Document:

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                                                                    EXHIBIT 10.5

                         PENN VIRGINIA RESOURCE GP, LLC
                            SHORT-TERM INCENTIVE PLAN

1.   INTENT.
     ------

     The purpose of this Short-Term Incentive Plan (the "Plan") is to promote
the interests of the Penn Virginia Resource Partners, L.P. (the "Partnership")
and its partners by motivating the key employees of Penn Virginia Resource GP,
LLC (the "Company") and its affiliates to produce outstanding results,
encouraging superior performance, increasing productivity, and aiding in the
ability to attract and retain such key employees through annual cash bonus
opportunities.

2.   PLAN GUIDELINES.
     ---------------

     The administration of the Plan and any potential financial remuneration to
come as a result of its implementation is subject to the determination by the
Compensation Committee of the Company's Board of Directors that the performance
goals for the applicable periods have been achieved. The Plan is an additional
compensation program designed to encourage Plan participants (designated by the
Company's Compensation Committee) to exceed specified objective performance
targets for the designated period. Payments under the Plan will be made upon
approval by the Company's Compensation Committee after it reviews the
performance results for the designated period.

3.   PERFORMANCE TARGETS.
     -------------------

     3.1 Designation of Performance Targets. The Compensation Committee shall
         ----------------------------------
determine the performance target or targets to be used for each calendar year (a
"Plan Year") for determining the bonuses to be paid as a result of this Plan.
Performance targets may be based on Partnership, business units and/or
individual achievements, or any combination of the same or on such other factors
as the Compensation Committee may determine. Different performance targets may
be established for different participants for any Plan Year. Except as provided
in Section 3.3, satisfactory results as determined by the Compensation
Committee, in its sole discretion, must be achieved in order for a performance
payment to occur under the Plan.

     3.2 Equitable Adjustment to Performance Targets. The performance targets
         -------------------------------------------
applicable to any participant for a Plan Year shall be subject to equitable
adjustment at the sole discretion of the Compensation Committee to reflect the
occurrence of any significant events during the Plan Year.

     3.3 Waiver of Performance Targets. The Compensation Committee may waive, in
         -----------------------------
whole or in part, the requirement that performance targets be achieved in order
to pay a bonus under this Plan whenever the Compensation Committee determines
such a bonus payment will be in the best interests of the Partnership.
<PAGE>

4.   PARTICIPANTS.
     ------------

     Employees of the Company and its affiliates eligible to participate in the
Plan shall be designated by the Compensation Committee.

5.   PERFORMANCE PAY.
     ---------------

     A participant's designated target bonus for a Plan Year will be determined
under criteria established or approved by the Compensation Committee for that
Plan Year. Care will be used in communicating to any participant his performance
targets and potential performance amount for a Plan Year. The amount of target
bonus a participant may receive for any Plan Year, if any, will depend upon the
performance level achieved (unless waived) for that Plan Year, as determined by
the Compensation Committee.

6.   TERMINATION OF EMPLOYMENT.
     -------------------------

     A participant's termination of employment for any reason prior to a
performance payment will result in the participant's forfeiture of any right,
title or interest in a performance payment under the Plan, unless and to the
extent waived by the Compensation Committee, in its sole discretion.

7.   AMENDMENT AND TERMINATION.
     -------------------------

     The Company's Compensation Committee, at its sole discretion, reserves the
right to amend the Plan and to terminate the Plan at any time.

8.   ADMINISTRATION OF PLAN.
     ----------------------

     8.1 Administration. The Compensation Committee may delegate the
         --------------
responsibility for the administration and operation of the Plan to the President
(or his designee(s)) of the Company or any participating affiliate. The
Compensation Committee (or the person(s) to which administrative authority has
been delegated) shall have the authority to interpret and construe any and all
provisions of the Plan, including all performance targets and whether and to
what extent achieved. Any determination made by the Compensation Committee (or
the person(s) to which administrative authority has been delegated) shall be
final and conclusive and binding on all persons.

