 	$	19,500,000.00	 	 	 	6.500000000	%
	
                  Total:

                	 	$	300,000,000.00	 	 	 	100.000000000	%

        

      

    

    

    
      
        
           

        

        
          Schedule
2.01

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
A

    

    ASSIGNMENT
AND ASSUMPTION

     

    This
Assignment and Assumption (the “Assignment and
Assumption”) is dated as of the Effective Date set forth below and is
entered into by and between [Insert name of Assignor] (the
“Assignor”) and
[Insert name of
Assignee] (the “Assignee”).  Capitalized
terms used but not defined herein shall have the meanings given to them in the
Credit Agreement identified below (as amended, the “Credit Agreement”),
receipt of a copy of which is hereby acknowledged by the
Assignee.  The Standard Terms and Conditions set forth in Annex 1
attached hereto are hereby agreed to and incorporated herein by reference and
made a part of this Assignment and Assumption as if set forth herein in
full.

     

    For an
agreed consideration, the Assignor hereby irrevocably sells and assigns to the
Assignee, and the Assignee hereby irrevocably purchases and assumes from the
Assignor, subject to and in accordance with the Standard Terms and Conditions
and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of the Assignor’s rights and
obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the
amount and percentage interest identified below of all of such outstanding
rights and obligations of the Assignor under the respective facilities
identified below (including any letters of credit guarantees included in such
facilities) and (ii) to the extent permitted to be assigned under applicable
law, all claims, suits, causes of action and any other right of the Assignor (in
its capacity as a Lender) against any Person, whether known or unknown, arising
under or in connection with the Credit Agreement, any other documents or
instruments delivered pursuant thereto or the loan transactions governed thereby
or in any way based on or related to any of the foregoing, including contract
claims, tort claims, malpractice claims, statutory claims and all other claims
at law or in equity related to the rights and obligations sold and assigned
pursuant to clause (i) above (the rights and obligations sold and assigned
pursuant to clauses (i) and (ii) above being referred to herein collectively as
the “Assigned
Interest”).  Such sale and assignment is without recourse to
the Assignor and, except as expressly provided in this Assignment and
Assumption, without representation or warranty by the Assignor.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  1.

                                	
                                  Assignor:

                                	 	
                                  ______________________________

                                
	 	 	 	 
	
                                  2.

                                	
                                  Assignee:

                                	 	
                                  ______________________________

                                
	 
      	 
      	 	
                                  [and
      is an Affiliate/Approved Fund of [identify Lender]2]

                                
	 	 	 	 
	
                                  3.

                                	
                                  Borrower(s):

                                	 	
                                  ______________________________

                                
	 	 	 	 
	
                                  4.

                                	
                                  Administrative
      Agent:

                                	 	
                                  ______________________,
      as the administrative agent under the Credit
  Agreement

                                

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        

      

      2 Select
as applicable.

    

    

    
      
        
           

        

        
          A-1

          
            

          

        

        
           

        

      

    

    

    
      
        
          
            	
                    5.

                  	
                    Credit
      Agreement:

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

                  
	 	 	 	 
	
                    6.

                  	
                    Assigned
      Interest:

                  	 	 
      

          

        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      	
                              Facility Assigned3

                            	 	
                              Aggregate Amount of

                              Commitment/Loans

                              for all Lenders

                            	 	
                              Amount of

                              Commitment/Loans

                              Assigned

                            	 	
                              Percentage Assigned

                              of

                              Commitment/Loans4

                            	 
	 
      	 	$	 	 	$ 	 	 	 	 	%
	 
      	 	$	 	 	$ 	 	 	 	 	%
	 
      	 	$	 	 	$ 	 	 	 	 	%

                    

                  

                

              

            

          

        

      

    

    

    Effective
Date:   _____________ ___, 20___ [TO BE INSERTED BY
ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF
TRANSFER IN THE REGISTER THEREFOR.]