     8.2 Indemnification. Neither the Company, any participating affiliate, the
         ---------------
Board of Directors, any member or any committee thereof, nor any employee of the
Company or any participating affiliate shall be liable for any act, omission,
interpretation, construction or determination made in connection with the Plan
in good faith; and the members of the Company's Board of Directors, the
Compensation Committee and/or the employees of the Company and any participating
affiliate shall be entitled to indemnification and reimbursement by the Company
to the maximum extent permitted by law in respect of any claim, loss, damage or
expense (including counsel's fees) arising from their acts, omission and conduct
in their official capacity with respect to the Plan.

                                      -2-
<PAGE>

9.   GENERAL PROVISIONS.
     ------------------

     9.1 Non-Guarantee of Employment. Nothing contained in this Plan shall be
         ---------------------------
construed as a contract of employment between the Company and/or a participating
affiliate and a participant, and nothing in this Plan shall confer upon any
participant any right to continued employment with the Company or a
participating affiliate, or to interfere with the right of the Company or a
participating affiliate to discharge a participant, with or without cause.

     9.2 Interests Not Transferable. No benefits under the Plan shall be subject
         --------------------------
in any manner to alienation, sale, transfer, assignment, pledge, attachment or
other legal process, or encumbrance of any kind, and any attempt to do so shall
be void.

     9.3 Facility Payment. Any amounts payable hereunder to any person under
         ----------------
legal disability or who, in the judgment of the Compensation Committee or its
designee, is unable to properly manage his financial affairs, may be paid to the
legal representative of such person, or may be applied for the benefit of such
person in any manner which the Compensation Committee or its designee may
select, and each participating affiliate shall be relieved of any further
liability for payment of such amounts.

     9.4 Tax Withholding. The Company and/or any participating affiliate may
         ---------------
deduct from any payments otherwise due under this Plan to a participant (or
beneficiary) amounts required by law to be withheld for purposes of federal,
state or local taxes.

     9.5 Gender and Number. Words in the masculine gender shall include the
         -----------------
feminine gender, the plural shall include the singular and the singular shall
include the plural.

     9.6 Controlling Law. The law of the State of Delaware, without regard to
         ---------------
its conflict of laws principles, shall be controlling in all matters relating to
the Plan.

     9.7 No Rights to Award. No person shall have any claim to be granted any
         ------------------
award under the Plan, and there is no obligation for uniformity of treatment of
participants. The terms and conditions of awards need not be the same with
respect to each recipient.

     9.8 Severability. If any provision of the Plan or any award is or becomes
         ------------
or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as
to any person or award, or would disqualify the Plan or any award under the law
deemed applicable by the Compensation Committee, such provision shall be
construed or deemed amended to conform to the applicable laws, or if it cannot
be construed or deemed amended without, in the determination of the Compensation
Committee, materially altering the intent of the Plan or the award, such
provision shall be stricken as to such jurisdiction, person or award and the
remainder of the Plan and any such award shall remain in full force and effect.

     9.9 No Trust or Fund Created. Neither the Plan nor any award shall create
         ------------------------
or be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any participating affiliate and a
participant or any other person. To the extent that any person acquires a right
to receive payments from the Company or any participating affiliate pursuant

                                      -3-
<PAGE>

to an award, such right shall be no greater than the right of any general
unsecured creditor of the Company or any participating affiliate.

     9.10 Headings. Headings are given to the Sections of the Plan solely as a
          --------
convenience to facilitate reference. Such headings shall not be deemed in any
way material or relevant to the construction or interpretation of the Plan or
any provision thereof.

                                      -4-<PAGE>

                                                                    Exhibit 10.6

================================================================================

                                OMNIBUS AGREEMENT

                                      among

                            PENN VIRGINIA CORPORATION

                         PENN VIRGINIA RESOURCE GP, LLC

                        PENN VIRGINIA OPERATING CO., LLC

                                       and

                      PENN VIRGINIA RESOURCE PARTNERS, L.P.

================================================================================
<PAGE>

                                OMNIBUS AGREEMENT

         THIS OMNIBUS AGREEMENT is entered into on, and effective as of, the
Closing Date, among Penn Virginia Corporation, a Virginia corporation ("Penn
Virginia Corporation"), Penn Virginia Resource GP, LLC, a Delaware limited
liability company (including any permitted successors and assigns under the MLP
Agreement (as defined herein), the "General Partner"), for itself and on behalf
of the MLP in its capacity as general partner, Penn Virginia Operating Co., LLC,
a Delaware limited liability company (the "OLLC"), and Penn Virginia Resource
Partners, L.P., a Delaware limited partnership (the "MLP").

                                R E C I T A L S:

         Penn Virginia Corporation, the MLP, the OLLC and the General Partner
desire by their execution of this Agreement to evidence their understanding, (i)
as more fully set forth in Article II of this Agreement, with respect to (a)
those business opportunities that Penn Virginia Corporation will not pursue
during the term of this Agreement unless each of the MLP and the OLLC has
declined to engage in such business opportunity for its own account and (b) the
procedures whereby such business opportunities are to be offered to the MLP and
the OLLC and accepted or declined and (ii) as more fully set forth in Article
III of this Agreement, with respect to certain indemnification obligations of
Penn Virginia Corporation in favor of the Partnership Entities (as defined
herein).

         In consideration of the premises and the covenants, conditions, and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:

                                   ARTICLE I
                                   Definitions

     1.1 Definitions. (a) Capitalized terms used herein but not defined shall
have the meanings given them in the MLP Agreement.

     (b) As used in this Agreement, the following terms shall have the
respective meanings set forth below:

         "Affiliate" has the meaning given such term in the MLP Agreement.

         "Agreement" means this Omnibus Agreement, as it may be amended,
     modified, or supplemented from time to time in accordance with Section 4.6
     hereof.

         "Assets" is defined in Section 3.1.

         "Change of Control" means, with respect to any Person (the "Applicable
     Person"), any of the following events: (i) any sale, lease, exchange or
     other transfer (in one transaction or a series of related transactions) of
     all or substantially all of the Applicable Person's assets to any other
     Person, unless immediately following such sale, lease, exchange or other
     transfer such assets are owned, directly or indirectly, by the Applicable
     Person; (ii) the consolidation or merger of the Applicable Person with or
     into
<PAGE>

     another Person pursuant to a transaction in which the outstanding Voting
     Securities of the Applicable Person is changed into or exchanged for cash,
     securities or other property, other than any such transaction where (a) the
     outstanding Voting Securities of the Applicable Person is changed into or
     exchanged for Voting Securities of the surviving corporation or its parent
     and (b) the holders of the Voting Securities of the Applicable Person
     immediately prior to such transaction own, directly or indirectly, not less
     than a majority of the Voting Securities of the surviving corporation or
     its parent immediately after such transaction; and (iii) a "person" or
     "group" (within the meaning of Sections 13(d) or 14(d)(2) of the Exchange
     Act) being or becoming the "beneficial owner" (as defined in Rules 13d-3
     and 13d-5 under the Exchange Act) of more than 50% of all of the then
     outstanding Voting Securities of the Applicable Person, except in a merger
     or consolidation which would not constitute a Change of Control under
     clause (ii) above.

          "Closing Date" means the date of the closing of the initial public
     offering of common units representing limited partner interests in the MLP.

          "Conflicts Committee" is defined in the MLP Agreement.

          "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 ownership of voting securities, by contract or otherwise.

          "Covered Environmental Losses" is defined in Section 3.1.

          "Environmental Laws" means all federal, state, and local laws,
     statutes, rules, regulations, orders, judgments and ordinances relating to
     protection of health and safety and the environment including, without
     limitation, the federal Comprehensive Environmental Response, Compensation
     and Liability Act, the Superfund Amendments Reauthorization Act, the
     Resource Conservation and Recovery Act, the Clean Air Act, the Clean Water
     Act, the Surface Mining Control and Reclamation Act, the Safe Drinking
     Water Act, the National Environmental Policy Act, and other environmental
     conservation and protection laws, each as amended through the Closing Date.

          "Exchange Act" means the Securities Exchange Act of 1934, as amended.

          "General Partner" is defined in the introduction to this Agreement.

          "MLP" is defined in the introduction to this Agreement.