     

    The
Assignee agrees to deliver to the Administrative Agent a completed
Administrative Questionnaire in which the Assignee designates one or more Credit
Contacts to whom all syndicate-level information (which may contain material
non-public information about the Borrower, the Credit Parties] and [its] [their]
Related Parties or their respective securities) will be made available and who
may receive such information in accordance with the Assignee’s compliance
procedures and applicable laws, including Federal and state securities
laws.

     

    The terms
set forth in this Assignment and Assumption are hereby agreed to:

     

    
      
        
          
            
              
                
                  	 
      	
                          ASSIGNOR

                        
	 
      	 
      
	 
      	
                          [NAME
      OF ASSIGNOR]

                        
	 
      	 
      	 
      
	 
      	
                          By:

                        	 
      
	 
      	 
      	
                          Title:

                        
	 	   
	 
      	
                          ASSIGNEE

                        
	 
      	 
      
	 
      	
                          [NAME
      OF ASSIGNEE]

                        
	 
      	 
      	 
      
	 
      	
                          By:

                        	 
      
	 
      	 
      	
                          Title:

                        

                

              

            

          

        

      

    

     

    
      
        

      

      3 Fill in
the appropriate terminology for the types of facilities under the Credit
Agreement that are being assigned under this Assignment (e.g. “Commitment,”
etc.). 

    

    
      4 Set
forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all
Lenders thereunder.

    

    

    
      
        
           

        

        
          A-2

          
            

          

        

        
           

        

      

    

     

    
      
        
          
            
              
                	
                        [Consented
      to and]5
      Accepted:

                      	 
      
	 
      	 
      
	
                        [NAME
      OF ADMINISTRATIVE AGENT], as

                      	 
      
	
                        Administrative
      Agent

                      	 
      
	 
      	 
      	 
      
	
                        By

                      	 
      	 
      
	 
      	
                        Title:

                      	 
      
	 	 	 
	
                        [Consented
      to:]6

                      	 
      
	 
      	 
      
	
                        [NAME
      OF RELEVANT PARTY]

                      	 
      
	 
      	 
      	 
      
	
                        By

                      	 
      	 
      
	 
      	
                        Title:

                      	 
      

              

            

          

        

      

    

     

    
      
        

      

      5 To be
added only if the consent of the Administrative Agent is required by the terms
of the Credit Agreement. 

    

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

    

    

    
      
        
           

        

        
          A-3

          
            

          

        

        
           

        

      

    

    

    ANNEX
1

     

    [__________________]7

     

    STANDARD
TERMS AND CONDITIONS FOR

    ASSIGNMENT
AND ASSUMPTION

     

    1.            
Representations and
Warranties.

     

    1.1           Assignor.  The
Assignor (a) represents and warrants that (i) it is the legal and beneficial
owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of
any lien, encumbrance or other adverse claim and (iii) it has full power and
authority, and has taken all action necessary, to execute and deliver this
Assignment and Assumption and to consummate the transactions contemplated
hereby; and (b) assumes no responsibility with respect to (i) any statements,
warranties or representations made in or in connection with the Credit Agreement
or any other Loan Document8, (ii) the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Loan Documents or any collateral thereunder, (iii) the financial condition of
the Borrower, any of its Subsidiaries or Affiliates or any other Person
obligated in respect of any Loan Document or (iv) the performance or observance
by the Borrower, any of its Subsidiaries or Affiliates or any other Person of
any of their respective obligations under any Loan Document.

     

    1.2           Assignee.  The
Assignee (a) represents and warrants that (i) it has full power and authority,
and has taken all action necessary, to execute and deliver this Assignment and
Assumption and to consummate the transactions contemplated hereby and to become
a Lender under the Credit Agreement, (ii) it satisfies the requirements, if any,
specified in the Credit Agreement that are required to be satisfied by it in
order to acquire the Assigned Interest and become a Lender, (iii) from and after
the Effective Date, it shall be bound by the provisions of the Credit Agreement
as a Lender thereunder and, to the extent of the Assigned Interest, shall have
the obligations of a Lender thereunder, (iv) it has received a copy of the
Credit Agreement, together with copies of the most recent financial statements
delivered pursuant to Section ___ thereof, as applicable, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Assumption and to
purchase the Assigned Interest on the basis of which it has made such analysis
and decision independently and without reliance on the Administrative Agent or
any other Lender, and (v) if it is a Foreign Lender9, attached to the
Assignment and Assumption is any documentation required to be delivered by it
pursuant to the terms of the Credit Agreement, duly completed and executed by
the Assignee; and (b) agrees that (i) it will, independently and without
reliance on the Administrative Agent, the Assignor or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.

     

    
      
        

      

      7 Describe
Credit Agreement at option of Administrative Agent. 

    

    
      8 The term
“Loan Document” should be conformed to that used in the Credit
Agreement. 

    

    
      9 The
concept of  “Foreign Lender” should be conformed to the section in the
Credit Agreement governing withholding taxes and gross-up.

    

    

    
      
        
           

        

        
          Annex -
1

          
            

          

        

        
           

        

      

    

    

    2.           Payments.  From
and after the Effective Date, the Administrative Agent shall make all payments
in respect of the Assigned Interest (including payments of principal, interest,
fees and other amounts) to the Assignor for amounts which have accrued to but
excluding the Effective Date and to the Assignee for amounts which have accrued
from and after the Effective Date.

     

    3.           General
Provisions.  This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns.  This Assignment and Assumption may be
executed in any number of counterparts, which together shall constitute one
instrument.  Delivery of an executed counterpart of a signature page
of this Assignment and Assumption by telecopy shall be effective as delivery of
a manually executed counterpart of this Assignment and
Assumption.  This Assignment and Assumption shall be governed by, and
construed in accordance with, the law of the State of New York [confirm that choice of law provision
parallels the Credit Agreement].

    

    
      
        
           

        

        
          Annex -
2

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
B

    FORM
OF

    ADDITIONAL
LENDER AGREEMENT

    

    To:                JPMorgan
Chase Bank, National Association,

                as
Administrative Agent

    

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

    

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

    

    [Language
for Existing Lender]

    

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

    

    [Language
for New Lender]

    

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

    

    

    
      
        
          
            	 
      	
                    Very
      truly yours,

                  
	 	 
	 
      	
                    [LENDER]

                  
	 	 
	 
      	
                    By:

                  
	 
      	
                    Name:

                  
	 
      	
                    Title:

                  

          

        

      

    

    

    
      
        
           

        

        
          Exhibit
B

          
            

          

        

        
           

        

      

    

     

    EXHIBIT C

    FORM
OF

    

    COMPLIANCE
CERTIFICATE

    As
of [______]

    

    To:           The
Lenders parties to the Credit Agreement Described Below

    

    This
Compliance Certificate (this “Certificate”) is
furnished pursuant to that certain Credit Agreement dated as of November 18,
2009 (as amended, modified, renewed or extended from time to time, the “Agreement”) among
Penn Virginia Holding Corp. (the “Borrower”), Penn
Virginia Corporation (the “Parent”), the lenders
party thereto and JP Morgan Chase Bank, N.A., as Administrative
Agent.  Unless otherwise defined herein, capitalized terms used in
this Certificate have the meanings ascribed thereto in the
Agreement.

     

    The
undersigned hereby certifies that:

     

    1.         I
am the duly elected Executive Vice President and Chief Financial Officer of the
Parent;

     

    2.         I
have reviewed the terms of the Agreement and I have made, or have caused to be
made under my supervision, a detailed review of the transactions and conditions
of the Parent, the Borrower and the Restricted Subsidiaries during the
accounting period covered by the attached financial statements;

     

    3.         The
examinations described in paragraph 2 did not disclose, and I have no knowledge
of, the existence of any condition or event which constitutes an Event of
Default during or at the end of the accounting period covered by the attached
financial statements or as of the date of this Certificate, except as set forth
below;

     

    4.         Schedule
I attached hereto sets forth financial data and computations evidencing the
compliance by the Parent, the Borrower and the Restricted Subsidiaries with
certain covenants of the Agreement, all of which data and computations are true,
complete and correct; and

     

    5.         Schedule
II attached hereto sets forth the various reports and deliveries which are
required at this time under the Agreement, the Collateral Documents and the
other Loan Documents and the status of compliance.