          "MLP Agreement" means the Amended and Restated Agreement of Limited
     Partnership of the MLP, dated as of the Closing Date, as such agreement is
     in effect on the Closing Date, to which reference is hereby made for all
     purposes of this Agreement. No amendment or modification to the MLP
     Agreement subsequent to the Closing Date shall be given effect for the
     purposes of this Agreement unless consented to by each of the parties to
     this Agreement.

          "Offer" is defined in Section 2.3.

                                      -2-
<PAGE>

          "OLLC" is defined in the introduction to this Agreement.

          "Partnership Entities" means the General Partner, the MLP, the OLLC
     and any Person controlled by any such entity.

          "Partnership Group" means the MLP, the OLLC and any Person controlled
     by such entities.

          "Penn Virginia Entities" means Penn Virginia Corporation and any
     Person controlled by Penn Virginia Corporation and its Affiliates other
     than the Partnership Entities.

          "Person" means an individual, corporation, partnership, joint venture,
     trust, limited liability company, unincorporated organization or any other
     entity.

          "Prospectus" means the final prospectus, dated _______, 2001 relating
     to the initial public offering of common units representing limited
     partnership interests in the MLP, as filed with Securities and Exchange
     Commission pursuant to Rule 424(b) under the Securities Act of 1933.

          "Restricted Businesses" is defined in Section 2.1.

          "Voting Securities" means securities of any class of Person entitling
     the holders thereof to vote in the election of members of the board of
     directors of the Person.

                                   ARTICLE II
                             Business Opportunities

     2.1  Restricted Businesses. For so long as the General Partner (or any
Person that directly, or indirectly through one or more intermediaries, is
controlled by or under common control with Penn Virginia Corporation) is the
general partner of the MLP, each of the Penn Virginia Entities shall be
prohibited from engaging in the following businesses ("Restricted Businesses"):
(a) owning, mining, processing, marketing, or transporting coal; (b) owning,
acquiring or leasing coal reserves; and (c) growing, harvesting, or selling
timber.

     2.2  Permitted Exceptions. Notwithstanding any provision of Section 2.1 to
the contrary, a Penn Virginia Entity may pursue an opportunity to purchase or
invest in, and may ultimately purchase, own and/or operate a Restricted Business
under the following circumstances:

     (a)  The Restricted Business was engaged in by a Penn Virginia Entity on
the date of this Agreement; provided, however, that any future acquisitions or
opportunities related to such Restricted Business shall be subject to the
procedures set forth in Section 2.3.

     (b)  The Penn Virginia Entity first offers the MLP the opportunity to
pursue such opportunity and the board of directors of the General Partner (with
the approval of the Conflicts Committee) has elected not to cause a Partnership
Entity to pursue such opportunity or acquisition in accordance with the
procedures set forth in Section 2.3.

                                      -3-
<PAGE>

     (c)  The fair market value of the assets that comprise the Restricted
Business represents less than a majority of the fair market value of the
business being considered for purchase or investment, in the reasonable belief
of majority of the board of directors of Penn Virginia Corporation.

     2.3  Procedures. (a) In the event that a Penn Virginia Entity becomes aware
of an opportunity to purchase a Restricted Business, then as soon as
practicable, such Penn Virginia Entity shall notify the MLP of such opportunity
and deliver to the General Partner all information prepared by or on behalf of
such Penn Virginia Entity relating to such potential purchase. As soon as
practicable but in any event within 30 days after receipt of such notification
and information, the General Partner, on behalf of the MLP, shall notify the
Penn Virginia Entity that either (i) the General Partner, on behalf of the MLP,
has elected, with the approval of the Conflicts Committee, not to cause a member
of the Partnership Group to pursue the opportunity to acquire such Restricted
Business, or (ii) the General Partner, on behalf of the MLP, has elected to
cause a member of the Partnership Group to pursue the opportunity to acquire
such Restricted Business. If, at any time, the General Partner abandons such
opportunity (as evidenced in writing by the General Partner following the
request of the Penn Virginia Entity), the Penn Virginia Entity may pursue such
opportunity. Any Restricted Business which is permitted to be purchased by a
Penn Virginia Entity must be so purchased (i) within 12 months of the time the
Penn Virginia Entity becomes able to pursue such acquisition in accordance with
the provisions of this Section 2.3 and (ii) on terms not materially more
favorable to the Penn Virginia Entity than were offered to the MLP. If either of
these conditions are not satisfied, the opportunity must be reoffered to the
MLP.