     

    Described
below are the exceptions, if any, to paragraph 3 by listing, in detail, the
nature of the condition or event, the period during which it has existed and the
action which the Parent has taken, is taking, or proposes to take with respect
to each such condition or event:

     

    
      
        
          
            	 
      	
                    None

                  
	 
      	 
      

          

        

      

    

     

    
      
        
           

        

        
          Exhibit
C

          
            

          

        

        
           

        

      

    

     

    EXHIBIT C

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

     

    
      
        
          
            	 
      	
                    PENN
      VIRGINIA CORPORATION

                  
	 	 	 
	 
      	
                    By:

                  	 
      
	 
      	
                    Name:

                  
	 
      	
                    Title:

                  

          

        

      

    

    

    [Schedule
I and II to be attached]

    

    
      
        
           

        

        
          Exhibit
C

          
            

          

        

        
           

        

      

    

     

    EXHIBIT D

    FORM
OF

     

    SUBORDINATION
AGREEMENT

     

    SUBORDINATION
AGREEMENT (this “Agreement”) dated as
of [______], by and among [___________], a [_______] and [________], a [______]
(“[_______]”, and together with [______], collectively the “PVA Debtors”), a
[_______] and [________], a [______] (“[_______]”, and together with [______],
collectively the “Subordinated
Creditors”) and in favor of JPMorgan Chase Bank, N.A., as Administrative
Agent, for the benefit of the Senior Creditors (as defined herein).

     

    RECITALS

     

    1.           PVHC
is a party to that certain Credit Agreement dated as of November 18, 2009, with
PVC, as Parent, each of the “Lenders” named therein (the “Lenders”), JPMorgan
Chase Bank, National Association, as Administrative Agent (the “Administrative
Agent”), and the other Agents parties thereto (as the same may from time
to time be amended, modified, refinanced or replaced, the “Credit
Agreement”).

     

    2.           The
PVA Debtors, except for PVHC (the “Guarantors”), have
delivered a certain Guaranty dated as of November 18, 2009, pursuant to which
the Guarantors have guaranteed all of the “Obligations” (as defined in the
Credit Agreement) of PVHC under the Credit Agreement and the other Loan
Documents.

     

    3.           The
PVA Debtors and the Subordinated Creditors were required to enter into those
certain Subordination Agreements identified on Schedule I hereto (the “Existing Subordination
Agreements”) pursuant to that certain Amended and Restated Credit
Agreement dated as of December 4, 2003, among PVC, as borrower, JPMorgan Chase
Bank, N.A., successor by merger to Bank One, N.A. (Main Office Chicago), as
administrative agent, and lenders party thereto, as amended, supplemented,
restated or otherwise modified.

     

    4.           The
Subordinated Creditors have made or may make certain intercompany loans or
advances to PVA Debtors.

     

    5.           To
induce the Administrative Agent, the Issuing Bank and the Lenders to enter into
the Credit Agreement and make the loans and other extensions of credit
contemplated thereby, the Subordinated Creditors have agreed to execute and
deliver this Agreement and subordinate the indebtedness of the PVA Debtors owed
to the Subordinated Creditors to all of the “Obligations” (as defined in the
Credit Agreement) of PVHC owed to the Lenders under the Credit Agreement or the
“Guaranteed Obligations” (as defined in the Guaranty) of the Guarantors, as the
case may be, and the other Loan Documents related thereto.

     

    NOW
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:

    

    
      
        
           

        

        
          Exhibit D
- 1

          
            

          

        

        
           

        

      

    

    

    ARTICLE
X

    Definitions

     

    SECTION
10.01.  Definitions.  Unless
otherwise defined herein, all capitalized terms referred to herein shall have
the meaning given to them in the Credit Agreement.