     (b)  In the event that a Penn Virginia Entity acquires a Restricted
Business as part of a larger transaction in accordance with Section 2.2(c), then
not later than 30 days after the consummation of the acquisition, such Penn
Virginia Entity shall notify the General Partner of such purchase and offer the
MLP the opportunity to purchase the Restricted Business constituting a portion
of such purchase and deliver to the General Partner all information prepared by
or on behalf of or in the possession of such Penn Virginia Entity relating to
the Restricted Business. As soon as practicable, but in any event, within 60
days after receipt of such notification, the General Partner shall notify the
Penn Virginia Entity that either (i) the General Partner has elected, with the
approval of the Conflicts Committee, not to cause a member of the Partnership
Group to purchase such Restricted Business, in which event the Penn Virginia
Entity shall be forever free to continue to engage in such particular Restricted
Business; provided, however, that any future acquisitions or opportunities
related to such particular Restricted Business shall be subject to the
procedures set forth in this Section 2.3, or (ii) the General Partner has
elected to cause a member of the Partnership Group to purchase such Restricted
Business, in which event the following procedures shall be followed:

          (i)   Within 30 days of receipt of the notice from the General Partner
     that the General Partner has elected to cause a member of the Partnership
     Group to purchase the Restricted Business, the Penn Virginia Entity shall
     submit a good faith offer to the General Partner to sell the Restricted
     Business (the "Offer") to any member of the Partnership Group on the terms
     and for the consideration stated in the Offer.

                                      -4-
<PAGE>

          (ii)  The Penn Virginia Entity and the General Partner shall negotiate
     in good faith after receipt of such Offer by the General Partner, the terms
     on which the Restricted Business will be sold to a member of the
     Partnership Group. The Penn Virginia Entity shall provide all information
     concerning the business, operations and finances of such Restricted
     Business as may be reasonably requested by the General Partner.

          (iii) If the Penn Virginia Entity and the General Partner agree on
     such terms within 60 days after receipt by the General Partner of the
     Offer, a member of the Partnership Group shall purchase the Restricted
     Business on such terms as soon as commercially practicable after such
     agreement has been reached.

          (iv)  If the Penn Virginia Entity and the General Partner are unable
     to agree on the terms of a sale during the 60-day period after receipt by
     the General Partner of the Offer, the Penn Virginia Entity and the General
     Partner will engage an independent investment banking firm with a national
     reputation to determine the fair market value of the Restricted Business.
     In determining the fair market value of the Restricted Business, the
     investment banking firm will have access to the proposed sale and purchase
     values for the Offer submitted by the Penn Virginia Entity and the General
     Partner, respectively. Such investment banking firm will determine the
     value of the Restricted Business within 30 days and furnish the Penn
     Virginia Entity and the General Partner its opinion of such value. The fees
     and expenses of the investment banking firm's appraisal will be split
     equally between the Penn Virginia Entity and the MLP. Upon receipt of such
     opinion, the General Partner will have the option, but not the obligation,
     subject to the approval of the Conflicts Committee, to:

          (v)   (A) cause a member of the Partnership Group to purchase the
     Restricted Business in accordance with the following process:

                    (1) if the valuation of the investment banking firm is in
                the range between the proposed sale/purchase values of the Penn
                Virginia Entity and the General Partner, a member of the
                Partnership Group will have the right to purchase the Restricted
                Business at the valuation submitted by the investment banking
                firm;

                    (2) if the valuation of the investment banking firm is less
                than the proposed purchase value submitted by the General
                Partner, a member of the Partnership Group will have the right
                to purchase the Restricted Business submitted by the investment
                banking firm; and

                    (3) if the valuation of the investment banking firm is
                greater than the proposed sale value submitted by the Penn
                Virginia Entity, a member of the Partnership Group will have the
                right to purchase the Restricted Business for the amount
                submitted by the Penn Virginia Entity; or

                (B) decline to purchase such Restricted Business, in which event
          the Penn Virginia Entity forever will be free to continue to own and
          operate the assets and

                                      -5-
<PAGE>

         business comprising such particular Restricted Business; provided,
         however, that any future acquisitions or opportunities related to such
         particular Restricted Business shall be subject to the procedures set
         forth in this Section 2.3.