     

    “Senior Creditors”
shall mean the Administrative Agent, the Lenders (including any Lender acting as
an “Issuing Bank” under the Credit Agreement) and any Lender or Affiliate of a
Lender party to Lender Party Swap Agreement or a Lender Party Financial Service
Product, and any permitted assignees of any of the foregoing pursuant to the
terms of the Credit Agreement.

     

    “Senior Indebtedness”
shall mean any and all indebtedness, liabilities and obligations owed by any PVA
Debtor to any Lender, Affiliate of a Lender, Issuing Bank or Administrative
Agent under the Loan Documents.  The Senior Indebtedness shall include
amounts accruing subsequent to the filing of any bankruptcy, receivership,
insolvency or similar petition.

     

    “Subordinated
Indebtedness” shall mean, for each PVA Debtor, the Indebtedness of such
PVA Debtor to any Subordinated Creditor.

     

    ARTICLE
XI

    Subordination

     

    SECTION
11.01.  Agreement to
Subordinate.  Each Subordinated Creditor agrees that the
Subordinated Indebtedness is subordinated in right of payment, to the extent and
in the manner provided in this Article II, to the payment when due of all Senior
Indebtedness.

     

    SECTION
11.02.  Liquidation, Dissolution,
Bankruptcy.  Upon any payment or distribution of the assets of
any PVA Debtor to creditors upon a total or partial liquidation or a total or
partial dissolution of such PVA Debtor (other than, to the extent permitted by
the Credit Agreement or the other Loan Documents, a voluntary dissolution of
such PVA Debtor or merger of such PVA Debtor into any wholly owned subsidiary of
any PVA Debtor solely for the purpose of permitting such PVA Debtor or such
wholly owned Subsidiary to assume all obligations in respect of the Subordinated
Indebtedness as if it were the direct obligor with respect thereto and in which
all the assets of such PVA Debtor are transferred to such PVA Debtor or such
wholly owned Subsidiary and no material payment or distribution is made to
creditors) or in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to such PVA Debtor or its Property:

     

    (i)           the
Senior Creditors shall be entitled to receive payment in full in cash of such
Senior Indebtedness before the Subordinated Creditors shall be entitled to
receive any payments in respect of the Subordinated Indebtedness;
and

     

    (ii)          until
such Senior Indebtedness is paid in full in cash, any distribution made by or on
behalf of any PVA Debtor to which any Subordinated Creditor would be entitled
but for this Article II shall be made to the Senior Creditors as their interests
may appear, except that all Subordinated Creditors may receive and retain shares
of stock and any debt securities that are subordinated to all Senior
Indebtedness to at least the same extent as the Subordinated
Indebtedness.

    

    
      
        
           

        

        
          Exhibit D
- 2

          
            

          

        

        
           

        

      

    

    

    SECTION
11.03.  Default on Senior
Indebtedness.  No PVA Debtor may make any payments in respect
of the Subordinated Indebtedness nor repurchase, redeem or otherwise retire any
of the Subordinated Indebtedness (collectively, “pay the Subordinated
Indebtedness”) if a “Default” or “Event of Default” has occurred and is
continuing under the Credit Agreement or such payment would create a “Default”
or “Event of Default” thereunder; provided, however, any PVA
Debtor may pay the Subordinated Indebtedness without regard to the foregoing if
such PVA Debtor receives written notice approving such payment from the
Administrative Agent.

     

    SECTION
11.04.  When
Distribution Must Be Paid Over.  If a distribution or payment
is made in respect of the Subordinated Indebtedness to a Subordinated Creditor
that because of this Article II should not have been made to it, such
Subordinated Creditor shall hold it in trust for the Senior Creditors and
promptly pay it over to the Administrative Agent for the benefit of the Lenders,
the Administrative Agent and the Issuing Bank.