     2.4 Scope of Prohibition. Except as provided in this Article II and the
Partnership Agreement, each Penn Virginia Entity shall be free to engage in any
business activity whatsoever, including those that may be in direct competition
with any Partnership Entity.

     2.5 Enforcement. The Penn Virginia Entities agree and acknowledge that the
Partnership Entities do not have an adequate remedy at law for the breach by the
Penn Virginia Entities of their covenants and agreements set forth in this
Article II, and that any breach by the Penn Virginia Entities of their covenants
and agreements set forth in this Article II would result in irreparable injury
to the Partnership Entities. The Penn Virginia Entities further agree and
acknowledge that any Partnership Entity may, in addition to the other remedies
which may be available to the Partnership, file a suit in equity to enjoin the
Penn Virginia Entities from such breach, and consent to the issuance of
injunctive relief under this Agreement.

                                  ARTICLE III
                                Indemnification

     3.1 Penn Virginia Corporation Indemnification. Penn Virginia Corporation
shall indemnify, defend and hold harmless the Partnership Entities from and
against (a) any Covered Environmental Losses relating to the assets of the
Partnership Entities described in the Prospectus attributable to events or
conditions that occurred or existed prior to the Closing Date (the "Assets") for
which notice is provided in accordance with Section 3.3 within three years after
the Closing Date to the extent such Covered Environmental Losses exceed all
amounts recovered or recoverable by the MLP under contractual indemnities from
third Persons or under any applicable insurance policies and (b) all federal,
state and local income tax liabilities attributable to the operation of the
Assets prior to the Closing Date, including any such income tax liabilities of
the Penn Virginia Entities that may result from the consummation of the
formation transactions for the Partnership Entities. "Covered Environmental
Losses" mean those non-contingent environmental losses, costs, damages
(including punitive and treble damages) and expenses (including, without
limitation, any reasonable legal or other expenses incurred in connection with
defending or investigating any such action or claim) suffered or incurred by the
Partnership Entities arising from correction of violations of, or performance of
remediation required by, Environmental Laws in effect on or before the Closing
Date due to events and conditions associated with the operation of the Assets
and occurring before the Closing Date.

     3.2 Limitations Regarding Indemnification. Penn Virginia Corporation shall
have no indemnification obligation under Section 3.1(a) for claims made after
the third anniversary of the date of this Agreement. The aggregate liability of
Penn Virginia Corporation in respect of all claims made under Section 3.1(a)
shall not exceed $10 million.

     3.3 Indemnification Procedures.

     (a) The Partnership Entities agree that within sixty (60) days after they
become aware of facts giving rise to a claim for indemnification pursuant to
Section 3.1, they will provide

                                      -6-
<PAGE>

notice thereof in writing to Penn Virginia Corporation specifying the nature of
and specific basis for such claim.

     (b) Penn Virginia Corporation shall have the right to control all aspects
of the defense of (and any counterclaims with respect to) any claims brought
against the Partnership Entities that are covered by the indemnification set
forth in Section 3.1, including, without limitation, the selection of counsel,
determination of whether to appeal any decision of any court and the settling of
any such matter or any issues relating thereto; provided, however, that no such
settlement shall be entered into without the consent of the Partnership Entities
unless it includes a full release of the Partnership Entities from such matter
or issues, as the case may be.