     

    SECTION
11.05.  Subrogation.  After
all Senior Indebtedness is paid in full and until the Subordinated Indebtedness
is paid in full, each Subordinated Creditor shall be subrogated to the rights of
the Senior Creditors to receive distributions applicable to such Senior
Indebtedness.

     

    SECTION
11.06.  Agreement Not to Pursue
Actions.  Until the Administrative Agent notifies the
Subordinated Creditors that all Senior Indebtedness shall have been paid in
full, the Subordinated Creditors will not commence any action or proceeding
against any PVA Debtor to recover all or any part of the Subordinated
Indebtedness or join with any other creditor, unless the Administrative Agent
shall also join, in bringing any proceedings against such Person under any
bankruptcy, reorganization, readjustment of debt, arrangement of debt,
receivership, liquidation or insolvency law or statute of the Federal or any
state government.

     

    SECTION
11.07.  Subordination May Not Be
Impaired by Subordinated Creditors.  No right of any Senior
Creditor to enforce the subordination of the Subordinated Indebtedness shall be
impaired by any act or failure to act by such Subordinated Creditor or by its
failure to comply with this Agreement. The Senior Creditors may extend, renew,
increase, modify or amend the terms of such Senior Indebtedness and otherwise
deal freely with any Subordinated Creditors, all without affecting the
liabilities and obligations of the parties to this Agreement or any other
Subordinated Creditor.

     

    SECTION
11.08.  Subordinated Creditors Not
Fiduciary for Senior Creditors.  A Subordinated Creditor shall
not be deemed to owe any fiduciary duty to the Senior Creditors and shall not be
liable to any such Senior Creditor if it shall mistakenly pay over or distribute
to any other Person, money or assets to which any Senior Creditor shall be
entitled by virtue of this Article II or otherwise, unless such payment or
distribution was a result of the negligence or willful misconduct of such
Subordinated Creditor.

    

    
      
        
           

        

        
          Exhibit D
- 3

          
            

          

        

        
           

        

      

    

    

    SECTION
11.09.  Reliance by Senior Creditors
on Subordination Provisions.  Each Subordinated Creditor
acknowledges and agrees that the foregoing subordination provisions are, and are
intended to be, an inducement and a consideration to each Senior Creditor,
whether such Senior Indebtedness was created or acquired before or after the
incurrence of the Subordinated Indebtedness, to acquire and continue to hold, or
to continue to hold, such Subordinated Indebtedness and such Senior Creditor
shall be deemed conclusively to have relied on such subordination provisions in
acquiring and continuing to hold, or in continuing to hold, such Subordinated
Indebtedness.  Each Subordinated Creditor acknowledges and agrees that
this Agreement is for the benefit of the Senior Creditors and any permitted
assignees of the Senior Indebtedness, and each such Senior Creditor and assignee
is a third party beneficiary of this Agreement and, as such, shall be entitled
to enforce the obligations of Subordinated Creditors hereunder.

     

    SECTION
11.10.  Liens
Subordinated.  Each Subordinated Creditor agrees that the
Subordinated Indebtedness shall be at all times unsecured, provided that if any
Lien arises by statute or other operation of law upon the property of any PVA
Debtor securing payments of the Subordinated Indebtedness, such Lien shall be
and remain inferior and subordinated to any Liens securing payments of the
Senior Indebtedness regardless of whether such encumbrances in favor of such
Subordinated Creditor or the Senior Creditors presently exist or are hereafter
created or attached.  If, notwithstanding the foregoing, a
Subordinated Creditor shall obtain a Lien on property of a PVA Debtor that is
not subject to a Lien in favor of the Senior Creditors, then such Subordinated
Creditor agrees not to exercise any rights under the instruments evidencing such
Liens, and not to receive any payments or distributions in respect of such
Liens, until the Senior Creditors have received payment of the Senior
Indebtedness in full in cash.  If under any applicable bankruptcy,
insolvency or other similar law, a Subordinated Creditor receives a secured
claim in lieu of a set-off, then such Subordinated Creditor agrees not to
exercise any rights under such secured claim, and not to receive any payments or
distributions in respect of such secured claim, until the Senior Creditors have
received payment of the Senior Indebtedness in full in cash.

     

    ARTICLE
XII

    Miscellaneous

     

    SECTION
12.01.  Notice.  Any
demand, notice or communication to be made or given hereunder shall be made or
given in the manner provided for in the Credit Agreement.

     

    SECTION
12.02.  Governing Law; Waiver of
Jury Trial.

     

    (i)           THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

     

    (ii)          EACH PARTY HERETO HEREBY IRREVOCABLY
AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF THE STATE OF TEXAS SITTING IN HOUSTON, HARRIS COUNTY, TEXAS AND
OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF TEXAS, HOUSTON
DIVISION, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT
OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH TEXAS STATE OR, TO THE EXTENT
PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, A FINAL JUDGMENT IN ANY SUCH
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT THE SENIOR CREDITORS MAY
OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
AGAINST BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.

    

    
      
        
           

        

        
          Exhibit D
- 4

          
            

          

        

        
           

        

      

    

    

    (iii)         EACH PARTY HERETO HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY
DO SO, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE
OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
IN ANY COURT REFERRED TO IN PARAGRAPH (b) OF THIS SECTION. EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING
IN ANY SUCH COURT.

     

    (iv)         EACH PARTY HERETO IRREVOCABLY
CONSENTS TO SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY
PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF TEXAS. NOTHING IN THIS AGREEMENT
WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW.

     

    (v)          EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE SENIOR CREDITORS HAVE BEEN INDUCED TO ENTER INTO THE CREDIT AGREEMENT
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

    

    
      
        
           

        

        
          Exhibit D
- 5

          
            

          

        

        
           

        

      

    

    

    SECTION
12.03.  Severability.  In
the event that one or more of the provisions contained in this Agreement shall
be finally judicially determined to be invalid, illegal or unenforceable in any
respect by a court of competent jurisdiction the validity, legality or
enforceability of the remaining provisions hereof shall not be affected or
impaired thereby and the parties agree to negotiate in good faith to agree on a
provision which is enforceable and which preserves the economic bargain of the
parties to the greatest extent possible.  Each of the Sections of this
Agreement is hereby declared to be separate and distinct.

     

    SECTION
12.04.  Benefit of the
Agreement.  This Agreement shall inure to the benefit of the
Lenders and be binding upon the Subordinated Creditors and their respective
successors and assigns.

     

    SECTION
12.05.  Entire
Agreement.  This Agreement constitutes the entire agreement
between the parties hereto and with respect to the subject matter hereof
supersedes any prior agreement, undertaking, declarations, commitments or
representations, written or oral, in respect thereof. There are no unwritten
oral agreements among the parties.

     

    SECTION
12.06.  Amendments.  This
Agreement may not be modified or amended except by an instrument in writing
signed by the Subordinated Creditors or by their respective successors or
permitted assigns and consented to by the Required Lenders.

     

    SECTION
12.07.  No
Waivers, Remedies.  No failure to exercise and no delay in
exercising any right hereunder shall operate as a waiver thereof nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law except
as otherwise expressly provided herein.

     

    SECTION
12.08.  Counterparts.  This
Agreement may be executed in counterparts, each of which so executed shall be
deemed to be an original and such counterparts together shall constitute one and
the same instrument.

     

    SECTION
12.09.  Further
Assurances.  The parties hereto agree to take all such further
actions and to execute, acknowledge and deliver all such further documents that
are necessary or useful to carry out the purposes of this
Agreement.

     

    SECTION
12.10.  Reinstatement.  To
the extent that any payments on the Senior Indebtedness or proceeds of any
collateral are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid by the Administrative Agent or
any Senior Creditor to a trustee, debtor in possession, receiver or other Person
under any bankruptcy law, common law or equitable cause, then to such extent,
obligations hereunder with respect to the Subordinated Indebtedness so satisfied
shall be revived and continue as if such payment or proceeds had not been
received and the Administrative Agent’s and the Senior Creditors’ Liens,
interests, rights, powers and remedies under the Loan Documents and this
Agreement shall continue in full force and effect.  In such event,
each Loan Document and this Agreement shall be automatically reinstated and the
PVA Debtors and the Subordinated Creditors shall take such action as may be
reasonably requested by the Administrative Agent and the Senior Creditors to
effect such reinstatement.