     (c) The Partnership Entities agree, at their own cost and expense, to
cooperate fully with Penn Virginia Corporation with respect to all aspects of
the defense of any claims covered by the indemnification set forth in Section
3.1, including, without limitation, the prompt furnishing to Penn Virginia
Corporation of any correspondence or other notice relating thereto that the
Partnership Entities may receive, permitting the names of the Partnership
Entities to be utilized in connection with such defense, the making available to
Penn Virginia Corporation of any files, records or other information of the
Partnership Entities that Penn Virginia Corporation considers relevant to such
defense and the making available to Penn Virginia Corporation of any employees
of the Partnership Entities; provided, however, that in connection therewith
Penn Virginia Corporation agrees to use reasonable efforts to minimize the
impact thereof on the operations of such Partnership Entities. In no event shall
the obligation of the Partnership Entities to cooperate with Penn Virginia
Corporation as set forth in the immediately preceding sentence be construed as
imposing upon the Partnership Entities an obligation to hire and pay for counsel
in connection with the defense of any claims covered by the indemnification set
forth in this Article III; provided, however, that the Partnership Entities may,
at their own option, cost and expense, hire and pay for counsel in connection
with any such defense. Penn Virginia Corporation agrees to keep any such counsel
hired by the Partnership Entities reasonably informed as to the status of any
such defense, but Penn Virginia Corporation shall have the right to retain sole
control over such defense.

     (d) In determining the amount of any loss, cost, damage or expense for
which any of the Partnership Entities is entitled to indemnification under this
Agreement, the gross amount of the indemnification will be reduced by (i) any
insurance proceeds realized or to be realized by the Partnership Entities, and
such correlative insurance benefit shall be net of any incremental insurance
premium that becomes due and payable by the Partnership Entities as a result of
such claim and (ii) all amounts recovered or recoverable by the Partnership
Entities under contractual indemnities from third Persons as described in
Section 3.1.

                                   ARTICLE IV
                                  Miscellaneous

     4.1 Choice of Law; Submission to Jurisdiction. This Agreement shall be
subject to and governed by the laws of the State of Delaware, excluding any
conflicts-of-law rule or principle that might refer the construction or
interpretation of this Agreement to the laws of

                                      -7-
<PAGE>

another state. Each party hereby submits to the jurisdiction of the state and
federal courts in the State of Delaware and to venue in Wilmington, Delaware.

     4.2 Notice. All notices or requests or consents provided for or permitted
to be given pursuant to this Agreement must be in writing and must be given by
depositing same in the United States mail, addressed to the Person to be
notified, postpaid, and registered or certified with return receipt requested or
by delivering such notice in person or by telecopier or telegram to such party.
Notice given by personal delivery or mail shall be effective upon actual
receipt. Notice given by telegram or telecopier shall be effective upon actual
receipt if received during the recipient's normal business hours, or at the
beginning of the recipient's next business day after receipt if not received
during the recipient's normal business hours. All notices to be sent to a party
pursuant to this Agreement shall be sent to or made at the address set forth
below such party's signature to this Agreement, or at such other address as such
party may stipulate to the other parties in the manner provided in this Section
4.2.

     4.3 Entire Agreement. This Agreement constitutes the entire agreement of
the parties relating to the matters contained herein, superseding all prior
contracts or agreements, whether oral or written, relating to the matters
contained herein.

     4.4 Termination. This Agreement will terminate upon a Change in Control of
the General Partner. In addition, the provisions of Article II of this Agreement
may be terminated by Penn Virginia Corporation upon a Change of Control of Penn
Virginia Corporation.

     4.5 Effect of Waiver or Consent. No waiver or consent, express or implied,
by any party to or of any breach or default by any Person in the performance by
such Person of its obligations hereunder shall be deemed or construed to be a
consent or waiver to or of any other breach or default in the performance by
such Person of the same or any other obligations of such Person hereunder.
Failure on the part of a party to complain of any act of any Person or to
declare any Person in default, irrespective of how long such failure continues,
shall not constitute a waiver by such party of its rights hereunder until the
applicable statute of limitations period has run.

     4.6 Amendment or Modification. This Agreement may be amended or modified
from time to time only by the written agreement of all the parties hereto;
provided, however, that the MLP and the OLLC may not, without the prior approval
of the Conflicts Committee, agree to any amendment or modification of this
Agreement that, in the reasonable discretion of the General Partner, will
adversely affect the holders of Common Units. Each such instrument shall be
reduced to writing and shall be designated on its face an "Amendment" or an
"Addendum" to this Agreement.