    

    
      
        
           

        

        
          Exhibit D
- 6

          
            

          

        

        
           

        

      

    

    

    SECTION
12.11.  NO
ORAL AGREEMENTS.  THIS AGREEMENT REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

     

    SECTION
12.12.  Termination of Existing
Subordination Agreements.  Each party hereto hereby agrees that
the Existing Subordination Agreements are hereby terminated.

    

    
      
        
           

        

        
          Exhibit D
- 7

          
            

          

        

        
           

        

      

    

    

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

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	 
      	
                                        PVA
      DEBTORS:

                                      
	 
      	 
      
	 
      	
                                        [_________],

                                      
	 
      	
                                        a
      [___________]

                                      
	 
      	 
      	 
      
	 
      	
                                        By:

                                      	 
      
	 
      	
                                        Name:

                                      
	 
      	
                                        Title:

                                      
	 
      	 
      
	 
      	
                                        [_________],

                                      
	 
      	
                                        a
      [___________]

                                      
	 
      	 
      	 
      
	 
      	
                                        By:

                                      	 
      
	 
      	
                                        Name:

                                      
	 
      	
                                        Title:

                                      
	 
      	 
      
	 
      	
                                        SUBORDINATED
      CREDITORS:

                                      
	 
      	 
      	 
      
	 
      	
                                        [_________],

                                      
	 
      	
                                        a
      [___________]

                                      
	 
      	 
      	 
      
	 
      	
                                        By:

                                      	 
      
	 
      	
                                        Name:

                                      
	 
      	
                                        Title:

                                      
	 
      	 
      
	 
      	
                                        [_________],

                                      
	 
      	
                                        a
      [___________]

                                      
	 
      	 
      	 
      
	 
      	
                                        By:

                                      	 
      
	 
      	
                                        Name:

                                      
	 
      	
                                        Title:

                                      

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
I

     

    EXISTING
SUBORDINATION AGREEMENTS

     

    1.      Subordination
Agreement, dated as of December 4, 2003, by and among Penn Virginia Corporation,
a Virginia corporation, Penn Virginia Resource LP Corp., a Delaware corporation,
Penn Virginia Resource Holdings Corp., a Delaware corporation, Powell River Rail
Corporation, a Virginia corporation, and Kanawha Rail Corp., a Virginia
corporation.

     

    2.      Subordination
Agreement, dated as of December 4, 2003, by and among Penn Virginia Holding
Corp., a Delaware corporation, and Penn Virginia Resource GP, LLC, a Delaware
limited liability company.

     

    3.      Subordination
Agreement, dated as of December 4, 2003, by and among Penn Virginia Oil &
Gas Corporation, a Virginia corporation, and Penn Virginia Resource LP Corp., a
Delaware corporation.

     

    4.      Subordination
Agreement, dated as of December 4, 2003, by and among Penn Virginia Oil &
Gas Corporation, a Texas corporation, Enersearch, Inc., a Virginia corporation,
Penn Virginia Resource GP, LLC, a Delaware limited liability company, and
Kanawha Rail Corp., a Virginia corporation.

     

    5.      Subordination
Agreement, dated as of January 28, 2005, by and among Penn Virginia Oil &
Gas LP LLC, a Delaware limited liability company, and Penn Virginia Resource LP
Corp., a Delaware corporation.

     

    6.      Subordination
Agreement, dated as of January 28, 2005, by and among Penn Virginia Oil &
Gas GP LLC, a Delaware limited liability company, and Penn Virginia Resource LP
Corp., a Delaware corporation.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00165-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00165-of-00352.parquet"}]]