     4.7 Assignment. No party shall have the right to assign its rights or
obligations under this Agreement without the consent of the other parties
hereto.

     4.8 Counterparts. This Agreement may be executed in any number of
counterparts with the same effect as if all signatory parties had signed the
same document. All counterparts shall be construed together and shall constitute
one and the same instrument.

                                      -8-
<PAGE>

     4.9  Severability. If any provision of this Agreement or the application
thereof to any Person or circumstance shall be held invalid or unenforceable to
any extent, the remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be affected thereby and
shall be enforced to the greatest extent permitted by law.

     4.10 Gender, Parts, Articles and Sections. Whenever the context requires,
the gender of all words used in this Agreement shall include the masculine,
feminine and neuter, and the number of all words shall include the singular and
plural. All references to Article numbers and Section numbers refer to Articles
and Sections of this Agreement.

     4.11 Further Assurances. In connection with this Agreement and all
transactions contemplated by this Agreement, each signatory party hereto agrees
to execute and deliver such additional documents and instruments and to perform
such additional acts as may be necessary or appropriate to effectuate, carry out
and perform all of the terms, provisions and conditions of this Agreement and
all such transactions.

     4.12 Withholding or Granting of Consent. Each party may, with respect to
any consent or approval that it is entitled to grant pursuant to this Agreement,
grant or withhold such consent or approval in its sole and uncontrolled
discretion, with or without cause, and subject to such conditions as it shall
deem appropriate.

     4.13 U.S. Currency. All sums and amounts payable to or to be payable
pursuant to the provisions of this Agreement shall be payable in coin or
currency of the United States of America that, at the time of payment, is legal
tender for the payment of public and private debts in the United States of
America.

     4.14 Laws and Regulations. Notwithstanding any provision of this Agreement
to the contrary, no party to this Agreement shall be required to take any act,
or fail to take any act, under this Agreement if the effect thereof would be to
cause such party to be in violation of any applicable law, statute, rule or
regulation.

     4.15 Negotiation of Rights of Penn Virginia Corporation, Limited Partners,
Assignees, and Third Parties. The provisions of this Agreement are enforceable
solely by the parties to this Agreement, and no shareholder of Penn Virginia
Corporation and no limited partner, member, assignee or other Person of the MLP
or the OLLC shall have the right, separate and apart from Penn Virginia
Corporation, the MLP or the OLLC, to enforce any provision of this Agreement or
to compel any party to this Agreement to comply with the terms of this
Agreement.

                                      -9-
<PAGE>

         IN WITNESS WHEREOF, the Parties have executed this Agreement on, and
effective as of, the Closing Date.

                                 PENN VIRGINIA CORPORATION

                                 By:
                                        ----------------------------------------
                                        Name:
                                        Title:

                                 Address for Notice:

                                 100 Matsonford Road, Suite 200
                                 Radnor, Pennsylvania  19087

                                 PENN VIRGINIA RESOURCE GP, LLC

                                 By:
                                        ----------------------------------------
                                        Name:
                                        Title:

                                 Address for Notice:

                                 100 Matsonford Road, Suite 200
                                 Radnor, Pennsylvania  19087

                                 PENN VIRGINIA OPERATING CO., LLC

                                 By: Penn Virginia Resource Partners, L.P.,
                                     its sole member

                                          By: Penn Virginia Resource GP, LLC,
                                              its general partner

                                          By:
                                                --------------------------------
                                                Name:
                                                Title:

                                 Address for Notice:

                                 100 Matsonford Road, Suite 200
                                 Radnor, Pennsylvania  19087

                                     -10-
<PAGE>

                                 PENN VIRGINIA RESOURCE PARTNERS, L.P.

                                          By: Penn Virginia Resource GP, LLC,
                                              its general partner

                                          By:
                                                --------------------------------
                                                Name:
                                                Title:

                                 Address for Notice:

                                 100 Matsonford Road, Suite 200
                                 Radnor, Pennsylvania  19087

                                     -11-

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